WCA November 2009

conclusion that [a merger] would have the most value for our shareholders. This will give us a stronger foothold in the UK market than we had before.” Tom Alexander, chief executive of Orange in Britain, will serve as chief executive of the new venture. Richard Moat, T-Mobile’s chief executive in Britain, will become chief operating officer. The board of directors will have two members each from Deutsche Telekom and France Télécom. may look to ‘the hollow operator’ to brighten up their balance sheets A report published 19 th August by Light Reading Insider introduced a term that seems likely to enter the vocabulary of the telecommunications industry. “Telecom Managed Services: the Rise of the Hollow Operator” defines such an operator as a telecom carrier that – while continuing to own all or most of its infrastructure assets – seeks out third-party partnerships to offload more and more operational functions. The hollow operator, according to analyst Simon Sherrington, who wrote the report, “has an eye toward cutting operational expenditure [opex] costs and freeing up internal resources for more intense business development activities.” The telecom managed services sector is seen as attracting huge interest from established IT giants that see this area as a natural extension of their core businesses; and from telecom equipment manufacturers that see telecom-focused managed services as their only significant growth path over the next decade. Mr Sherrington wrote, “We began charting this inevit- able clash in 2004. The intensity level has picked up dramatically over the past 18 months and will continue to grow into the next decade.” Phil Harvey, Editor-in-Chief of Light Reading Insider noted “a bunch of reasons” why operators would want to hollow out and trust the running of some of their networks to companies that have traditionally been telecom equipment suppliers. He wrote, “In developed countries, cost-cutting is the main driver, especially as it relates to legacy networks. Traditional telecom equipment vendors

Having launched its SEACOM system, on 23 rd July, the Indian giant Tata Communications Ltd believes it has in place the first undersea submarine cable system to connect Europe, Asia, Africa and India. SEACOM, which augments the Tata Communications SAT3/SAFE cable system, also provides fully redundant service by supplying access via multiple routes to anywhere in the world. Europe may now be reached by any one of the separate routes SAT3, SEACOM and SAFE SEA-ME-WE3/4. Writing on 27 th August in MIS Asia , the information technology management magazine for CIO’s and senior IT executives across the Asia-Pacific region, Jack Loo noted that the African countries Mozambique, Tanzania, Kenya and South Africa can hook onto Tata Communications network services and thence to European, Asian and Indian networks. Tata Communications is itself operating the landing point in its headquarters city of Mumbai. Neotel, the Tata subsidiary in South Africa, will manage the landing point there. “Meanwhile,” Mr Loo reported, “Tata Communications is touting SEACOM to enhance connectivity for businesses based out of Europe, Asia and India with cable and capacity options into South Africa. The subsidiary Tata Communications Transformation Services will manage network administration, operations and maintenance of the 10,560-mile cable system supporting 1.28 terabits per second of capacity.” Byron Clatterbuck, who is senior vice president, global transmission services, at Tata Communications, told MIS Asia that his company is also able to provide onward connectivity to major business destinations in the United States. Now a global service provider via SEACOM, Tata Communications offers end-to-end solutions for Europe, Asia, Africa and India

and Vodafone, with 25%. Deutsche Telekom and France Télécom said they expected to sign an agreement by the end of October. Writing from Berlin in the New York Times , Kevin J O’Brien reported that the prospective partners foresee an outlay of $984 million to $1.3 billion through 2014 to eliminate redundant mobile base stations, close retail stores, and streamline administrative operations. They said they intend to maintain their current brands in Britain for 18 months before making a final, mutually agreeable choice. This could be the French brand, Orange; the German, T-Mobile; or something else entirely. (“Merger Would Create Mobile Giant in Britain,” 9 th September) The operators predicted that the venture would eventually generate savings of $5.7 billion. Gervais Pellissier, the France Télécom chief financial officer, said, “We needed the scale to run a very efficient business.” Timotheus Höttges, the Deutsche Telekom chief financial officer, told Mr O’Brien, “We evaluated all options over the last months and came to the

Deutsche Telekom and France Télécom plan to merge their cellular units in Britain into the country’s largest mobile operator The largest and third-largest Euro- pean telecommunications companies, Deutsche Telekom and France Télécom, said 8 th September that they plan to merge their British mobile operations and thus become the leading provider of such services nationwide. The 50-50 joint venture between the companies, the number 3 and number 4 operators in Britain, would combine Deutsche Telekom’s T-Mobile UK with France Telecom’s Orange UK. According to the information tech- nology research firm Gartner, the proposed 50-50 joint venture, which needs approval from each company’s supervisory board and from British and European regulators, would have 28.4 million subscribers and a 37% market share. Their pooled strength would push the partners well ahead of current market leader O2 – which commands 27% of the market –

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Wire & Cable ASIA – November/December 2009