WCA January 2009

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18 Wire & Cable ASIA – January/February 2009
Elsewhere in telecom . . .
Nokia Siemens Networks announced ✆ ✆
it has increased its workforce of
TD-SCDMA qualified engineers in
China to over 1,200, in advance of
the deployment of China Mobile’s
new network.
The Finland-based telecom solu-
tions supplier had already secured
Chinese approval for deployment of
its TD-SCDMA radio access solution.
Nokia reported weaker-than-
expected sales and profits for its
third quarter, ended 30th September.
Net profit dropped to $1.46 billion,
from $2.10 billion a year earlier,
and sales declined 5.1%, to $16.42
billion, but the world’s top cell phone
maker retains a positive outlook on
prospects for that market.
Handset makers have started to feel
the pinch from slowing economies,
with sales falling in Western Europe.
But booming demand from emerging
markets has so far balanced that
out, and the Finnish company said
it expects mobile industry volumes
to rise around 10.5%, for a total of
1.26 billion phones in 2008. Nokia
will continue to concentrate on profits
and cash flow rather than on driving
market share higher for its own sake,
the company’s chief financial officer
told Bloomberg TV on 16th October.
“We don’t manage for volume or
market share for the sake of market
share,” Rick Simonson said. “We
manage for market share that’s
sustainably profitable.”
South Korean fixed line and ✆ ✆
broadband provider LG Dacom
attributed strong third-quarter
2008 results to increased
demand for its Internet and VoIP
services. For the three months
through September, net profits
were up 28% year-on-year to
$29.9 million. Revenues climbed
21.8% from the same period of
2007. Most notably, 12-month
revenues from the operator’s VoIP
business rose 178%. According
to TeleGeography (23rd October),
LG Dacom previously announced
having reached the one-million-
subscribers mark. In other news of
LG Dacom, Reuters reported that a
subsidiary, the broadband provider
LG Powercom, hoped to raise up
to $99 million through an initial
public offering in November.
Could the instant popularity of its ✆ ✆
newest product actually hurt AT&T?
Apparently so. On 23rd October
the US telecommunications giant
reported that stronger than
expected sales of its eagerly
awaited iPhone 3G, which went on
sale 11th July, cut into third-quarter
results as earnings were impacted
by subsidies for the 2.4 million
iPhones sold. AT&T pays a subsidy
of about $375 per iPhone, selling in
stores for $199 or $299 depending
on the model.
The company thinks the subsidy
arrangement will justify itself over
time, as iPhone buyers go on to
pay up to 60% higher service
fees on the Apple phones. AT&T
also estimates that 40% of those
2.4 million iPhones were snapped
up by new wireless customers
– good news for the company’s
future earnings.
In the meantime, earnings
were down $900 million in the
July-September quarter, costing
AT&T in three months what it had
budgeted for the full year 2008.
The European Union’s telecommunications commissioner, Viviane Reding,
is scaling back her plan to create a new Europewide telecommunications
agency. Ms Reding’s proposal for an agency with the power to intervene in
national markets to mandate consumer-friendly changes in regulation and
pricing has faced opposition in Brussels. The new agency – the Body of
European Telecommunications Regulators – has achieved no traction in the
European Council of Ministers, the upper chamber of EU government.
Writing from Berlin in the International Herald Tribune, Kevin J O’Brien reported
that documents obtained by that newspaper indicate Ms Reding’s compromise
would reduce the staff of the new agency to from 50 to 20 people. It would
also give telecommunications regulators from the 27 EU countries an effective
veto over any decisions taken by the new agency. Most of the EU members
are known to oppose the idea of a new overseer. (“Commissioner to Offer
Concessions to EU Telecommunications Regulators,” 23rd October)
The scaled-back Reding plan was to be outlined in Venice on 25th October
during a two-day meeting of the European Telecommunications Network
Operators’ Association, which tends to reflect the interests of countries in the
Council of Ministers.
The purpose of the conference was to gather EU lawmakers and chief
executives of the largest telecom operators – including BT, Deutsche Telekom,
France Télécom, Telefónica, and Telecom Italia – to deliberate the future of
the industry.
The Herald Tribune cited these factors as prompting Ms Reding’s call for a
European telecommunications regulator:
The creation of such a post would enable the European Commission to ✆ ✆
enforce EU law on its members, many of which defy significant directives
from Brussels – including some rules aimed at weakening the dominance
of former monopolies
The commission has the power to recommend remedies in the 27 national ✆ ✆
markets but not the power to enforce those remedies. The result is a
patchwork of sometimes conflicting regulation as countries protect former
monopolies, most of which are still partly owned by their governments
Mr O’Brien wrote, “The compromise plan would rename the new agency
the Office for the European Telecoms Regulators to underscore its control
by the regulators, who would appoint a managing director and half of the
staff members. If an EU country failed to follow EU law, the commission and
the new agency would have to agree jointly before intervening in national
markets. The national regulators would set policy for the agency and reach
decisions by majority vote.”
Trying again for support from national regulators,
EU telecom chief retools an unpopular proposal