WCA January 2007

Telecom News

“[Bharti] feels confident in seeking global opportunities of small to mid- size companies, especially in the emerging markets,” the director said. Bharti is 30.84% owned by Singapore Telecommunications Ltd . The other foreign partner in the company is the British mobile phone operator Vodafone Group PLC , with a 10% stake. Bharti’s closest domestic competitors are Hutchison Essar Ltd , Reliance Communications Ltd , and the state-run Bharat Sanchar Nigam Ltd . Motorola, world’s No 2, eyes a French mobile phone maker Speculation over the possible acquisition by Motorola of a French cell phone maker intensified on 26 th October when Le Figaro , the leading French newspaper, reported that Ron Garriques, head of Motorola’s cell phone business, said the US company had a ‘serious interest’ in buying the mobile phone operations of the communications company Sagem . A Motorola spokeswoman said later that Mr Garriques’ remarks were ‘misinterpreted,’ but that did little to dampen speculation in the French press that the American firm was interested in buying Sagem, a unit of Safran. Safran , in which the French government has about a 30% stake, was formed in 2005 by the merger of Sagem and the French aerospace group Snecma. Staff writer Mike Hughlett, of the Chicago Tribune , reported on 27 th October that Sagem’s mobile phone business had been losing money for the previous 18 months, and that Safran’s chief executive, Jean Paul Bechat, had not ruled out selling it. “Sagem is a relatively minor player in the cell phone industry,” wrote Mr Hughlett. “It had 1.7% of the global handset market during 2006’s second quarter, ranking seventh, according to IDC, a market research firm. It has little if any distribution in the US.” Schaumburg, Illinois-based Motorola, the world’s second-largest mobile phone maker, had a 22% global market share over the same period, IDC said. Nokia , of Finland, was first with 33.2%.

Alcatel and partner strengthen their position in China in advance of 3G licensing Alcatel Shanghai Bell (ASB), a joint venture between Alcatel and the municipal government of Shanghai, said it has secured three separate network expansion contracts with China Mobile for Shaanxi and Jiangsu provinces. The value was given as $67.3 million. Writing in Shanghai Daily (26 th October), Rich Zhu noted the view of industry insiders that ‘this is another large deal telecom giants have snared before the central government issues 3G licenses.’ His sources also observed that the pending license issuance forces operators to upgrade networks. Alcatel Shanghai Bell president Gerard Dega told the Daily that the carrier’s investment reflects its determination to upgrade to the third-generation mobile networks. Under the contract with Shaanxi Mobile , ASB will provide and install the expanded GSM (global system for mobile communications) network in five major cities in the northwest: Yulin, Yan’an, Shangluo, Baoji, and Xianyang. Shanghai-based ASB will also provide equipment to support enhanced mobile voice and data services to current subscribers and as many as a million new ones. In Jiangsu Province, ASB will deploy an expanded network to serve subscribers in Nanjing, Yangzhou, Xuzhou, Huaian, Yancheng, Lianyungang, Suqian, and Taizhou. China is expected to issue 3G licenses this year. Mr Zhu said that the China Mobile Communications Association recently estimated the cost of introducing the system at $26 billion.

In other news of Alcatel , the French telecom equipment maker said it plans to invest $12.7 million in a new venture capital fund aimed at start-up companies focused on telecommunications development. The company’s partners will be CDC, the state- owned bank of France, and French insurance companies and research foundations. As reported by AFX News in Paris (26 th October), $127 million will be raised for the I- Source-3 fund, to be managed by French venture capital group I-Source Gestion. The company said: “With this investment, Alcatel reinforces its action to promote innovation in France and Europe. For instance, around new uses of Mobile TV and innovative applications requiring high-speed networks.” India’s largest cell phone carrier Bharti posts quarterly profit up 79% Bharti Airtel Ltd announced a net profit for the July-September quarter 79% higher than in the equivalent period of 2005. The New Delhi-based telecom giant said in a statement that its income over the fiscal second ✆

quarter totalled $203 million, on revenue of $947 million. The numbers beat analysts’ expectations. India’s largest cell phone carrier added a record four million new customers in the quarter, leading to a 61% year- on-year increase in revenue, the statement said. Bharti has 27.1 million cellular subscribers in 4,000 cities and towns across India. It also provides broadband and landline services to 1.6 million customers in selected cities. Bharti’s chairman and managing director, Sunil Bharti Mittal, said, “This quarter, for the first time ever, India’s mobile net additions surpassed those of China.” India added about 17 million new wireless phone connections in the July-September period, for a total of 129 million, according to the Telecom Regulatory Authority of India. This growth, one of the fastest in the world, has been driven by low tariffs and a rise in some incomes. But in the total number of users India still lags well behind China, which has some 430 million mobile phone subscribers, the highest in the world. Rajesh Mahapatra of the Associated Press reported that Mr Mittal, encouraged by the growth of his company, said it will look for overseas acquisitions.

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Wire & Cable ASIA – January/February 2007