Archive for May, 2008

MyScreen

Friday, May 30th, 2008

MyScreen

MyScreen is a permission and incentive-based marketing and advertising tool which allows mobile subscribers to be compensated for permitting targeted ads to appear on their mobile devices in the form of images, SMS and video at the end of a call. Rewards are stored in a subscriber’s e-wallet account and are then redeemed for products such as ring tones, additional air time, music downloads and games. The company secured a $10 million strategic investment by Orascom Telecom (88 million subscribers in the Middle East, Africa, South Asia, Italy and Greece).

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China restructuring

Friday, May 30th, 2008

China restructuring

China has announced its long-awaited telecommunications industry restructure, as foreshadowed and analysed by BuddeComm over the last three years.

The six main state-owned carriers are to merge their assets into just three networks. This will allow fixed-line carriers to expand into wireless services, creating three operators that will offer phone and Internet connections to 1.3 billion people. The US$105 billion industry has plenty of room to expand since mobile penetration is still only around 40% and over 80% of the population is not yet making use of the internet.

In March 2008 the ruling State Council agreed to split up China Unicom and create three new integrated telecommunications operators, as per restructuring scenario 3, as predicted by BuddeComm in 2004.

Restructuring Scenario 3

  • China Mobile (the largest mobile operator) merges with China Tietong (the smallest fixed-line operator set up by the Ministry of Railways);
  • China Telecom acquires China Unicom’s CDMA mobile network and China Satcom;
  • China Netcom joins with China Unicom’s GSM network.

The changes, jointly announced by the Ministry of Industry and Information (MII), the State Reform and Development Commission (SRDC) and the Ministry of Finance in May 2008, are the biggest reforms to China’s booming telecom sector since the formation of the MII in 1998.

The goal of the plan is firstly to create three integrated operators that operate with greater efficiency than in the current lopsided mobile and fixed-line markets, and secondly to create more competition as China moves toward fixed/mobile convergence ( FMC ). In 2007 China Mobile posted a profit of 87.1 billion yuan (US$12.5 billion), which was almost half as much again as the combined profit of China Telecom, China Netcom and China Unicom.

While the reforms were agreed on In March 2008, it has taken time to agree on the sensitive appointments of top executives at the new carriers. Senior positions in the state-controlled corporations are all Communist Party appointments. The May announcement confirmed China Mobile chairman Wang Jianzhou and China Telecom chairman Wang Xiaochu in their current posts. China Unicom chairman Chang Xiaobing was made head of the “preparatory group” driving the Netcom merger and should retain his post.

The most prominent move was that of Netcom chairman Zhang Chunjiang to China Mobile, where he becomes party secretary. Unicom president Shang Bing was posted as the new party secretary at China Telecom, while China Tietong chief Zhao Jibin and Unicom vice-president Li Zhengmao are also to become China Mobile VPs.

Officials stopped short of setting a timetable for the introduction of 3G, saying that licences will be issued after the restructure is completed. It is expected that each of the three carriers will receive a 3G license, although no details have been issued on what kind of technology each will need to adopt.

See also: China – Key Statistics, Telecom Market Overview & Analysis.

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Thailand’s AIS delays Bangkok 3G launch

Friday, May 30th, 2008

AIS delays Bangkok 3G launch

Leading mobile operator in Thailand, AIS, said it had been forced to postpone the commercial launch of its 3G mobile broadband services in Bangkok until mid-July because the telecom regulator, the National Telecommunications Commission (NTC), was behind schedule in approving equipment imports. The operator had previously announced it would introduce 3G commercial service in Bangkok in mid-June after it was launched in the north eastern city of Chiang Mai early in May. AIS was given approval by the NTC to upgrade 30 base stations to High-Speed Packet Access (HSPA) technology. The company said the expected delay was because the NTC had not approved the equipment imports and relocation of five 3G base stations from Chiang Mai to Bangkok. AIS acknowledged that 3G in Chiang Mai was only a trial venture and not a serious roll-out due to its limited bandwidth and the fact that only a handful of handsets were 3G-capable. However, the company said that AIS planned to introduce 3G in another 20 major cities. Although 3G on existing networks required AIS to pay concession fees under existing arrangements, the company insisted it needed to act now on 3G rather than do nothing. The operator indicated plans to apply for a 3G licence operating on the 2100MHz frequency band in order to move aggressively into the sector.

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Power company in Thailand to read meters remotely

Friday, May 30th, 2008

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The billion dollar NBN question – latest analysis

Thursday, May 29th, 2008

The billion dollar NBN question – latest analysis

As we become more and more involved in the nitty gritty of the NBN, some of the more uncomfortable issues are emerging.

As soon as the government came to power it became clear the FttN 12Mb/s service to 98% of the population was a serious plan and the various companies began to look into network designs and costing.

And over the last few months the messages have been quite consistent – to connect the last 10% of the 98% could gobble up the entire $4.7 billion of government subsidies.

Many of the residences in the last 10% are on 100-acre properties, frequently separated by as much as 2Km. In the case of ADSL2+ nodes, service could be required to as few as 4-6 customer premises per node; and the fibre to some of these nodes will be 20Km long.

The last 1% of the 98% will comprise approximately 110,000 homes. One of the calculations put this at around $20,000 per connected service and this would bring the total cost to $2.2 billion. There is no need to calculate the revenue on those 110,000 premises – it is obvious that there is absolutely no business case for this exercise.

It is also not too difficult to see that this money could be spent much more wisely.

Depending on which vendor or operator one talks to, according to them it doesn’t make sense to roll out FttN based broadband services to the last 4% to 8% of the 98% required by the government.

For as long as I have been involved in the telco business I have been arguing for technology-independent policies, but time and again the government has become involved in legislating technologies (satellite TV, microwave pay TV, ISDN and now FttN).

Such technology choices are much better left to the engineers. At BuddeComm we believe that the government should legislate outcomes and then let the companies decide how they will be delivered.

If the government wants to ensure that these companies deliver, it should institute timeframes and even perhaps penalties for non-delivery. But it should stay away from technology decisions.

Now I certainly understand how difficult it is for governments to back-pedal on past decisions, but it also demonstrates leadership to make the right decisions – to face reality and do what is best for the country.

Perhaps we should aim at 93% or 95% coverage by fibre and use equivalent wireless broadband services to connect the remaining premises. This could be combined with the Broadband Guarantee Service and would still deliver a first-class outcome for all of Australia.

Paul Budde

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