WCA May 2007

Telecom News

Mobile phone operator StarHub , of Singapore, has selected Huawei Technologies to provide and support future upgrades of its 3G mobile network, including the forthcoming high-speed downlink packet access (HSDPA) service. As reported by TeleGeography (9 th February), StarHub said it picked the Chinese vendor on the strength of its progressive 3G technology roadmap. StarHub hopes that the Huawei technology will deliver the full capabilities of HSDPA in 2007, including an upgrade to 14.4Mbps by year-end. StarHub launched its 3G service in 2005, and at the end of September 2006 had 128,000 3G customers. The president of Venezuela, Hugo Chávez, announced a state takeover of the telephone company CA Nacional de Teléfonos , and said he did not intend to pay CANTV shareholders the market value. Speaking during a 21 st January radio broadcast, Mr Chávez said the price for CANTV would take into account a ‘technological debt’ to the state, as well as debts to workers, pensions, and other obligations. Verizon Communications, the New York-based international telecom, holds a minority stake and is the controlling shareholder in CANTV, which provides all fixed telecom services within Venezuela. América Móvil and its sister company Teléfonos de México , or Telmex, have agreed to scrap their joint plan to buy a $677 million (28.5%) stake in Venezuelan fixed- line operator CANTV from US- based Verizon Communications . This leaves Verizon on its own to negotiate with the Venezuelan government in the wake of President Hugo Chávez’s declaration of intention to nationalise CANTV. In April 2006, América Móvil agreed to buy Verizon’s telecom interests in Venezuela, the Dominican Republic, and Puerto Rico for a total $3.7 billion. It has completed the acquisition of Verizon’s 100% stake in Verizon Dominicana for $2.062 billion and expects clearance soon from the US Federal Communications Commission to purchase a 52% interest in Telecomunicaciones de Puerto Rico for $939 million. The announcement by the US government that it will no longer require applicants for an amateur radio licence to demonstrate

proficiency in Morse Code has shaken the tight community of 660,000 operators who have long provided a communications lifeline in emergencies. The lingua franca of amateur radio is an apparent victim of the popularity of other modes of communicating over so-called ham radio – voice, teletype, even video. While the December decision had been expected, some Morse Coders fear that the very survival of the code is in question. “It’s part of the dumbing-down of America,” Nancy Kott, editor of World Radio magazine, told the New York Times (27 th December). “We live in a society today that wants something for nothing.” Motorola Inc , of the US, said it plans to cut 5% of its 70,000-strong work force, some 3,500 jobs, in an effort to improve operating costs after a disappointing fourth quarter last year. Operating earnings from the mobile devices division, the company’s largest business, fell 49%, to $341 million, in the quarter despite a 19% increase in sales, to $7.8 billion. The company shipped a record 65.7 million handsets in the quarter, up 47% from a year earlier. Motorola, which trails Nokia Corp , of Finland, among cellphone makers, said on 19 th January that its world market share grew nearly 1%, to 23.3%, in the final quarter of 2006. The job cuts are to be spread across the company globally and completed in the first half of the year. Motorola said that the cuts would save about $400 million over two years. North America’s biggest maker of telephone equipment – Nortel Networks Corp , of Canada – will slash 2,900 jobs, or 8.5% of its workforce, over the next two years and shift another 1,000 employees to lower-cost locations like China, India, and Mexico. This is the latest round of job cuts for the Toronto- based company, which once employed about 90,000 people and currently employs about 34,000. Nortel said on 8 th February that this year it will also reduce by 500,000 square feet its global real estate portfolio of about 11 million square feet. The company said the two moves would save about $400 million a year. Helio LLC – a joint venture of EarthLink Inc , of the US, and SK Telecom Co , of South Korea, said on 6 th February that its youth-

oriented cell phone service would reach 100,000 subscribers in April and that it was generating monthly revenue at an annual rate in excess of $100 million. Helio, which began marketing in May 2006, said its users send and receive more than 400 text messages per month, a level it said was nearly seven times the industry average. Chief executive Sky Dayton said the New York-based company finished 2006 with about 70,000 customers and that subscriber growth has been accelerating, although he declined to estimate how long or how many subscribers it would take to reach profitability. Shares in the Swedish cellular equipmentmaker Ericsson dropped appreciably on 2 nd February, even after chief executive Carl-Henric Svanberg said that Ericsson saw ‘continued opportunities to outpace the market.’ As noted by Parmy Olson on Forbes.com, investors and analysts were more interested in the company’s smaller-than- expected growth in profit for fourth-quarter 2006, as well as the fact it had lowered its forecasts for 2007. Ericsson said it expected growth of between 4% and 6% for its GSM/WCDMA mobile phone technologies unit, compared to the 5% to 9% it had previously forecast. GSM/WCDMA technology is used in about 80% of mobile networks. In a joint effort to reduce phone development time and costs, a group of mobile phone operators and handset vendors is developing a 3G (third-generation) mobile phone platform that combines many standard hardware and soft- ware components. NTT DoCoMo , Renesas Technology , Fujitsu , Mitsubishi Electric , Sharp , and Sony Ericsson Mobile Communications will jointly develop a platform to support HSDPA (high-speed downlink packet access) and W-CDMA (wideband code division multiple access) as well as GSM (global system for mobile communications), GPRS (general packet radio service), and EDGE (enhanced data rates for GSM evolution). As reported by Nancy Gohring of IDG News Service, phones that use the new platform could become available worldwide and at a lower cost than other 3G handsets. The companies expect to complete development of the platform in second-quarter 2008.

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Wire & Cable ASIA – May/June 2007