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Wire & Cable ASIA – September/October 2008
Elsewhere in telecom . . .
Sony Ericsson warned on 27
✆
✆
th
June
that it would make no profit in the
April-June quarter due to weaker
demand for its more expensive
phones. Motorola is expected
to continue losing market share
to aggressive competition from
LG Electronics and Samsung
Electronics, both of South Korea,
as well as Nokia.
Virgin Mobile USA said on 27
✆
✆
th
June
that it would pay $39 million in
stock for Helio US, a mobile unit
of SK Telecom, South Korea’s top
mobile operator. The acquisition, for
a nominal sum, is seen as an effort
to bolster two faltering businesses.
Helio was founded in May 2006 to
bring popular features of South
Korean cellphones to the US
market, but its 170,000 subscribers
are down from nearly 200,000
at the beginning of 2008. Virgin
Mobile USA, partly owned by Sprint
Nextel Corp and British-based
Virgin, serves more than 5 million
customers in the US but its growth
there has been slowed by the
weakening American economy and
competition from rival providers.
SK Telecom, which already owns
69% of Helio, had been looking to
China and the US as the Korean
market becomes saturated.
The Vodafone Group on 4
✆
✆
th
July
said it had agreed to acquire a
70% stake in Ghana Telecom,
the African country’s third-largest
mobile phone operator, for $900
million. The British company said
the government of Ghana would
retain a 30% stake. Vodafone’s
chief executive, Arun Sarin, said in
a statement, “Ghana is one of the
most attractive markets in Africa,
with mobile subscribers growing
at more than 55% [per year] and
mobile penetration around 35%.”
As reported by CNNMoney.com
✆
✆
(8
th
July), Russian telecommunica-
tions provider Vimpel-Communica-
tions (VimpelCom) said it will invest
$267 million to establish a mobile
telecommunications joint venture in
Vietnam, to be called GTEL-Mobile.
Vietnamese state-owned Global
Telecommunications Corp and
its subsidiary, GTEL TSC, are
VimpelCom’s partners in the venture.
The Russian telecom will receive
a 40% interest in GTEL-Mobile;
Global Telecommunications, 51%;
and GTEL, 9%.
Nortel Networks Corp plans
✆
✆
aggressive growth in the Asia-
Pacific region over the next two to
three years, hoping to capitalise
on demand for network gear and
services in rapidly growing markets
such as India and China. Last
year, the region accounted for
16% of Nortel’s total revenue. The
Canadian company wants to see
that increase to 20%–25% over the
next several years, a Nortel official
told Wojtek Dabrowski of Reuters
in a recent interview.
As noted by Mr Dabrowski,
Toronto-based Nortel — North
America’s biggest maker of
telephone equipment — has
picked faster network technology,
next-generation WiMax wireless
products and communications
that integrate the phone closely
with desktop computers as among
its big Asian bets. He wrote, “To
be successful, Nortel is trying
to set itself apart on technology
and long-term value, instead of
going head-to-head on price with
low-cost Asian vendors such as
Huawei Technologies.” (“Nortel
Plans Asia Push, But It May Be
a Tough Slog,” 8
th
July). Francois
Lancon, Nortel’s executive for the
Asia-Pacific region, said, “If you
are competitive in Asia, you’re
competitive in the rest of the
world.”
After the rejection of its $42 billion offer for its Finnish-Swedish rival
TeliaSonera, France Télécom said 30
th
June that it would shift its attention
to acquiring smaller telecommunications companies in the less developed
markets of Africa, Asia and the Middle East. The new focus reflects
the thinking of other European operators whose home markets are
nearing saturation. France Télécom has more than 172 million
customers worldwide, mostly under the Orange brand. It had revenue
of $83 billion in 2007. TeliaSonera had more than 100 million customers,
including those at associated companies, and posted 2007 revenue
of $16.1 billion. France Télécom in combination with TeliaSonera –
which has holdings in Spain, Russia and Turkey – would have created
the largest European telecom, with nearly 240 million subscribers:
ahead of Deutsche Telekom and Telefónica, of Spain.
In relinquishing its plan to acquire TeliaSonera, France Télécom said that
such a deal was “not essential to the pursuit of its strategy.” This strategy
may be deduced from the French company’s reported interest in assets in
privatisations in Algeria and Vietnam. Another possibility mentioned by analysts
is a deal with Orascom, which has operations in Pakistan and Bangladesh.
The Egyptian phone operator would offer significant growth potential.
TeliaSonera is partly owned by the governments of Sweden (37.3%) and
Finland (13%), which are trying to sell their stakes. The company’s rejection of
the France Télécom bid as too low puts TeliaSonera back into play, with few
short-term prospects for a new buyer but with an apparently strong sense of
its own value.
The TeliaSonera chairman, Tom von Weymarn, said in a statement,
“TeliaSonera is a strong business with excellent growth prospects in its
own right.” Jyri Haekaemies, the Finnish minister in charge of the state
shareholding agency, said in a statement that Finland had “strong confidence
in TeliaSonera’s future as an independent company.”
In other news of France Télécom, the company announced an agreement
✆
✆
with Nokia, of Finland, for a partnership to provide Internet services over
mobile telephones in nine European countries. France Télécom’s mobile
phone unit, Orange, will provide its mobile music store, while Nokia will
contribute digital mapping to provide location-based advertising and
search services to Orange’s cell phone customers. Customers will be
charged for the services on their Orange bills, eliminating the need for
credit card transactions. Terms of the partnership, which is to be effective
for three years, were not disclosed.
TeliaSonera rejects a bid, and France Télécom
looks farther afield