BuddeBlog

I was recently asked by a newspaper in Atlanta (USA) to comment on the activities of BellSouth Down Under. I would also like to share my thoughts on this with you.

My reading of the situation is that BellSouth initially entered the New Zealand and Australian markets to learn about deregulation and doing business in a competitive environment. I don’t think that they ever had long-term plans to maintain their businesses here. Even if they initially did have such plans these quickly changed as the dynamics of the global market, as well as the American market, changed dramatically in the mid-1990s. Better opportunities became available elsewhere around the globe, the new Act created a more inward-looking focus amongst all the American carriers and they also stayed closer to home. This was demonstrated by an increase in business activities in Latin America.

Back to Down Under: During the mid-1990s BellSouth neglected their operation in NZ. There was very little growth in their business and they never challenged the incumbent Telecom New Zealand in a big way. There were lots of complaints from the industry and from business customers along those lines.

This attitude only started to change in late 1996, early 1997 – I believe when the company had made the decision to sell. In order to get some reasonable money for it they would have to lift their game and so they did. There was a dramatic increase in the number of innovative products, they introduced more competitive prices and the business really started to take off.

However, the fact remains that New Zealand is a very small country and that business opportunities, especially for large-scale operations such as BellSouth, will always be small fry. It is a parochial market and this is reflected in the current selling activities.

BellSouth activities in Australia were slightly different. Their stake in Optus Communications also meant their involvement in fixed line operations and a Full Services Network. This last activity especially created a lot of problems which needed to be solved and my opinion is that in the end this was all a bit too far from home.

The daily problems, both technically and in a competitive/regulatory sense, were quite overwhelming and a far more deeper involvement would be required. In the end it was the other partner, Cable & Wireless, who chose to become more hands-on involved and bought out BellSouth’s 25% shareholding.

The company Personal Communications has begun providing CDMA standard fixed wireless communications services in the Moscow area using equipment provided by Qualcomm.

A network including eleven base stations has been deployed in the outlying suburbs of Biberovo, Khimki, Lyubertsi, Solntsevo; in downtown Moscow; and near the metro stations Kaluzhskaya, Domodedovskaya and Tushinskaya. The network currently covers 40% of Moscow proper, providing services to about 100 subscribers.

The company has purchased 32 base stations in all, which are to be fully deployed by the end of the year, covering all of Moscow. The network will be able to support about 60,000 subscribers.

The CDMA system has been built on the basis of one of the city’s largest data transmission networks, run by MTU-Inform. Thus the CDMA system can handle Internet and data transmission as well as phone service.

Next year the network will be expanded to a radius of 40 kilometres from Moscow, and to Vladimir, Tver, Yaroslavl and Tula regions where the company already holds CDMA operating licences.

Personal Communications was founded last year as a wholly-owned subsidiary of MTU-Inform.

Commercial use of CDMA networks has also begun in Chelyabinsk (equipment provider Qualcomm) and in Ivanovo (Samsung). CDMA networks are being deployed in Rostov-on-Don using Qualcomm and Nortel equipment, in St Petersburg (Motorola), in the Kuban (Qualcomm), in the Kaliningrad region (Nortel), in Krasnoyarsk (NEC) and in other regions.

For more information: www.interfax-news.com

Stocktext is a PC-based teletext service delivering ASX quotations without the use of data communication or phone lines.

The service transmits ASX quotations along with the Seven Network television picture to a special decoder connected to the computer. The system will work anywhere in Australia where a good quality Seven Network TV picture can be received.

Stocktext provides up to the minute quotations which include the bid, ask, open, value, percentage move, high, low, last sale, previous close, volume, and seven major ASX Indices throughout the day.

The decoder is a device somewhat like a modem that receives the Channel Seven picture and extracts the teletext signal and converts it to data suitable for PC use. The decoder needs to be connected to the TV aerial, and to the computer via a serial cable from one of the computer’s serial ports. The decoder has TV channel selector on the front, which can be tuned to the local station that transmits the Seven Network picture. Once registered as a customer, the decoder will continuously send minute by minute ASX Quotations to the computer as the market trades.

The system costs $220 per month, which includes the ASX royalty of $35. The purchase price of the decoder and display software is $850.

Russian privatisers will shelve until later this year a much-discussed auction of 25% minus two shares of national telecommunications holding company Svyazinvest, in order to come up with a new starting price (see p.195 October Newsletter).

The stake is being revalued. It had initially been priced at US$1.035 billion in rubles at the rate for mid-August 1998. But the ruble price set at that time is now worth two-thirds less in dollar terms because of the collapse of the Russian currency.

The new starting price will be set in US dollars for payment in rubles at the official exchange rate on the day of payment. It has not been revealed, meanwhile, whether the dollar price would be as high as that quoted back in August. That is said to depend on what the appraiser recommends.

For more information: www.interfax-news.com

A Russian State Communications Inspectorate official has predicted that total subscribers to cellular services in Russia could reach 6 million by the year 2005.

By that year, total AMPS subscribers should stand at around 800,000, NMT-450 subscribers at around 1.8 million, and GSM subscribers at around 3 million. As of late 1997, cellular subscribers in Russia totalled 527,000.

The DSC-1800 standard will be slower to develop, requiring as it does significant investment to develop infrastructure. Currently the standard is used only in Moscow.

CDMA wireless technology (IS-95 standard) is legal in Russia only for fixed radio access to local telephone networks. This technology could serve some 3 million people. The Inspectorate is authorised to reserve bandwidth in the 800 MHz range for about this number of subscribers.

Trunk communications will be used by approximately 1-1.5 million Russians towards the year 2005, mainly in regions where population density is not sufficiently high to support other technologies. At present, trunking communications are used by just 50,000 subscribers, but in the future this technology may come to dominate the regional cellular market.

For more information: www.interfax-news.com