WCA January 2007

Telecom News

Through Sagem, Motorola could pick up market share in India, Indonesia, and other developing markets. A stock analyst told the Tribune that Sagem has made inroads in those countries with low-priced, low-end phones. Another stock analyst observed that Sagem also could help Motorola gain market share in Europe, particularly through its higher-end phones. Motorola is second to Nokia in Europe, but it is further behind the Finnish phone giant there than it is globally. Nokia’s Western European share in the second quarter was 35%, Motorola’s 17%, according to IDC. Sagem’s share was 5%. Short takes . . . The government of Macau on 24 th October awarded 3G (third- generation) mobile telephony licenses to Hutchison Telephone Macau ; China Unicom local subsidiary Macau Unicom ; and local operator Companhia de Telecomunicacoes de Macau. The Hutchison unit is owned by Hong Kong’s Hutchison Tele- communications International . The winning bids superseded those of Hong Kong’s SmarTone- Vodafone and Macau’s Kong Seng Paging . Italy’s biggest phone company Telecom Italia SpA has confirmed that it will shift its fixed-line access network into a separate unit. A plan to split off the domestic wireless business may have been shelved, analysts said. Chiara Remondini, of Bloomberg News, reported on 25 th October that the Milan- based company did not mention the separation of Telecom Italia Mobile SpA , which was part of the reorganisation plan announced on 11 th September. That plan marked a shift in strategy after Telecom Italia spent $26 billion to buy back its wireless unit in 2005. A healthier Portugal Telecom was likely to be successful in repelling a hostile takeover by Sonaecom SA , a unit of the largest private employer in Portugal. The per- ceived risk of owning Lisbon-based Portugal Telecom’s $4.1 billion in bonds had declined to the lowest in three months on 26 th October, an indication that an acquisition was not in the works. An unsuccessful takeover would mean that Portugal Telecom keeps its investment grade rating as designated by Standard & Poor’s. ✆ ✆ ✆

The $1.9 billion purchase of a controlling stake in Thailand’s dominant telecommunications conglomerate early this year by a group led by the Singapore government’s investment arm, Temasek Holdings , has led to problems that could have a dampening effect on foreign investment. The purchase of the company, Shin , provoked nationalist outrage in Thailand. And buying it from the family of an unpopular prime minister sparked off extensive street protests that culminated on 19 th September in the military ousting of Thai leader, Thaksin Shinawatra. The coup attracted wide notice to Temasek, which is conducting an ambitious overseas investment campaign that exceeded $13 billion in its latest fiscal year. Temasek has materially helped Singapore in its effort to stay up with its competitors China and India. Deutsche Telekom AG , Europe’s biggest phone company, plans to spend $2.7 billion over three years to build a high-speed mobile network in the US. By adding services, the German company’s cellular phone unit T-Mobile , fourth-largest in the US, plans to boost its customer count by least 50% to 35-40 million subscribers by 2015. In September, T-Mobile USA spent $4.2 billion on wireless licenses. Deutsche Telekom bought the company, formerly known as VoiceStream Wireless Corp, for $35 billion in 2001. President Jacques Chirac of France on 27 th October called for closer ties with China in telecommunications and other fields. Mr Chirac flew from Beijing to the central city of Wuhan to place the symbolic last brick in a new factory being built by Paris- based auto maker PSA Peugeot- Citroen SA . The French president took the opportunity to broaden the scope of his expectations, noting that France ‘is ready for the most ambitious cooperation’ with Beijing in other sectors, such as telecom. Telecom carrier Global Crossing Ltd (Hamilton, Bermuda) said it will buy Impsat Fiber Networks Inc for about $95 million and the assumption of about $241 million of debt. Global Crossing, which operates an Internet Protocol- based system of networks, said it will pay cash for the Buenos

Aires, Argentina-based company. Impsat operates a private telecommunications network and provides Internet services in Latin America. According to Business Week (26 th October), the deal is expected to close in the first quarter of 2007. Impsat’s cash balance as of June 2006 was $23 million. Separately, Global Crossing said it has obtained a financing commitment for about $95 million to pay for its acquisition of UK-based Fibernet Group PLC . 3G licensing in Russia has come a step nearer, now that the State Radio Frequency Commission has announced frequency allocations for next-generation services. The commission will offer an unspecified number of concessions in the 1.935GHz- 1.980GHz, 2.010GHz-2.025GHz, and 2.125GHz-2.170GHz bands. Prime Tass reports that three licenses are expected to be auctioned. The country’s two largest cellular operators, MTS and Vimpelcom , confirmed to the news agency that they intend to bid for 3G licenses. The third- largest operator, MegaFon , did not disclose any plans. Fuller details of the auction process were expected to be announced in December. KDDI Europe , a wholly owned subsidiary of Japan’s second- largest integrated telecom operator KDDI Corp , has contracted with Juniper Networks , of the US, to supply it with appliances for launching a managed service to provide secure remote network access in Europe. In a press release Juniper said its Secure Access solution would enable the European company to deliver network-based SSL VPN services to multiple enterprises of any size from a single appliance and/or cluster. As reported by TeleGeography (24 th October), the new service will also utilise the vendor’s integrated platforms to protect the network infrastructure in KDDI’s London data centre. This facility is provided by KDDI Europe’s sister company Telehouse Europe . The new service is being made available initially in the UK but will then be extended across Europe.

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Wire & Cable ASIA – January/February 2007