The Official Blog of Asian Mobile News magazine

2008-10-10T01:04:00.000-07:00

Is Chunghwa ending the year face-down?

Chunghwa Telecom, Taiwan's largest phone operator, posted a 2.5 percent drop in nine-month profit.

Net income fell to NT$36.9 billion ($1.1 billion), or NT$3.86 a share, the Taipei-based company said in a statement. Revenue for the period was NT$140 billion, the statement said, almost unchanged from a year ago.

The company posted profit of NT$37.8 billion, or NT$3.55 per share, for the same period last year on sales of NT$139.9 billion.

Will Chunghwa climb back up this last quarter of '08?

2008-09-30T01:24:00.000-07:00

Is the world the new WiFi hotspot?

Vodafone Group, Microsoft and Ericsson AB are among 17 companies working together to promote laptop computers with built-in tools for making broadband connections to mobile-phone networks.

The initiative is led by the GSM Association, which will spend $1 billion next year to promote such devices, the London- based organization said in a statement.

“It's freedom from your desk, freedom from WiFi hotspots, the ability to get online anywhere where you have cellular coverage,” marketing head Michael O'Hara said in an interview. There should be “several hundreds of thousands” of such products in stores around Christmas, he said.

Wireless broadband using high speed packet access, or HSPA, technology offers data transfer speeds of more than 1 megabyte per second, in line with typical fixed-line Internet services.

There were 191 phone operators offering HSPA networks for more than 740 devices, including handsets and notebooks, the GSMA said in an August statement. The market for laptops is worth about $50 billion this year, the GSMA said in a statement, citing data from Pyramid Research.

There are more than 55 million wireless broadband subscribers in 91 countries, the GSMA said, citing data from Wireless Intelligence. The figure is estimated to rise by four million each month until the end of this year.

3 Group, Asus, Dell, ECS, Gemalto NV, Lenovo Group, LG Electronics, France Telecom SA's Orange, Qualcomm, Telefonica SA, Telecom Italia SpA, TeliaSonera AB, Deutsche Telekom AG's T-Mobile and Toshiba are the other companies taking part in the initiative.

O'Hara predicted the number of companies joining the group will rise as there are about 750 operators globally offering wireless services using the GSM standard.

Who will be the next to join Vodafone , Microsoft and the like in the quest to building and promoting laptops that can connect to the internet almost anytime and anywhere?

2008-09-23T02:58:00.001-07:00

CEO Cho Young Chu, Guilty or Not?

KT Freetel, South Korea's second-largest mobile-phone operator, said Chief Executive Officer Cho Young Chu quit after he was taken into custody by prosecutors as part of a bribery investigation.

The company's board of directors accepted the resignation following Cho's arrest, Kim In Tae, a spokesman for Seoul-based KT Freetel, said by telephone. He declined to comment on whether Cho, 52, denies allegations related to bribery.

The resignation of Cho, who's been heading KT Freetel since 2005, forces the wireless operator to search for a new chief executive after the company posted six straight quarters of profit declines. Cho's replacement, to be named within two weeks, will face the challenge of reviving earnings growth in a market where nine out 10 people already own a mobile phone.

“Even if a new CEO arrives immediately, we believe there is increased uncertainty on KTF's ability to address changes in the market, including regulation and competition,” Goldman, Sachs & Company said in a note. “With the resignation of the CEO, we do not expect the market to warm up to the stock anytime soon.”

South Korean prosecutors took KT Freetel's head into custody on Sept. 19 and formally arrested him to question him on allegations that Cho received about 2.5 billion won ($2.2 million) from equipment suppliers, violating his fiduciary duty, Kim Soo Nam, a prosecutor at the Seoul Central District Prosecutors' Office, said by phone.

Merger Delay?

Cho's arrest may delay any merger talks between KT Freetel and parent KT as investors probably won't approve a combination before “corporate governance issues” are resolved, according to Citigroup analyst Sean Lee. Cho's arrest and the probe aren't affecting KT Freetel's operations, the mobile- phone operator's spokesman said.

The arrest of Cho raises concern over “a serious corporate governance problem -- lack of management integrity and transparency in the equipment purchase process,” Citigroup's Lee wrote in a Sept. 21 report.

KT plans to submit an application to the Korea Communications Commission in September to merge with KT Freetel, Edaily reported in August, citing an unidentified KT official. KT shareholders will probably vote on the merger in February, the Korean-language online newspaper reported then.

Since reporting earnings in July, spokesmen at KT have reiterated comments by KT Chief Financial Officer Maeng Soo Ho that the “timing and other details have not been confirmed or decided” on any possible merger with KT Freetel.

KT Freetel shares rose 2.5 percent to 28,900 won at 1:39 p.m. in Seoul, compared with the benchmark Kospi stock index's 0.9 percent advance.

Is Cho's bribery case an issue of a questionable management or governace on KTF's side?

2008-09-12T03:04:00.000-07:00

Is China Mobile losing its edge?

China Mobile, the world's biggest wireless carrier by users, fell to its lowest in 15 months in Hong Kong trading on a report regulators will let its users retain phone numbers when switching to rival services.

The mobile carrier fell 5.3 percent to close at HK$77 on the city's stock exchange, the lowest since June 15, 2007. The benchmark Hang Seng Index fell 3.1 percent.

Chinese regulators plan to let Beijing-based China Mobile's users in the cities of Tianjin and Shenzhen keep their phone numbers when they switch service providers from next month, the Nanfang Daily newspaper reported, citing an unidentified source. Customers who move from other carriers to China Mobile won't be able to keep their numbers, according to the report.

“The phone numbers issue is certainly weighing on the shares,” said Li Zhiwu, an analyst with BOCOM International Holdings in Hong Kong. “I think we've already seen the peak of growth for China Mobile,” said Li, who rates the stock “neutral.”

China will introduce so-called number portability nationwide next year if the trials in Tianjin and Shenzhen are successful, Nanfang Daily reported. China Telecom, China Unicom and China Netcom Group also fell in Hong Kong trading on concern that the policy may affect earnings at the companies.

“The point of number portability is to increase competition, which could be a concern,” he said. Li rates shares of China Unicom, China Telecom and China Netcom “neutral.”

China Telecom declined 5.1 percent to HK$3.37, while China Unicom dropped 4.8 percent to HK$11.48 and China Netcom fell 4.5 percent to HK$17.24.

The Chinese government said in May that it planned to adopt regulations that limit China Mobile's dominance of the world's biggest wireless market. The government also ordered the nation's six state-owned carriers to merge into three companies all able to provide mobile, fixed-line and Internet services in a bid to spur competition.

Can we attribute China Mobile's current estate to the restructuring plan of the Chinese government?

2008-09-04T02:21:00.000-07:00

Is Telekom Malaysia's stake a good buy for Sotelgui?

Telekom Malaysia, Malaysia's second-biggest mobile-phone operator, sold its 60 percent stake in Societe des Telecommunications de Guinee, known as Sotelgui, to the Guinean government.

The sale follows a visit by Guinea's Communication Minister Tibou Kamara, Finance Minister Ousmane Dore and Sotelgui officials to Kuala Lumpur, the west African nation's government said in a statement read on national television yesterday. The state now controls 100 percent of Sotelgui and plans to seek new private investors for the company, it said.

Sotelgui competes with companies including Areba, a unit of MTN Group and France Telecom SA's Orange mobile-phone subsidiary. The Conakry-based company has 25,000 fixed-line subscribers and about 1 million mobile-phone customers.

Will the sale benefit Telekom Malaysia in general?

2008-08-28T03:03:00.000-07:00

Ho-chen to be replaced as CEO?

Chunghwa Telecom, Taiwan's largest phone operator, named President Lu Shyue-ching as chairman and chief executive officer to replace Ho-chen Tan, who held the posts for five years.

Senior Vice President Chang Shaio-tung will succeed Lu, 59, as president, the Taipei-based company said in an e-mailed statement. The appointments, recommended by the Ministry of Transportation and Communications, Chunghwa's largest shareholder, go into effect after board approval, the statement said.

Ho-chen, 57, formerly a vice minister at the ministry, oversaw Chunghwa's privatization, listing and overseas expansion into Japan, Singapore and Vietnam. Lu, a career civil servant, became president of the company in 1996.

Chunghwa's stock advanced about 40 percent on the Taiwan Stock Exchange under Ho-Chen, in line with the gain in the benchmark Taiex index over the same period. The shares fell 1.3 percent to close at NT$77.20 in Taipei.

Lu, who has a doctorate in electrical engineering from the University of Hawaii, was previously deputy director-general of the government department that became Chunghwa Telecom, according to the company.

Chang was previously an executive vice president in charge of Chunghwa's mobile and international businesses. He has a Master of Business Administration degree from Taiwan's National Chiao Tung University.

Can President Lu Shyue-ching be a replacement to Ho-chen Tan?

2008-08-21T18:22:00.000-07:00

Is ZTE now the better half of China Telecom?

ZTE, a Chinese telephone- network equipment maker, won half of a 10 billion yuan order ($1.5 billion) from China Telecom, the South China Morning Post reported, without saying how it obtained the information.

Alcatel-Lucent won about 20 percent of China Telecom's contract for its code division multiple access wireless value- added service platform, while the remainder was split among other companies including Huawei Technologies, the newspaper said.

ZTE was also awarded China Telecom's order to build a mobile-positioning system and a multimedia message service, according to the Chinese phone operator's Web site, the report said.

With ZTE's profile, does it deserve 50% of China Telecom?

2008-08-10T21:48:00.000-07:00

Why does Indonesia insist on keeping its directors at Indosat?

Indonesia has turned down a request by Qatar Telecom to replace the government-appointed directors at PT Indosat after the Qatari company bought a stake in the mobile-phone operator, Bisnis Indonesia reported.

The government will keep its five directors at Indosat, including President-Director Johnny Swandi Sjam, the newspaper reported, citing State Enterprises Minister Sofyan Djalil. Qatar Telecom may add their directors to the board, filling seats now held by Singapore Technologies Telemedia, he added.

Qatar Telecom bought 40.8 percent of Indosat in June from Asia Mobile Holdings, the Qatari company's venture with ST Telemedia. Asia Mobile placed four directors at Indosat, the newspaper said.

The Indonesian government owns 14.29 percent of Jakarta-based Indosat, Indonesia's second-biggest mobile-phone operator. The company will hold a shareholders meeting on Aug. 25.

Can Qatar Telecom maximize its control over Indosat despite the government's firm hold on the mobile-phone operator?

2008-07-30T21:08:00.000-07:00

Can Globe Telecom recover from the negative effects of the seemingly unseizing soar in the Philippines's oil price?

Globe Telecom had its biggest gain in almost a year in Manila trading on speculation lower oil prices will boost mobile phone use.

Globe, the Philippines' second-largest phone company, climbed 5.1 percent to 1,125 pesos at the noon close in Manila. That's its biggest gain since August 21.

"Lower oil prices would mean more spending power for consumers," said Richard Laneda, an analyst at Citiseconline.com in Manila. "Consumers will spend more of their budget on telecoms instead of oil." Phone use "is one of the things that people can cut on, unlike electricity and oil, so when oil prices are lower they would again spend on text messaging and calls."

Crude oil fell to a 12-week low, rounding out a 17 percent decline from the July 11 record. Philippines inflation accelerated to a 14-year high of 11.4 percent in June on higher prices of oil, almost all of which the country imports.

Does lower oil price mean more revenue for the Philippines's Telecom Industry?

2008-07-23T20:58:00.000-07:00

Is Ericsson losing its grip in the mobile market?

Ericsson AB, the world's largest maker of wireless networks, may report its steepest profit drop in more than three years on costs to cut 4,000 employees and waning demand for phones at the handset venture with Sony.

Net income in the second quarter fell 56 percent to 2.82 billion kronor ($472 million), according to the median estimate of 15 analysts surveyed by Bloomberg. Sales at the Stockholm- based company probably rose 1 percent to 48.1 billion kronor, the least in more than four years.

Chief Executive Officer Carl-Henric Svanberg, who has presided over three straight quarters of falling profit, cut revenue forecasts twice last year because of a slump in North American and European consumer spending. Sony Ericsson Mobile Communications, the handset venture with Sony, said on July 18 that second-quarter net income was almost wiped out.

"The uncertainties continue to be regarding growth, competition in the industry, and pressure on profit margins," said Jan Dworsky, an analyst at Handelsbanken Capital Markets in Stockholm. "The global network market will be flat going forward, with limited growth next year, and competitive pressures will weigh on profit margins this year and next."

Ericsson forecast in February that demand for wireless and fixed-line telephone networks used by Telecom Italia SpA, Telefonica SA and other customers will be "flattish" this year, and announced plans to trim 1,000 jobs in Sweden and probably three times as many abroad.

'Troubled Portfolio'

WestLB analyst Thomas Langer in Dusseldorf, who cut his rating on Ericsson to "hold" from "buy" on July 15, estimates the company booked about 800 million kronor in restructuring charges at its network unit. Ericsson spokesman Fredrik Hallstan declined to comment on the coming earnings report.

Sony Ericsson said on July 18 it aims to cut annual costs by 300 million euros ($474 million) and said the handset market will remain "challenging" this year. Net income fell to 6 million euros from 220 million euros a year earlier and sales dropped 9.4 percent to 2.82 billion euros, the venture said.

"We expect Sony Ericsson's troubled portfolio to lose money through the second half, in contrast to market expectations for a substantial fourth-quarter recovery," London-based Goldman Sachs analyst Tim Boddy said in a July 16 note. He rates Ericsson "neutral."

The phone venture contributed more than 20 percent of Ericsson's operating profit in the first quarter, and Ericsson received a 2.2 billion-krona dividend from the company in the period. Svanberg is chairman of the joint venture.

Missed Twice

Svanberg saved Ericsson from the brink of bankruptcy after he took over in April 2003. He accelerated cost reductions started by his predecessor, Kurt Hellstroem.

Between the end of 2000 and early 2004, Ericsson cut more than half its workforce. The company had 75,000 workers at the end of the first quarter.

Earnings have met or exceeded analysts' estimates twice in the past four quarters and missed them twice.

The company reports at 7:30 a.m., followed by a press conference at 9 a.m. Chief Financial Officer Hans Vestberg will speak also. He took over in October from Karl-Henrik Sundstroem, who stepped down in October after Ericsson cut earnings targets.

Ericsson fell as much as 1.4 kronor, or 1.9 percent, to 70.9 kronor in Stockholm, and traded at 71.1 kronor at 9:41 a.m. in the Swedish capital. Before July 21, Ericsson lost 4.7 percent this year, compared with a 23 percent drop for the Dow Jones Europe Technology Index of 22 companies. Alcatel-Lucent SA, the largest supplier of telecommunications equipment, has lost 24 percent.

Job Cuts

Paris-based Alcatel-Lucent posted a fifth straight quarterly loss on April 30 on costs to cut jobs and lowered its full-year sales forecast. Alcatel SA bought Lucent Technologies in November 2006 and plans to cut 16,500 jobs.

About 50 percent of commercial wireless broadband operators use Ericsson technology, according to the company. Ericsson's largest source of sales is China, which contributed 7 percent of total sales in the first quarter, followed by India and the U.S.

"It's a tough environment," said Dresdner Kleinwort Group. analyst Janardan Menon in London. "Most of the revenue upside is coming in emerging markets, where price and margin pressure is even more aggressive than in Europe or the U.S."

Svanberg, who was paid 15.2 million kronor in fixed salary last year, has organized Ericsson into three main divisions: networks, professional services and multimedia.

"We view multimedia and its products, with the exception of mobile platforms, merely as an enabler for networks and profession services," Stockholm-based Nordea analyst Mats Bergstroem said in a July 16 report titled "A Bumpy Ride." "Mobile broadband and network expansion will continue to drive demand." He advises investors buy
Ericsson shares.

Is cutting manpower the solution for Ericsson to go back on track?

2008-07-16T20:33:00.000-07:00

Is Samsung's Lee Kun Hee guilty of tax evasion?

Lee Kun Hee, former chairman of Samsung Group, was convicted of tax evasion, concluding a trial that prompted the billionaire to end his 20-year reign over South Korea’s biggest business empire.

The Seoul Central District Court handed Lee a three-year prison sentence, suspended for five years, and fined him 110 billion won ($109 million), Judge Min Byung Hoon said. Lee, 66, was cleared of charges that he oversaw illegal trades designed to transfer control of Samsung to his son.

Lee, who succeeded his father as chairman, joins the heads of Hyundai Motor Group and SK Group in winning clemency for white-collar crimes. The decision may revive criticism of the family-run chaebol business model, which has been blamed for perpetuating corruption and disadvantaging minority shareholders.

“All these things just cause foreign investors and corporate-governance advocates to sort of roll their eyes and say here we go again,” said Jamie Allen, Hong Kong-based secretary general of the Asian Corporate Governance Association. “The family has got what it wants.”

Samsung Electronics, Asia’s largest maker of semiconductors, flat screens and mobile phones, declined to comment on the ruling and how the decision may affect the company, said Luke Cho, a Seoul-based spokesman. He also declined to comment on whether Lee will appeal the conviction.

Lee quit as chairman of the group in April after he was indicted for causing losses at Samsung by helping his son, Lee Jae Yong, gain control of group units and for failing to pay 112.8 billion won in taxes. Group Vice Chairman Lee Hak Soo and President Kim In Joo also resigned.

Suspended Sentences

Lee Hak Soo and Kim both received suspended sentences for tax evasion, Judge Min said.

“The judicial branch has officially shown us that in Korea, the chaebol are above the law,” the Solidarity for Economic Reform, a Seoul-based civic group, said in an e-mailed statement. “No Korean will respect the authority of a judicial system that’s powerless before the chaebol.”

The Federation of Korean Industries, a group representing the chaebol, hopes the ruling will help businessmen concentrate on reviving the economy, spokesman Jeon Je Kyung said.

Prosecutors last week asked for a seven-year sentence for Lee Kun Hee and a fine of 350 billion won. They also sought five- year prison terms for Lee Hak Soo and Kim.
The tax evasion and breach of duty charges resulted from a probe that began in January into allegations of corruption at Samsung after the group’s former chief lawyer, Kim Yong Chul, said that Samsung diverted funds for bribery.

Hidden Accounts

Prosecutors said in April that Lee Kun Hee evaded taxes on income by trading shares of Samsung units via hidden accounts held by other executives. They also said Lee breached his fiduciary duty because he knew of illegal sales of bonds by Samsung Everland, the group’s de facto holding company, and Samsung SDS, an unlisted information technology company.

Lee was found not guilty of breach of duty related to the Everland transactions, Judge Min said. The charges on the SDS trades are invalid because of the applicable statute of limitations, he said.

During the trial, prosecutors said the sale of Everland and SDS bonds were part of plans to help Lee Jae Yong get control of Samsung Group. Lawyers for the former chairman denied the allegations and claimed there were no losses incurred by the two companies. Two Samsung Executives have been convicted for helping Lee family members buy Everland shares at a discount.

Lee paid 182.9 billion won in overdue taxes to the National Tax Service on May 30, Samsung Group said last month.

Prior Conviction

Lee was convicted in 1996 of corruption for bribing ex- Presidents Chun Doo Hwan and Roh Tae Woo, receiving a two-year prison sentence that was suspended for three years. He was pardoned by President Kim Young Sam a year later.

The chairman took the helm in 1987 after the death of his father, Lee Byung Chull, who founded Samsung from a wooden store selling groceries in the southern city of Daegu in 1938, when Korea was under Japanese occupation.

By 2006, Samsung Group’s revenue had jumped ninefold over two decades to $159 billion, according to the company’s latest consolidated figures. Overseas sales totaled $70 billion in 2006, or 21 percent of the country’s exports.

Samsung is the largest among the family-controlled chaebol, which emerged in South Korea after Park Chung Hee, who seized the country’s presidency through a military coup in 1961, promoted industrialization through multiyear economic plans. The International Monetary Fund cited the chaebol’s debt-driven practices as part of the reason the economy landed in a financial crisis at the end of 1997.

Lee’s resignation contrasts with the path taken by Hyundai Motor Chairman Chung Mong Koo, who kept his position after he was convicted for embezzlement and breach of duty. The Seoul High Court last month upheld Chung’s suspended sentence.

In May, South Korea’s highest court reaffirmed a suspended sentence for SK Group Chairman Chey Tae Won, who heads Korea’s third-biggest industrial group. Chey was convicted of fraud five years ago and the Supreme Court upheld a ruling to sentence him to a suspended three-year prison term.

Will Lee's conviction bring a negative impact on Samsung?

2008-07-09T23:03:00.000-07:00

China Telecom wants to double its number?

China Telecom, which is taking over the smaller mobile-phone unit of China Unicom, aims to double the number of wireless customers at the business next year, CCIDCOM.com said.

The carrier expects to have almost 100 million mobile-phone subscribers by the end of next year, CCIDCOM.com, a Web site affiliated with the Ministry of Industry and Information, reported, citing an internal China Telecom plan.

William Li, a Hong Kong-based spokesman for China Telecom, said the carrier's Chairman Wang Xiaochu has said in the past that the company expects to have 100 million mobile subscribers within three years of being licensed to offer the services.

China Telecom, the nation's biggest fixed-line carrier, and its parent offered to pay 110 billion yuan ($16 billion) last month for the smaller of China Unicom's two wireless units, which provides services based on code division multiple access, or CDMA, technology. China Unicom's CDMA business had 43.2 million subscribers at the end of May.

Will the goal of China Telecom be more attainable after the restructuring done by the Chinese Government?

2008-07-02T20:04:00.000-07:00

Is SingTel taking over its subsidiary, Globe Telecom?

Singapore Telecommunications Ltd., Southeast Asia's largest phone company, agreed to pay S$141.4 million ($104 million) for 3.8 million shares of the Philippines' Globe Telecom, as it seeks to increase overseas revenue.

The acquisition will raise the company's stake in Manila- based Globe to 47.34 percent from 44.47 percent, Singapore Telecom said in a statement. It bought the stake from Ayala, which owned 33.3 percent of Globe before the deal, according to data compiled by Bloomberg.

Singapore Telecom has invested in companies in India, Australia, the Philippines and Indonesia to increase revenue, because its home market already has more mobile-phone subscriptions than people. Chief Executive Officer Chua Sock Koong said this month that SingTel is in talks with Chinese companies about a potential investment.

Ayala plans to reinvest the 4.6 billion pesos from the sale in its electronic manufacturing and outsourcing businesses, it said in a statement. Manila-based Ayala also owns the nation's largest bank by market value and the largest builder.

“Our value as a holding company lies in our ability to re- allocate and turn over capital in order to start new investment cycles,” Ayala Chairman and Chief Executive Officer Jaime August Zobel de Ayala said in a statement.

SingTel fell 2 Singapore cents, or 0.5 percent, to S$3.68 as of 1:59 p.m. on the Singapore stock exchange. The stock has lost 8 percent this year, compared with a 15 percent loss for the benchmark Straits Timex Index.

Globe, the second-largest Philippine phone company, has declined 24.8 percent this year, compared with a 32 percent drop in the main Philippine Stock Exchange Index. The stock fell 0.4 percent to 1,180 pesos as of the noon close of trading in Manila.

Does SingTel’s recent acquisition of Globe shares along with other shares from the region indicative of interest in controlling the mobile phone market in Asia?

2008-05-19T23:07:00.000-07:00

Can Old Mobile Phones Destroy the Environment?

The average Korean consumer gets a new mobile phone every 28 months, a survey by the Association of Electronics Environment has found, meaning two thirds of the country's mobile phone users or 15 million people every year buy new phones. This should also mean a stockpile of 10 million used phones, given the number of new subscribers. So where are all these old phones?

During an audit of state affairs last year, Grand National Party lawmaker Suh Sang-kee, a member of the National Assembly's Science, Technology, Information and Telecommunication Committee, said that some 125 million mobile phones had been produced in Korea since 1999, but only 40 million had been collected. The telecom industry and environmental groups say that 40-50 million of the remaining 85 million phones are probably lying idle in junk drawers or decaying in rubbish heaps. And many of those in the junk drawers will eventually end up with their brothers in the rubbish when cleaning time comes around.

The AEE estimates that about 8 million old phones are buried or incinerated every year. These dumped phones can contaminate the environment because they are essentially lumps of heavy metals. According to the audit by lawmaker Suh, each handset contains about 0.26 g of lead, 2.5 g of cadmium, 274 g of cobalt, and 20 g of arsenic. Dumping 40-50 million handsets is tantamount to dumping over 11 tons of lead.

Park June-woo, a professor of economics at Sangmyung University, said that the best thing to do economically is to keep using them. "A handset has no more than W400 (US$1=W1,043) worth of metals or plastic," he said. "It's economically more valuable to reuse them if they still work properly." About 1 million phones were resold every year until a subsidy system for subscribers was reinstated recently, which pushed the figure down to some 100,000. Since the subsidies allow consumers to buy phones for just W50,000 to W100,000, fewer people are interested in second-hand phones.

In order to resolve the environmental and social costs of some 40 million idle phones, Prof. Park said the agencies that dominate the mobile phone retail market should provide incentives to consumers to collect used ones. But while reusing old phones can prevent overproduction and over-consumption, it can also damage the credibility of established brands when they are exported to China or resold in Korea. "Selling recycled phones under a third brand can be one solution," Park pointed out.

Will Old Phones Be Able to Keep Up With Technological Changes? If Not, What Do We Do With Them?

2008-05-13T02:44:00.000-07:00

Will Temasek’s Plan to Bring the Case to International Arbitration Result in a Victory?

Temasek Holdings, Singapore's state-owned investment company, lost its appeal on an Indonesian antitrust ruling and was ordered to sell its stake in either of the country's two biggest mobile-phone operators within a year.

An Indonesian court today ruled in favour of the competition regulator, which said Temasek breached antitrust laws by using indirect stakes in PT Telekomunikasi Selular, known as Telkomsel, and PT Indosat to fix prices. Temasek was earlier asked to sell either stake within two years.

The decision today highlights Temasek's antitrust challenges as it manages more than $100 billion in assets from Indonesia to India. A Temasek-led group in March sold its 56 percent stake in PT Bank Internasional Indonesia to Malayan Banking., helping meet the Indonesian central bank's rules limiting investors' ownership to one bank.

“Indonesia needs to show more commitment to investors,” said Christopher Wong, who helps to manage $40 billion of assets at Aberdeen Asset Management in Singapore, including shares in Singapore Telecommunications, Indosat and PT Telekomunikasi Indonesia, Telkomsel's parent. “The ruling is sending the wrong signal”

‘Fair’

Indonesia's regulator, known as KPPU, said Nov. 19 Temasek breached antitrust laws by using indirect stakes in Telkomsel and Indosat to fix mobile-phone calling prices. The court today cut an earlier fine to 15 billion rupiah ($1.6 million) from 25 billion rupiah. It also said Temasek has the option of cutting stakes in both companies by half.

“We consider that it is fair if they are given an option to reduce their shareholding in each of the companies,” Andriani Nurdin, the judge who presided over the hearing on the telecommunications assets today, said at the Central Jakarta District Court.
The court also overruled KPPU's decision to ask Telkomsel to cut prices by 15 percent.

Temasek owns 54 percent of Singapore Telecom or SingTel, which holds 35 percent of Telkomsel, Indonesia's largest mobile- phone operator.

Another unit, Singapore Technologies Telemedia Pte, controls 75 percent of Asia Mobile Holdings Pte, which in turn owns 40 percent of Indosat, Indonesia's second-largest phone company. The Indonesian government has a stake in both operators.

Temasek is ‘deeply disappointed’ with the decision and plans to appeal the ruling, it said in an e-mailed statement.

`Vigorously Challenge'

“We will vigorously challenge through all available legal channels the court decision that was based on the groundless allegations of the KPPU,” ST Telemedia Chief Executive Officer Lee Theng Kiat said in an e-mailed statement.

SingTel said it objects to the decision and is studying its options. “We will examine the court's ruling in depth before deciding on our appeal to the Supreme Court,” it said in an e- mailed statement.

Under the Nov. 19 ruling by the competition regulator, Temasek isn't allowed to sell its holdings to affiliate companies and each buyer is restricted to a maximum 10 percent stake, from 5 percent during the antitrust agency's ruling.

Temasek, set up more than three decades ago to hold Singapore's state-owned assets, also owns part of PT Bank Danamon Indonesia. The investment company also controls half of Singapore's 10 biggest listed companies including SingTel and Singapore Airlines, the world's second-largest airline by market value.

A union representing workers from Indonesia's state-run enterprises filed a complaint against Temasek in December 2006, claiming the company was fixing call rates through its stakes in Telkomsel and Indosat. Although the union dropped its claim last April, without giving a reason, Indonesia's competition regulator decided to continue the price-fixing probe.

Temasek and ST Telemedia have repeatedly said they don't direct the operational decisions of Telkomsel and Indosat. Temasek, which denies the charges, has said it will take the case to international arbitration if Indonesia's courts don't rule in its favour.

Thru the Sophisticated Mechanisms of Corporate Structures, Is There Any Way Possible to Verify That Temasek and ST Telemedia Do Not Direct Operational Decisions?

2008-05-08T20:07:00.000-07:00

Is the current market “calm” enough for bond issuance as DoCoMo Claims?

NTT DoCoMo, Japan's largest mobile-phone operator, plans to sell about 100 billion yen ($956 million) of bonds in its first issuance in five years, to fund dividend payments and share buybacks.

“We'd like to make the sale while the market is calm, so sometime in the first half of the fiscal year would probably be best,” Chief Financial Officer Masayuki Hirata said in an interview. The amount will in the range of 100 billion yen and won't reach 200 billion yen, he said.

The debt sale will help DoCoMo meet its pledge to pay about 200 billion yen of dividends and buy back as much as 150 billion yen of shares in the year ending March 31. The company's inflow of cash is shrinking after it began allowing customers to pay for mobile phones in installments.

The Tokyo-based carrier last month said the installment plan will reduce its free cash flow to 80 billion yen in the 12 months ending in March 2009, less than the 442.4 billion yen it had a year earlier, as customers spread out handset payments.

DoCoMo's most recent debt sale was $100 million of bonds in March 2003, spokesman Shuichiro Ichikoshi said. The company's biggest bond issue was in March 2001, when it sold 180 billion yen of debt, he said.

Standard & Poor's rates DoCoMo AA, the third-highest level of credit quality.

Annual Returns

DoCoMo on April 25 said it will seek stockholders' approval to buy back as many as 900,000 shares, or 2 percent of its outstanding amount. The operator also said it will maintain its dividend payout at 4,800 yen a share for this year, or a 3.1 percent yield based on the stock's current price.

DoCoMo was unchanged at 153,000 yen as of 12:35 p.m. on the Tokyo Stock Exchange, while the benchmark Nikkei 225 Stock Average gained 1.8 percent. The shares have fallen 18 percent this year, adding to a 1.1 percent decline in 2007.

Corporate bond sales in Japan stopped after an April 25 report showed inflation accelerated, pushing up five-year government bond yields the most since 1999. The benchmark is used to set the rates paid on similar-maturity company debt.

Investors are shifting toward Japanese corporate debt with the highest ratings on concern slower economic growth and higher raw materials costs will reduce profitability.

Sales of bonds with the top four credit ratings have more than doubled to 2.63 trillion yen this year, compared with a year earlier, according to data compiled using ratings from S&P, Moody's Investors Service and Fitch Ratings.

Full-Year Outlook

Net income may increase 2.4 percent to 503 billion yen this fiscal year, as sales rise 1.2 percent to 4.77 trillion yen, DoCoMo said last month. Operating profit, or revenue minus the cost of goods sold and administrative expenses, will probably climb 2.7 percent to 830 billion yen, it said.

DoCoMo almost halved monthly fees in November and started offering free calls among family members last month to retain customers. The company also announced a plan to spend about 10 billion yen to promote a new corporate logo as Softbank and KDDI gain market share.

With Free Calls, a Hefty Budget Set Aside for Logo Re-Design and the Shaky Global Market, Will DoCoMo Outdo its Competitors?

2008-04-24T02:35:00.000-07:00

Will industry restructuring help?

China Unicom, the smaller of the nation's two mobile-phone companies, reported first-quarter profit rose 1.5 percent, missing analyst estimates, after losing market share to China Mobile.

Net income climbed to 2.02 billion yuan ($288.84 million), or 0.15 yuan a share, from a restated 1.99 billion yuan, or 0.13 yuan, a year earlier, the company said in a statement to the Hong Kong stock exchange. Unicom was expected to post profit of 2.2 billion yuan, according to the median of four analysts' estimates compiled by Bloomberg.

China Mobile, the world's biggest phone company by users, added customers at five times the rate of Unicom in the first quarter as the wireless carriers cut charges. Unicom shares have risen more than 43 percent in the past year on speculation its assets may be broken up and sold to the fixed-line carriers in a government revamp to improve competition in the industry.

“While Unicom is adding more users, it's still far behind China Mobile in terms of users and scale,” Chen Haofei, an analyst at China International Capital, said before earnings were announced. “The industry restructuring may help Unicom as it will be able to focus on one network.” He rates the company's shares “accumulate.”

Unicom's sales climbed 5.8 percent to 25.5 billion yuan. The company's shares rose 2.9 percent to HK$17.18, before the earnings were announced, compared with 1.6 percent gain in the benchmark Hang Seng index.

The mobile carrier, which controls about 33 percent of the nation's wireless-phone market, added 4.5 million users in the first quarter for a total of 167 million. China Mobile increased subscribers 22.8 million in March to 392.1 million.

Fixed-line carriers China Telecom and China Netcom Group have lost phone users for at least eight straight months and have relied on Internet subscribers to bolster earnings.

China, the world's biggest mobile market by users, had 565.2 million wireless-phone subscribers at the end of February and 362.2 million fixed-line customers.

Will China Unicom get back on track?

2008-04-10T23:48:00.000-07:00

Can Telkom adapt to changed consumer behaviour?

PT Telekomunikasi Indonesia, the country's biggest telephone company, will cut long-distance rates for calls made from fixed-line phones by as much as 46 percent, spokesman Eddy Kurnia said.

The company, known as Telkom, is trying to encourage use of fixed-line telephones, Kurnia said in a statement posted on Telkom's Web site.

Indonesia's mobile-phone operators, including Telkom's PT Telekomunikasi Selular unit, have slashed calling rates to attract more subscribers. Telekomunikasi Selular, the nation's biggest mobile-phone operator, said on Feb. 20 its subscribers topped 50 million following rate cuts in December.

“Telkom must adapt to the current conditions because people prefer to make long-distance calls using mobile phones,” said Edwin Sinaga, a director at Jakarta-based brokerage PT Financorpindo Nusa. He rates Telkom as “neutral.” “This is part of competition.”

Telkom's fixed-line service accounted for 19 percent of the company's revenue in the nine months ended September 30, compared with a 37 percent contribution from its mobile-phone operations, according to a statement on its Web site. The Bandung, West Java-based company has yet to release its full-year earnings.

Will slashing rates encourage people to change their habits?

2008-04-02T18:29:00.000-07:00

Is wireless the way forward for Natrindo?

PT Natrindo Telepon Seluler, the third mobile-phone operator to begin services in Indonesia in a year, plans to raise spending on its wireless network in the country to more than $500 million by this year to expand coverage.

The investments will help Natrindo expand after it begins services in Jakarta and surrounding areas by the end of April, President Director Erik Aas said in an interview on March 28. The company, owned by Saudi Telecom and T. Ananda Krishnan's Maxis Communications, started offering mobile-phone calls in East Java under the Axis brand in February.

Upgrading the network helps Natrindo approach its target of offering nationwide service by the end of next year. Surging demand may help the company counter competition from PT Telekominikasi Selular and Li Ka-shing's Hutchison Telecommunications International as six out of 10 Indonesians still don't own mobile phones.

“The market is big enough that everybody will grow,” said Ong Boon Leong, an analyst at Hwang-DBS Vickers Research in Kuala Lumpur. “We see a lot of potential in subscriber growth.”

Indonesia's penetration rate for mobile phones was 39.7 percent at the end of September last year, the lowest among its neighbors Malaysia, the Philippines and Singapore, PT Indosat, Indonesia's second largest phone, said.

Jakarta-based PT Sinar Mas Telecommunications and PT Hutchison CP Telecommunications also started services in Indonesia in the past year.

“There are a lot of people in this country that are not connected yet, we will find our way of attracting them,'' said Aas, the former chief executive officer at Grameenphone, the Bangladeshi mobile-phone company founded by Nobel Peace Prize laureate Muhammad Yunus.

Mobile-phone users in Indonesia are rising 36 percent every year, Fortune magazine reported last week, citing estimates by Imran Khan, an analyst at JPMorgan Chase.

Will Natrindo be able to tap into the rapidly growing Indonesian market?

2008-03-27T02:42:00.001-07:00

An Internet fortune for China Netcom?

China Netcom Group, the nation's second-largest fixed-line telephone company, posted an unexpected increase in full-year profit after signing up more Internet customers.

Net income last year rose to 10.58 billion yuan ($1.5 billion), from 10.55 billion yuan, in 2006, the Hong Kong-listed company said. Sales gained to 82.5 billion yuan from a restated 81.8 billion yuan. The average of 24 analysts' estimates compiled by Bloomberg was for profit of 9.87 billion yuan.

Netcom's gains from Internet users offset declining revenue from phone calls as mobile carriers lured customers by cutting rates. The company increased its online subscribers by 31 percent to 19.8 million last year, while revenue from the service rose 40 percent to 13.8 billion yuan.

“In 2007, the substitution of fixed-line voice services by mobile voice services accelerated,” Zuo Xunsheng, Netcom's chief executive officer, said in a statement to the Hong Kong stock exchange. The increasing use of Internet by all sectors of the public is accelerating. Access to the Internet is increasingly regarded not as a luxury but a household necessity,” he said.

China's fixed-line subscriptions fell last year for the first time, dropping by 2.3 million, according to data from the Ministry of Information Ministry. The country's mobile-phone users rose
86.2 million, more than the population of Germany, in 2007.

Netcom had its first annual decline in subscribers after grappling with the growing dominance of China Mobile, which reported a 32 percent profit gain and widened its lead as the world's largest phone company by users.

Bigger rival China Telecom may say profit rose 6 percent to 23.5 billion yuan when it reports results on March 31, according to the average of 29 analysts' estimates compiled by Bloomberg.

“The gap between mobile and fixed-line operators is widening further as the mobile operators lower tariffs,” said Marvin Lo, an analyst at Daiwa Institute of Research in Hong Kong.

China Netcom shares climbed 10 percent in Hong Kong to HK$21.80 at the end of trading. The stock has fallen 7 percent this year, compared with a 19 percent drop in the benchmark Hang Seng Index.

Netcom, which dominates the fixed-line market in China's northern provinces, lost 3.2 million phone customers last year for a total of 110.8 million.

China Netcom plans to pay a 2007 dividend of 59.3 Hong Kong cents, compared with 55.3 Hong Kong cents a year earlier, it said in the statement.

The government plans to reorganize its telecommunications industry to promote competitors to China Mobile, whose 384.4 million customers exceed the country's total number of fixed-line subscriptions.

China plans to reduce the number of telecoms groups in the country to three from six, the Shanghai Securities News reported, citing Shi Wei, a researcher at the National Development and Reform Commission, the country's economic planning agency.

The government may order China Unicom, the nation's second-largest mobile operator, to sell its larger phone network to Netcom, analysts at UBS AG, Morgan Stanley and Goldman Sachs Group Inc. project. Unicom may sell its smaller network to China Telecom, while the parent of China Mobile may acquire fixed-line operator China Tietong Telecommunications, according to the analysts.

“We have not received any formal news about an industry restructuring,” Chairman Zhang Chunjiang said in a briefing in Hong Kong.

The company expects to be able to offer both fixed and mobile services within the next five years, Zhang said, reiterating Netcom had applied for a mobile license.

China Telecom stock jumped 9 percent in Hong Kong trading, while China Mobile gained 8 percent and Unicom shares surged 9.8 percent. The Hang Seng Index rose 6.4 percent.

Chairman Zhang reiterated the company is keen to sell yuan- denominated shares on the mainland and there is no timetable set.

Netcom expects to invest 19.6 billion yuan this year on network and equipment, a drop of 5.2 percent from 2007's 20.7 billion yuan, Li Fushen, chief financial officer, said.

What kind of consolidation will happen in China’s telecom industry?

2008-03-20T01:14:00.000-07:00

What will happen next in emerging markets?

Hutchison Telecommunications International, the emerging markets mobile-phone carrier controlled by billionaire Li Ka-shing, had a second-half loss because of a one-time charge at a unit in Thailand.

The net loss was HK$3.2 billion ($412 million), compared with a profit of HK$199 million a year earlier, while revenue rose 14 percent to HK$10.76 billion. Bloomberg derived the second-half results from annual earnings reported by the Hong Kong-based company. Spokeswoman Mickey Shiu couldn't immediately be reached to confirm the calculations.

The mobile-phone carrier, with units in eight markets including Vietnam and Indonesia, booked a HK$3.85 billion charge to write down most assets at its unprofitable Thailand venture last year. The loss overshadowed earnings from Israel, which became the company's biggest market after the sale of a controlling stake in India's third-largest mobile operator.

“There is greater risk in operating in emerging markets, but also greater potential for reward,” Andrew Jobson, who rates Hutchison Telecom shares “hold” at Daiwa Institute of Research. in Hong Kong, said before the announcement. “The Indonesia and Vietnam businesses are still in the early stages, and they are where the excitement should be coming from.”

The Hong Kong carrier, a unit of Li's Hutchison Whampoa, aims to end losses in its units in Indonesia and Vietnam in 2009, two years after starting services, Chief Financial Officer Tim Pennington said in August.

Hutchison Telecom agreed to sell phone towers in Indonesia for $500 million to PT Profesional Telekomunikasi Indonesia, according to a separate statement. The Hong Kong company, which will lease back the network assets, expects to book a one- time gain of $236 million from the transaction, according to the statement.

The sale in Indonesia will add to the HK$40 billion Hutchison Telecom previously earmarked for acquisitions and investment in existing operations.

“Being liquid at the moment puts us in a commanding position,” Chief Executive Officer Dennis Lui told reporters at a briefing in Hong Kong.

Hutchison Telecom may buy wireless operators in Asia, Middle East, Africa and Eastern Europe, Chief Financial Officer Tim Pennington said in November.

PT Hutchison CP Telecommunications, 60 percent owned by Hutchison Telecom, had 2.04 million users in Indonesia at the end of last year, compared with 1.63 million three months earlier.

Vietnamese unit HT Mobile's users declined to 152,000 as of December 31, from 185,000 on September 30, Hutchison Telecom said.

HT Mobile has gained a license to offer services based on the global system for mobile communications technology, Hutchison Telecom said. The Vietnam unit current provides services using the code division multiple access standard.

Israel's Partner Communications, in which Hutchison Telecom owns 51 percent, said that fourth-quarter profit almost doubled to 302 million shekels ($89.2 million), after adding customers and selling more non-voice services.

Partner, the country's second-largest mobile-phone operator, accounted for 57 percent of Hutchison Telecom's sales last year, the Hong Kong company said.

The mobile-phone units in Hong Kong and Macau increased combined subscribers to 2.43 million at the end of December, from
2.3 million three months earlier, the company said.

Hutchison Telecom, which also operates wireless units in Sri Lanka and Ghana, had 9.9 million mobile-phone users in its eight markets at the end of December, compared with 9.1 million three months earlier.

Hutchison Telecom's full-year profit rose to HK$66.88 billion, from HK$201 million in 2006. The company booked a one-time gain of HK$69.3 billion from selling its 67 percent stake in India's Hutchison Essar.

Will Hutchinson’s operations in the emerging markets stabilize soon?

2008-03-12T23:46:00.000-07:00

Will conditions derail high speed wireless deal?

Time dotCom delayed concluding the sale of its high speed wireless airwaves to Digi.Com, Malaysia's third-biggest mobile-phone operator, after regulators imposed conditions for the deal.

Time has written to the Malaysian Communications and Multimedia Commission to seek clarification on conditions imposed in the regulator's letter approving the transfer of the so-called 3G spectrum to Digi, the company said in a filing to the stock exchange in Kuala Lumpur.

Digi has “agreed to an extension of time of up to April 11 to accept the conditional approval of the” Commission, the mobile phone network operator said in a separate filing.

Digi, Malaysia's only wireless operator without a permit to sell third-generation wireless services, agreed in November to pay Time dotcom 654.5 million ringgit ($206 million) in new shares in return for the spectrum. As part of the agreement, Digi was to buy phone-network capacity from unprofitable Time, sell the company's products and train its workers.

Time can't yet confirm if it will be able to accept the conditions, it said. They include a penalty for failing to comply with the detailed business plan that is part of the sale.

How many conditions will the companies be willing to accept in order to make the deal work?

2008-03-05T17:52:00.000-08:00

Will Chunghwa further lose on foreign currency derivatives contract?

Chunghwa Telecom, Taiwan's largest phone operator, said it wrote off NT$3 billion ($97 million) for losses from a foreign-currency derivatives contract because of a stronger Taiwan dollar.

Chunghwa had accumulated losses of NT$4 billion as of Feburary 29 on the 10-year contract signed in September, widening from NT$1 billion at the end of January, the company said. Taipei-based Chunghwa's operations aren't affected by the losses, Chief Financial Officer Joseph Shieh said on a conference call.

Under the terms of the contract, Chunghwa is required to pay cash to an unidentified investment bank if the Taiwan dollar appreciates to less than NT$31.50 per U.S. dollar, while it would receive cash if the rate is between NT$31.50 and NT$32.70.

Taiwan's currency gained 3.9 percent against the U.S. dollar last month and closed at NT$30.950, according to Taipei Forex.

Chunghwa will book the loss in the first quarter, Shieh said. Losses could widen to as much NT$7.6 billion over the life of the contract if the currency strengthens to NT$27 against the U.S. dollar, he said.

The company is in discussions to revise the contract terms, he said. Shieh declined to confirm or deny a Commercial Times report that named Goldman, Sachs as the counterparty.

The phone operator also said its net income in February fell 47 percent from a year earlier to NT$1.9 billion because of the currency loss, while sales climbed 3.6 percent to NT$16 billion.

Are these symptoms of bigger problems brewing for Chunghwa?

2008-02-27T22:29:00.000-08:00

Will Telekom Malaysia’s move deter suitors?

Telekom Malaysia, Southeast Asia's second-largest phone company, said it will keep control of its wireless business in any stake sale, dimming the appeal for potential suitors including Orascom Telecom Holding SAE.

“We must be able to actually control its operations,” Telekom Malaysia Chief Executive Officer Abdul Wahid Omar, 44, said in an interview at the company's Kuala Lumpur headquarters after reporting record full-year profit. “Should any decision be made to bring in a partner it will not be a majority, it would be a minority stake.”

Insisting on control may hamper Telekom's ability to reap a premium for the business, which it estimates is worth 28 billion ringgit ($8.7 billion). Orascom, the biggest mobile carrier in the Middle East and North Africa by users, has said it is interested in bidding for joint control of Telekom.

“The issue has always been: who would want to pay that kind of valuation for a minority stake?” said Khair Mirza, an analyst at Aseambankers Malaysia in Kuala Lumpur with a “fully valued” rating on Telekom shares. “Would Telekom cede control, holding 90 percent?”

Orascom Telecom Chief Executive Officer Naguib Sawiris didn't immediately reply to an e-mail seeking comment.

The phone operator is trading at twice its book value, compared with an average of 30 times for telephone companies in the Pacific Rim, Bloomberg data show. Singapore Telecommunications, Southeast Asia's biggest phone company, is trading at more than three times book value.

Telekom may opt for a partner who can help the Malaysian company expand in Vietnam or Pakistan to complement its overseas operations, instead of accepting the highest offer, said Abdul Wahid, who will leave Telekom Malaysia to become chief executive officer of Malayan Banking, the country's largest bank, in July.

The phone carrier, which has mobile-phone operations in nine countries including Indonesia, Singapore and India, might consider a suitor with assets in other Asian nations, he said.

“There are some partners that may be able to add in terms of assets, assets which we couldn't have otherwise gotten,” he said. It's “not just pure money.”

Vodafone Group, Emirates Telecommunications, AT&T, China Mobile Communications and Vivendi SA have expressed interest in bidding for a stake in TM International, the holding company for Telekom's domestic and overseas mobile assets, the Malaysian company said last month. TM International is scheduled to be listed in Malaysia by July.

Greg Brutus, a Hong Kong-based spokesman for AT&T, didn't immediately reply to messages left on his phone. Rainie Lei, a Hong Kong-based spokeswoman for China Mobile, said she wasn't aware of any expression of interest by the company in Telekom Malaysia's mobile-phone unit.

China Mobile bought Pakistan's Paktel last year, while Emirates Telecommunications, based in Abu Dhabi, owns 16 percent of PT Excelcomindo Pratama, Telekom Malaysia's Indonesian mobile unit. Vodafone bought control of Hutchison Essar, India's third-largest wireless operator, in May, and AT&T has operations in Vietnam.

Telekom is separating the faster-growing wireless division from the domestic fixed-line business to increase the appeal of a possible sale. In Malaysia, where at least 70 percent of the population own a mobile phone, the company is relying on demand for Internet connections to sustain earnings as it rolls out a high-speed nationwide network.

Telekom, which reported full-year profit rose 23 percent to a 2.55 billion ringgit, may not need an investor. TM International's listing may raise $700 million, the company has forecast, and Abdul Wahid said the company hasn't decided if a partner is required at all.

“Let's be very clear, we have yet to make that decision,” Abdul Wahid said.

Will this be the right strategic move for Telekom?

2008-02-20T17:15:00.000-08:00

Is this the end of NTT’s former monopoly advantages?

Japan's government said it will instruct Nippon Telegraph & Telephone, the country's largest phone operator to improve its business because its sales operations may have harmed competition.

The telecommunications ministry will ask NTT East and NTT West to submit their improvement measures by March 31, Yasuhiko Taniwaki, director of the ministry's telecommunications policy division, said by phone.

The two fixed-line units may have used information on their customers to sell fiber-optic Internet services, the ministry said. They also may have sold mobile phones of NTT DoCoMo and given preferential treatment to affiliates including providers of NTT's fiber-optic Internet services, it said.

“We haven't engaged in any practice that stifles fair competition,'' Hideki Ohmichi, an NTT spokesman, said by phone.

NTT, which was privatized in 1985, is Japan's biggest provider of fixed-line and wireless phone services and Internet access. It incorporates five major units under a holding company structure that followed a state-led reshuffle in 1999.

The government introduced a monitoring system last year to prevent NTT from using its advantage as a former phone monopoly.

It plans to resume talks on the break up of the company in 2010.

Will NTT be able to thrive in a more competitive environment?

2008-02-14T00:11:00.000-08:00

Will China’s consumers eventually win?

China's Ministry of Information Industry (MII) and National Development and Reform Commission (NDRC) jointly announced the country's mobile roaming service charges would be lowered starting from March 1 amid fervor of consumer expectation to entirely abolish them.

Mobile phone users would be charged 0.6 yuan (about 8 U.S. cents) per minute for making calls outside the local service area, and 0.4 yuan, or about 5 cents, per minute for receiving calls when they travel to another province, according to the new plan.

It compares with current charges of 1.3 yuan to 1.5 yuan per minute for the roaming service for Chinese cell-phone users under different payment schemes, prepaid or paying monthly.

This means that the country's 539 million mobile subscribers would be able to enjoy price cuts ranging from 54 percent to 73 percent from next month on, or no later than May 1.

Service providers could be allowed to delay the implementation of the new plan due to time needed for technological upgrading of their charging systems.

The announcement also made it clear that no further fees, which are currently an additional 0.07 yuan, or 1 U.S. cent, for every six seconds, would be charged if the roaming service occupies a long-distance phone line.

The country's move to cut such charges is in response to increasing complaints from mobile phone users about the telecom industry reaping handsome profits by charging monopolistic prices.

Previously, a public hearing was held on cutting charges for domestic mobile roaming services in January to discuss two proposed plans, which have aroused heated discussions and disputes.

The hearing was attended by five consumers -- including one from Beijing – as well as representatives from mobile service providers, experts, scholars and relevant government officials.

The two ministries in charge said most representatives at the hearing had supported plan B, which offers more favorable price cuts than plan A, except service providers, who wanted plan A.

The final plan was a further improvement based on plan B, which proposes a charge of 0.7 yuan per minute for making calls and 0.3 yuan for receiving calls for all users, according to the two ministries.

A consumer representative by the name of Shen Changzheng, who attended the hearing, said the final plan "was acceptable, but was not up to expectations of consumers", adding "there was still a great gap."

Local services currently cost 0.4 yuan, or 5 U.S. cents, per minute for users paying monthly, and 0.6 yuan, or 8 U.S. cents, for those under p repaid schemes

Some users actually enjoyed free incoming calls thanks to service packages offered by service providers, again efforts made to lower mobile service charges amid mounting consumer complaints.

And there is indeed some gap between roaming service charges and local service charges under the new plan.

An online survey conducted by the MII in May 2007 showed that about 63.77 percent of 30,000 respondents supported an equal charge for domestic roaming services and local services.

Only about 22.55 percent considered it reasonable to pay an additional 0.01 to 0.1 yuan per minute for roaming services.

Mobile service providers had explained such service fees were charged to cover the extra operational costs incurred when cross-province calls were transferred from one local operator to another.

Experts, however, said new technologies had lowered operational costs – some argued roaming calls actually incur no extra cost for the operators.

Will roaming charges in China continue to fall?

2008-01-30T19:41:00.000-08:00

Does entry of Arab firm signal the opening up of North Korea’s mobile services market?

Orascom Telecom, the fourth-largest Arab phone operator based in Cairo, Egypt, announced that it earned the first commercial license to provide mobile telephone services in North Korea.

The license was given to a company subsidiary, CHEO Technology, of which North Korea's state-owned Korea Post and Telecommunications Corporation owns 25 percent, Orascom said in a press release posted on its website.

“The terms of the license allow CHEO to offer services to its customers throughout the country. The duration of the license is 25 years with an exclusivity period of four years,” it said.

The company intends to invest up to US$400 million in network infrastructure over the first thee years and plans to provide coverage in voice, data and value-added services for the capital city of Pyongyang and most of the major cities during the first 12 months in operation.

“We are continuing to head in the right strategic direction; our Greenfield license in (North Korea) is in line with our strategy to penetrate countries with high population and low penetration by providing the first mobile telephony services,” said Naguib Sawiris, the company chairman.

North Korea's population is estimated at around 23 million.

Another Orascom subsidiary struck an agreement in July 2007 to invest $115 million in a North Korean cement manufacturer for a 50 percent stake in the firm.

Does this move by the South Korean authorities indeed signal an opening up of the North Korean market?

2008-01-23T22:44:00.000-08:00

Why is India vital to Vodafone?

Vodafone Group, the world’s largest mobile-phone operator by sales, plans to invest $2 billion in India this year to win more customers in the fastest-growing major wireless market.

The investments, in line with the amount spent in 2007, will be used to build telecommunications towers, set up shops and for advertising, Chief Executive Officer Arun Sarin told reporters today in New Delhi.

The Newbury, England-based company is investing in emerging markets to boost profits as subscriber growth slows at home. Vodafone took control of Hutchison Essar in May to tap a market where 874 million of India’s 1.1 billion people don’t yet own a mobile phone.

“We’ll continue to invest to make sure that we provide a mobile phone to every Indian citizen and that’s our goal,” Sarin said.

Vodafone aims to sign up 100 million users in India by 2010 and may get approval to begin services in the state of Madhya Pradesh within weeks, Sarin said. The company ended 2007 with 40 million users, behind Reliance Communications and market leader Bharti Airtel.

Vodafone spent $10.7 billion for a controlling interest in Hutchison Essar, at that time India’s fourth-largest operator.

Do foreign companies find it easy to operate in India?

2008-01-16T23:51:00.000-08:00

Will India's $10 billion IPO lure investors to the world's fastest-growing major wireless market?

India plans a $10 billion initial public offering of the nation's former telecommunications monopoly, betting the world's fastest-growing major wireless market will lure investors. As much as 10 percent of Bharat Sanchar Nigam may be sold in India and overseas, Finance Director S.D. Saxena told reporters. Telecommunications Minister Andimuthu Raja said the government may sell part of its stake in an IPO that would quadruple India's current record.

Vodafone Group Plc overtook Bharat Sanchar as India's third-largest mobile phone operator in July as a lack of equipment stalled growth at the state-run carrier. The IPO would make Bharat Sanchar Asia's biggest wireless company by market value after China Mobile. "The growth potential in India is huge," said Sumit Modi, telecom analyst at Emkay Share and Stock Brokers. "The mobile penetration is just less than 20 percent.'' Vodafone took control of Hutchison Essar in May for $10.7 billion to expand in a market where 874 million of the nation's 1.1 billion people don't own a mobile phone.

Prospects for subscriber growth drove a 58 percent gain in Bharti Airtel and Reliance Communications, India's two biggest wireless operators, last year on the Bombay Stock Exchange. Adding Subscribers India added 8.33 million wireless users in November to end the month with 225.5 million subscribers, making it the world's third-largest wireless market after China and the U.S.

On average, the South Asian nation added 7.5 million new wireless connections each month between April and November, compared with 5.5 million in the same period a year earlier. To fund this growth, Bharat Sanchar plans to raise as much as 400 billion rupees ($10.2 billion) selling shares in India and overseas in about a year, Saxena said.

The New Delhi-based operator, India's largest telephone company, added 1 million wireless subscribers in November to end with 35.9 million. Bharat Sanchar also has about 34 million fixed-line users in a market where the numbers of subscribers has been declining in recent years. Record Sale The share sale is the third announced in six weeks by India as the government taps a record stock market rally to raise funds for new planes, railway equipment and telecom gear. Rites, a unit of state-owned Indian Railways, will sell shares for the first time, said Finance Minister Palaniappan Chidambaram. Air India plans to sell a 15 percent stake, Civil Aviation Minister Praful Patel said on Dec. 4. Air India was formed by the merger of Air India and Indian Airlines India's Sensitive Index gained 47 percent in 2007, the biggest rise in four years, spurring companies to raise a record $8.5 billion from initial public offerings, according to data.

Bharat Sanchar may surpass India's IPO record set by real estate company DLF, which raised 91.9 billion rupees last year, and the maximum 117 billion rupees that Reliance Power, a generating unit of the country's second-largest utility by market value, seeks to raise in an IPO starting very soon.

With such rapid growth, who will come out tops in this wireless market race?

2008-01-09T20:06:00.000-08:00

What will be the future mobile information society?

C-COM Satellite Systems has completed the integration of its iNetVu mobile antenna systems with Shin Satellite's IPSTAR broadband satellite, Asia's largest satellite broadband system.

The IPSTAR satellite, with a capacity of over 45 Gigabits-per-second (Gbps), has extensive coverage across the Asia Pacific region and offers high speed, 2-way broadband communication to over 100,000 subscribers in 8 countries with 11 gateways including: Australia, Cambodia, China, Laos, Thailand, Myanmar, New Zealand, and Vietnam. The Malaysian, Filipino and Indonesian gateways are now under construction.

The iNetVu mobile integration with the IPSTAR modem makes it now possible to deliver mobile solutions to existing and new potential IPSTAR customers in the above countries.

“We are pleased to have been able to cooperate with IPSTAR and implement a seamless integration of the iNetVu controller with the IPSTAR modem. This integration will allow us to deliver jointly with IPSTAR a cost effective and reliable mobile solution to a very large area in the Asia Pacific region covered by the IPSTAR network. C-COM will be working closely with our own reseller channels in the region as well as with the large IPSTAR distribution network to promote this new business opportunity” said Leslie Klein, President and CEO of C-COM Satellite Systems.

“We are seeing a large demand for mobile satellite applications in our coverage area and with the successful integration of the C-COM manufactured iNetVu mobile platforms with the IPSTAR modem we will be able to provide our existing and new potential customers with a cost effective, reliable world class mobile satellite solution." said Mr. Patompob Suwansiri, Head of Marketing for IPSTAR.

How will mobile satellite applications influence the formation of a converged world?

2008-01-02T21:31:00.000-08:00

Will an increase in mobile phone usage result in a glut in China’s mobile telecommunications market?

China's number of mobile-phone users may climb to 620 million next year, bringing the total telephone subscribers in the country to 976 million, the Information Times reported, citing a government official.

Sales from the country's communications industry may rise 25 percent to 2.5 trillion yuan ($342 billion) in 2008 from a year earlier, the newspaper said today, citing comments by Wang Xudong, who heads the Ministry of Information Industry.

China will eventually allow phone operators to set their own charges, the report said, citing comments by Wang at an annual working conference held in Beijing yesterday, without providing a timetable. Fixed-asset investment in the nation's communications
sector may exceed 200 billion yuan next year, the report said.

Carriers should be able to offer both mobile and fixed-line services as competition intensifies and technologies merge, the report quoted Wang as saying.

China had 539.4 million mobile-phone users at the end of November and 369.3 million fixed-line subscribers, according to government data.

Are you ready for China’s exploding mobile phone market, expected to reach 620 million users?

2007-12-30T23:06:00.000-08:00

Is the anti-monopoly rule simply a move for localized control?

In a battle that could widen the rift between the two neighboring countries, Indonesia says

Singapore

violates its anti-monopoly laws. It was a hot, sticky day in Jakarta, especially for visiting officials of Singapore's state-owned Temasek Holdings. They sweated for nearly four hours on Nov. 19, as Indonesia's competition commission completed its six-month probe into the country's mobile-phone sector, where

Singapore

companies own major stakes in two operators that between them control 85 percent of a $6 billion market.

When it was over, the sweltering Singaporeans found the ruling as dark as the monsoon storms gathering outside. "The Temasek Business Group is legally and convincingly proven to have violated Article 27 of the anti-monopoly law," Syamsul Maarif, chairman of the Business Competition Supervisory Commission, pronounced.

Maarif ruled that the two Indonesian telecoms part-owned by Singaporean companies - which are in turn controlled by government-owned Temasek - had colluded to make Indonesia's mobile phone rates the most expensive in the region. He fined Temasek $3 million and gave it two years to sell either SingTel's 35 percent stake in market leader Telkomsel or ST Telemedia's 30 percent of Indosat, the n 2 wireless carrier. He also said that consumers had been overcharged by as much as $3.2 billion and noted that his commission had no power to punish the Singaporeans further.

Temasek, which controls $120 billion in assets, insists that its myriad subsidiaries operate independently of each other and of Singapore's government. It says its two telco stakes are minority holdings with control vested in Indonesians, and that the ruling, which it is appealing, raises questions about the viability of Indonesia as an investment destination.

"We will rebut these allegations in the strongest of terms," says Tan Guong Ching, chairman of Asia Mobile Holdings, the ST Telemedia subsidiary that owns the Indosat stake.

The case threatens to further poison relations between the two neighbors, who are already fighting over an extradition treaty. And it comes on the heels of another cross-border imbroglio involving Temasek's purchase last year of Shin Corp. from former Thai Prime Minister Thaksin Shinawatra - a deal that led to Thaksin's downfall and to a paper loss of more than $1 billion.

The drama in Jakarta also raises questions about how developing democracies like Indonesia's will balance rising nationalism with the need for foreign investment from sovereign-wealth funds like Temasek or from China, where state-owned Shenhua Energy is eyeing a $4 billion coal play in Indonesia. (Temasek seems to be getting the message. After the Indonesia ruling, chairman Suppiah Dhanabalan said the fund will avoid deals "that arouse all kinds of emotional sentiments." A week later Temasek reduced two controversial bank stakes in China.)

Indonesia might have been more grateful. Singapore was almost alone in propping up the train wreck that was Indonesia's economy after the 1997 financial crisis, when it was beset by terrorism, corruption, and dysfunctional government. The country has since stabilized, and Temasek's investments have done well. Analysts estimate that the telecom stakes are worth four or five times the $1 billion they cost.

It's easy to understand why Singapore is flummoxed that Jakarta is now crying foul. But in insisting its state companies are managed independently, Singapore does little to allay Indonesian suspicions that government and its businesses are linked. One lawyer engaged by Temasek in Jakarta is a director of another Temasek company and a member of Parliament tied to the party that has long ruled Singapore. Asia Mobile's Tan served simultaneously as a senior civil servant and on the board of several Temasek companies. And Temasek CEO Ho Ching is married to Singapore's Prime Minister, Lee Hsien Loong.

Ironically, Indonesia's competition commission was founded in 2000 to satisfy foreign investors that Jakarta was doing something to counter the corruption and cronyism that marked Suharto's 31-year reign. The country is now enjoying its highest level of foreign direct investment since the financial crisis, mostly in the resources sector. So far this year a record $37 billion in foreign investment has flooded in, nearly triple the $13 billion during the same period last year.

Most foreign investors see the Temasek contretemps as a bilateral fuss that won't derail further investment. But a nasty propaganda war has erupted over the affair. Fortune was handed a document by a Singapore lobbyist that purports to be a brief for a Russian company's plan to take over Temasek's Indosat share. The document, whose bona fides could not be verified, names several Indonesian government officials as participants.

Meanwhile, politicians are hovering. Vice president Jusuf Kalla, who has a family telecom business that once partnered with SingTel, has told Temasek to "respect" the monopoly commission's independence. But respect is something in short supply in this nasty neighbors' spat.

First – Bank Danamon and BII, Now – Telkomsel and Indosat, what does the future hold for Temasek’s investments in Indonesia?

2007-12-13T18:52:00.000-08:00

Does improved mobile technology means better service?

EA Systems, a world leader in enterprise and communications infrastructure software, announced that Singapore Telecommunications Limited (SingTel), Asia's leading communications operator and largest multi-market mobile operator, has deployed BEA WebLogic(R) Network Gatekeeper at the core of its next-generation service delivery platform (SDP). Standardizing on BEA WebLogic Network Gatekeeper has enabled SingTel to create a powerful services layer which can help SingTel realize new revenue opportunities with their existing network assets by leveraging content and services from a wide ecosystem of third-party partners.

"We are committed to providing our customers with convenient, valuable and innovative services via wireless and Internet platforms and recognize that these services must be developed quickly and must function reliably in order to meet the needs of today's consumer," said Mr. Ho Siaw Hong, vice president of Consumer Mobile Engineering, SingTel. "By extending our service delivery platform, BEA WebLogic Network Gatekeeper enables our partners to build on SingTel's service capabilities in order to create these new services for our customers and enhance revenue opportunities for the company."

A key aspect of next-generation SDPs is that they allow third-party partners to access an operator's telecom network capabilities such as messaging, call control, charging, presence and location. To ease the integration of an operator's capabilities with third-party partners, including IT developers, BEA WebLogic Network Gatekeeper uses open, industry standards such as Java and Web services, as well as custom telco interfaces. With BEA WebLogic Network Gatekeeper deployed in its SDP to enforce service level agreements, SingTel can manage and control the increased partner access and can source new revenue-generating services from a larger pool of third-party content and service provider partners.

"Rapid technological change, combined with increasing consumer demand for innovative and personalized services, has created significant opportunity for the telecommunications industry. In this dynamic market, innovation, responsiveness and reliability are critical," said Mike McHugh, vice president and general manager of BEA WebLogic Communications Platform, BEA Systems. "We are delighted that SingTel has deployed BEA WebLogic Network Gatekeeper as the agile and scalable foundation of its next-generation service delivery platform."

Will other mobile operator deploy similar technology if Singtel and EA Systems partnership prove successful?

2007-12-05T23:17:00.000-08:00

Is the end of GSM era nigh?

China's locally developed high-speed network for mobile phones will have the capacity to serve 50 million customers in 10 cities of the world's biggest wireless telephone market by users, according to an industry group. The so-called third-generation mobile-phone network may be introduced for commercial tests by users at the end of the first quarter, Jing Wang, secretary general of TD-SCDMA Forum said. The network's capacity will exceed South Korea's population of 49 million.

"The network is already big enough for commercial deployment and the government may expand it to other cities if the commercial tests produce positive results,'' said Steven Liu, a Hong Kong- based telecommunications analyst at DBS Vickers. "The technology is quite reliable as it has already undergone a lot of testing since 2005.''

China Mobile Communications may invest as much as 26 billion yuan ($3.5 billion) on infrastructure and handsets for the network, Wang said. The government hasn't set a timetable for issuing 3G licenses or said how many it will grant. The high-speed standard allows users to video conference and offers quicker downloads from the Internet.

China Mobile Communications, which owns 74 percent of Hong Kong-listed China Mobile, is building the network based on the time-division synchronous code division multiple access technology in eight of the cities including Beijing and Guangzhou. TD-SCDMA is one of three standards chosen for 3G mobile-phone services in the country. The parent companies of fixed-line operators China Telecom and China Netcom Group are also building TD-SCDMA networks. High-speed licenses will be issued by the government if testing of the TD-SCDMA network is successful, Wang said.

The mobile operators may face increased competition, with China Telecom and China Netcom also seeking 3G licenses. At present the fixed-line carriers are losing customers to the wireless companies, which are offering reduced rates and are targeting smaller towns and villages to win users.

China gained a record 8.1 million mobile-phone subscribers in October, raising the total to 531.4 million at the end of the month, according to government data. The number of fixed-line subscribers fell by 977,000 to 370.7 million, the government said. China Mobile Communications may this month seek bids for mobile phones to be used on the TD-SCDMA network, Wang said.

ZTE said in June it won orders from China Mobile Communications for equipment worth 2.37 billion yuan ($320 million) to build the TD-SCDMA network. The Shenzhen, south China-based company will also submit bids to supply TD-SCDMA handsets to the mobile-phone company, President Yin Yimin said in April. TD-SCDMA Forum, a group promoting the technology, counts China Mobile Communications and handset providers such as Huawei Technologies as members. Apart from TD-SCDMA, the government is endorsing the wideband CDMA and CDMA2000 standards for 3G services in the country.

Will China dominate the world's 3G mobile market in the near future?

2007-11-29T17:47:00.000-08:00

Is search engine so important for mobile users?

Global search portals are involved in a slugfest to grab a pie of the world’s fastest growing mobile market that is adding over seven million new users every month. Yahoo!, which lost the race for the big two, after Google forged an exclusive tie-up with Bharti Airtel and Microsoft’s MSN entered into a similar partnership with Vodafone, has now pulled off a coup by signing ‘strategic’ deals with three telcos simultaneously.

Yahoo!, whose India presence was so far limited to a tie-up with Idea Cellular, has snapped up state-owned BSNL, BPL Mobile and Aircel, and now has a target audience of 60 million subscribers. The race for tapping the cellphone market is best explained if the numbers are considered. “We have about half-a-million subscribers using the search facility daily. The response to the search offering has been particularly good. Most of the searches are centred on information, entertainment, directions and music,” explains Bharti Airtel’s president for mobile services Sanjay Kapoor.

The business model is such that the search engine gets to incorporate advertising along with search responses, much like the sponsored links on the PC. So, with the tie-up with Airtel, Google advertisers can reach about 15 million potential customers per month on a cost-per-click basis. With mobile phone users outnumbering PC-users in India by a factor of almost seven, it’s expected that the first computing experience for many Indians will be on their mobile phones. With these tie-ups with telcos, the search giants are offering more than mere ‘search’.

And the battle does not end here. Google and Yahoo! have also launched operator-independent SMS-based search services. While Yahoo’s SMS- based service requires the users to have Internet-enabled phones, which make up about 40-45 per cent of India’s handset market, Google SMS allows even phones without GPRS to search information on info from movies playing at the local theatre and places to eat to weather, calculator, currency conversion and dictionary.

“With millions of new subscribers being added every month, it’s a great medium to reach the consumers and get them information when and where they need it,” said Vinay Goel, Head of Products, Google India. It’s a market that leading Indian portal Indiatimes is also planning to tap.

Who will be the next to grab the pie in this rapid growing mobile market?

2007-11-22T22:07:00.000-08:00

Does China's mobility come at a price?

China Mobile, the world's biggest phone company by users, added a record number of customers in October as fixed-line operator China Telecom lost telephone subscribers for the third straight month. About 6.6 million people signed up for China Mobile's services last month for a total of 356.3 million, according to the Beijing-based carrier's Web site. That is more than the population of the U.S. and Canada combined. China Telecom's total phone subscribers fell by 880,000, it said.

China Telecom and China Netcom Group (Hong Kong) rose in Hong Kong trading for the second day after an official said the fixed-line companies may be granted licenses to provide high-speed wireless services. China Mobile's growth may spur the government to speed up the issuing of third-generation permits to promote competition in the industry.

“Mobile substitution is the trend, and there's not much the fixed-line operators can do,'' Marvin Lo, a Hong Kong-based analyst at Daiwa Institute of Research said. “Getting mobile licenses is the only solution.''

China Mobile shares rose 2 percent to HK$134.40 in Hong Kong, while Unicom gained 3.1 percent at the end of trading in Hong Kong. China Telecom stock surged 8.1 percent to HK$5.89, while Netcom climbed 11 percent, its biggest gain since Dec. 27 last year. Lo rates China Telecom “outperform,'' with a six-month target price of HK$7.30, and has a “hold'' recommendation on Netcom, with a six-month target price of HK$24.72.

China will accelerate the process of granting licenses for providing third-generation mobile-phone services to fixed-line operators to help them compete in the nation's telecommunications market, the official Xinhua News Agency reported Nov. 19, citing Xi Guohua, a vice minister at the Beijing-based Ministry of Information Industry.

Yesterday - Land lines, today - mobile phones. What's for tomorrow?

2007-11-14T18:28:00.000-08:00

Is Vietnam's mobile phone market going to take over China and India?

Vietnam Mobile Telecom Services said Vodafone Group and Singapore Telecommunications are among companies interested in buying shares in the operator when it holds an initial public offering in May or June next year.

About seven companies in Asia and Europe, including France Telecom and operators in Russia and Norway, “expressed interest'' in buying shares of the state-owned mobile services provider known as MobiFone, Managing Director Le Ngoc Minh said. “We will try to hold an initial public offering in either May or June,'' he said.

Vietnam is selling stakes in state-owned companies as part of a two-decade-old reform process known as Doi Moi. Some of these companies will be listed, which would help increase the value of the equity market and make Vietnamese stocks more liquid.

“We are interested in the Vietnam market,'' Andrienne Tho, a Singapore-based spokeswoman for Singapore Telecom said. If a share sale next year “is indeed the case, we would welcome the news.''

Vietnam Post and Telecommunications is the state-owned parent of MobiFone and Vietnam Telecom Services, known as VinaPhone. NTT DoCoMo, Japan's largest mobile-phone company, also wants to invest in a Vietnamese operator, said Toshinari Kunieda, senior vice president and managing director of the Tokyo-based operator's global business unit.

“We would like to be an established investor for one of the Vietnamese operators,'' Kunieda said. “The privatization process of MobiFone is now going on, and maybe after that VinaPhone is coming.''

MobiFone plans to increase its subscriber base to 16 million next year, from 10 million currently, according to the Web site of Vietnam's Ministry of Information and Communication. The company expects to have a 39 percent market share after the increase.

Will more foreign mobile phone operator invest in vietnam's mobile phone market?

2007-11-11T19:13:00.001-08:00

Is economy the reason why China's mobile industry is booming?

The pieces of China's slow-motion telecom reform are beginning to move into place, even if real progress is difficult to see. With China Mobile and the fixed-line carriers building out TD-SCDMA "trial networks", the National Audit Office has announced an investigation into the five leading carriers. The NAO says the audit - the biggest ever into the telecom industry - is aimed at improving "operational efficiency" and competitiveness of the four listed carriers plus China Railcom.

However, many believe it is also linked to the planned industry reorganization by the State-owned Assets Supervision and Administration Commission (SASAC). Market speculation on a restructure prompted spikes in the telecom stocks in Hong Kong when news of the audit was confirmed. SASAC sources have said they will begin work on restructuring the big four - China Mobile, China Telecom, China Netcom and China Unicom - in the final quarter.

The trigger has been the release of recent financial results that show China Mobile taking 61% of industry profit, and the continuing leakage of fixed-line voice to mobile. However, not even SASAC is certain of the exact nature of the reforms, while it faces the difficult task of forcing rationalization on large and unwilling organizations. Hence the excitement generated by news of the large-scale audit.

The core problem is China Unicom's slow-growing CDMA network. Unicom has rebuffed efforts by fixed-line carrier China Telecom to open up negotiations over the sale of the network, which could cost as much as 120 billion yuan ($15.6 billion).

Sources close to China Telecom says the company is "absolutely determined" to obtain a mobile license. It has hired an international financial consultant to conduct due diligence on Unicom's operations around the country.

Unicom last month took the unusual step of first contracting and then doubling its capital base. The carrier hasn't explained why, but it is almost certainly in order to ward off a forced merger or asset sale.

Meanwhile, the other long-awaited step forward in the heavily-regulated carrier sector - the launch of TD-SCDMA service - looks set to be postponed because of a delay in both handset supply and network build-out.

China Mobile originally planned to complete its "trial network" build-out and start service in its ten target cities by the end of the month. However, the carrier and its vendor partners - chiefly ZTE, Datang Mobile and Siemens-Huawei JV TD Tech - have had difficulty acquiring cell sites, in particular in the larger cities such as Beijing and Shanghai.

One engineer involved in the build-out predicted it would take until the end of the year to complete. He said the ample 2G coverage in large cities meant that many of the potential base station sites were already occupied. At the same time, residents were objecting to deployment because of environmental and health concerns. The engineer said the delay in handsets was of even more of a concern. Products from Lenovo, ZTE and Datang and other handset vendors are now being tested, but because of the stringent requirements from the operators, the cycle from beta testing to commercial use is extremely short. China Mobile has acknowledged that volume shipments of TD-SCDMA handsets are unlikely until April or May next year.

Will China Mobile dominate the mobile industry in China?

2007-11-01T23:42:00.000-07:00

Will the new licence agreement signed by telecom service provider in India affect their sales?

While investigating suspected use of illegally-procured SIM cards by international terror networks, security agencies have stumbled upon a startling finding - many cellular service providers in the country have rented out thousands of SIMs to users whose identities they are not aware of.

This is not only a clear violation of the law, which does not allow renting of SIMs, but also potentially raises the risk of terror groups misusing these cards. Most users of these rented SIMs are members of diplomatic missions and foreign tourists. The licence agreement signed by telecom service providers clearly stipulates that SIMs must be sold and not rented out.

The agreement also lays down that repeated violations of the terms would invite penalties up to Rs 50 crore or withdrawal of the licence itself. Despite being bound by this agreement, Vodafone is learnt to have rented out approximately 4,000 domestic SIMs, Airtel 3,200 and Idea 3,400.

That these operators have rented out the SIMs in bulk through their agents and are not aware of the identities of all individuals who possess these cards, leaves ample scope for their misuse.

Will the new licence agreement really work against the global terrorist?

2007-10-24T21:39:00.000-07:00

Will China's Huge Mobile Market Want Research In Motion?

Research In Motion plans to start selling its BlackBerry e-mail phone in China this year, tapping the world's largest handset market as it expands beyond North America. The shares rose 9.8%.

The BlackBerry 8700 model will begin shipping to business customers in China through France's Alcatel-Lucent, Research In Motion said. Beijing-based China Mobile, the nation's biggest wireless carrier, is providing local BlackBerry service in the country.

China has more than 500 million mobile-phone users, according to government data, and its growth is surpassing that of North America. Alcatel-Lucent, a "pioneer'' in Chinese phone sales, will help the BlackBerry reach subscribers in the country, Oppenheimer analyst Lawrence Harris said.

"The long-term growth potential here is significant,'' New York-based Harris said, "The market is still growing rapidly. The timing could be just right.'' He rates Research In Motion shares "neutral.''

Research In Motion, based in Waterloo, Ontario, rose $11.15 to $124.53 on NASDAQ Stock Market trading, the most in more than two weeks. The stock has almost tripled this year.

Co-Chief Executive Officer James Balsillie has enlisted more than 300 phone-service providers around the world to expand beyond North America, which accounts for most of Research In Motion's revenue. Paris-based Alcatel-Lucent, the world's largest maker of telecommunications equipment, already has the right to sell BlackBerrys in Africa and the Middle East.

China's economy grew 11.9% on an annual basis at the end of the second quarter, about six times the U.S. rate.

The BlackBerry will face competition from Nokia Oyj, the market leader in China, as well as lower-cost local handsets such as the RedBerry, which China Unicom, the nation's second- biggest mobile-phone operator, started selling last year.

China Mobile, which controls about 67% of the country's wireless market, said that it added 48.4 million subscribers in the first nine months of 2007, bringing its total to 349.7 million. The number of wireless customers using data services such as text messaging and e-mail jumped 34% to 336.5 million.

The global number of BlackBerry users was about 10.5 million as of Sept. 1, after Research In Motion added 1.45 million in its latest quarter.

Will BlackBerry be successful in dominating mobile phone market in China?

2007-10-18T19:27:00.000-07:00

How will foreign carriers help the India's wireless market?

India may allow overseas mobile-phone carriers to bid for licenses to provide third-generation, or 3G, services in the world's fastest-growing wireless market, said India's telecom secretary, D.S. Mathur.

The government hasn't decided if it will auction or allocate the airwaves. India also hasn't set a deadline for issuing recommendations on providing spectrum for 3G services."If we decide on auctioning, then anybody can bid, even foreign players," Mathur said. "There is space for three to four operators, including existing ones."

The government's proposal to allow overseas carriers to bid for third-generation wireless services, which allow faster downloads of music and videos on mobile phones, would be at odds with recommendations by the Telecom Regulatory Authority of India in September 2006. The regulator wants such frequencies to be auctioned only to existing Indian companies.

India added a record 8.31 million wireless subscribers in August as call rates as low as 1 U.S. cent a minute lured new users. Carriers such as Bharti Airtel, India's largest mobile-phone operator, expanded networks in rural areas, where less than 6 percent of the people own mobile phones.

The growth in wireless subscribers has attracted as many as 30 companies, including AT&T, Indiabulls Real Estate and the Videocon Group, which applied for licenses to offer telecommunications services by an Oct. 1 deadline.

Will allowing foreign carriers to offer 3G Services aid India's wireless market growth?

2007-10-11T20:45:00.001-07:00

Can Bharti Airtel maintain its lead over rivals by selling its tower units?

Bharti Airtel, India's largest mobile-phone operator, plans to sell control of its tower unit, raising cash that can be used to stave off competition and widen its network in the world's fastest-growing wireless market.

“We are willing to come into a minority position” in Bharti Infratel, which runs the mobile-phone tower business, Joint Managing Director Akhil Gupta said. “We would like to get the company listed over the next two-three years but will retain a sizeable minority stake.”

Bharti, based in New Delhi, transferred its network equipment to wholly owned Bharti Infratel to cut costs by sharing infrastructure with rivals in a market where less than two in 10 people own a handset. Bharti's closest rival, Reliance Communications, sold a 5 percent stake in its tower unit for $338 million to seven global investors on July 19.

India's largest tower company, Bharti Infratel, plans to double the number of towers to 80,000 by March, Chairman Sunil Mittal said on Aug. 21. Reliance plans to have a total of about 40,000 towers this year.

Having extra tenants on towers will reduce expansion costs, said Arun Kejriwal, director at research firm KRIS.

“Bharti will get an additional income stream from tenancy,” said Kejriwal, who has some clients with shares in Bharti and Reliance. “The valuation of Bharti will also increase if it is able to sell a stake in the tower unit.”

Bharti, controlled by billionaire Sunil Mittal, could sell a stake in Bharti Infratel to any type of investor, including buyout firms and phone companies, Gupta said.“We are open to all opportunities and can explore each of these options,” he said.

Bharti Infratel has a value of $11 billion, roughly translating into 232 rupees per share for the parent, Harit Shah, analyst at Angel Broking, wrote in a research report. India will need about 330,000 towers to meet a projection of 500 million phone users by 2010 from 110,000 at the end of March 2007, Shah said in a note to clients on Oct. 8.

Bharti, which has appreciated 74.3 percent this year, rose 24.15 rupees, or 2.3 percent, to 1,096 on the Bombay Stock Exchange.

The stock is the sixth-best performer on the benchmark Sensitive Index this year, according to data compiled by Bloomberg. Reliance Communications is ranked eight among the 30 on the index.

Bharti, 30.84 percent owned by Singapore Telecommunications, plans to spend as much as $3.5 billion in the year to March 31, 2008, on network expansion to maintain its lead over rivals Reliance Communications and Vodafone.

Will the $1 billion investment in towers pay off?

2007-10-04T02:24:00.000-07:00

Can Vodafone capture the mobile phone industry in India and China?

Arun Sarin, named chief executive of Vodafone in 2003 as business models faltered, has invested $28 billion to expand into emerging markets such as India. At the same time, he's exited slow-growth markets in Japan, Belgium and Switzerland.

Sarin's main strategy is to increase Vodafone's presence in countries that are driving regional economic growth and gain a majority stake in the right companies.

Vodafone's fiscal first quarter results, reported in July, beat analyst forecasts. The firm added 9.1 million subscribers to reach 232 million globally. Revenue rose 7.5% to $17 billion as growth in emerging markets offset tougher competition in Europe, especially Germany.

While Sarin says that emerging markets will drive revenue growth. Vodafone garners almost 20% of revenue from emerging markets.

Vodafone now controls the third biggest wireless firm in India, where only 17% of people have mobile phones, leaving plenty of room for subscriber growth.

In India, Vodafone added 7.7 million wireless users in July. Research firm Informa says that about one-third of new cell-phone users worldwide this year will come from India and China.

In China, more than one-third of its 1.3 billion people, now use wireless phones. It's a market that Sarin covets, but China's government limits foreign ownership of telecom companies.

Vodafone has a 3.3% stake in China Mobile, by far China's biggest wireless firm with 332 million customers.

Sarin has been stymied in his bid to grow in China, where the government has delayed an industry restructuring that would let new entrants, and new investors, into the market.

“We'll just have to wait and see how the industry restructuring goes,” Sarin said, adding that Vodafone has some sway with the government. “We have to find a privileged position,” he said.

China Mobile looms as a Vodafone rival in Asia as it prowls for acquisitions,

“Our emerging markets strategy is focused on large populations, with good industry structures, and places that dominate the economics of a continent, like India and China.” said Sarin.

Can Vodafone gain control of these two enormous emerging markets?

2007-09-13T02:47:00.000-07:00

Will mobile phones pay off in the skies?

China’s Szhenzhen airlines and India’s Kingfisher airlines are both looking to adopt the nascent technology in their respective airlines. The dilemma now is to whether the passengers patronizing these airlines will embrace the use of mobile phones onboard.

The apprehension is due to the failure to introduce seat phones in the late 1990s. Exorbitant phone charges have put customers off the idea from utilizing the phones in the skies. If adopted, the technology would cost about $200,000 to install per aircraft.

Most analysts believe Asia is the region where the idea will really take off because of the widespread use of mobile phones in the region. The question to ask here would be if the airline companies can fund a platform to market mobile telecommunications in the air as most business passengers carry labtops and send emails. Mobile phones do possess a more personal field in view of communication but will the move take off? And more importantly, will the idea pay off?

2007-09-07T02:03:00.000-07:00

Nokia, a copycat?

InterDigital has accused Nokia, the world’s biggest maker of mobile phones, that they have committed a patent infringement. InterDigital is a developer of software and chips for wireless internet access.

The U.S. International Trade Commission in Washington received a complaint from InterDigital . The claim would presumably block U.S. imports of Nokia’s newest generation of wireless handsets to other parts of the world, including Asia where Nokia enjoys terrifically high sales. The new generation of wireless handsets offer faster access to the internet, thus making it easier to photos and videos.

The agency said, “By instituting this investigation, the ITC has not made any decision on the merits of the case.” This is the second time Nokia has locked horns with InterDigital. In 2006, Nokia paid Interdigital $253 million to settle claims over the 2-G phones.

2007-08-30T03:16:00.000-07:00

What’s next for Nokia?

Nokia has unveiled four new mobile service devices that offer dedicated music or gaming keys, expanded memory, large screens and extended battery performance to provide quick and easy access to entertainment.

Executive Vice President of Nokia, Kai Oistamo said, “From the compact Nokia 5310 Xpress Music phone to the fully featured Nokia N81 multimedia computer, Nokia offers a range of entertainment enabled devices for consumers who want their music, games and favourite media with them wherever they go. We believe these full featured, well designed devices will be very popular and will help bring Nokia’s internet and music services to life,” he said.

For a brief rundown of the soon to be released phones, the Nokia 5310 Xpressmusic is small in size and big on music. The Nokia 5610 Xpressmusic has an edgy design and sharp sound. The Nokia N95 8 GB has a stunning screen and massive memory. And finally, the Nokia N81 and N81 8GB is a true entertainment mobile powerhouse.

2007-08-16T02:01:00.000-07:00

Why is Singtel tapping into the pay TV market?

One of Singtel’s competitors in the mobile industry in Singapore is Starhub. It seems now that Starhub, which monopolises Pay TV in Singapore has a new competitor. Singtel has now ventured into the Pay TV market.

The added revenue stream would be an added benefit for Singtel as the earnings growth in Singapore is slowing down due to the mobile market becoming more saturated. The reason for this is that there are more handsets than the 4.6 million people living in Singapore.

Nevertheless, Singtel would take more than 5 years to break even. “The cost of setting up the service will be more than the earnings,” said Sachin Mittal, an analyst at DBS Vickers Research. If this be the case, why is Singtel breaking into this market? If they do break even , would Starhub customers switch to Singtel? Will they try to force Starhub out of the market through clever marketing? Will they provide a mobile cum Pay Tv package that is cheaper than Starhub’s and would this eventually lead to Starhub losing its mobile phone customers in the process?

2007-08-10T03:57:00.001-07:00

AT&T: Will their China-India invasion plan work out?

Thirteen is the percentage point by which AT&T, U.S.’s largest telephone operator, increased its budget for investments outside of the U.S.

According to AT&T’s Asia Pacific President Gopi Gopinath, plans are in motion for the telecommunication giant to invest an additional $100 million this year to upgrade its networks among other projects. In March, AT&T estimate investments of about $750 million would be pumped into overseas markets including India, Pakistan, Vietnam and Malaysia.

“Everybody thinks about China and India and it is a very important part of our growth. There is always a spotlight on specifically these two countries and on Asia as a whole.'' Gopinath said.Revenue from China, the company's fastest-growing market, may rise 30 percent this year, meeting last year’s growth.

Half of AT&T’s China revenue is collected from venture Shanghai Symphony Telecom Co. and the remaining from China Telecommunications and China Network Communications Group. In April, the company opened its fourth office in China in the southern city of Shenzhen, and in October won licenses to sell long-distance call services to large businesses in India.AT&T will offer mobile-phone services to India and China, when the two nations open up to foreign operators. The company may also offer wireless services in India. As of end June, China had 372.7 million fixed-line phone users and 501.7 million-mobile users, according to China's Ministry of Information Industry.

AT&T signed an agreement with China Netcom to offer telecommunications services between China and the U.S. for the Beijing Olympics. This agreement would allow AT&T to provide a private leased line for NBC to transmit digital TV broadcasts

Despite its throngs of success, it may be audacious for even AT&T to think it can sink its teeth into China and India’s colossal mobile markets. The big boys, China Mobile and Bharti Airtel have more than 750 million subscribers between them, hardly the meek ones who will sit on the fence when the China government finally decides to wave the foreign players in.
With the Asian players snatching lucrative contracts everywhere, will they be able to continue their market domination in the advent of western power?

2007-08-03T04:55:00.000-07:00

Will you be paying to watch TV on your mobile phone?

Live TV on mobile phones is a stagnant market but one that is expected to grow rapidly and reach up to 8 billion by 2011. There is now intense competition between phone companies such as Nokia and Qualcomm. It is not a competition over voice signals but a competition over mobile to signals over cell phones. There are at least six different contenders competing in the European market and there are still others emerging globally.

This is especially so in China and Japan. However none of the mobile tv standards is compatible and all require significant infrastructure investment. In Britain, services will not be available until 2012 and it would likely take another one to two years before services could be rolled out. The Chinese will be ready to offer mobile tv services at the Olympics in 2008 but there is a chance the British won’t be able to do the same four years later.

The question to ask here is whether there will be a definite great demand for mobile tv and whether customers have to pay for it on their mobile phones if the demand gets too great.

2007-07-25T19:54:00.000-07:00

M1 looking to Google for new edge?

MobileOne (M1) , the smallest of Singapore's three wireless-phone operators, will extend an alliance with Google on mobile search to counter market- share losses to Singapore Telecommunications (SingTel) and StarHub.

Singapore-based M1 will include a Google toolbox on its mobile-phone web browser that lets users type in their search queries directly. Currently, customers have to click on a link before they can access the services of Mountain View, California-based Google, the world's most popular search engine.

“The way we see globally the market developing is mobile operators linking up with Internet players because they obviously get their revenues through access in click-throughs” for Web advertising, M1 Chief Executive Officer, Neil Montefiore said. “Those revenues can be shared with mobile operators.”M1 needs more earnings sources as its rivals are winning market share by adding services to lure users in a market where the number of handsets exceeds the 4.6 million people. SingTel began offering on-demand movies on its high-speed Internet network July 21, while StarHub plans to enable customers to watch cable television, access the Web and make phone calls using one device.“We are looking at advertising in lots of areas,” Montefiore said in a recent interview. “Location-based, SMS- based, handset-based advertising, we think that will grow.”

The company added 30,000 new subscribers in the second quarter, taking the total number to 1.41 million as of June 30. That gives M1 a 28.4% market share, down from 28.9% three months earlier. MobileOne yesterday said second-quarter net income rose 10% to S$40.6 million. Sales climbed 4% to S$199.8 million.

Whilst being the second longest standing mobile network provider, they are yet to experience the success of StarHub and SingTel who have secured greater island-wide coverage and a larger customer database. Will this latest move by M1 help boost their user network?

2007-07-17T03:14:00.000-07:00

Do we smell legal tangles in the Indian telecom sector?

The 3G spectrum controversy is taking a dramatic turn with former GSM allies Bharti, Essar Vodafone (earlier Hutch) and Idea are now taking different positions. This division among India's largest mobile operators, who together control over 50 per cent of India’s subscriber base, is expected to have a telling impact on the spectrum policy, which primarily seeks to address how best to allocate this scarce resource.

In the past, 3G had successfully put GSM and CDMA service providers on opposite sides of the fence, but this discord among three of GSMs largest players is unprecedented. Confirming the development, T V Ramachandran of COAI (Cellular Operators Association of India) said all three companies had sent in separate representations to Trai in response to its consultation paper on review of license terms and capping of number of service providers. COAI's submission to Trai on this consultation paper represents the majority and not unanimous view of the GSM industry, he admitted.

At the heart of this split is the question of who should be allotted 3G spectrum. Bharti, which holds licenses in all 23 telecom circles, wants 3G spectrum to be given on a priority basis to operators, who currently provide mobile services under their licenses in the circles in question. Only after 15 MHz of spectrum has been reserved for existing operators, should the government entertain any request from those who have a license without spectrum or those who have applied for but have no license, says a senior Bharti official. For Vodafone, which operates in 16 circles, with license applications pending in the rest, Bharti's position is untenable. “We are license holders. If we have still not been allocated spectrum for operations, we cannot be penalised for it,” counters a senior Vodafone official.

Idea, Aircel and Spice are learnt to be supporting Vodafone's position. These companies seek parity between those who provide services and those who either hold licenses or have applied for one. Idea operates in 11 circles. It has two licenses for Mumbai and Bihar, but no spectrum and another nine pending license applications. Idea officials say licenses already qualify for spectrum. “Spectrum is bundled with the license and the license fee represents part payment for spectrum. So how can license holders be asked to participate in an auction,” they argue.

Trai had recommended auctions for 3G spectrum in September last year. GSM players are facing a growing squeeze, with CDMA operators also laying claim to GSM spectrum over CDMA spectrum in their service areas. This division in the GSM ranks will considerably weaken their strategic play in the 3G spectrum battle. These hardening positions are further placing pressure on government to deliver a fool-proof 3G spectrum policy.

Is there a possibility that India's telecom sector witnesses a repeat of the massive legal tangles of 2001-03, following the policy shift?

2007-07-10T00:51:00.000-07:00

Is open-market competition a more fair game?

Japan Communications said that it has asked the Internal Affairs and Communications Minister Yoshihide Suga to make an arbitration ruling on its use of NTT DoCoMo's mobile network. The company made the first-ever request for the minister's arbitration on the use of a mobile communication network after its negotiations with Japan's top mobile carrier DoCoMo reached a deadlock.

The Internal Affairs and Communications Ministry is set to make a draft after hearing claims by both companies and will submit this to the Telecommunications Business Dispute Settlement Commission. Based on a report by the commission, the minister is expected to makea ruling within the next three or four months.

Japan Communications, a mobile virtual network operator, offers data telecommunications services by borrowing part of the network of personal handy phone system service provider Willcom Inc.

In its negotiations on the use of NTT DoCoMo's network, the company has demanded an interconnection-style contract, which sets out clear conditions, rather than a wholesale-style deal under which the network operator is freer to control the terms of use.

Japan's telecommunications business law stipulates that a carrier is not allowed to reject a request for access to its network without reasonable grounds.

Will such episodes eventually give way to an open market competition in the telecom sector? Are market restrictions justified in today’s open-market-world?

2007-07-03T21:52:00.000-07:00

‘wuld u txt 2 fite crime?’

Wireless Text messaging is taking on a new role as it is morphed into an effective tool to combat crime. The Wall Street Journal reported that Police are now able to obtain reports on crimes from individuals via text.

Around a dozen cities in China have established text-message crime reporting systems and the Boston Police Department adopted this crime fighting method in June. Initiating the program, “Text a Tip”, they aim to increase co-operation with police among young members of the community.

Text messaging is widely regarded as a more subtle and anonymous way for individuals to contact the police. It offers a more discreet way of delivering tips to officials rather than telephoning, the WSJ reported, citing Boston Commissioner Ed Davis.

Is the integration of socio-technological networking into a crime fighting capacity really going to have positive effects or will it just lead Police on wild goose chases due to prank tip-offs?

2007-06-28T23:14:00.000-07:00

Is Softbank able to catch up with its competitors?

Softbank Corp., which owns Japan's third-largest mobile-phone company, plans to boost capital spending at least 11 percent this year to expand its network and catch up with bigger rivals NTT DoCoMo Inc. and KDDI Corp.

The Company is ready to spend generously. It will raise spending to about 432.9 billion yen ($3.5 billion) in the 12 months ending March 2008, from 389.8 billion yen a year earlier, Tokyo-based Softbank said in a financial statement submitted to the Ministry of Finance. The mobile-phone unit will increase spending at least 26 percent to about 387.9 billion yen, according to the document.

Chief Executive Officer Masayoshi Son failed to meet his network expansion plans last fiscal year. By the end of March, Softbank had 29,404 base stations, which transmit mobile-phone signals, missing the company's own target and trailing DoCoMo's number of stations by 36 percent.

“The move will help Softbank overcome its weakness and catch up with rivals,” said Mitsuru Miyazaki, an analyst at SMBC Friend Research Center Ltd. in Tokyo. “The company will get fully ready to compete with DoCoMo and KDDI.”

Softbank has said it aims to deploy 46,000 base stations by Sept. 30. DoCoMo, which plans to cut capital spending 19 percent to 750 billion yen this fiscal year, has forecast it will increase its number of stations to 56,700 by March 2008. KDDI has said it will boost investment in its wireless network by 12 percent to 370 billion yen this year.

The number three of service providers is trying to get a hold of the market. However, companies like DoCoMo are likely to retaliate. This competition will encourage the other service providers to follow suit and this may benefit the customers who will experience better network coverage and better services as the others invest more. Can Softbank overcome its competitors with this spending spree? How will the others react following this strategic move? What do you think?

2007-06-21T03:40:00.000-07:00

Can Sony Ericsson replace Samsung via Indian project?

Sony Ericsson Mobile Communications Ltd will create a research facility in India to strengthen its foothold in the world's fastest growing telecommunications market.

The unit, based in the southern Indian city of Chennai, will produce 10 million phones by 2009 and help Sony Ericsson in its bid to unseat Samsung Electronics Co. as the world's No. 3 maker of handsets. Sony Ericsson is a joint venture between Sony Corp. and Ericsson AB of Sweden.

The Indian site will join Sony Ericsson research and development facilities in China, Japan, Sweden, the Netherlands, the U.S. and the U.K. Sony Ericsson estimates the Indian mobile-phone market doubled last year, and that more than 62 million handsets were sold in the last 12 months.

Will the research and development program suffice to give Sony Ericsson a lead over Samsung? What must Sony Ericsson do differently?

2007-06-15T01:49:00.000-07:00

NTT’s attempt to sell Sri Lanka Telecom: Smart Move?

After Sri Lanka Telecom’s biggest decline in a month, Nippon Telegraph & Telephone (NTT) Corp’s attempt to sell a stake in Sri Lanka Telecom to Usaha Tegas Sdn, Malaysia’s biggest wireless operator and parent of Maxis Communications was suspended after a former Sri Lankan minister challenged the transaction.

Sri Lanka Telecom’s Deputy General Manager W. M. U. Mahamithawa said that the sale cannot be concluded before it hears Sripathi Sooriyarachchi’s petition alleging corruption in the sale process. Tokyo based NTT owns 35.2 percent of Sri Lanka's biggest telephone company, with the government holding 49.5 percent.

Sooriyarachchi, who was dropped as a minister by President Mahinda Rajapaksa from his government in February, claimed the stake sale by NTT is tainted and called for a bidding process to ensure transparency, Mahamithawa said.

Sri Lanka Telecom on May 15 said it plans to invest about $200 million in two years to expand its basic and advanced mobile-phone services. Networks that run calls based on the Global System for Mobile Communications standard and offer third-generation, high-speed services will be enhanced, Sri Lanka Telecom said. Chief Executive Officer Shoji Takahashi expects the company's mobile-phone unit to turn profitable this year and broadband and Internet services to add to earnings.

The company had 917,435 mobile-phone users at the end of March and plans to expand its base to 1.75 million users.

Maxis is betting that Sri Lanka's proximity to India, the world's second-most populous country, would boost earnings at Sri Lanka Telecom. Usaha Tegas is controlled by billionaire T. Ananda Krishnan, who has offered to buy out Maxis in a 16 billion ringgit bid ($4.6 billion) to accelerate expansion in faster-growing markets. About 70 percent of Malaysia's 27 million people own mobile phones.

Is NTT being hasty in selling off Sri Lanka Telecom? Can Sri Lanka Telecom gain from the highly competitive Indian market?

2007-06-06T02:48:00.000-07:00

Will Reliance win Vodafone hands down in price war?

Reliance Communications, India's second-largest mobile operator, said the launch of its new handsets costing 777-rupee ($19) will help it in gaining share in the world's fastest-growing wireless market as Vodafone Group slashes prices for phones.

“I really do not see a challenge there,” S.P. Shukla, president of the personal-business unit for Mumbai-based Reliance Communications, said. “We are confident that we'll not only maintain market share, but we'll grow it.”

Vodafone, the world's largest wireless operator by sales, has said its phones would be on sale at prices ranging from $25 to $45 each in emerging markets, days after completing the purchase of a controlling stake in Hutchison Essar, India's fourth-largest mobile operator.

Reliance's nationwide network of towers and sales and service centers will also give the company an edge over competitors, Shukla said. Vodafone's Indian unit has operations in only 16 of India's 23 designated telecommunications zones. “We are very comfortably placed on every parameter,” Shukla said.

India ended April with 171.2 million mobile-phone users after seeing an addition of 5.15 million new subscribers in the month. The South Asian nation's government aims to have 500 million phone connections in the country in three years, up from 212 million last month.

Nokia, the world's largest mobile-phone maker, in May introduced seven handsets to be sold in emerging markets. The Nokia phones have estimated retail prices ranging from 35 euros($47) to 90 euros, excluding taxes and subsidies, Espoo, Finland- based Nokia said on May 3.

Reliance seems to be at the winning end of this price war so far. It began selling its handsets for as low as 777 rupees on May 2, and sold one million phones in a week. With cost being one of the most important “key barriers” in emerging markets such as India, will Reliance’s low price sustain its high sales through the year? Is Vodafone likely to counter attack with new strategies? Who will get a bigger pie of the ever-increasing number of mobile-phone users?

2007-05-28T03:13:00.000-07:00

Are mergers the only way for India’s telecommunications market?

Idea Cellular, an Indian mobile-phone services provider, and competitor Spice Communication are underway in discussions for a merger. This will create the nation’s fifth-largest operator, local media reported.

Spice acquiring Idea and Idea acquiring Spice are both viable options that are being considered, the report said. The combined entity will have a 10.5 percent market share. The completion of the transaction might take eight to twelve months.

Telekom Malaysia, Southeast Asia's second-biggest phone company, has said it would be “open” to the possibility of merging its Indian venture Spice Communications with Idea Cellular to increase its share in India, the world's fastest-growing wireless market.

“We're open to everything,” Yusof Annuar Yaacob, chief executive officer of TM International Sdn., said. He declined to elaborate on the report.

Idea Cellular, which made India’s largest initial public offering this year, operates mobile-phone networks in 11 of the 23 circles or zones in India’s telecommunications market. Spice, in which Telekom Malaysia has a 49 percent share, operates in two circles. In light of the Vodafone-Essar deal, and such merger talks does competition from the big companies rule out new entrants in the Indian mobile phone market? Is survival only guaranteed by mergers and acquisition?

2007-05-21T21:50:00.000-07:00

Will SingTel lose ground in Indonesia?

Indonesia’s Setdco Group intents to buy the 35 percent of Telekomunikasi Selular (Telkomsel) stake held by SingTel, local media reported citing Mr. Setiawan Djody, Chief Executive Officer of Setdco Group.

Setdco has reportedly sent an offer proposal to Temasek Holddings, SingTel’s parent with about $1.6 billion to fund the purchase. Djody said he was optimistic SingTel would let him get his shares back at least by the end of this year. However, if all negotiations failed, he would not hesitate going to court, he said.

Djody went on to say “I offered $650 million, which was around $50 million higher than SingTel's offer, but (even though) I could pay more, SingTel won the bid," regarding the 2001 tender given to SingTel.

In 2001, the Singaporean telecom giant bought 22.3 percent of Indonesia’s largest mobile-phone operator from Royal KPN NV for $601 million. Royal KPN was partially owned by Megacell Indonesia, a unit of Setdco. A year later in 2002, SingTel spent $429 million to increase its share in Telkomsel to the current 35 percent.

Earlier this month SingTel reported its first profit decline in two years as earnings growth slowed at its Indonesia Affiliate Telkomsel. Will SingTel give up its stake in Telkomsel, or will it put up a strong fight? If the case does go to court who has the upper hand?

2007-05-14T02:49:00.000-07:00

Why is DoCoMo making heavy investments?

Japan’s biggest mobile-phone operator, DoCoMo will invest 700 billion yen ($5.8 billion) to increase the capacity to transmit songs and videos as demand for the service has outgrown the voice calls.

Most of the funds will be used to upgrade base station, announced Chief Financial Officer Masayuki Hirata. The firm forecasts that customers will increase use of services like full-song downloads and web browsing to help data revenue increase 6.9 percent this year, as that of voice may fall 7.7 percent.

The 59 year old Hirata said in Tokyo that, “We have to expand the capacity of base stations as data transmission is expected to increase further. About 60 percent of our capital spending will be for base stations equipment that transmits wireless signals nationwide.”

This investment will be in addition to the 750 billion yen already spent this year to expand networks and accommodate increased data transfer. In March, DoCoMo started a fixed monthly price plan for unlimited Internet browsing and download, outspending KDDI and Softbank, whilst maintaining its 54 percent share of Japan’s $74 billion wireless market.

KDDI, Japan's second-biggest carrier, said it will invest 500 billion yen this fiscal year in the mobile-phone and fixed-line businesses, remaining at similar levels in the years through March 2011. Softbank, parent of Japan’s third-largest mobile-phone operator, will spend about 300 billion yen installing more base stations this year.

On May 7, DoCoMo revoked a license it gave to Hutchison Essar to provide i-mode internet access in India. This move slowed plans to extend services in new domains, from the existing 16 countries, including Germany, the Netherlands and Singapore. Having expanded worldwide, possessing such expertise, what could be DoCoMo’s hesitation with entering the Indian market? Is investing heavily in the competitive local market more viable than venturing into high-growth nations with astounding demands?

2007-05-07T01:59:00.000-07:00

Is Reliance misplacing its hopes on rural India?

With a profit increase of more than double in the last quarter of its fiscal year ending March 2007, India's second largest telecoms operator Reliance Communications has announced that it would spend over INR100bn in expanding its infrastructure. It has also launched a new range of low-cost handsets. Net profit increased by 154% and reached INR10.2bn for the quarter whilst revenue increased by a third to INR39.4bn. At the same time, leading Indian mobile operator Bharti Airtel almost doubled its quarterly profit to INR13.5bn.

Most of the operator's investment will be channeled towards the enhancement of its network across the rural regions of India where growth is at its fastest pace. With approximately two-thirds of the population situated in rural India, penetration is just 2%. The potential for growth is massive. Other carriers to pledge investment towards the extension of their networks are Bharti Airtel, BSNL and Hutchison Essar. However, aside from its infrastructure building, Reliance has also launched a range of new handsets - the Classic range. These handsets will mainly be distributed in metros, small cities and rural India, where Reliance is looking to augment its 28mn customer base.

In such a fragmented market as India's, competition is widespread and a key competitor for Reliance is Hutchison Essar. Already, during the recent sale of Hutchison's 67% stake in the joint venture operator, which Vodafone won, Reliance failed in its acquisition attempt. Having announced its successful acquisition in February 2007, Vodafone had to wait until the end of April 2007 before India's Foreign Investment Promotion Board approved the deal. Decision on regulatory approval had been deferred by the FIPB on grounds that the UK company had breached India's tough FDI legislation. There was some controversy after it was alleged that the 15% of the company owned by local partners was indirectly held by Hutchison, which would have meant Vodafone breaching India's FDI legislation. The FIPB ruled, however, that this 15% stake was held by resident Indians, and not by foreign players.

The huge potential of the rural market aside, what are the other factors that Reliance should consider while making its colossal investment in rural India? Would fierce competition from Bharti and Hutchison thwart Reliance’s plans to break into the rural market with new infrastructure and handsets?

2007-04-09T22:38:00.000-07:00

Is Malaysia set to embrace a wireless broadband era?

Malaysia has a national vision of moving towards a knowledge-based society and economy. To achieve this, the government talked of aims to focus on expanding the communications network to ensure more equitable access to information and services during the International Conference on Business IT 2006. The country recognised that one of the ways to achieve the above is to increase the nation’s broadband penetration.

Malaysia seems to be set on the right track as its penetration rate for its high-speed internet rose to 3.3 percent in 2006 as companies such as Telekom Malaysia introduced new services. Broadband connections reached 879,200 last year, surpassing the forecasted 700,000 users, the Malaysian Communications and Multimedia Commission reported.

In 2005, the proportion of the population using high-speed Internet services was 1.9 percent, well behind other Asian countries and regions such as Singapore, Taiwan, Korea and Japan, which have double-digit penetration rates. However, TM's promotion of its broadband services has been a success. Abdul Wahid Omar, CEO of Telekom Malaysia said TM will increase the number of ports to widen the availability of its Streamyx service.

From its current broadband penetration of less than 10 percent, is Malaysia well on its way to reach its aim of reaching a 50 percent broadband penetration by 2008, as targeted by the government? Does Malaysia still have a long way to go before catching up in wireless broadband industry? Can Malaysia achieve its aim of delivering high speed broadband services to aid the development of a knowledge-based society and economy?

2007-03-26T02:31:00.000-07:00

With yet another failed bid, will Digi ever make a breakthrough?

Digi.Com, the smallest of Malaysia's three mobile-phone operators, has failed on its second attempt to get a license for high-speed wireless Internet services.

Digi, which is 61 percent owned by Norway's state-run phone operator Telenor ASA, is now considering “all options” to start high-speed services.
Mobile phone operators in Malaysia are turning to high-speed products to attract subscribers in a country where four out of five people are mobile phone users. Digi had previously lost the bid for the 2.3 Gigahertz spectrum permit to offer so-called WiMAX services.

Digi also lost a bid last year for a third-generation, or 3G, license which would have allowed it to offer faster Web access and movie downloads through mobile phones. The company spent about 450 million ringgit in a second capital repayment in2006 after it failed to obtain the 3G license.

Malaysia anticipates the number of homes with broadband access to increase from less than 30 percent to 75 is percent by 2010. The country is depending on WiMAX technology, which some analysts say is cheaper to roll out than more advanced wireless systems, to help reach its target.

WiMAX, which allows faster Web access on cell phones, uses radio networks to provide broadband connections over greater distances than WiFi, which is limited to hotspot areas of about 50 to 100 meters.

Digi wants to offer WiMAX to avoid lagging behind rivals such as Telekom Malaysia and Maxis Communications which started 3G last year. However, Maxis said last month it would start WiMAX services using its existing 2.5 Gigahertz spectrum, while Telekom said it may spend as much as 300 million ringgit ($87 million) on WiMAX. With Digi always one step behind its rivals, will it ever be able to compete successfully in Malaysia’s telecommunications arena?

2007-03-19T19:00:00.000-07:00

Can Vodafone and Essar's wireless venture deal succeed?

Vodafone Group, the world's biggest mobile-phone company, reached an agreement with Essar Group over their wireless venture in India. Essar Group Vice Chairman Ravi Ruia will become chairman of the venture, to be renamed Vodafone Essar, while Vodafone Chief Executive Officer Arun Sarin will be vice chairman.

The agreement moves England-based Vodafone closer to completing its $11.1 billion purchase of a 67 percent stake in Hutchison Essar, India's fourth-largest mobile-phoneoperator. Both companies said that the acquisition will be completed in the coming weeks.

Between the third and fourth years, Essar Group gets the option to sell its stake in Vodafone Essar to Vodafone for $5 billion. Essar also gets the option to sell between $1 billion and $5 billion of Vodafone Essar shares to Vodafone at a price determined by an independent appraiser.

Essar's "risk is capped and they can take advantage of the upside from the telecom business, which is growing in India at a phenomenal rate," said Jon Thorn, who manages $350 million in Indian stocks at India Capital Fund in Hong Kong.

Vodafone will be getting eight board seats while Essar will have four. The company will be named Vodafone Essar, and the venture will market its products and services under the Vodafone brand. The companies said they will take advantage of Essar's “deep understanding" of the Indian market and Vodafone's wireless expertise to expand services.

Vodafone had previously valued Hutchison Essar at $18.8 billion. When the company announced the transaction, it also said it planned within weeks to offer to buy Essar's stake at the same price per share being paid to Hutchison Telecom. With the acquisition finalised, will it be a bane or a boost for both organisations? What are your thoughts?

2007-03-15T19:34:00.000-07:00

India, China "Showdown", who will come up tops?

India's Communications Minister Dayanidhi Maran said that the nation's tremendous growth has made it now the third-largest wireless market by users.

India has overtaken Russia in rankings and is currently just behind China and the U.S. The South Asian nation is expected to reach 250 million wireless users by the year end and 500 million subscribers by 2010.

India's largest wireless operator, Bharti Airtel, Idea ellular and other mobile-phone operators in the country added about 4.9 million new users last month on their GSM networks. The nation ended February with 115.3 million GSM users, the Cellular
Operators Association of India said.

Reliance Communications last month followed its bigger rival Bharti Airtel in cutting rentals and rates on roaming services, as phone companies in India, the fastest-growing mobile market, and aim to narrow the gap with China by making phone services more affordable.

On March 2, the Ministry of Information Industry announced that the number of mobile subscribers in China, the world's biggest wireless market by users, increased to 467.4 million at the end of January.

China and India both look like they are in the race to topple "Top Gun" U.S to dominate the global wireless market in term of rankings. With India's phone companies slashing prices on rentals and roaming rates, is the South East Asian power looking to be more than third or will China step up and counter Indian tactics? Your thoughts.

2007-03-06T22:53:00.000-08:00

Who will dominate Singapore's internet ?

Siemens and Alcatel-Lucent are among the 12 companies and groups vying to build Singapore's Internet Network, according to the state's regulator. Singapore needs advanced telecommunications infrastructure to stay competitive with rivals in the region, including Hong Kong, Seoul and Tokyo.

The island-nation intends to construct a national high-speed Internet infrastructure with speeds of at least one gigabit for 95 percent of all homes and businesses by 2012. This will "ensure competitiveness in our infocomm sector and facilitate the development of diverse new services for businesses and individuals," said Vivian Balakrishnan, second minister for Information, Communications and the Arts.

Nippon Telegraph and Telephone, StarHub, Singapore Telecommunications, Cisco Systems and Ericsson were also among the few that were pre-qualified by the city-state to participate in the so-called Next Generation National Broadband Network. The winning bidder is expected to be revealed in December.

With these big names in the running to contribute to Singapore's Internet Network, will this spur adverse effects on current leaders Starhub and Singnet? And will individual bidders have offerings that give them an edge over the others? Who will win this contest? What are your thoughts on this?

2007-02-27T18:17:00.000-08:00

Will fast food giant retain Docomo's customers?

DoCoMo to Provide Electronic Payment Service at McDonald's Japan's largest mobile-phone operator, DoCoMo, will offer its "iD" service at McDonald's Japan Holdings restaurants, letting users pay for their meals by swiping their handset across terminals.

Masanori Goto, a spokesman for the company, said, DoCoMo and McDonald's Japan will invest 300 miliion yen ($2.5 million) to establish a company that promotes the service through e-mail advertisements. The service will be available from October and will include the "iD" credit payment system and "ToruCa" which allows users to store electronic coupons in their mobile phones. This payment system allows users to use their handsets like a credit card.

The iD electronic payment service commenced in December 2005, Docomo plans to prevent users from switching to rival mobile phone operators, through its innovative service. Docomo will own 30% of the shares and McDonalds will own the rest, as reported in a press conference in Tokyo.

Will Docomo's move on utilizing the fast food giants massive client base to market their services take off?

2007-02-25T18:02:00.000-08:00

Will 3G phase out fixed-line operators in China?

Fixed-line operators are seeking to enter the faster-growing mobile market by gaining licenses from the government for third- generation wireless services.China Netcom says that the licenses are likely to be awarded by October, according to company's Chief Executive Officer Zuo Xunsheng. The high-speed wireless licenses may be issued before thegovernment finishes building test networks based on a domestic 3G technology, known as time division-synchronous code division multiple access.

Apart from plans to start 3G services, which allow faster downloads of music and video on mobile phones, China Telecom and China Netcom are looking to sign up more broadband subscribers tooffset declining fixed-line growth. The first time China Telecom provides monthly additions for broadband users showed an increase of 760,000 broadband users in January, bringing its total to 29.1 million.

What does the phenomenal subscription increase in China's wireless market spell for fixed-operators? Is this temporary or will it eventually mean a purely wireless nation?

2007-02-12T20:28:00.000-08:00

Will Docomo win battle for wireless supremacy?

In January, DoCoMo, Japan's largest wireless operator, added a net 7,000 mobile phone users which was less than 5 percent of the additions at rivals, after Softbank lowered basic monthly fees.

DoCoMo said it now has 52.2 million users, about 55 percent of the market. A month after a government rule change made it easier for users to switch carriers; the Tokyo-based company in November suffered its first net loss of subscribers. DoCoMo and rivals KDDI and Softbank are investing in network coverage and new phone models to entice users to their services after number portability increased competition in the $74 billion wireless industry. Softbank, controlled by Japanese billionaire Masayoshi Son, has promised to undercut competitors' monthly fees and set a 980 yen ($8) basic monthly rate.

"The trend of customers switching from DoCoMo to its competitors is increasingly clear," said Haruo Sato, a Tokyo-based analyst at a research unit of Tokai Tokyo Securities. He said DoCoMo may implement price cuts or other steps to combat the loss of subscriber growth. He didn't elaborate. Softbank added a net 164,000 users in January, bringing its total to 15.7 million. On Jan. 16, the company cut its basic monthly fee to 980 yen. This lured about 500,000 users, including 100,000 new subscribers, Softbank's Son said on Jan. 25.

KDDI, which controls about 29 percent of the market, added 208,400 users in January. Its "au" brand service added a net 432,000 users in January, while it's slower "Tu-ka" brand network lost a net 223,600. DoCoMo may increase its handset subsidies to try to lure users. Handset subsidies at DoCoMo increased by 1,000 yen to 38,000 yen per unit in the three months ended Dec. 31, while Softbank, which will announce its third-quarter earnings, averaged 43,800 yen in per handset subsidies in the second quarter. KDDI cut its incentive payments by 2,000 yen to 35,000 yen.

KDDI added a net 2.5 million subscribers last year which surpasses DoCoMo's 1.8 million in net additions. Softbank added a net 379,800 users, Telecommunications Carrier Association figures show. As a result, it said it may increase spending on its mobile network to a seven-year high to tackle a subscriber increase. KDDI had a 450 billion yen projection for this fiscal year but expects to invest as much as 500 billion yen ($4.2 billion) in the 12 months to March 2008.

In an attempt to win over users from competitors, Japan's wireless operators are introducing handsets that can play music, receive TV broadcasting and listen to digital radio. Profit margins may be narrowed if there is an Increase in new subscribers as the companies absorb costs for subsidizing new handsets.

2007-01-15T20:02:00.000-08:00

Will KDDI's new GPS phones be a blessing or a curse?

A collective sigh of relief from parents in Japan might just be heard as KDDI launches their 2 new phones which allow parents to know their childrens' exact locations. This follows after Japan's other big mobile operators who have already started offering similar services.

The handsets, among three the company unveiled, can inform parents of their children's whereabouts every five minutes. While this might be a blessing for the over-concerned parent, the children might lament that this would eventually lead to a total loss of privacy. What could be further implications of the market with the introduction of these 2 new phones?

For one, the mobile operators will have increased rivalry due to different demographics turning their own way. Parents will boost KDDI's sales as they would want that extra security in knowing their children's whereabouts. The company has had "constant demand" for children's handsets, said Hiroshi Arai, a spokesman for the company. "There are parents who want their children to have a handset because they are concerned about safety."

On the flipside, children who buy their own phones would avoid KDDI for the reason of the loss of privacy and could result in KDDI's competitors to increase their own sales. It could turn out to be a double-edged sword for KDDI. Also, since the three biggest mobile operators in Japan offers phones with GPS, smaller operators night benefit from this trend. Also, the recently introduced number portability policy will increase rivalry and this GPS phone might just be good news for smaller operators, that is if they play their cards right.

A social consequence of this GPS-enabled handset trend might be the total reluctance to carry a phone around everywhere they go. In this case, the high-tech GPS phone will be deemed useless and that could create even more cause for worry for parents as their children would now be not contactable at all.

Those are just examples of the market and social impacts that GPS-enabled phones might have in Japan. Perhaps in the future, all phones will have GPS and there may be more implications then, for better or for worse. But till that time comes, I can safely speculate that KDDI won't have the support of rebel children who treasure their freedom. What do you think?

2007-01-08T19:17:00.000-08:00

Will Google crush Baidu in its quest for Asian domination?

Every journey begins with a small step. Google's top executives obviously don't seem to agree. Perhaps to them, the bigger the step, the quicker the journey and the faster it is to reach the goal and what bigger step to take in Asia than by invading the biggest nation.

A two-prong attack on China's mobile and internet market ensures a steady stamping of Google's footprint in the region and leaves butterflies in Baidu's stomach.

Google has teamed up with China Mobile, world's biggest cell-phone operator by customers to offer a mobile-phone search service in an attempt to attract more customers.

China Mobile will include a Google search box on its mobile Web site to help users find news, games, images and videos, the companies said in a statement. A trial version of the service is already up and running and will be expanded further this year.

The decision for a venture was motivated by China Mobile's drop in average spending of its clients. China Mobile Chairman Wang Jianzhou hopes that sales growth would improve by offering services such as video downloads on handsets. Similarly, the deal also allows Google, owner of the world's most-used Internet search site, to broaden its market reach for its search engine.

China is the world's second-largest Internet market after the U.S. and had 132 million subscribers by the end of last year.

Not contented with that offering, Google upped the stakes by investing in a Chinese company that helps users download online videos and software in a bid to take market share from local competitor Baidu.com.

Google will be a "strategic investor" in the company, Sean Zou, chief executive officer at Shenzhen Xunlei Network Technology, said at a briefing in Beijing.

Google, whose share of China's market is one-third the size of Beijing-based Baidu's, gains access to the 120 million customers Xunlei says use its Web site. Google China President Lee Kai-Fu believes the popularity of online videos will help the company win more customers in a Web market that may be the world’s biggest in two years. The U.S. company bought YouTube for $1.65 billion in November.

"Xunlei is Google's YouTube in China," said Liu Bin, an Internet analyst with Beijing-based research company BDA China. "Xunlei could help Google catch Baidu as more and more people search for videos on the Internet," Lee added, stopping short of confirming that Google has invested $5 million for a stake in Xunlei.

Google's harmless ripples have turned into offensive waves and Baidu must be desperate to stop Google from taking over its prime market. However, if they do step up their game, then exciting times will be ahead for us when these two giants go head to head. The fierce competition can only be good for the consumers, provided that things, especially price, do not spiral out of control.

Can Baidu continue to reign supreme or will Google be the new king of China's wireless market?

2007-01-03T18:43:00.000-08:00

Would rivals become allies in race for India's mobile market?

It has been regarded as the crown jewel of its owner's portfolio. Not surprising then that the fight for India's mobile market has become so intense. Maybe the heat has gotten to some of the top executives that the unthinkable might just unfold before our eyes.

In a twist of events, Vodafone Group, Reliance Communications, Essar Group and Maxis Communications may bid jointly for Hutchison Telecommunications International stake in its Indian unit.

The companies are in early talks on a joint bid to help bring down the price at which Hutchison Telecom may sell its stake in Hutchison Essar to about $14 billion from $20 billion. Hutchison Telecom owns 67 percent of Hutchison Essar, India's fourth-largest cell-phone operator, while Essar Group owns the rest.

The bidding companies may split Hutchison Essar by telecom circles, or areas. Hutchison Essar operates in 13 telecom circles in India and has 22.2 million subscribers.

Observers have argued that Hutchison Telecommunications International might not be so interested in leaving such a lucrative industry at such a booming time. This is especially since relies on India and its 67 percent Hutchison Essar stake for an estimated four-fifths of operating income.

Analysts say mobile penetration could double over two years from 12 percent now, and triple in four years. India's government expects 180 million mobile phone users by end-2007, up more than 25 percent from 143 million now.

Essar Teleholdings, which owns 33 percent of Hutchison Essar, initially offered $11 billion for the rest of the company, turning the battle for control of the Indian mobile phone company into a three way fight with Vodafone Group and Reliance Communications.

Vodafone made an approach that values Hutchison Essar at $17 billion to $18 billion.

The move might just help push the price down and succeed in catching the prey but would they eventually be willing to share the coveted prize and be contented with whatever takings they have earned? Or will the allies become foes again in the future?

2006-12-28T19:07:00.000-08:00

How could Asia's slow cell phone sales growth be countered?

Mobile phone sales growth will slow the most in Asia next year as wireless services have already spread to much of the region.

Sales of cellular phones will increase 6 percent to 1billion worldwide next year, after a 20 percent gain in 2006, the Japan Electronics and Information Technology Industries Association said. Growth in Asia will probably drop to 8 percent next year from 36 percent.

"There are fewer and fewer countries where people are buying mobile phones for the first time," said Masaaki Akahori, a member of the association's research team. "People who already have handsets only change them occasionally."

Nokia Oyj, the world's biggest handset maker, and Motorola, its largest rival, are focusing on less-expensive phones that work on lower-capacity networks, betting sales to first-time buyers in China and India will increase faster than those of handsets for users who are upgrading to higher-speed, or third-generation, networks.

Growth in India, where sales will more than double this year, will probably slow to 7 percent next year, the association said. China's sales will increase 19 percent, about half this year's pace. India accounts for 25 percent of sales in Asia and China for 32 percent, JEITA said.

Texas Instruments, the world's biggest maker of semiconductors for mobile phones, this month cut its sales and profit forecast for the fourth quarter, citing the trend among phone makers toward cheaper handsets that don't use as many semiconductors.

Subscribers to mobile phone services will probably increase 14 percent to 2.9 billion worldwide in 2007 from this year's 2.6 billion, said the association, which represents 509 Japanese manufacturers.

That forecast is in line with that of Nokia Chief Executive Officer Olli-Pekka Kallasvuo. Last month, he predicted global wireless phone users would rise to 3 billion by next year.

China is Nokia's biggest market by sales, contributing almost 12 percent in the first nine months of 2006. Revenue in China reached 3.4 billion euros ($4.5 billion) last year.

With a substantial number of Asia's population already owning a handset, the market in Asia would experience a slump. One solution might be to advance the technology so greatly in a short span of time to render the existing sets almost obsolete. That way, sales would be assured in markets with advanced generation networks but not for first time buyers in places like China and India.

The producers of handsets have to compromise one market for the other although a two-prong attack might also be viable. But as always, a lack of focus could always lead to a downfall.

In places like Singapore, where image plays a very important role, new technologies would not really be necessary. Just an added function or a little facelift to the existing handset suffice. In these kinds of markets, producers should concentrate more on the outlook of the phone and continue to beautify the handsets if they want to boost their sales.

Cultures in different markets have to be given due consideration the efforts to promote sales in Asia. Don't you agree?

2006-12-11T18:18:00.000-08:00

Motorola successfully goes 'green'

Trial confirms feasibility of powering GSM Base Stations using 'green' power.

Motorola announced that it has successfully completed a trial to demonstrate the feasibility of alternative power systems which can support remote GSM Base Stations (BTS). The trial concluded that a combination of solar cells and wind turbines can generate 1,200 watts in a continual cycle; enough to drive a mid-sized BTS and support a microwave backhaul installation.

Powering BTS sites in both developed and emerging markets is a challenge for operators because of the high cost or difficulty of provisioning mains electrical power. Motorola's green-powered BTS, part of the company's Reach GSM portfolio, can replace or reduce the load on mains power and can also remove the need for power generators that require continual re-fueling and security.

"In areas such as central Africa, operators can spend as much as two-thirds of their operating costs on diesel power," comments Mohammad Akhtar, vice president, global product management GSM/UMTS, Motorola Sales and Services. "Using eco-powered BTS can help operators to lower operating costs. This reduction in operating expenditure (OPEX) can be critical for operators in emerging markets when building networks that reach customers in remote locations."

Like other 'eco-friendly' inventions, there are bound to be hassles, inconveniences and uncertainties, more than one might actually bargain for. So we applaud them now for going green but we'll cheer even louder if it would prove to be truly feasible and marketable when the time comes. Do you share this view?

2006-12-03T20:55:00.000-08:00

Motorola aims to capture new market in India

Motorola, the world's second-biggest maker of wireless phones, started selling the low-cost Motofone in India to compete with larger rival Nokia.

The thin, "value-priced" phone will be sold in other countries starting in "coming weeks," Schaumburg, Illinois-based Motorola revealed. A U.S. version will be shipped by year-end, the company said.

Motorola is banking on the Motofone, its thinnest phone yet at about 8 millimeters, to break Nokia's dominance in markets such as India and China, where sales are rising faster than in Europe and North America. The company is also seeking to build on the success of the Razr, a half-inch thick clamshell-style phone. Motofone's price wasn't disclosed as yet.

“It is an opportunity to bring in new consumers to the market place,” said Steve Lalla, general manager of Motorola's mass market phone unit, in an interview. “We're looking at places like India, China, South Africa and Eastern Europe.”

The Motofone makes it easier for first-time users to place a call and retrieve messages by using local languages and symbols as well as text, the company said. The phone also uses a plastic display that incorporates Cambridge, Massachusetts-based E Ink electronic paper technology, Motorola said.

Each company is looking to lure first-time users in regions such as Asia and Latin America as sales growth slows in Western Europe and North America. The Motofone will compete with phones such as the 75-euro ($99) Nokia 2626, introduced recently.

Will Motorola's Motofone entice customers away from Nokia? How much of an impact will their practical interface, which integrates local languages and symbols, make in emerging markets?

2006-11-19T18:42:00.000-08:00

Who will be forced out during Thailand's "Crisis" year ?

Advanced Info Service Pcl, Thailand's biggest mobile-phone company, said call-pricing competition will continue throughout the rest of what it has described as a "crisis" year.

"Competition this quarter is similar to the previous quarter, as average call rates are almost the same level," President Wichian Mektrakarn told reporters in Bangkok. "This year has been the toughest time in several years for me. I have faced every crisis I could ever imagine."

Advanced Info, based in Bangkok, and rivals Total Access Communication Pcl and True Corp. cut rates and offered free talk time to expand users before a government plan allowing them to charge for connecting calls from competing networks later this year. Growth in Thailand's wireless market is slowing as more than half the 65 million population already own mobile phones. Advanced Info on Nov. 10 reported third-quarter profit fell 13 percent to 3.65 billion baht ($100 million), the lowest in three years, as competition intensified and users made fewer calls after the company ended discount rates.

The mobile phone operator added 405,200 subscribers in the third quarter, down from 684,000 subscribers a quarter earlier. Average monthly revenue of prepaid subscribers, who account for 89 percent of the 17.7 million customers, fell to 265 baht per user as of September, from 277 baht at the end of June, Advanced Info said. It had about a 49 percent market share of Thailand's 35 million mobile-phone users at the end of September.

On Sept. 30, Advanced Info started offering a package for new customers who buy stored-value cards in October to pay 1 baht ($0.03) per call during certain hours, and 1 baht per minute the rest of the day.

"Earlier this year we faced change in our main shareholder that led to boycott of our products. Price cutting by our competitors led to the collapse of our network and falling
profit," Wichien said. "The military coup and changes in government caused investigations of our parent."

Total Access and True, Thailand's second- and third-biggest mobile-phone companies, on Nov. 9 said they filed a complaint with the telecommunication regulator against Advanced Info's call-rate reduction. Advanced Info has cut rates to levels that are lower than its real costs, hurting other cellular phone operators, said Supachai Chearavanont, chief executive officer of True.
Wichian, Advanced Info Chief Executive Officer Somprasong Boonyachai and other executives called today's press conference to deny that they had cut their call rates below cost. Advanced Info is still making a profit from the current call rates, and insists its prices are at the same level as that of rivals, Somprasong said today. He and other executives declined to provide earnings forecasts.

The obvious winners in this price war are the consumers. But with a saturating market, how long will it take before one of the companies involved collapses? Who will be the biggest loser?

Share your thoughts with us.

2006-11-12T20:18:00.000-08:00

Where will Colin Giles lead Nokia to?

Nokia Oyj, the world's biggest maker of mobile phones, named Colin Giles as the company's new China president, replacing David Ho.

Ho, will become chairman of the China region for Nokia Siemens Networks, Nokia said today in an e-mailed statement. Giles at present heads the Espoo, Finland-based company's customer and market operations in China.

Nokia Siemens Networks is a venture that will be formed through the merger of the telecommunications network equipment units of Nokia and Siemens AG, the companies in June. Nokia and Siemens will own equal shares of the venture and the merger is expected to be completed before Jan. 1, 2007, they said.

Giles will begin his new duties once Nokia Siemens Networks China is formed and Ho is transferred to the new company, the statement said. Ho will remain a board member of Nokia China.

China has the biggest potential market for mobile phone users. Yet the major portion of that market is expected to come from the rural market, where income distribution is lower than the cities. Should Nokia concentrate on the emerging rural market or the more affluent urban market?

Share your thoughts with us.

2006-11-06T21:31:00.000-08:00

New Handsets for Old Customers

The war for customers between Japan's mobile phone operators is heating up. NTT DoCoMo Inc., Japan's biggest mobile phone operator, said new handsets it is introducing will lure back subscribers it lost since new rules made it easier for users to switch wireless carriers.

DoCoMo had a net 60,000 contract cancellations in the five days following the Oct. 24 start of mobile number portability, which allows subscribers to select a new operator without changing their phone number. The company blamed its biggest rival, KDDI Corp., for the cancellations.

"KDDI had a good start because it introduced new handsets earlier," said DoCoMo Chief Financial Officer Masayuki Hirata in an interview. "Our new handsets will appear after KDDI's and our subscriptions will rise from now on."

DoCoMo, whose 56 percent share of the mobile market is narrowing, on Sept. 28 said it would introduce 20 handsets by March. Masao Nakamura, the company's president, in September said he expects annual cancellations to increase by as much as 35 percent to 700,000 for the year ending March 31, 2007. The number of net subscriptions lost since Oct. 24 was "in-line" with that estimate, Hirata said.

KDDI on Sept. 28 introduced 12 new handsets with improved sound quality and designs it called "chic" to draw and keep subscribers. The models started selling in September. With the new handphones, DoCoMo hope to stem the number of subscribers moving on to their rivals, and attract some away from them as well. Whichever operator wins the battle, the biggest winners are ultimately the consumers, as they enjoy the benefits of a price war.

Is it too late for DoCoMo to save their customers from going to KDDI? What more does DoCoMo have to do to win back their customers? Or will KDDI counter with another move of their own?

Tell us what you think.

2006-10-19T18:58:00.000-07:00

Japan’s telecoms battle heats up weeks before new ruling

When mobile operators counter each other's moves like-for-like within weeks of each other, you know you have a fight on your hands. NTT DoCoMo, Japan's biggest mobile-phone operator, said it will offer 14 new handsets, including models that support music transfers to computers to counter a similar service by KDDI Corp, according to Bloomberg.

DoCoMo, which has about 56 percent of the market, said 11 of the handsets will have music-playing and other entertainment functions. The models are part of a plan announced September 28 to introduce 20 new handsets by March 2007, the Tokyo-based company said in a press release on its Web site.

KDDI, Japan's second-biggest wireless operator, in January unveiled its au Listen Mobile Service, LISMO. The service allows users to download and store music on their personal computers and to transfer those songs to their mobile phones. As of May 20, subscribers had downloaded more than 50 million songs to its au high-speed phones and to PCs, KDDI said.

The number portability ruling, due on October 24th, has really changed the playing field for Japan’s top mobile operators. Now, they’re offering new models and services to keep and lure subscribers in Japan's $74 billion market. Music services may help retain users because some songs downloaded to handsets aren't transferable to other carriers' phones.

So are there any other ways that cellular operators can try to retain their customers? Will customers bite or will they wait and see what the other operators can come up with? Let us know what you think.

2006-10-06T01:00:00.000-07:00

Can WiMAX save PCCW's mobile business? Dr Liang Wu certainly hopes so

Things are tough in Hong Kong, Asia's and perhaps the world's toughest telecoms market. And leading incumbent operator PCCW has seen its fixed line network market share drop from 95 percent to 70 percent in just 5 years. To turn the situation around the company is hoping that triple play of fixed, mobile and broadband will keep customers with them. But already the triple play strategy is being sorely tested. Why ? Because in a market like Hong Kong it is not enough to offer just voice on a mobile phone, where 2000 minutes of voice sells for just US$10. So PCCW is now offering its NOW IP TV services on the mobile network.

But there is a catch, explains Dr Liang Wu, Executive Vice President of Emerging Technology at PCCW. "The trouble is if you look deeper the mobile TV we have is MDMS - its beautiful but I can only provide 3 channels over 5 MHZ. That's just not cost effective. Video streaming can support 5 (in a cell) simultaneous users. HSDPA is fine but we are limited by the spectrum. So I need to find some way to make all these services robust and scalable."

"For mobile TV I heard WiMAX can do it but I cannot find any solution. So we are now testing with Motorola and that's fine. The streaming part I really need WiMax to work because I have people testing the services in the subway but 3G data in the subway drops to 100 kb and HSDPA drops to 1.2 Megs but for streaming in a small screen is not going to make a business. So I am really putting a high hope in WiMAX but WiMAX better do the video right."

Motorola's Ray Owen certainly thinks WiMAX offers an operator choice. "WiMax does not share the same spectrum as 3G so the question of whether you choose one technology over the other is a moot point," says Owen.

So is PCCW"s Dr Wu right? Will WiMAX enable new services that operators really need to keep customers? IS HSDPA just not cost effective for high usage of broadband data?

Tell us what you think.