Download Global Insight newsletter - 22 May 2007

Telecoms: Same-Day Analysis for 22 May 2007
Report printed on 23 May 2007
© 2007 Global Insight. All rights reserved. Wednesday, May 23, 2007. Page 1 of 7.
Same-Day Analysis
for 22 May 2007
Telecoms
World: Vodafone Launches Own-Brand, Low-Cost Handsets
(Tue 22 May 2007) - Low-cost mobile devices will open up new market demographics for Vodafone, while putting its own brand on the
new models signals that the group is taking on the leading low-cost handset manufacturer, Nokia.
Telecoms
Switzerland: Swisscom Announces Major Reorganisation
- Switzerland's incumbent telecoms group has announced a major reorganisation aimed at exploiting the
advantages of the emerging trend in convergence.
(Tue 22 May 2007)
Asia-Pacific
Telecoms
Australia: Telstra to Launch Next G to Pre-Paid Customers
(Tue 22 May 2007) - Telstra, Australia's largest telecoms operator, plans to start offering mobile services on its new Next G network to
pre-paid customers from 24 May, the Australian Associated Press Financial News Wire reports. "We've ensured Telstra's existing prepaid calling rate remains the same for our pre-paid Next G customers," said Telstra consumer and marketing executive director, Tim
Cooper. "Covering 98.8% of the population and more than 100 times bigger geographically than any other 3G network in Australia,
the voice quality, in building coverage and advanced features of the Next G network mean our CDMA pre-paid customers can make
the move to the new network with confidence," Cooper said. Telstra plans to replace its CDMA network with the Next G network
completely by early 2008, but the company has also stated it will not turn off CDMA until Next G is at least as good.
Significance: Until now, Next G, which provides customers with services like video calls, subscription television and mobile maps
based on HSDPA technology, has only been available on post-paid contracts. However, more than half of Telstra's total mobile
subscriptions are now pre-paid, and the operator wants to expand its Next G network further. The company says 400,000 customers
have signed on to the new network since it was switched on last October (see Australia: 9 October 2006: HSDPA Network
Launched by Telstra). The telecoms giant is keen to take over Hutchison Australia—the first to launch 3G in the country—to become
the market leader in the 3G segment, leveraging on its Next G network.
Telecoms
China: Nokia Siemens Networks Successfully Conducts Performance Testing with China Mobile
- Nokia Siemens Networks today announced that the company and China Mobile Communications Corporation
(China Mobile) have successfully completed performance testing of the 3GPP release 4 MSC Server System (MSS) from Nokia
Siemens Networks. "The MSS performed with outstanding results in the tests organised by China Mobile, demonstrating the Nokia
Siemens Networks solution’s capacity, stability and efficiency in data-delivery," said the company.
Significance: The MSC Server System, which is already widely used in commercial networks globally, showed stability in an
overload test that included a continuous 12-hour, 150% data-overload simulation. Despite the simulated data overload, the system
ran, on average, at under 35% of total capacity (CPU load). The call success rate was higher than 99.999%, and SMS delivery
boasted a 100% success rate, said Nokia Siemens Networks. The company said its release 4 compliant MSC Server System will
support GSM, W-CDMA and TD-SCDMA (China's home-developed 3G mobile technology).
(Tue 22 May 2007)
Telecoms
Japan: Japanese Mobile Operators to Ship 20 mil. One-Seg Mobile Handsets this Fiscal Year—Report
- NTT DoCoMo, KDDI and Softbank Mobile expect to ship a combined 20 million mobile phones capable of
receiving One-Seg terrestrial digital broadcasts this fiscal year ending 31 March 2008, which would amount for roughly over 40% of
total handset shipments, the Nikkei business daily reports. The digital TV broadcasts were launched in April last year, with the
handsets hitting shelves at the start of 2006. By the end of March, nearly seven million One-Seg handsets had been shipped, the
daily said.
Significance: DoCoMo, the country's largest mobile operator, is currently selling three such handsets. By the end of June, it will
launch another two handsets and, as early as the autumn-winter shopping season, it plans to include One-Seg as a standard feature
in all models. It predicts shipments of more than five million handsets. Meanwhile, almost all new models launched this spring by
KDDI's au service had built-in One-Seg functions. KDDI, the second-largest player, is likely to see sales of One-Seg devices reach
around 1.2 million, accounting for roughly 80% of its total mobile phone sales. Softbank Mobile, the smallest of the three, is also
beefing up sales of the handsets. In the current fiscal year, the operator is likely to more than double the last fiscal year's figure of
some 1.2 million One-Seg handsets. In the last fiscal year, 6.1 million TV sets able to receive One-Seg broadcasts were shipped.
Although this is likely to increase to about 10 million sets this fiscal year, the figure pales in comparison to projected shipments of
One-Seg cell phones, said the Nikkei. As sales of such handsets have increased, they are less expensive and their popularity is likely
to rise dramatically.
(Tue 22 May 2007)
Telecoms
Japan: NTT to Issue US$823 mil. Bonds in 2007
(Tue 22 May 2007) - Nippon Telegraph and Telephone Corp (NTT) plans to issue ¥100 billion (US$823 million) worth of 10-year bonds
in the second-biggest Japanese corporate debt sale this year, according to Reuters. NTT, Japan's largest telecoms group, has set the
coupon of its domestic straight bonds at 1.77%, lead manager Nomura Securities said today. The telecoms group plans to use the
issue to refinance its debt, mainly at its traditional fixed-line units, NTT East and NTT West, an official in NTT's finance department
said. He also said the group may issue more bonds in the current financial year ending 31 March 2008 as it has close to ¥600 billion
© 2007 Global Insight. All rights reserved. Wednesday, May 23, 2007. Page 2 of 7.
worth of loans on a consolidated basis that need refinancing. The market conditions are good, and NTT's pre-marketing has showed
there is solid demand from investors, he said.
Significance: Standard & Poor's yesterday raised NTT's long-term credit rating to "AA" from "AA-", citing an improvement in its
finances amid consistent debt reduction. Nevertheless, in the face of a declining fixed-line call market and fierce competition from
smaller rivals, NTT has to spend heavily to boost its 3G mobile business and fibre-optic broadband service to seek growth. For the
fiscal year ending 31 March 2007, the group saw its operating profit fall by 7% from the previous year while operating revenue
increased by a marginal 0.2% (see Japan: 11 May 2007: NTT Fiscal Year Operating Profit Down 7% Y/Y on Higher 3G Costs at
Mobile Unit).
Telecoms
Sri Lanka: Bharti Airtel to Invest US$150 mil. in Sri Lanka
- Having won Sri Lanka's fifth mobile licence in January 2007, India's largest mobile operator, Bharti Airtel, has
raised its investment plan to roll out GSM and W-CDMA services in Sri Lanka from US$100 million to US$150 million, Business
Monitor International reports. The network should be ready for deployment towards the end of 2007, the paper said.
Significance: Having beaten India's Reliance Communications and Maxis to the licence, Bharti Airtel is speeding up its network
expansion for commercial launch as Sri Lanka's mobile market continues to grow rapidly. The island's mobile market has experienced
significant growth over recent years, with 5.4 million mobile subscribers at the end of 2006, representing a penetration level of about
27%. Leading operator Dialog, controlled by Telekom Malaysia, has a market share of around 60%. The other mobile operators in the
country are Sri Lanka Telecom unit Mobitel Lanka, Celltel Lanka (fully owned by Luxembourg-based Millicom), and Hutchison. The
island country has also become the first 3G-enabled country in South Asia, owing to the progressive policies of the local telecoms
regulator (see Sri Lanka: 16 August 2006: TM Unit Dialog Launches Commercial 3G Services in Sri Lankan Capital).
(Tue 22 May 2007)
CIS
Telecoms
Belarus: Minister Procrastinates over Beltelecom Privatisation
(Tue 22 May 2007) - The reform and privatisation of Belarusian fixed-line monopolist Beltelecom looks unlikely to take place this year,
according to press reports. Communication and IT Minister Nikolai Strukov has pointed out that the operator "cannot be reformed in
one day". Measures have already been taken to improve the operator's appeal as an asset for investment. Beltelecom has diversified
operations and increased its focus on broadband internet this year (see Belarus: 31 January 2007: Beltelecom to Increase Focus
on Broadband Operations in 2007). However, further measures need to be taken before Beltelecom will be sold, including a reform
of its management system, the introduction of a new system of separate cost-accounting, and possibly the end of its international
communications monopoly, according to the Communications and IT Ministry. The next phase of reform for Beltelecom will take place
in 2008-09.
Significance: The Belarusian government had hinted earlier this year that it would look to privatise a number of state-owned assets
in order to boost its budget income in the wake of higher oil and gas prices introduced in 2007. However, Strukov's words are
indicative of recognition by the government that in order to maximise the profitability of Beltelecom, further reform must be
undertaken.
Telecoms
Russia: North-West Telecom Announces Completion of 139-km Fibre-Optic Line
- North-West Telecom has revealed that it has completed the final stage of construction of a fibre-optic line that
stretches from the region of Leningrad to Pskov, via St Petersburg. The 139-km line will improve local, intrazonal and inter-city
connections, while also enabling IP TV and video-on-demand via high-speed internet access. The final stage of the line, from Luga to
Gatchina, will replace communications channels that were previously rented by North-West Telecom.
Significance: North-West Telecom's fibre-optic infrastructure forms the backbone for its network across St Petersburg and more
remote regional units in the North-West Federal District. The operator, a subsidiary of national fixed-line holding Svyazinvest, is
capitalising upon strong demand from high-end users to offer a range of value-added services and the construction of its fibre-optic
backbone will enhance these offerings.
(Tue 22 May 2007)
Europe
Telecoms
Italy: Wind Awards Optical Network Deal to Ericsson
- Italian alternative telecoms provider Wind has selected Ericsson to provide a metro and core optical transport
technology and to integrate the new system supporting Wind's fixed IP broadband access. In a statement, Ericsson said the contract
includes a dense wavelength-division multiplexing (DWDM) solution to increase transmission capacity in Wind's 1600km existing fibre
cables and Broadband Remote Access Servers (BRAS). Ericsson's solution will utilise the Marconi-branded metro and core platform
to improve fixed broadband access performance for Wind.
Significance: Wind is stepping up efforts to reassert itself in the Italian broadband space and limit the dominance of Telecom Italia
and FastWeb. The company's broadband subscriber base has been rising steadily, reaching 763,000 customers by end-2006.
Ericsson's optical network solution is part of the equipment vendor's Full Service Broadband offering.
(Tue 22 May 2007)
Telecoms
Luxembourg: Belgium's Mobistar Buys Luxembourg's Voxmobile for US$108 mil.
- Belgian mobile operator, Mobistar, has acquired 90% of Luxembourg's telecoms operator, Voxmobile, for 80.3
million euro (US$108 million). Mobistar, which is part of the Orange group, outbid rival Belgacom to the take over the youngest of the
three mobile-telecoms players in Luxembourg. In a statement, the Belgian operator said the deal would further cement the existing
relationship it has with Voxmobile: "There are already commercial agreements between Mobistar and Voxmobile for offers to big
companies in the Benelux…This approach can now be further enhanced and both parties believe in different joint projects".
Significance: In reality, the acquisition is a takeover by France Telecom using its Mobistar unit. The French group confirmed today
that it would seek further acquisitions around the world. Earlier in the year, it made acquisitions in Africa using its unit in Senegal (see
(Tue 22 May 2007)
© 2007 Global Insight. All rights reserved. Wednesday, May 23, 2007. Page 3 of 7.
Guinea: 15 March 2007: Sonatel Acquires Spacetel’s Mobile Licence in Guineaand Guinea Bissau: 19 January 2007: Sonatel
Wins Mobile Licence in Guinea-Bissau).
Telecoms
Poland: Polish Regulator Launches Tender For GSM 1800 Frequencies
(Tue 22 May 2007) - Poland's telecoms market regulator, UKE, has opened a tender for two 15-year concessions for the GSM 1,800
frequency band in the range of 1,710-1,730 MHz and 1,805-1,825 MHz. The minimum fee for each frequency range stands at 1.96
million zloty (US$697,340). According to the tender requirements, the frequencies are to be used for telecoms services, including
mobile or fixed-line telephony, or radio internet access. The deadline for submitting bids is 24 August 2007.
Significance: This is the second time that the UKE has attempted to auction the remaining GSM 1,800 frequencies.Thewinner of the
previous tender, Telekomunikacja Kolejowa (TK), which offered 255 million zloty for each group of 33 channels, or a total of 510
million zloty, decided not to file for the frequencies because of a lack of sufficient financial resources to roll out the network. The
potential bidders that have expressed interest in the tender include the country’s three mobile operators, Orange, PTC and Polkomtel,
as well as the telecoms arm of the national railway company, Telekomunikacja Kolejowa, and privately owned Centernet (see
Poland: 17 April 2007: Polish Regulator Plans GSM 1800 Tender in May).
Latin America and Caribbean
Telecoms
Brazil: Brasil Telecom Plans Launch of Broadband Service over Electric Powerline
- Brazilian regional incumbent Brasil Telecom—active in Region II, which expands to 10 Brazilian states—is
planning to launch broadband over powerline (BPL) services, reports technology news provider Computerworld. This project forms
part of the operator's strategy to launch IP TV in September 2007. According to a company official, Brasil Telecom has been testing
powerline communications (PLC) for the last year and has managed to minimise the risk of interference from other electrical
appliances, as well as increase the transmission speed from 14 Mbps to 200 Mbps.
Significance: Brasil Telecom's initiative means that broadband services can become widely available due to the increased
penetration rate of electrical power cables. Brazil has also announced the deployment of a public trial network based on BPL
technology in the remote city of Barreirinhas in Maranhão (see Brazil: 24 April 2007: Brazilian Ministry of Communications Trials
BPL Technology in Maranhão).
(Tue 22 May 2007)
Telecoms
Chile: Redvoiss Expands Coverage to Six More Regions of Chile
(Tue 22 May 2007) - Chilean VoIP service provider Redvoiss has expanded its coverage area to six more regions of the country, local
newspaper La Segunda reports. From now on, broadband service subscribers in Arica, Copiapó, Los Andes, Rancagua, Temuco, and
Puerto Montt can take advantage of up to 70% reduced long-distance charges, compared to standard telephony rates. Redvoiss has
over 16,000 IP lines and covers more than 80% of the national territory.
Significance: Global Insight expects to see a negative impact on the revenues of Chilean long-distance carrier Entel as a result of
this recent development. Last year Redvoiss, whose legal name is Voissnet, sued Telefónica Chile for obstructing competition in the
broadband market. This resulted in a fine of 581 million Chilean pesos (US$1.11 million) imposed on Telefónica by Chile's antitrust
tribunal (TDLC) (see Chile: 31 October 2006: Telefónica Chile Fined US$1.11 mil. for Obstructing Competition).
Telecoms
Latin America: DigiLinea Announces Partnership Agreement with Rebtel on Mobile VoIP
- VoIP infrastructure and service provider DigiLinea has announced a partnership agreement with Rebtel for the
provision of mobile VoIP services to consumers in Latin America and the Hispanic population in the United States. Rebtel, a VoIP
telephony service provider, will use DigiLinea's platform to offer local Latin American telephone numbers, unlimited calling plans, and
direct termination, which will allow subscribers to considerably reduce the cost of their everyday communication needs.
Significance: Latin America has a low broadband penetration rate, with the majority of lines concentrated in the big urban centres.
Due to a strong fixed-to-mobile substitution, the number of mobile accesses has increased at a much faster pace when compared to
fixed telephony lines. Global Insight expects to see increased take-up of Rebtel's service, particularly for communications between the
United States and Latin American markets.
(Tue 22 May 2007)
Telecoms
Venezuela: Venezuelan Government Concludes Nationalisation of CANTV
- Following the successful completion of the public offer for the acquisition of an 86.2% stake in CANTV, the
Venezuelan state has assumed control of the operator and appointed Socorro Hernandez as the company's new president (see
Venezuela: 10 May 2007: State Scoops Up 86.2% Stake in CANTV). According to Telecommunications Minister Jesse Chacón,
CANTV employees will maintain a 5.71% stake, while 8.07% will remain in the hands of private investors. Out of this, 3.95% belongs
to local investors and the rest corresponds to investors at New York's Stock Exchange.
Significance: CANTV recorded a 40.7% increase in revenues from mobile services in the first quarter of 2007 and 45.5% year-onyear (y/y) growth in the total number of mobile accesses, whereas the fixed telephony segment has seen a much slower progress,
resulting in a total of 3.6 million subscribers (see Venezuela: 26 April 2007: Q1 Revenues from Mobile Services Increase by
40.7% for CANTV). As previously reported, one of the priorities of Hugo Chavez’ government is to increase penetration rates in the
country, particularly in poorly developed areas, and CANTV's nationalisation was the first step in that direction.
(Tue 22 May 2007)
Middle East and North Africa
Telecoms
Bahrain: Batelco Suffers Under TRA Competitive Action
(Tue 22 May 2007) - Bahrain's Telecommunications Regulatory Authority (TRA) is liberalising the telecommunications market in the
Kingdom; it has told Batelco that it must be willing to accept new competition.
© 2007 Global Insight. All rights reserved. Wednesday, May 23, 2007. Page 4 of 7.
Significance: Earlier this week, Batelco told the TRA that it would halt capital investment in the country unless it received more
favourable treatment under the TRA's pricing policy. Last month the TRA announced it would ensure that Batelco offers other
telecoms firms access to its internet infrastructure on the same terms it offers to its own retail business (see Bahrain: 17 April 2007:
TRA Forces Batelco to Offer Fair Wholesale Access Services). A spokesperson for Batelco stated that such interference from the
TRA would cause the company to downsize, leading to job losses and investment outside Bahrain rather than developing the
Kingdom's telecoms infrastructure.
Telecoms
Egypt: Etisalat Misr Signs 300,000 Subscribers in 20 Days
(Tue 22 May 2007) - The Egyptian mobile unit of Etisalat, Etisalat Misr, has announced that more than 300,000 subscribers have
signed up for its services within 20 days of it beginning its operations.
Significance: The operator paid US$2.9 billion for a licence in July 2006 and launched its 3.5G network on 1 May this year (see
Egypt: 1 May 2007: Etisalat Launches 3G Network in Egypt and Increases Stake in Atlantique Telecom to 70%), which will
enable it to provide multimedia content, including television and high-speed internet, to its customers. The new operator plans to
invest E£6 billion to E£8 billion (US$1.07–US$1.4 billion) additionally in the next three years. Etisalat Misr's chairman Jamal Al Sadat
said: "These investments will be allocated to all aspects of our business in Egypt including new base stations, enhancing the network,
customer service centres, and so forth." Although subscriber levels have been high within the early stages of launch, it is still
uncertain whether the consumer will spend on 3G services as GDP per capita in the country is low, at US$4,200.
Telecoms
Oman: Omantel Enhances Telecoms Services in Sohar
- Omantel has launched a campaign to enhance telecoms services in vital industrial regions such as Sohar, by
advising companies and factories on their requirements for additional services.
Significance: There has been an increase in large-scale projects within the sultanate and Omantel needs to work with local
industries to provide for the extra telecoms service requirements. Earlier this year, the operator launched corporate private network
services that will benefit high mobile phone users (see Oman: 12 April 2007: Oman Mobile Launches Corporate Private Network
Service), and also Wi-Fi hotspots to enable connectivity to local businesses and users (see Oman: 8 May 2007: Omantel Launches
20 Wi-Fi Hotspots in Muscat).
(Tue 22 May 2007)
Telecoms
United Arab Emirates: Etisalat Compete in Mobile Surveillance Service
- Etisalat has announced a similar service to that provided by du for a home-surveillance product, called Etisalat 3G
MobileCAM, which will enable the user to view footage remotely from a 3G enabled handset (see United Arab Emirates: 21 May
2007: du Launches Home Camera Service).
Significance: The mobile market in the U.A.E. is becoming very competitive with only two operators and a penetration level of 120%;
each has been trying to launch new services to maintain its customer base. Etisalat has 30 international roaming partners, which will
allow its customers to monitor footage from anywhere in the world.
(Tue 22 May 2007)
North America
Telecoms
United States - Canada: Sprint Buys into DragonWave
- DragonWave, a producer of wireless metro Ethernet networks, has announced the proposed placement of a
warrant for a subsidiary of Sprint-Nextel, Sprint/United Management Company, to grant 126,650 shares for a total of C$448,1875
(US$411,785.65). The price of C$3.55 is below the market price that was listed on the Toronto Stock Exchange at C$3.95 on 17 April
2007 and currently trading at C$4.15, thus requiring stockholder consent to proceed. Sprint is evaluating DragonWave equipment for
its 4G network and the deal is subject to vesting conditions based on the volume of future business that DragonWave receives from
Sprint prior to 31 December 2008.
Significance: This fairly small investment by Sprint is likely a pre-cursor to a deal on equipment for its 4G network. This may refer to
an upgrade to the CDMA system, but is more likely referring to the WiMAX network, which Sprint is gambling on to provide an early
entry to 4G wireless services (see United States: 9 August 2006: Sprint Outlines Plans for Nationwide WiMAX Network and 10
January 2007: Sprint Performance Still Below Par, Looks to Future with WiMAX). DragonWave specialises in point-to-point
microwave systems, particularly for backhaul applications.
(Tue 22 May 2007)
Telecoms
United States: Alltel Acceptance Pre-empted Auction Process
(Tue 22 May 2007) - Reuters and the Washington Post report information from anonymous sources that some of the potential bidders
in the Alltel buyout were surprised by the announcement that Alltel had accepted a deal with TPG Capital and Goldman Sachs,
announced yesterday (see United States: 21 May 2007: Alltel Goes Private for US$25 bil. from TPG and Goldman Sachs). Firstround bids were reportedly not due until 6 June 2007, so Alltel could not have known if a higher bid would be forthcoming from
alternative bidders, including Providence Equity Partners, which partnered with the Blackstone Group, and the Carlyle Group, which
partnered with Kohlberg Kravis Roberts & Co.
Significance: The door is not firmly closed on potential bidders, who are still able to make a higher bid, although Alltel’s management
seems happy to accept the deal offered by TPG and Goldman Sachs. The deal was seen as a more than fair price for the company.
In the wake of the buyout news, Alltel has re-iterated commitments to expansion through both spectrum acquisition in the coming 700
MHz auction and the purchase of smaller companies, despite the assumption of large debts to finance the deal. These details may
have been what pushed Alltel to accept the deal.
Telecoms
United States: Clearwire Mobile WiMAX Trial Concluded
- Clearwire has announced that it has completed the first stage of its mobile WiMAX (or 802.16e-2005) trial in a 15
© 2007 Global Insight. All rights reserved. Wednesday, May 23, 2007. Page 5 of 7.
(Tue 22 May 2007)
sq. mile area in the Portland suburb of Hillsboro (United States). The field trial was conducted in conjunction with Motorola and Intel,
both major investors in the putative network carrier, and focused on coverage, capacity, and speed (see United States: 6 July
2006: Clearwire Receives US$900 mil. in Financing). Laptop card and base station infrastructure uses the licensed 2.5 GHz
spectrum owned by Clearwire in the United States. The next phase of testing will cover an area of 145 sq. miles and will further test
the capacity of the whole network.
Significance: Clearwire has rolled out a large number of networks, operating in 400 municipalities across 12 states, in addition to
operations in Ireland, Belgium, and joint ventures in Demark and Mexico. The current Expedience network is based on precertification WiMAX equipment and therefore cannot benefit from the mass production of standardised mobile WiMAX equipment that
is set to begin soon. The move to the mobile WiMAX standard will help to resolve this and ensure that a wider ecosystem of
compatible equipment and devices is available. Sriram Viswanathan, vice-president of Intel Capital and general manager of the
WiMAX Program Office, noted that the field trial is also part of the drive to produce processors with integrated mobile WiMAX by
2008.
Telecoms
United States: Regional Bells Win Suppression of Competition Suit
(Tue 22 May 2007) - The companies that used to be SBC—Bell Atlantic, BellSouth, Qwest and now parts of Verizon, AT&T and Qwest
respectively—have won an antitrust suit filed by U.S. citizen William Twombly, alleging that they, in the form of the pre-merger
Regional Bell Operating Companies (RBOC), had conspired to suppress competition by failing to assist new competitors under
Federal Communications Commission (FCC) regulations and refrained from meaningful competition in each other’s incumbent legacy
landline territories. This was described as "parallel conduct" that amounted to an antitrust situation, but was today (21 May 2007)
rejected by the Supreme Court, which held that without evidence of conspiracy, individual firms’ actions and choices upon market
entry cannot amount to collusion and evidence of an antitrust conspiracy (see United States:28 November 2006: Supreme Court
Hears Antitrust Suit Against Bell Companies).
Significance: This decision was expected, as the Justice Department’s antitrust division had noted that parallel action and inaction
did not amount to antitrust without proof of conspiracy. Allegations of antitrust behaviour will be required to have a firmer basis than
parallel behaviour, inaction to force continuation of cases, and disclosure of potentially incriminating evidence.
Telecoms
United States: Google Suggests "Real Time Auction" Model for Airwave Use
- Indications of Google's particular interest in spectrum have solidified with Dow Jones reporting that Google has
submitted an innovative 'real-time auction' model for the use of spectrum that bears many similarities to its advertising auction
platform. The "real-time airwaves auction model" facilitates the wholesale auctioning by licence holders of unused spectrum.
Significance: While Google spokesman Adam Kovacevich stated that this did not indicate Google had an interest in acquiring
spectrum, the company would benefit from broadening internet access methods. Google is also turning its auction technology in ever
new directions, from TV to print (see United States: 4 April 2007: Google Dives Into TV Adverts with EchoStar Deal). This push
could also pull its real-time brokerage system into a new, unforeseen area. As Google gains more dominance over brokerage
systems, Microsoft announced the US$6-billion acquisition of digital marketing firm Quantive at the end of last week as companies vie
to break Google's dominance of the online advertising market (see United States: 17 April 2007: Rivals Fear Impact of Google's
Acquisition of DoubleClick). Yahoo! and AOL have all also recently boosted their online advertising capabilities in a major
consolidation run in the online and mobile advertising world (see World: 4 May 2007: Microsoft Boosts Mobile Advertising
Capabilities and 16 May 2007: AOL Acquires "Third Screen Media" Advertising Company). Such a system as outlined by
Google would face considerable technical hurdles, requiring advanced software-defined radio systems to be widely implemented, as
well as protocols to be developed and implemented to minimise interference between essentially ad-hoc users.
(Tue 22 May 2007)
Sub-Saharan Africa
Telecoms
Côte d'Ivoire: Cora de Comstar Dispute Resolved Amicably
- The dispute over U.S.-owned mobile operator Cora de Comstar has now been brought to a final resolution after
three and a half years. According to a press release, the Ivorian government has signed a ‘Settlement and Release Agreement’ with
three companies—Western Wireless International Ivory Coast LLC, Modern African Two LLC, and Wireless Communications
Technology Inc. The agreement relates to an investment dispute over Cora de Comstar, in which the U.S. investors were forced to
abandon their investment during 2003. Following a long-running ownership dispute, the company's offices were raided and staff
evicted in October 2003, as a result of which the operator was forced to shut down its wireless service (see Côte d'Ivoire: 27
October 2003: U.S. Investors Forced to Quit Ivorian Mobile Operator Cora de Comstar).
Significance: The U.S. investors behind Cora de Comstar filed a claim against the Ivorian government in an attempt to reclaim
assets that were seized on 9 October 2003. The claim was valued at US$54 million and, according to a company press release
issued at the time, 'the shareholders of Cora de Comstar expect that the government of Côte d'Ivoire will provide prompt, adequate
and effective compensation' (see Côte d’Ivoire: 16 December 2003: Dispossessed Cora Investors File Expropriation Claim
against Ivorian Government).
(Tue 22 May 2007)
World and Regions
Telecoms
Latin America: DigiLinea Announces Partnership Agreement with Rebtel on Mobile VoIP
- VoIP infrastructure and service provider DigiLinea has announced a partnership agreement with Rebtel for the
provision of mobile VoIP services to consumers in Latin America and the Hispanic population in the United States. Rebtel, a VoIP
telephony service provider, will use DigiLinea's platform to offer local Latin American telephone numbers, unlimited calling plans, and
direct termination, which will allow subscribers to considerably reduce the cost of their everyday communication needs.
Significance: Latin America has a low broadband penetration rate, with the majority of lines concentrated in the big urban centres.
Due to a strong fixed-to-mobile substitution, the number of mobile accesses has increased at a much faster pace when compared to
fixed telephony lines. Global Insight expects to see increased take-up of Rebtel's service, particularly for communications between the
United States and Latin American markets.
(Tue 22 May 2007)
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