Hughes Electronics and Boeing Satellite Systems (BSS) have settled for $32 million with the State Dept. on allegations the companies were involved in unauthorized assistance to China, State said. It had filed 123 charges against Hughes and Boeing in Dec. alleging they had violated the Arms Export Control Act and the International Traffic in Arms Regulations (ITAR) (CD Jan 3 p3).
Exports to China
Qualcomm named Jing Wang, ex-Asia Practice Group, chmn. of Qualcomm China, and Frank Meng, ex-Tecom Asia Group, pres… Scott Schubert, ex-WilTel Communications, appointed CFO, NTL… John Malone, ex-BizTelOne, named senior vp, NeuStar’s OSS Clearinghouse Services… Changes at MeshNetworks: Joe Leopold, ex-Metricom, named vp-sales; Martin Suter, ex-Microsoft, becomes vp-business development.
In annual report to Congress, NTIA said 2002 saw trend “of foreign governments’ intervening to mandate an increase in fixed line international termination rates above market prices.” Such “artificial upward adjustments in pricing” raise payments by U.S. carriers to overseas counterparts, agency said. NTIA said it worked on “interagency strategy” to spell out U.S. views, urging foreign govts. to “reconsider their decisions to intervene in the market.” It formally outlined position for use in consultations with China, Dominican Republic, Ecuador, Jamaica. In case of China, NTIA reached agreement on policy summit with U.S. govt. and industry to be held this month. Amid interagency effort in U.S. to raise concerns about termination rates, China subsequently “dropped the rates back to earlier levels and committed to carrier-to-carrier (rather than government- mandated) negotiated rates in the future,” NTIA said. It said Ecuador decided against govt.-mandated price floor, “preferring instead to let market forces prevail.” U.S. raised concerns last year on China raising settlement rates for international calls. U.S. also has been monitoring similar steps in other countries, which in some cases are setting minimum termination rate for international traffic instead of ceiling that caps rates. In other areas, NTIA held Spectrum Management & Policy Summit last year. As follow-up, it said it planned 4 “major studies” in 2003 addressing spectrum interference and effectiveness through interference protection, receiver standards, improvements in federal spectrum use, new technologies that could be applied to public safety to attain interoperability. Agency said it revamped its Continuity of Operations Plan (COOP), which sets policy for staff to “ensure that critical or essential functions and operations are continued” in face of emergency or threat of one. Point is to make sure appropriate individuals and equipment can perform essential functions “in a new operating location or environment when the home site becomes unusable or when a failure of equipment means that emergency action must be undertaken.” New procedure was set up for personnel to report contact and status information in response to emergency via secure Web site. NTIA said many other federal agencies were using its COOP plan as model. It also outlined research and engineering studies conducted last year on spectrum occupancy and new technology. Using Radio Spectrum Management System (RSMS), agency’s Institute for Telecom Sciences (ITS) measured impact of transmitters, including ultra-wideband, on air surveillance radars; measured impact of radar-to-radar interference; assessed emission characteristics of different pager transmitters; made Part 15 measurements on PCs; issued report on new Radar Spectrum Engineering Criteria Measurement Procedures. ITS also worked on 4th-generation RSMS that could to measure emerging technologies, such as new broadband and UWB services, “as well as new communications services at extremely high frequencies, including new satellite and radar services and new, more complex signal waveforms.”
China Telecom and Fla.-based Calypso Wireless signed 3- year $500 million contract for delivery of latter’s cellular broadband videophones. Calypso said it was pursuing additional contracts with major global carriers as it completed first phase of testing its switching system. It said it planned to launch its proprietary ASNAPTM technology operating on either WAN using GSM/GPRS or CDMA networks or WLAN such as Wi-Fi “in several markets at once.”
SAN DIEGO -- In rare press appearance, Qualcomm Chmn. Irwin Jacobs dismissed any notion that 3G rollout somehow could be characterized as failure, saying: “Although there’s been a lot of negative talk about 3rd-generation over the fact that some of it implementation has been delayed… it has been moving ahead fairly rapidly in other areas.”
Nokia said its 4th-quarter profits jumped to 1.05 billion euros from 450 million euros year earlier, but predicted weaker first quarter sales. It said its 2001 profits were reduced by 736 million euros in restructuring costs, write-downs and goodwill. It said its 4th-quarter sales rose 1% to 8.8 billion euros. Nokia said sales of its mobile phones were flat at 6.7 billion euros, reflecting weaker sales in Americas, offset by strong growth in Europe and Asia Pacific. In Nokia networks, sales grew 6% to 2.1 billion euros, including 370 million euros in 3G dual-mode revenue recognition and reflecting strong growth in U.S., partially offset by weaker sales in China. Nokia said its annual sales declined 4% to 30 billion euros. It said it expected first quarter sales to grow by less than 0-9% it predicted for its handsets.
UBS Warburg said in report Thurs. that share price of Qualcomm this year depends on CDMA wireless handset growth in markets such as China and India. Third-generation mobile station modem (MSM) chipsets appear to be building in such emerging markets, Warburg report said. In part, report noted that distribution channels for CDMA in China are widespread, requiring substantial volumes for market that consumes more than 3 million phones per quarter. Greatest risks to Qualcomm shares this year are likely to be growth of CDMA in China and India “as these two countries will account for the majority of CDMA handset unit growth in 2002,” report said. About 35% of Qualcomm’s revenue in 2003 is expected to come from CDMA products sold in U.S., Warburg said.
UTStarcom said it signed $80-million contract with China Telecom for new deployments of its IP-based PAS (Personal Access System) equipment. It said its PAS technology held more than 60% of China’s market share for sector.
China continues to impose “major” barriers to U.S. carriers that interfere with their ability to compete in China’s telecom market, U.S. Council for International Business (USCIB) said in comments to U.S. Trade Representative (USTR). USCIB Pres. Thomas Niles urged USTR to work closely with China to create regulatory body separate from any basic telecom supplier: “Given that the Chinese government owns and controls all of the major operators in the telecommunications industry, it is impossible for China to establish a regulator that is truly independent.” USCIB said China’s “overly narrow” interpretation of market access opportunities for foreign carriers and lack of independent regulator had “negatively impacted market opportunities for U.S. telecommunications companies contrary to China’s WTO commitments.” USCIB said countries such as Canada, France, Germany, Japan and Mexico also imposed barriers to U.S. carriers violating their WTO obligations. It said Canadian Radio-TV & Telecom Commission (CRTC) failed to ensure that independent ISPs have access to cable networks on reasonable terms and conditions that would drive them from market, allowing dominant cable operators to preserve their dominant position preventing fair competition. European Union (EU) enforcement of its rules regarding telecom services has been “far from uniform” that negatively affects investment through this area, USCIB said. It said EU demonstrated its inability to secure compliance in long term. It said while some member states had been taken to European Court for failure to implement those rules, that process could take up to 4 years. Those problems are particularly evident in France, Belgium and Germany, USCIB said. It said with exception of U.K. and Ireland, there was no effective regime in place to ensure WTO obligations on cost orientated pricing for interconnection and nondiscrimination could be met. USCIB said USTR should monitor very closely any progress within EU and “maintain appropriate pressure” on its national authorities. Germany also clearly violates its WTO compliance, USCIB said. It said RegTP was incapable of enforcing its rulings in timely and effective manner. It said German regulator lacked basic tools, such as ability to impose fines for violations of its orders. Moreover, it said, German law doesn’t give competitors opportunity to examine evidence presented by Deutsche Telekom (DT) to RegTP to justify telecom rates. USCIB said RegTP should be granted statutory authority to implement and enforce Germany’s trade commitments. It also said German courts should have statutory authority to hear appeals in timely manner and to enforce country’s trade commitments. USCIB said Mexico failed to implement its WTO obligations, which “if fully implemented, would allow effective competition to flourish.”
FCC should reform International Settlement Policy (ISP) to reflect existing international telecom market, many telecom carriers said in comments to Commission. They said agency should ensure that enforcement mechanisms were in place to address anticompetitive practices on some international routes. Some carriers also agreed Commission should adopt rule prohibiting U.S. carriers from increasing any international termination rate above existing commercially negotiated rate with particular foreign carrier. Parties also expressed concerns about “excessive” foreign mobile termination rates.