50% reduction in MTRs proposed by Belgian regulator
www.WirelessFederation.com/news: To increase competition in the wireless sector and reduce the cost of calls to consumers, the mobile network operators of Belgium has been asked by the country’s telecoms regulator, the Belgian Institute for Post and Telecommunications (BIPT) to halve mobile termination rates (MTRs). The operators have six weeks to respond to the regulator’s proposals.
50% cut in MTRs, far steeper than the 20% reduction has been recommended by the regulator. It is now widely expected that all three operators, Proximus (Belgacom Mobile), Mobistar and BASE, will appeal the decision.
Regulation of mobile interconnection rates had been proposed by BIPT in March 2006, and while the charges have been cut by around 50% since that date, the levels remain different for each of the three operators.
S.Korea’s KTF cuts 2006 earnings forecast, shares fall
SEOUL, Sept 26 (Reuters) – KTF Co. Ltd. , South Korea’s second-biggest mobile operator, cut its 2006 earnings forecast on Tuesday to reflect a fall in interconnection rates and higher marketing costs, sending its shares 2 percent lower.
KTF said its 2006 EBITDA margin (earnings before interest, tax, depreciation and amortisation) would be 33 percent, down from a previous 37-39 percent range, and against its 2005 EBITDA margin of 39 percent.
The revision, slightly shy of forecasts by analysts of around 35 percent, follows bigger rival SK Telecom Co. cutting in August its 2006 EBITDA forecast by 9 percent to 4 trillion won ($4.24 billion).
South Korean mobile carriers are trapped in margin-crushing competition that has intensified after the reintroduction of partial handset subsidies in March, while revenue growth is stalled in a country where four out of five have a mobile phone.
“We expect second-half marketing costs to edge down from the first half, but they will be certainly higher than a year earlier,” said No Mi-won, an analyst at Goodmorning Shinhan Securities. “A wider-than-expected fall in interconnection revenue is also negative.”
Marketing costs, which accounted for 19 percent of KTF’s revenue in 2005, shot up to 24.5 percent in the second quarter of 2006, compared with SK Telecom’s 22.7 percent.
Compounding earnings worries, South Korea’s telecoms ministry cut 2006-07 interconnection charges at KTF on Friday, reducing the amount it can charge rivals to use its networks, while raising the rates at SK Telecom.
“A marketing war seems to have stablised somewhat from the hectic second-quarter but KTF’s recovery will fall short of SK Telecom,” said Yoo Sang-rok at Daewoo Securities.
KTF’s interconnection revenue totalled 1 trillion won in 2005, or 16.6 percent of its total sales.
KTF is expected to earn a 483.6 billion won net profit this year, down 12 percent from last year, according to Reuters Estimates.
Shares in KTF ended down 2.1 percent at 29,900 won, after earlier falling as much as 3.8 percent, lagging the wider market’s 0.83 percent drop.
SK Telecom rose 0.74 percent to 204,500 won while the smallest LG Telecom Co. Ltd. dipped 2.33 percent to 10,500 won.
Source- http://asia.news.yahoo.com
Technorati : KTF, Mobile, South Korea
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