WCA July 2010

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16 Wire & Cable ASIA – July/August 2010
The global telecom market,
which shrank 3.4% in
2009, is forecast to grow
5.1% this year
Telecom spending worldwide is on
pace to reach just under $2 trillion
in 2010, for a 5.1% increase from
2009, according to Gartner Inc. The
information technology research firm
expects the mobile device share of the
telecom market to increase from 11%
to 14% between 2010 and 2014.
Over that period the service share is
seen as dropping from 80% to 77%
while the infrastructure share remains
stable at 9% of the total market.
Worldwide enterprise network services
spending is forecast to grow 2% in
revenue in 2010, but Gartner analysts
said this masks ongoing declines
in mature markets as well as an
essentially flat North American market.
“Longer term, the global enterprise
network services market is expected
to grow modestly, largely on the
back of growth in Internet services
such as hosting,” Peter Kjeldsen,
research director at Gartner (Stamford,
Connecticut), said on 12th April.
Mr Kjeldsen added “Ethernet services
will also grow significantly, albeit at the
expense of both legacy services and
MPLS [multiprotocol label switching].”
Purchase of a Nortel
stake will mean a stronger
presence for Ericsson in
the Korean market
Ericsson AB, the world’s largest maker
of wireless networks, has bought a
controlling interest in a South Korean
joint venture from Nortel Networks
Corp for $242 million in cash. As
reported by Dow Jones Newswires,
on 21st April Ericsson said that it had
acquired a 50% plus-one-share stake
in LG-Nortel, the Canadian telecom
equipment maker’s joint venture
with LG Electronics Inc, the world’s
third-largest maker of mobile phones.
LG-Nortel develops large-scale sys-
tems for telecom providers in South
Korea. It is to be renamed LG-Ericsson
and continue to have its headquarters
in Seoul. The Swedish equipment
vendor said it expects the purchase,
which is subject to regulatory approval,
to significantly expand its footprint in
the Republic of Korea. “Korea is one
of the largest telecom markets with
advanced end-user demand for new
services,” Ericsson president and chief
executive Hans Vestberg said. “The
collaboration with LG Electronics will
enhance our position for future tech-
nology shifts.” Dow Jones’s Jung-Ah
Lee and Dominic Chopping reported
that the joint venture last year had
1,300 employees and sales of $650
million. Ericsson said it expects to
see a positive earnings effect from the
transaction within a year of closing.
Nortel, at one time the biggest maker
of telecommunications equipment in
North America, has been auctioning
its assets since filing for bankruptcy
protection in Canada and the US in
January 2009.
Elsewhere in telecom . . .
Genesys Telecommunications,
✆
of Singapore, has found that bad
customer service costs the country
$374 million a year. Also according
to its recent report, Singaporeans
are more likely than Malaysians,
Filipinos and Thais to switch their
allegiance when service is poor.
Karen Ng of the Business Times
[11th April] noted that the report,
intended to identify the key
factors that influence consumer
attitudes in the four markets, cites
telecoms, financial services, and
utilities as the industries with the
The video conferencing sector has seen a number of acquisitions recently
and, analysts say, is a key growth area as companies seek to cut the costs of
business travel.
Cisco Systems (San Jose, California) said the industry got a boost from the
disruption to business travel across Europe caused by the Icelandic volcano,
responsible for the worst air travel chaos since the 11th September 2001
terrorist attacks in New York.
“The only evidence is anecdotal, but you will not get a demo room in any of
the Cisco facilities,” Fredrik Halvorsen, former Tandberg CEO and head of the
Cisco Systems TelePresence Technology Group, told Reuters on 19th April.
“We have seen a huge spike in usage.”
As befits something called Eyjafjallajökull, the volcano was productive of
major havoc. Mr Halvorsen spoke on the fifth day of no-fly rulings enforced
across much of northern Europe, blanketed by a dense cloud of ash that
precluded jet aviation.
On the same day, Cisco closed its $3.3 billion acquisition of Oslo-based
Tandberg, announced last October – and became the biggest maker of
video conferencing equipment anywhere. Cisco is already the world’s
biggest network equipment maker. Also on 19th April, the Norwegian tech
start-up Videoworks opened for business, set to begin supplying a range of
high-definition conferencing systems based on technology from Sony. One
of the company’s founders came from a top sales position at Tandberg.
Videoworks chief executive Even Zimmer told Reuters that the volcano would
make business people think about the benefits of video conferencing. “The
timing is very good,” he said. “The market’s growing and the consequences
of the ash cloud won’t be forgotten very soon.”
On a smaller scale, the Swiss peripheral-device maker Logitech International
SA has acquired privately held video conferencing company LifeSize
Communications (Austin, Texas).
As noted by the Reuters reporters Richard Solem and Paul Sandle, Polycom
(Pleasanton, California) is attracting interest as the only major public video
conferencing company without a deal in the works.
Cisco saw an immediate surge in video conferencing
after the volcano eruption in Iceland