WCA September 2008

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

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

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.

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Wire & Cable ASIA – September/October 2008