WCA September 2007

Telecom news

As reported by Telecom AsiaDaily , the first of two deals signed by Alcatel-Lucent with two Chinese operators is an agreement to provide mobile communications solutions and services to China Mobile. Arranged through the Chinese company Alcatel Shanghai Bell, this engages Alcatel-Lucent to provide $340 million worth of GSM/GPRS/EDGE radio and core network equipment. Paris-based Alcatel-Lucent also said it has a separate, $120 million agreement with China Unicom that secures its position as the vendor with the largest installed base in that company’s CDMA network. The range of projects to be fulfilled includes a cdma2000 1xEV-DO Rev. high-speed data network upgrade for the China Unicom network in Macau, as well as expansion of the CDMA core network, radio solutions, and applications in support of China Unicom’s broader programme of mobile network enhancement. The China Unicom agreement also calls for Alcatel-Lucent to provide GSM/GPRS/EDGE core and radio network solutions and optical network components in support of GSM service offerings. Acquisitions ECI Telecom, an Israeli maker of telecommunications equipment, has agreed to be bought by the Swarth Group and the Ashmore Group for $1.2 billion, Bloomberg News reported on 3 rd July. Ashmore Investment Management is a London-based emerging markets investor with assets of about $29 billion, while Swarth is controlled by an Israeli technology entrepreneur. ECI is based in Petah Tikva, Israel. The Macquarie Communications Infrastructure Group, of Australia, said on 3 rd July that its Macquarie Bank consortium has agreed to acquire Global Tower Partners, an American wireless tower operator, from the New York-based investment firm Blackstone Group for $1.43 billion. Global Tower leases its 2,500 towers and 4,600 rooftop sites in the United States and Puerto Rico to wireless communications operators including AT&T, Sprint- Nextel, T-Mobile, and Verizon Wireless. ✆ ✆ ✆

Mobile operators in India who have lined up a $20 billion programme to expand their networks would need to install an additional 264,000 towers across the country, according to GTL Infrastructure, the Mumbai- based company providing support to the operators. As reported by IndiaTimes.com (10 th June), GTL’s chairman has said that, given the large capital expenditure required, the operators would do well to reduce their costs by sharing the infrastructure network. Although a proven model globally, third-party shared telecom infrastructure is a relatively new concept for India. GTL also pointed out that the demand for towers will increase several times over with the introduction of the third-generation (3G) technology which supports higher data transfer speeds. The largest phone company in Saudi Arabia announced on 27 th June that it was acquiring a 25% interest in Maxis Communications, of Malaysia, for $3 billion. Saudi Telecom Co, based in Kuala Lumpur, bought the Maxis stake from a Malaysian national, T Ananda Krishnan, who in May had offered to buy the 40% that he did not already control. Maxis, the largest mobile phone operator in Malaysia, has 14 million subscribers there and in India and is looking for further growth in developing markets. Under the agreement, Saudi Telecom will also acquire a 51% stake in PT Natrindo Telepon Selular, the Maxis subsidiary in Indonesia, the company said. To put an end to five weeks of strikes, Deutsche Telekom on 21 st June announced an agreement with the Ver.di union that allows the company to set up the customer service unit T-Service, part of a cost-cutting programme aimed at saving $1.2 billion. As reported by Bloomberg News , Deutsche Telekom pledged not to sell the unit before 2010. For their part, 50,000 employees would take a 6.5% pay cut and lengthen their work week by four hours. As many as 16,000 workers a day had gone on strike across Germany to protest Deutsche Telekom’s initial plan to cut pay by 9%. The big US telecommunications equipment maker Motorola said on 30 th May that it would cut another 4,000 jobs, or more than 6% of its already shrunken global workforce. The company had been in the process of eliminating 3,500 jobs as part of a two-year plan to save

$400 million. Motorola said the newly announced cuts, together with other cost-control measures, would save another $600 million in 2008. Its workforce, which stood at 150,000 worldwide as recently as 2000, had declined to 66,000 at the beginning of 2007. Illinois-based Motorola had been regaining market share in the cellphone business from Samsung, of South Korea, among others, when two years of strong momentum collapsed. Nokia Siemens Networks, the world’s third-biggest maker of telecommunications equipment, intends to become first or second in the North American market, its chief executive Simon Beresford- Wylie said at a conference in Toronto on 12 th June. Nokia Oyj, of Finland, and Siemens AG, of Germany, combined their phone equipment units in April to form a company that competes with Alcatel-Lucent and Ericsson AB. The venture, with annual sales of $22.7 billion, is cutting 15% of its workforce, or 9,000 jobs, by 2010 to reduce costs. Mr Beresford- Wylie sees broadband Internet as presenting a ‘tremendous opportunity’ deriving from billions of connections by 2015. “Nokia Siemens is number one or number two in all markets except North America, where we’re sixth,” he told Bloomberg News (13 th June). “We are determined to have a position in North America that is representative of our global position generally.” In other news of Nokia Siemens Networks, the Helsinki-based company has won a $500 million contract from India’s fifth-largest mobile phone service provider to manage and expand its com- munications network. As reported by NewsEdge , the two-year contract from Idea Cellular (Mumbai) requires Nokia Siemens to supply and service communication equipment and help the Indian company to double its existing capacity. Idea Cellular has 14.56 million customers and operates in 11 of the 23 mobile phone service zones that make up the Indian market. Nokia Siemens will be involved in expansion of network capacity in six of these zones, according to a joint statement by the companies. India, the world’s fastest-growing mobile phone market, has been adding more than 5 million con- nections every month over the past year.

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Wire & Cable ASIA – September/October 2007