WCA January 2009

to rise around 10.5%, for a total of 1.26 billion phones in 2008. Nokia will continue to concentrate on profits and cash flow rather than on driving market share higher for its own sake, the company’s chief financial officer told Bloomberg TV on 16 th October. “We don’t manage for volume or market share for the sake of market share,” Rick Simonson said. “We manage for market share that’s sustainably profitable.” South Korean fixed line and ✆ ✆ broadband provider LG Dacom attributed strong third-quarter 2008 results to increased demand for its Internet and VoIP services. For the three months through September, net profits were up 28% year-on-year to $29.9 million. Revenues climbed 21.8% from the same period of 2007. Most notably, 12-month revenues from the operator’s VoIP business rose 178%. According to TeleGeography (23 rd October), LG Dacom previously announced having reached the one-million- subscribers mark. In other news of LG Dacom, Reuters reported that a subsidiary, the broadband provider LG Powercom, hoped to raise up to $99 million through an initial public offering in November. Could the instant popularity of its ✆ ✆ newest product actually hurt AT&T? Apparently so. On 23 rd October the US telecommunications giant reported that stronger than expected sales of its eagerly awaited iPhone 3G, which went on sale 11 th July, cut into third-quarter results as earnings were impacted by subsidies for the 2.4 million iPhones sold. AT&T pays a subsidy of about $375 per iPhone, selling in stores for $199 or $299 depending on the model. The company thinks the subsidy arrangement will justify itself over time, as iPhone buyers go on to pay up to 60% higher service fees on the Apple phones. AT&T also estimates that 40% of those 2.4 million iPhones were snapped up by new wireless customers – good news for the company’s future earnings. earnings were down $900 million in the July-September quarter, costing AT&T in three months what it had budgeted for the full year 2008. In the meantime,

Trying again for support from national regulators, EU telecom chief retools an unpopular proposal

The European Union’s telecommunications commissioner, Viviane Reding, is scaling back her plan to create a new Europewide telecommunications agency. Ms Reding’s proposal for an agency with the power to intervene in national markets to mandate consumer-friendly changes in regulation and pricing has faced opposition in Brussels. The new agency – the Body of European Telecommunications Regulators – has achieved no traction in the European Council of Ministers, the upper chamber of EU government. Writing from Berlin in the International Herald Tribune, Kevin J O’Brien reported that documents obtained by that newspaper indicate Ms Reding’s compromise would reduce the staff of the new agency to from 50 to 20 people. It would also give telecommunications regulators from the 27 EU countries an effective veto over any decisions taken by the new agency. Most of the EU members are known to oppose the idea of a new overseer. (“Commissioner to Offer Concessions to EU Telecommunications Regulators,” 23 rd October) The scaled-back Reding plan was to be outlined in Venice on 25 th October during a two-day meeting of the European Telecommunications Network Operators’ Association, which tends to reflect the interests of countries in the Council of Ministers. The purpose of the conference was to gather EU lawmakers and chief executives of the largest telecom operators – including BT, Deutsche Telekom, France Télécom, Telefónica, and Telecom Italia – to deliberate the future of the industry. The Herald Tribune cited these factors as prompting Ms Reding’s call for a European telecommunications regulator: The creation of such a post would enable the European Commission to ✆ ✆ enforce EU law on its members, many of which defy significant directives from Brussels – including some rules aimed at weakening the dominance of former monopolies The commission has the power to recommend remedies in the 27 national ✆ ✆ markets but not the power to enforce those remedies. The result is a patchwork of sometimes conflicting regulation as countries protect former monopolies, most of which are still partly owned by their governments Mr O’Brien wrote, “The compromise plan would rename the new agency the Office for the European Telecoms Regulators to underscore its control by the regulators, who would appoint a managing director and half of the staff members. If an EU country failed to follow EU law, the commission and the new agency would have to agree jointly before intervening in national markets. The national regulators would set policy for the agency and reach decisions by majority vote.”

third quarter, ended 30 th September. Net profit dropped to $1.46 billion, from $2.10 billion a year earlier, and sales declined 5.1%, to $16.42 billion, but the world’s top cell phone maker retains a positive outlook on prospects for that market. Handset makers have started to feel the pinch from slowing economies, with sales falling in Western Europe. But booming demand from emerging markets has so far balanced that out, and the Finnish company said it expects mobile industry volumes

Elsewhere in telecom . . . Nokia Siemens Networks announced ✆ ✆ it has increased its workforce of TD-SCDMA qualified engineers in China to over 1,200, in advance of the deployment of China Mobile’s new network. The Finland-based telecom solu- tions supplier had already secured Chinese approval for deployment of its TD-SCDMA radio access solution. Nokia reported weaker-than- expected sales and profits for its

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Wire & Cable ASIA – January/February 2009