BT said it signed a 5-year $111.7 million pan-European premium rate voice services agreement with Teleholding International (ThI) to deliver managed value-added telephony services on its pan-European fiber network to customers in Germany, Italy, the Netherlands, Spain. BT said it also would deliver a single central reporting solution for ThI, manage the billing of ThI customers in each country and present ThI with a single set of accounts. BT and ThI said they planned to extend the agreement to include other countries across Eastern Europe, Scandinavia, the Middle East and China. They said they also were considering to create a pan-European platform to deliver entertainment network services to businesses and consumers across Europe.
Exports to China
Despite the turmoil in Iraq, a $50 million order for satellite TV tuners for that country has been awarded to Sichuan Changhong, China’s largest TV maker. The company is to supply one million digital set-tops over the next 2 months to an unidentified importer, the South China Morning Post reported Wed. “I was surprised with getting the orders so soon after the war. It is quite beyond me to say if the country’s foreign trade is being supervised or has to be approved by the U.S.,” Changhong Deputy Sales Chief Liu Haizhong told the paper. Liu said other major foreign TV brands had also begun exporting to Iraq since the war ended. Iraq Satellite Channel was established in July 1998 and was used to broadcast govt.-controlled programming. Broadcasts now are apparently under the supervision of the U.S.-led coalition.
China’s Qiao Xing Universal Telephone said it had signed an agreement with the Beijing branch of China Unicom (BBCU) to market its cordless Wuxiangtong phones, which use the GSM core technology with the look and functions of regular press- key phones and are suitable for use as mobile public phones. It said BBCU would buy up to 80,000 of such phones.
Gilat Satellite Networks said it would provide a satellite-based rural telephony network with technical services, training and support for China Telecom. The network will serve Tibet, the company said.
“Billions of dollars” would be needed to rebuild and upgrade the destroyed telecom infrastructure in postwar Iraq, the Dept. of State (DoS) “Future of Iraq Project” working group, which focuses on IT and telecom infrastructure, estimated. Iraq will need $1.2-$1.5 billion just for the initial stage of rehabilitation of the existing infrastructure, said Rubar Sandi, a member of the infrastructure working group.
Tellabs said it lost $42.9 million in the first quarter, vs. a year ago profit of $5.3 million, and said it would cut 665 jobs, or 14% of its work force, starting this month. It said its sales fell to $222.5 million from $371.5 million. The company said it planned to reduce operating expenses to $125 million per quarter by the 4th quarter. To drive revenue growth, Tellabs said it would focus resources in “growth” geographic areas such as Eastern Europe, China and other countries in Asia.
CellStar said it lost $16.8 million in the first quarter compared with net income of $11.4 million in the same period a year earlier, citing a $17.2 million noncash goodwill write-off related to a change in accounting principles. The company said its revenue dropped to $507.1 million from $629.2 million primarily because of decreased sales in China. However, it said its Asia revenue increased 14.8% and gross profit surged 89% from the 4th quarter of 2002, mostly from sales in China of new products under a new agreement with NEC.
The international telecom market will grow at 10.1% this year to $1.4 trillion, reversing declines in 2001-2002, the TIA’s “2003 Telecom Market Review & Forecast” said. It predicted the market would grow at a 10.3% compound average growth rate through 2006, encouraged by increases in wireless and support services. TIA said the underlying demand for telecom remained strong, as Internet traffic and the need at the enterprise level for high-speed data transmission continued to grow rapidly, and the demand for mobile connectivity for both voice and data was expanding. The report said spending on landline transport services was beginning to be cannibalized by wireless services. International spending on communications transport services is expected to reach $788 billion in 2003 (up 10.5% over 2002) accompanied by a 2.7% uptick in international spending on telecom equipment to $247 billion in 2003, TIA said. It said the Asia-Pacific market was the largest regional area outside N. America, with total telecom revenue expected to reach $421.6 billion this year from $380 billion in 2002. TIA predicted that market would increase at a 9.1% clip through 2006. The report said the Japanese market continued its modest gains and China and India were growing rapidly with mobile phones subscribership growth in both countries exceeding 80% in recent years. It said revenue in Western Europe, the 2nd largest regional telecom market outside N. America, was expected to reach $362 billion in 2003, up 5.8%. Despite the difficulties faced by many carriers resulting from the 3G spectrum auctions, European operators are beginning to plan their strategies for rolling out advanced wireless networks encouraged by the decision to allow wireless carriers to share infrastructure, TIA said. It also said broadband rollout was beginning to accelerate in Europe and was expected to reach 10% penetration in 2003. Unlike in N. America, the report said, DSL is the most popular broadband access technology there, surpassing cable modems and accounting for 60% of broadband connections. TIA Pres. Matthew Flanigan said broadband and wireless were “the big drivers for the international market for” this year. He said broadband deployment was approaching critical mass in 2003 in many countries, “putting the market on an accelerated growth curve.” He said 3G and unlicensed wireless networks also were taking off this year and had “the potential to be a driver for the entire global market.”
The information technology (IT) and telecom markets are in “reconstruction mode” and investors are just beginning to “come out of their shells,” said Richard Lukaj, pres., Babcock Capital Partners. He spoke at a panel on technology needs of the telecom and IT industry at the International Finance Corp. (IFC) Global Technology Conference 2003 Wed. Venture capitalists have “very much gone back to the basics” in deciding what to invest in, he said. It’s much tougher to find financing for raw, pre-beta (testing) technologies, Lukaj said. However, he said, the woes of the developed IT markets are creating new opportunities for emerging markets.
Mobile phone operators in some countries “have used mobile termination as their ‘cash cow’,” AT&T said commenting on the report (CD April 2 p2) released by the U.S. Trade Representative (USTR) Tues. on WTO compliance in other countries: “Poor policy and lack of regulation have failed to ensure that termination fees are cost-based or reasonable.” The company said such “abuse” and the “excessive margins” earned on fixed-to-mobile termination was becoming a “worldwide problem” with mobile termination rates significantly higher than fixed rates. “U.S. consumers bear the brunt of these exorbitant charges that may soon reach billions of dollars annually,” AT&T said. The company also strongly supported a report finding that an independent regulator was critical for opening markets and encouraged USTR “to pursue this issue with our trading partners, including China and Mexico.” It said it was “encouraged” that the USTR highlighted the need to monitor the practices of several countries such as Brazil, Canada and the Dominican Republic to better access compliance with individual trade commitments. In a separate statement, CompTel also supported USTR in its concerns on “excessive” mobile termination rates in the European Union (EU), Japan, Argentina, Australia, Netherlands and Peru. CompTel applauded USTR for encouraging govts. that hadn’t taken any action, such as Germany, to consider appropriate responses to that “significant” trade barrier. It also supported USTR’s decision to monitor leased line provisioning problems in Germany and France and to encourage govts. such as Singapore, Switzerland and Australia to lower their “extremely” high leased line prices to more reasonable, GATS-consistent levels.