WCA January 2007

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Telecom News
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Wire & Cable ASIA – January/February 2007
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 (26th 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.
“[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
26th 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
27th 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 (26th 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.