WCA November 2007

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Wire & Cable ASIA – November/December 2007 29
Telecom news
Elsewhere in telecom . . .
Telephone service has quadrupled
worldwide over the past decade to
4 billion lines, according to a report
published 4th September by the
International Telecommunication
Union, a UN agency.
The ITU counted 1.27 billion
fixed lines and 2.68 billion mobile
accounts, but notes that the total
number of users is uncertain
because many people, particularly
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in industrial countries, have both
kinds of service. The increase
is most evident in developing
countries that have been able to
offer cellular service at lower rates
than fixed-line to tens of millions
of people. As a result, the ITU
said 61% of the world’s mobile
subscribers are in developing
countries.
China and India together added
almost 200 million mobile sub-
scribers to the global total in the
first three months of 2007.
The Paris-based telecom equip-
ment maker Alcatel-Lucent on
13th September issued its third
profit warning of the year, causing
its shares to immediately slide
as much as 14% in Paris trading.
Blaming weakness in its wireless
network business, Alcatel-Lucent
forecast third-quarter operating
profit at ‘around break-even’,
and full-year revenues as ‘flat or
slightly up’. Since concluding its
transatlantic merger less than a
year before, the French-American
combine had shed more than 40%
of its market capitalisation.
Writing in Business Week (13th Sep-
tember), Paris bureau chief Carol
Matlack noted that, five years after
the telecom crash, Alcatel and
Lucent had ‘looked to be back on
track in 2006’, with combined sales
of $25.3 billion at current rates and
$724 million in net earnings. Now,
a London-based analyst predicted
to BW , the company will likely show
a net loss for 2007 of $1.6 billion,
on a 3.2% decline in revenues
to $24.49 billion. By comparison,
Ms Matlack wrote, market watcher
Infonetics Research forecast growth
in the global market for tele-
communications equipment of 4%
in 2007, to $225 billion.
As consumer product prices
continue to rise in China, tele-
communications companies have
raised their international long-
distance calling rates by more than
300% in some cases. According to
Shanghai’s Oriental Morning Post
(20th August), China Unicom, China
Netcom, and China Telecom have
all announced substantial increases
in their mainland international call
rates. The newspaper reported that
the China Telecom increases that
took effect on 1st September for 47
countries and regions range from
(approximately) $0.59 to $1.94 per
minute, for a maximum increase of
329%. The new China Unicom rates
that commenced 1st June were up
over 200%.
A Dow Jones report of 31st August
gave Chunghwa Telecom’s first-
half audited net profit as $774
million, representing a 10.9%
rise from $671 million in the year-
earlier period. The report said
the result was in line with the
unaudited net profit of $743.9
million the company posted in July.
Dow Jones added that the firm’s
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On 5th September the European Competitive Telecommunications Association
(ECTA) published the results of its latest bi-annual broadband scorecard,
showing that broadband penetration in the European Union has reached an
all-time high and has drawn even with Japan and the US. The 16% growth
achieved in the EU was attributed largely to increased competition from
new-entrant telecom providers using LLU (local loop unbundling), cable,
and alternative technologies. The favourable results followed a slowdown in
growth recorded for the previous six-month period.
ECTA reported from Brussels that eight EU countries now have broadband
penetration levels above 20%, with Northern Europe leading the field. The
Netherlands has the highest penetration (33%), followed by Denmark, Finland,
and Sweden. For the first time, average penetration in the EU15 countries
is, at 19.9%, comparable with the average penetration of 20.2% in Japan
and 19.6% in the US. (Data as of December 2006 from the Paris-based
Organisation for Economic Cooperation and Development [OECD].) [Note:
EU15 comprises the following countries: Austria, Belgium, Denmark, Finland,
France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal,
Spain, Sweden, and the United Kingdom. These were the 15 members of the
European Union prior to the accession of 10 more countries in May 2004.]
Key findings of the most recent ECTA broadband scorecard are:
total broadband lines increased by 16% in the six months to September,
from 73 million lines in the third quarter of 2006 to 84 million lines in the
first quarter of 2007
northern European countries remain world leaders in broadband. At
the other end of the scale, penetration in Greece, Poland, Slovakia, and
Cyprus remained below 10%
in the EU15, growth was particularly strong in Germany (an estimated
20%), Ireland (38%), and Greece (69%, although from a particularly low
base). Growth was less than 10% in Finland, Belgium, and Portugal
countries with the highest levels of broadband penetration in Europe could
be characterised as having strong competition through a combination
of LLU and cable. Lower-ranked countries often lacked significant
unbundling competition
• incumbents’ market share of the overall retail broadband market in
the EU stayed static at 46% and, when re-sale services are taken into
account, remained at more than half of total broadband lines. In Italy the
incumbents’ market share remained at a very high 70%
DSL (digital subscriber line) maintained its share of the European market
at 83% (slightly above the third quarter of 2006), while cable remained at
15% of end-user retail connections
overall, compared with the previous period there was a dramatic increase
in full unbundling, while bitstream declined as competitors climbed the
ladder of investment
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With competition reviving broadband growth in
Europe, the European Union closes the gap
with Japan and the US