Ericsson CEO Kurt Hellstrom said Tues. he expected wireless systems market to show flat to moderate growth for year, although that outlook was becoming murkier as economic slowdown in Latin America intensified. He said company was extending same forecast for mobile systems market to 2002 despite signs of growth in China and Japan. “The market may look tough right now and that is why we have taken necessary actions to return to profitability, even in these difficult times,” Hellstrom said. “When it comes to the fundamental drivers for our industry, we see no reason to change our positive view for the longer term.” He expected rollout of General Packet Radio Service to “accelerate” for rest of this year and next year and said 3G deployment in commercial volumes was on track for 2003. Hellstrom spoke at strategy and technology summit that company held in London. He cited weak market conditions that continued for wireless industry in 2nd quarter, including delays by many customers in spending to expand networks. In some cases, he said contracted deliveries had been postponed. Ericsson shares plummeted on Nasdaq Tues., closing down 19.4% to $4.
Exports to China
Citing “huge potential” in cable and terrestrial digital broadcast markets in China, Oslo-based Tandberg TV said it planned to open office in Beijing. That potential will expand greatly in buildup for 2008 Summer Olympics in China, said Fred Schwabe- Hansen, Tandberg Asia-Pacific gen. mgr. Company said it also recently signed contract with China’s Information Network Centre (INC) to provide equipment for country’s first nationwide DTV network.
Yankee Group report estimates overall capital expenditures for cdmaOne and cdma2000 networks planned by China Unicom will reach $15 billion over next 5 years. Research group forecast that planned cdmaOne network in country would provide “smooth” migration path to next-generation cdma2000 1xRTT network in 2003, with expected upgrade to cdma2000 1xEV in 2004. Unicom is expected to generate cumulative revenue of $24 billion from CDMA networks from 2001 to 2005, Yankee Group said. CDMA subscribers in China are expected to total 55 million by end of 2005, which would make country largest CDMA market worldwide. CDMA infrastructure and terminal market there will be valued at $50 billion over next 5 years, Yankee Group said. “As the only major operator in the world running both large-scale GSM and CDMA networks, Unicom has not convinced us how it will tackle the tough task of expanding the two incompatible networks simultaneously,” said analyst Larry Wan. “Meanwhile, we are concerned about Unicom’s ability to raise enough capital in today’s bear market to finance its massive investment.” Wan said that with 30 million subscribers and govt. backing, carrier was expected ultimately to come up with adequate financing.
Intelsat said it postponed deadline to launch Astrium- manufactured APR-3 satellite that still hadn’t received presidential waiver it needed for launch aboard Chinese Long March rockets. Company declined to comment on status of launch, but probably would have statement before end of week, Vp-Corp. Services Tony Trujillo said. Both Intelsat and Eutelsat, which was to launch Alenia Spazio-manufactured Atlantic Bird-1 satellite aboard same rocket, said in May (CD May 4 p5) they were preparing alternative plans in expectation that U.S. would deny permission. Trujillo said no new deadline had been set and declined to comment on whether other launch options were being considered. Astrium spokesman said he thought waiver acquisition was taking longer because of April’s international spy plane incident in which 24 American servicemen and women were held in China for 12 days: “It obviously did not speed up the process… The people at the State Department were in no hurry to give an approval. I don’t think it’s an issue anymore, and the process is coming back on a more normal track.” Spokesman did say discussions were being held in attempt to obtain waiver, but “it would be difficult to get clearance before business on Capitol Hill resumes in September… The summer recess is the real issue.” This marked first time U.S. had faced issue of dealing with its components aboard non-U.S. satellite since export licensing was moved to State Dept. from Commerce Dept. 2 years ago. A recommendation from State Dept. to President is needed to secure proper export licenses. If President agrees to export, he submits plan to Congress for review. None of parties involved would comment on whether State had given recommendation and State declined to comment on any licensing issues. Space analyst said he would be very surprised if license wasn’t issued eventually because U.S. “wouldn’t want to make it more difficult to launch overseas… That would encourage European manufacturers to become more independent in every area of satellite manufacturing.” Analyst also said acquiring license had become more difficult since State Dept. had taken control of satellite exports: “Their priority is not allowing U.S. technology falling into the hands of the Chinese… I can’t imagine what technology on a satellite could be so sensitive that they could be so concerned from a security standpoint. Any one component that was so sensitive -- somebody would have uncovered it.”
Motorola outlined terms of 6 recent GSM contracts between its Global Telecom Solutions Sector and China Unicom, with total value of $260 million. Motorola said it planned to expand China Unicom’s GSM wireless networks in 5 provinces in China, including adding capacity to its GSM 900 MHz and 1800 MHz networks in Fujian, Guangdong, Hunan, Jiangxi and Shanxi provinces. As result of network upgrades, Motorola said China Unicom’s network capacity in those areas would increase by 3.11 million subscribers. Networks are expected to be operational by year-end except in Guangdong, where improvements are set for completion in first quarter of 2002.
ShanDong Telecom in China chose Nokia to expand its DSL network to increase Internet access coverage in cities of JiNan and QinDao in Shandong province.
U.S. Bancorp Piper Jaffray Managing Dir. Samuel May projected in report that international wireless subscribers would grow to 965 million at end of this year from 730 million at end of 2000. May said 40% of mobile subscriber growth would be in Asia Pacific region, which he forecast would have 327.4 million subscribers by year-end, particularly because of expected surge in wireless infrastructure construction in China. In Asia Pacific region, wireless subscribers will reach 403 million by end of next year, representing 34% of world subscriber base, May said.
Vyyo signed nonexclusive agreement with Chinese broadband equipment vendor, Wuhan Research Institute of Posts & Telecommunications (WRI) to supply its broadband fixed wireless systems on OEM basis. WRI will serve as system integrator for service providers in China.
Nortel won $250 million in contracts from China’s Chunghwa Telecom, which is upgrading capacity of its GSM wireless network in Taiwan to handle 6.5 million subscribers. Companies said upgrades, which include adding GSM gateway mobile switching gear, will allow Chunghwa to provide wireless Internet services across China. “This will allow us to accommodate growth in both subscribers and short message traffic, as well as to improve coverage in hot spots,” said Chin-Yi Yue, pres., Chunghwa’s long distance and mobile business group. He said upgrades also would enable Chunghwa to handle increases in prepaid subscribers. Chunghwa operates only national, dual-mode GSM 900 MHz and 1800 MHz network in China. Separately, Nortel received 3G contract in Portugal from Optimus, subsidiary of Sonea.com and France Telecom, terms not announced. Optimus selected Nortel to build out its Universal Mobile Telecommunications System network in Portgual, including Internet base transceiver stations.
Telecom Industry Assn. (TIA) lauded Congress for defeating resolution (H.J. Res.-50) by Rep. Rohrabacher (R-Cal) that would have disapproved trade with China. TIA Pres. Matthew Flanigan said that Congress’ continued support of Normal Trade Relations with China ensures that “U.S. businesses can continue to work in China and contribute to its fast-growing communications, Internet and e-commerce sectors. Both from a technical and policy perspective, it remains critical that U.S. companies remain engaged in China’s communications market.” House voted 169-259 last week to defeat Rohrabacher measure.