WCA November 2015

Telecom news

equally swift off the mark. Becoming the first US company to do so, Verizon Communications Inc said on 17 th September it would begin to offer roaming wireless service in Cuba the following week. The announcement came on the same day that new Cuban ambassador José Cabañas presented his credentials to Mr Obama at a White House ceremony. Verizon will charge $2.99 per minute for voice calls and $2.05 per mega- byte for data. This is an expensive option but one likely to be welcomed by Americans requiring cellular service while on a visit to Cuba. Previously they had to purchase a pay-as-you-go cell phone through state telephone company Empresa de Telecomunicaciones de Cuba SA (ETECSA); or else have a cell phone account in a third country. ETECSA does not offer data transmission. Whether the Verizon initiative will produce an early effect on Cuban subscribers is less certain. Of a population of 11 million, barely two million have cell phones. Cuban officials, who cite the USA embargo for the poor wireless development, say they hope that 60 per cent of the island’s people will have mobile phone access by 2020. Two important factors will help advance that hope: US mobile and broadband service providers can now enter into agreements with Cuban partners; and American companies can now outsource work to Cuban software developers. At the time of the Verizon announcement, US corporations had been working behind the scenes with the Obama administration for months to bring about the normalisation promised by the president, which began with the initial set of regulatory changes in January. The new rules – which allow US telecommunications and Internet companies to locate in Cuba and market their services there, as well as to import mobile applications made in Cuba for development in the United States – have exceeded the expectations of some business leaders. Ø “They’ve gone farther [and faster] than most anyone expected,” said John S Kavulich, president of the New York-based US-Cuba Trade and Economic Council. “It’s in keeping with President Obama’s strategy, agree or disagree, which

The approach of autumn brought some good news to European telecoms from the ratings firm Standard & Poor’s. According to an S&P Industry Report Card (4 th September), after years of declining revenues Europe’s telecom market is expected to halt this trend in 2015-16, with some countries set to reverse it altogether. Among several trends supporting stronger revenues across the region are these, cited by S&P credit analyst Mark Habib: Ø sharp rises in data traffic and increasing monetisation of 4G investments Ø the beneficial impact of tiered pricing in most markets Ø fewer price wars as mergers and acquisitions continue to consolidate and converge markets. Consistent cost control by operators also influenced the forecast, noted Nick Wood of London-based Total Telecom (4 th September). Accordingly, S&P expects Europe as a whole to see a break-even revenue trend in 2015-16, with pockets of growth in the United Kingdom, Germany, and the Nordic countries. Mr Wood also detected a “tone of renewed optimism running through the recent financial reports” of Europe’s big telecoms, offering these examples: Ø Spain’s Telefónica raised its full-year revenue guidance after reporting strong second-quarter growth in sales and profit, while revenue and adjusted EBITDA of French incumbent Orange beat estimates for the second quarter. Ø Deutsche Telekom saw second-quarter revenue in Germany edge up 2.1 per cent, while strong domestic performances by Swisscom and Norway’s Telenor boosted both their top lines. Ø Vodafone CEO Vittorio Colao said in the British telecom’s first-quarter report that more of its European businesses had returned to revenue growth. His opposite numbers at Telecom Italia and Sweden’s TeliaSonera made similarly upbeat comments about recent performance by their companies. Ø S&P expects long-term stability in Europe’s telecom and cable sectors. In its view, mergers and acquisitions are the single most important factor in the recent improvement because they have relieved the competitive pressure that was eroding revenues. In particular, mergers among fixed and mobile operators have defused competition as customers signed up to bundled services. Short-term regulatory headwinds are also receding, S&P said, as the last round of mobile termination rate (MTR) cuts will have been accounted for by the end of fiscal 2015. Noted Mr Wood of Total Telecom : “That leaves the phase-out of roaming charges as the main regulatory headwind when it comes to pricing.” Standard & Poor’s sees ‘pockets of revenue growth’ ahead for telecoms in the United Kingdom, Germany, and Scandinavia

The economic embargo of Cuba crumbling, US telecoms see a place for themselves in the $68 billion Cuban economy When, in December 2014, the United States and Cuba announced moves to re-establish diplomatic relations broken off in 1961, the

USA declared connectivity to be a priority in its new relationship with the island nation 92 miles offshore Florida. And President Barack Obama made plain his intention to follow through. Telecommunications equipment, technology and services were among the first exemptions to the US economic embargo of Cuba that had been in place for 54 years. Now, at another watershed point, the No 1 US wireless carrier proved itself

BigStockPhoto.com • Photographer: Krishnacreations

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Wire & Cable ASIA – November/December 2015

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