WCA March 2008

Mr Wong reported that Rene Obermann, the CEO of Bonn-based Deutsche Telekom, is expanding T-Mobile to make up for more than four years of declining fixed-line phone revenue in Germany. Last year, T-Mobile USA agreed to buy SunCom Wireless Holdings Inc for $1.6 billion, adding about 1.1 million mobile-phone customers in southeastern US and Puerto Rico. T-Mobile International, which sells services across 11 Euro- pean countries and the US, last year also acquired France Telecom SA’s Orange mobile-phone unit in the Netherlands. Bloomberg that T-Mobile USA has not seen any signs of cooling customer demand for wireless data services. “[That is] a steep curve that goes north,” he said at the investor conference in Arizona, organised by the banking giant Citigroup. Deutsche Telekom bought Voice-Stream Wireless Corp, now T-Mobile USA, for $35 billion in 2001. T-MobileUSAadded857,000 subscribers in third-quarter 2007 for a total of 27.7 million at the end of September. It lags behind AT&T, Verizon Wireless, and Sprint Nextel Corp in numbers of subscribers. In the same week that Deutsche Telekom delivered the sobering news of its US unit, the largest US phone company – AT&T Inc – said that its consumer business faces ‘softness’ because of slowing economic growth, triggering the biggest drop in the company’s stock value in more than five years. AT&T said the pressure comes from its having disconnected great numbers of home-phone and high- speed Internet clients for failure to pay their bills. The softness has not, the company said, spread into the mobile-phone unit. Elsewhere in telecom . . . As reported in the Economic Times for 10 th January, India’s Department of Telecom reconsidered the applications of six companies for telecom licences, which it had rejected only two days earlier on technical grounds. The companies – Allianz Infratech, S Tel, Spice Communications, Indiabulls- owned Selene, Parsvnath, and Cheetah Corporate Services – were expected to be issued letters of intent permitting them to offer their services in the areas (‘circles’) covered by their applications. ✆ ✆ Mr Dotson told

Watched by Europe, two British mobile phone operators join forces to share networks

T-Mobile UK and 3 UK announced 31 st December that they are combining their third-generation networks in a move to save each of them $1.5 billion over the next decade. Vodafone and Orange, two other British mobile phone companies, have been talking about going the same route at least since February of last year. In theory, at least, such agreements make good sense. In 2000, European mobile phone companies spent some $145 billion on 3G licences, then spent billions more building networks intended to generate enormous profits through the enhancement of mobile Internet services. Now, seven years have passed, and mobile phone operators still struggling to market their 3G wares. Pooling their networks would lighten operating costs while they wait for their subscribers to become willing to pay for slower 3G connections that net them portable Internet. So far, however, paying customers have exhibited a stubborn determination to stay with the faster download speeds offered by fixed-line broadband connections. If that can be broken, and fairly soon, the industry will likely see more such network-sharing agreements beguiling the time – and easing the financial strain – while the phone companies bring their 3G technology up to speed. Faster speeds are again being promised, this time by way of a High-Speed Downlink Packet Access, or HSDPA, which is being billed as several times faster than the original 3G networks. T-Mobile UK and 3 UK are creating what they say will be the largest HSDPA network in Europe. Analysts are adopting a wait-and-see attitude toward both the new technology and the usefulness of network-sharing short of outright merger. Many believe that only consolidation across the industry will spell success for 3G. Meanwhile, T-Mobile and 3 UK have begun their own consolidation. Like a touring company, they will be trying out their network-sharing in rural areas first.

Alcatel-Lucent sells its stake in a Dutch fibre vendor

had a negative impact on AlcaLu’s financial performance in 2007.’ He also cites ‘industry chat’ to the effect that the vendor has been considering selling some of its assets to free up cash for acquisitions, and that the Draka stake sale might be the first of a number of divestments. Profit outlook for T-Mobile USA disappoints its German parent Deutsche Telekom AG, Europe’s largest telephone company, said investments in its American mobile- phone unit T-Mobile USA will hurt the division’s profitability growth over the next two years. As reported by Kenneth Wong of Bloomberg News , T-Mobile USA Chief Executive Officer Robert Dotson told a conference in Phoenix on 9 th January that spending on networks and on faster wireless services will prevent the profit margin from reaching a ‘mid-30s’ per cent target. The fourth-largest US wireless company had budgeted $10.3 billion in capital spending in the three years through 2009. (‘Deutsche Telekom Spending to Hurt US Profitability,’ 10 th January)

Draka Comteq BV was formed in 2004 when Amsterdam-based Draka and Paris-based Alcatel-Lucent combined their optical fibre and communications cable assets. Now, AlcaLu is selling its 49.9% stake in the fibre vendor to Draka Holding NV for $301 million in cash. What has prompted the sale? International news editor Ray Le Maistre posed the question in Light Reading for 18 th December, and solicited this answer from an AlcaLu spokesman: “[We] had a good opportunity to get out of this non-core asset and to help Draka further develop its business. Draka Comteq’s development has been very successful so far, and now the company needs to further develop with other partners. We believe that for further development, Draka needs to have full control of Draka Comteq.” Mr Le Maistre noted that analysts had been suggesting for some time that AlcaLu should reconsider its position in the mobile infrastructure market, ‘an increasingly cut-throat sector that’s

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Wire & Cable ASIA – March/April 2008