WCA May 2007

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Telecom News
26 Wire & Cable ASIA – May/June 2007
The winner: LG Electronics,
for its low-cost 3G handset
LG Electronics, of South Korea,
has won a contest held by the GSM
Association to identify the best low-
cost handset for third-generation
mobile phone networks, a source
close to the project told Reuters in
Amsterdam, Holland, on 6 th February.
The winner was to be officially
announced at the 3GSM World
Congress 2007 between 12th and 15th
February in Barcelona. Given this
exposure at the industry’s premier
mobile communications event , Seoul-
based LG can expect to receive orders
for several millions of the handsets by
as many as a dozen mobile carriers.
Reuters reported that the LG handset
will cost around $100, breaking an
important price barrier and probably
boosting sales of 3G phones. Most
3G phones are much more expensive,
and sluggish sales of the devices
has held back the advance of such
3G network services as mobile
Internet. The winning handset was
certainly chosen by a jury of LG’s
peers. Participants in the selection
include Cingular, Globe Telecom,
Hutchison 3G, KTF, MTN, Orange ,
Smart, Telecom Italia, Telefónica,
Telenor, T-Mobile, and Vodafone.
According to the GSM Association,
taken together these operators have
620 million subscribers.
LG is the No 5 mobile phone maker
worldwide, behind Nokia (Finnish),
Motorola Inc (American), Samsung
Electronics Co (South Korean),
and Sony Ericsson (Japanese-
Swedish). LG Electronics has been
trying to regain its share of the
global market after a slow 2006.
3GSM, the latest addition to the
GSM family, enables the provision
of mobile multimedia services. The
technology on which these services
are delivered is based on a GSM
network enhanced with a wideband-
CDMA (W-CDMA) air interface – the
over-the-air transmission element.
Global operators, in conjunction with
the 3G Partnership Project standards
organisation, have developed 3GSM
as an open standard.
The LG handset will be available
to all members of the London-based
GSM Association – most of the world’s
carriers.
In combination, Alcatel-
Lucent is slow to find its feet
In the first earnings report from the
recently combined telecom equipment
maker Alcatel-Lucent SA, the Paris-
based company said on 9th February
that it planned to cut another 3,500 jobs
in the wake of disappointing fourth-
quarter results. The company posted
a loss of $803 million for the October-
December period, compared with
a profit of $495 million for the same
period of 2005. Revenue went down
15.8% to $5.74 billion. The company
ascribed its losses to tougher-
than-expected market conditions
– particularly in North America – and
uncertainty among customers about
the combination of the French and
US equipment makers.
Alcatel-Lucent said it plans to shed
a total of 12,500 jobs, or 16% of
its work force, over the next three
years, instead of the 9,000 originally
announced. The company currently
has about 80,000 employees, inclu-
ding some 21,500 across the United
States. That total is down from about
88,000 at the time of the merger in
September 2006, and reflects the
recent sale of the company’s satellite,
transport, and security operations
to the Thales Group , of France, and
the acquisition of the UMTS radio
access business of Canada’s Nortel
Networks Corporation.
In other telecom news . . .
VietnamPosts and Telecommuni-
cations (VNPT) and Viettel, the
two government-owned telecom
operators, have joined an inter-
national consortium to lay a
$780 million fibre optic cable
linking Asia and the US. Work
on the cable, which will pass
through a hub in Malaysia, was
due to start by 1st March, with
completion slated for March 2008.
The eight-firm consortium includes
AT&T (US), CAT (Thailand), PLDT
(Phillipines), REACH (Hong Kong),
StarHub (Singapore), and Malaysia
Telecom. The project took on a
new urgency after an undersea
earthquake off Taiwan late last
year damaged cables in the area
and cut off communications to and
from Southeast Asia.
The Spanish telecommunications
giant Telefónica and two founda-
tions run by the Hong Kong
billionaire Li Ka-shing will join
the financier Francis Leung in
acquiring a 22.7% stake in Hong
Kong’s largest phone company,
PCCW. Telefónica is buying 8% of
PCCW; the two foundations, 12%.
Telefónica is already a partner with
state-operated China Network
Communications , which owns
19.9% of PCCW through a 5%
holding in its China Netcom Group
Corp (Hong Kong) unit, known as
China Netcom. An official of the
Spanish company said that, with
the deal, Telefónica expects to
strengthen the alliance with China
Netcom. A benefit to Telefónica
from the stronger alliance would be
the right to exchange its shares in
PCCW for shares in China Netcom.
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Rise of monopolies is blamed for dramatic slowing of
broadband take-up across Europe
The European Competitive Telecommunications Association (ECTA)
reported a significant slowdown in broadband uptake across Europe, falling
from 23% to only 7% growth in the half-year ended September 2006. The
slowdown comes at a time when once again Europe is seeing the growth
of telecommunication monopolies in key countries, a correlation ECTA
believes is not coincidental. ECTA managing director Steen Clausen said,
“[Our scorecard] shows that growth has stalled in a number of countries
where we have seen the power of the incumbent on the increase, including
Denmark and Belgium which experienced a paltry 3% growth in broadband
penetration; and France, which has fallen to eighth place in Europe, well
behind the United Kingdom. In contrast, in Germany, Deutsche Telekom’s
market share dropped below 50% for the first time, corresponding with a
surge in growth in broadband penetration.”
Europe includes some of the world’s leading broadband countries. However,
its position could be put at risk if regulators do not act to re-enforce
competition and open markets, ECTA warned. Mr Clausen said, “This is
extremely disappointing news from some of the countries which have
traditionally been at the forefront of Europe’s broadband revolution. Until
recently, France was the poster child for broadband, with some of the most
attractive triple-play packages in Europe. It now needs to be vigilant if it is to
maintain its position.”