TOKYO (XFN-ASIA) – KDDI Corp and credit card operator JCB Co have agreed to tie up to make cellular phones that can be used as credit cards, the Nihon Keizai Shimbun reported without citing sources.
Users will be able to make purchases of up to 20,000 yen per transaction at stores participating in JCB’s mobile wallet service, the Nihon Keizai said.
Mobile phone operators are adding new services and features to retain customers ahead of the introduction of ‘number portability’ in October where customers can continue to use the same mobile phone numbers even after they subscribe to other mobile phone companies.
Aug. 16 (Bloomberg) — China Mobile Ltd., the world’s largest cellular operator by market value, may report a 23 percent gain in second-quarter profit after adding a record number of subscribers.
The Beijing-based company, which overtook Vodafone Group Plc as the world’s largest mobile company by market capitalization last month, will report net income rose to 15.7 billion yuan ($2 billion) from 12.8 billion yuan a year earlier, according to the median estimate of six analysts in a Bloomberg survey. China Mobile is scheduled to report earnings tomorrow after the 4 p.m.market close in
Chief Executive Wang Jianzhou raised revenue by offering a wider range of wireless phone services such as movie and video downloads and targeting the more than 900 million people living in
China’s rural areas. The mobile operator added 13.1 million users in the second quarter, gaining a record number for three straight months to June.
“With the continued growth of subscribers and strong growth of data revenue,” earnings will keep rising, said Mandy Chan, who helps manage $1 billion at ABN Amro Asset Management Ltd. in Hong Kong, including China Mobile shares.
China Mobile attracted users after it received approval from the telecommunication regulator to cut rates and offer cheaper monthly packages for cell-phone users in
Beijingstarting May. The operator also reduced international roaming charges in the provinces of
The phone operator is expected to report half-year profit rose to 30.2 billion yuan from 24 billion yuan a year earlier, analysts said.
Share Price China Mobile’s market capitalization on July 11 was $132 billion, compared with Newbury, England-based Vodafone’s $110 billion. The Chinese company’s shares have risen 38 percent this year, compared with a 23 percent decline in Vodafone stock.
“The share price reflects the market’s view of the prospects of the companies in the future,” Francis Cheung, an analyst at CLSA Ltd., said. “There’s more growth potential in
Europe, where the market is more mature.” China Mobile, which lags behind Vodafone and
Japan’s NTT Docomo Inc. in sales, may say second-quarter revenue rose to 69.4 billion from 59.6 billion yuan a year earlier.
The company, which offers global system for mobile communications, or GSM, services, gained 25.8 million subscribers in the first six months of the year for a total of 273.8 million, about two-thirds of the nation’s mobile-phone users. That’s more than Vodafone’s 186.8 million users and Docomo’s 51.9 million combined by the end of July.
User Revenue China Unicom Ltd., the country’s second-largest mobile operator, offers services using both the GSM and code division multiple access standards. Unicom had a total of 135.1 million users at the end of June. China Mobile’s average revenue per customer, or ARPU, an industry measure of the size of a phone bill, probably remained unchanged in the second quarter from a year earlier, and up from the previous quarter, analysts said.
We expect China Mobile’s ARPU to be driven by higher usage and wireless data contribution,” Kelvin Ho, an analyst at Nomura International (
Hong Kong) Ltd. said. Ho estimates China Mobile’s ARPU will be about 90 yuan in the second quarter, unchanged from a year earlier, and up from 86 yuan in the previous quarter. Usage per subscriber probably rose 10.8 percent from a year earlier to 363 minutes per month. Chief Executive Wang, 57, is boosting revenue from new businesses such as short message services, ringtone downloads and wireless services such as emails and games.
Data Services New businesses from such wireless data services may account for 23 percent of revenue in the first six months, compared with 19.7 percent a year earlier, Ho said. Competition also eased as fixed-line phone network operators China Telecom Corp. and China Network Communications Group Corp., slowed promotions of a city-wide cordless service called Little Smart, which has cheaper rates than for cellular calls, as they prepare for the government’s issuing of high-speed wireless licenses.
Chinahasn’t set a timetable for granting licenses for 3G services, which allow subscribers to video conference and download movies faster on their handsets. The Ministry of Information Industry on Jan. 20 said it has adopted the locally developed time division synchronous code division multiple access standard as one of the so-called third- generation services. “A 3G license could be further delayed into second half 2007, which implies the 2007 could be another safe year for China Mobile, and the company could still deliver stellar results until the beginning of 2008,” Wang Jinjin, an analyst at UBS Securities Co. said in a report. China Mobile shares rose 1.5 percent to HK$52.10 as of middayin
Hong Kong, after gaining as much as 1.7 percent earlier.
Korean mobile operator SK Telecom and Samsung have unveiled their ‘Real World Phone’, a handset that works on CDMA, GSM and JCDMA networks. Making roaming possible in over 90 countries, the phone also includes a simple translation service for ocmmon phrases in English, Chinese and Japanese, as well as a camera, MP3 player and Nate drive. The 14.9-mm phone will be available in grey, red, silver or white at a cost of around KRW 500,000.
In one of the biggest network management and rollout deals globally,
‘s largest GSM operator, Bharti Airtel, has awarded Swedish telecom equipment vendor, Ericsson, a $1 billion outsourcing contract for network management services. Deals such as this, along with the hyper growth, have propelled our telecom sector and operators into global limelight. High sunk costs, rapid technological advances, high obsolescence and intense competition are some reasons for these mega deals and consolidation in the industry.Market access is a prime motive for such partnerships. Vodafone acquired a 10% stake in Bharti for Rs 6,500 crore to get a foothold in the Indian market to expand its worldwide presence. Conversely, Indian companies are eyeing companies outside to expand their access. Tatas recently invested $60 million for a 26% stake in InfraCo, an emerging domestic and international fiber-optic carrier in
. VSNL acquired Teleglobe International, a provider of wholesale voice, data, internet and mobile signaling services for $239 mn, to get access to Teleglobe’s network spanning the globe and having capacity in more than 80 sub-sea and terrestrial cables.
Reliance’s $211 mn acquisition of FLAG, VSNLs $136 mn acquisition of Tyco Global Network, and Bharti’s 8% acquisition in the $500 mn, 20,000 km, next generation undersea cable system SEA-ME-WE-4 project reflect the same intent.
The government-owned MTNL, after a successful foray into
, is actively looking at other markets, including
. Both Reliance and Bharti are in the race for the fifth mobile operator license in
. Since telecom requires large investment in developing networks, apart from market access, many companies try to achieve economies of scale and scope by buying networks from existing service providers. According to Stanley Sigman, the CEO of Cingular in the
, one of the main reasons for him taking over AT&T Wireless in 2004, in a whopping $41 bn deal, was to combine assets of these two companies to take advantage of economies of scale to be the best in the class. We witnessed Tata Teleservices buying Hughes.net to gain access to the basic services market in. Bharti acquired stakes in JT Mobile, Spice and Hexacom to get entry to the Andhra, Karnataka andcircles. In July last year, Essar scooped BPL Communications for Rs 4,400 cr to consolidate its market position in Mumbai,,,and
. Through its $66 mn acquisition of Escotel in January 2004, Idea not only gained the Haryana, Kerala and UP(W) networks of Escotel, but also acquired market access to Rajasthan and HP.
Similarly, VSNL acquired Dishnet in March 2004 for Rs 270 crore to get access to Dishnet’s subscriber base and nationwide network of cyber cafes. VSNL also acquired Tyco Global Network for $130 mn for supplementing its submarine cable-based bandwidth services.
The third major factor for the partnerships in telecom is for companies to have control over emerging technologies. Bharti’s mega deals, of outsourcing its entire network management and operations to Nokia, Ericsson and Siemens, are an example.
A reason is to transfer technology obsolescence and infrastructure upgrading risk to equipment manufacturers. Hutch followed with the outsourcing deal with Nokia. The motive behind the surprise acquisition of a 51% stake by Reliance Capital in Adlabs Films for Rs 360 cr is to use Reliance Infocomm’s nationwide fibre optic network for the digital distribution of movies produced by Adlabs.
Tech companies with niche specialisation such as Sasken Communications Technologies that builds mobile multimedia applications and codec engines, Subex Systems which specialise in advanced telecom fraud management products might well be targets for acquisitions in near future.
While we have been witnessing the above partnerships, the fourth dimension to the partnership is emerging.Technology-intensive companies are also pursuing partnerships with hedging as the main value objective. Companies are getting a stake in technologies unrelated to the core business promise. Notable ones being the recent acquisition of Luxembourg-based Skype Technologies SA, the global internet communications company, by the worlds largest online auction company, eBay, for approximately $2.6 bn.
eBay claims this brings into its e-auction business a powerful communication engine, capable of opening new lines of businesses, new monetisation models and geographies, among other things.
This euphoria over emerging technologies and associated businesses is similar to the ones witnessed over the dotcoms in the mid-90s. Whether this momentum will continue is anyone’s guess.
While telecom companies in
and theare vying to acquire companies outside their countries at astronomical prices, global giants such as Vodafone are divesting their stake in foreign telcos. Vodafone terminated its Japanese mobile telecom business by selling it to Softbank for $8.9 bn and is even planning to exit from the
operator, Verizon. The telecom bubble that burst and left big holes in the
telecom industry, notable ones being AOL-Time Warner, and MCI-WorldCom, is slowly gaining momentum again.
The Indian telecom scenario, as we have seen, is also abuzz with hyper growth, with associated consolidations and new partnerships. Let us hope this one,unlike the dotcom burst, is a sustainable bubble in the making!
JEJU, South Korea — Most mobile phones you buy in South Korea don’t work in Japan, while a phone bought in the United States may or may not work in Europe.
Consumers have long faced a perplexing alphabet soup of terminology involving disparate wireless technologies and radio frequencies when simply seeking to buy a phone to call business associates or loved ones from anywhere in the world.
The engineers of tomorrow’s mobile technology are hoping to change that.
At a forum last week sponsored by Samsung Electronics Co. on South Korea’s Jeju island, the architects of tomorrow’s wireless future — referred to as fourth-generation technology — discussed ways to help them meet the challenge of true worldwide mobile roaming.
Finding a common radio frequency that could be used anywhere in the world isn’t a simple task, given the current airwave clutter among cell phone, police radio, satellite and other wireless transmissions.
Studies are seeking to determine whether frequencies now in use by other technologies could be shared with new devices that would be able to sense when those channels are busy or free to transmit.
Another idea to free up frequencies would be to reallocate ones now given to obsolete technologies or those that don’t see heavy use.
Agreeing on a single global frequency would also be a key to allowing the new technology to work seamlessly worldwide.
Consumers shouldn’t have to spend thousands of dollars for devices that can work with various competing technologies to be able to roam worldwide, said Ali Tabassi, a vice president from U.S.-based Sprint Nextel Corp.
But as is often the case with trailblazing technology, a potential format and frequency war is taking shape, along with a debate over how quickly the industry should move.
Some companies are supporting the technology known as Mobile WiMax, a burgeoning standard now coming into use that has been strongly backed by U.S. chip maker Intel Corp. It offers relatively fast connections over a long range, but not the kind of superfast speeds that are considered the realm of the fourth-generation future.
“We cannot wait for another three to four years for another technology platform to support the Internet-everywhere dream,” said Bin Shen, vice president for broadband at Sprint Nextel, which plans WiMax trials by late 2007 before launching the service in the United States in 2008. “We believe Internet is like air and oxygen in people’s lives in the future.”
There already are limited trials of Mobile WiMax under way in South Korea, with plans to cover the capital, Seoul, by early next year. However, in a sign of the difficulties in deploying a worldwide standard, the South Korean system uses a different frequency than the one planned for Sprint Nextel’s future network because of government restrictions.
Samsung has backed WiMax and is a partner in commercializing the technology in South Korea and the United States.
But at the same time, Samsung is using the forum to show off another potential next-generation technology. The South Korean company is one of several working to develop a standard for a lightning-speed data transmission that hasn’t yet been named and won’t be agreed upon until at least 2010, meaning it won’t be in consumers’ pockets for years.
Some say that’s too long to wait.
“Why can’t users today connect to the Internet everywhere they are?” asked Siavash Alamouti, chief technology officer for Intel’s mobile wireless division. “We’ve got to do it as fast as possible.”
Nearly one quarter of Japanese operator Vodafone KK’s subscribers are considering switching to another mobile phone provider after number portability comes into force on 24 October, according to a survey by Nikkei Industrial Daily. Including Japanese mobile networks combined, the latest survey indicates that 17.1 percent of respondents plan to change providers, or 6.1 percentage points less than in a June survey. Some 24.7 percent of Vodafone subscribers said they were considering a change, followed by 18.7 percent of NTT DoCoMo subscribers and 8.1 percent of KDDI au service customers. When those considering a change were asked what was their preferred company, 61.1 percent said KDDI, followed by Vodafone with 17.6 percent and DoCoMo with 13.5 percent.
The phone, called “TiMO”, will go on sale at the end of October and will be sold only at the automaker’s 7,500 outlets in Japan, the companies said in a statement.
Toyota has been working closely with KDDI, in which the auto maker has an 11 percent stake, to develop new services that link cars and telecom networks.
The companies have also developed a phone battery charger that can be attached to the driver’s armrest and will offer downloads of music and games free to TiMO users.
Drivers will also be able to connect to emergency centres by just pushing a button on the handset if they need help while on the road.
KDDI, Japan’s No.2 wireless carrier after NTT DoCoMo Inc., is keen to introduce new services before October 24, when mobile phone users will be able to keep their phone numbers when they change operators.
KDDI was formed in 2000 after a merger of three operators including a mobile phone unit backed by Toyota. Toyota is now KDDI’s second-biggest shareholder after Kyocera Corp.. The new model is based on an existing KDDI phone made by Toshiba Corp..
MANHASSET, N.Y. – Motorola Inc. has announced a strategic initiative to develop mobile WiMax chipsets for the company’s next-generation WiMax devices.Motorola’s initial chipset will focus on core 802.16e mobile WiMax functionality supporting voice, video, and data for low power mobile applications in handsets and modules. These first chipsets are scheduled to support commercial Motorola WiMax devices in 2008 for carriers in North America, Japan and around the world including Sprint and others.
Motorola is working with its silicon vendors on the overall fabrication of the chipsets.
Aug. 29 (Bloomberg) — SK Telecom Co., South Korea’s largest mobile-phone operator, will help China develop its own standard for wireless networks, seeking access to the world’s biggest cell-phone market by subscribers.
The alliance is the first China’s government has signed with an overseas operator for the third-generation technology known as TD-SCDMA, which allows faster downloads of movies and music, the Seoul-based company said in a statement. SK Telecom bought $1 billion of bonds convertible into shares of China’s second- largest mobile-phone company in July.
China’s homegrown standard needs to win customers to compete with rival technologies developed by Nokia Oyj and Qualcomm Inc. SK Telecom, the world’s first provider of 3G services, joins Spain’s Telefonica SA and Hong Kong’s PCCW Ltd. in trying to access a market with more cell-phone users than the combined populations of the U.S. and Japan.
China “can benefit from the experience of a foreign operator,” said Kelvin Ho, a telecom analyst at Nomura International (Hong Kong) Ltd. The agreement may “help faster development of the TD-SCDMA standard in China.”
SK Telecom said last month when it bought bonds convertible into a 6.7 percent stake in China Unicom Ltd. that the two companies would cooperate in the development of handset and network technology and new services.
Shares of SK Telecom rose 1.1 percent to close at 189,500 won in Seoul. The stock has fallen 6.9 percent since the company announced the convertible bond purchase, compared with a 9.7 percent rise by the Kospi stock index in that period.
As part of the agreement announced today, SK Telecom will test TD-SCDMA in South Korea by the second half of next year, the statement said. China plans to start the 3G service before the start of the 2008 Beijing Summer Olympics, according to the statement.
SK Telecom expects its China business, into which SK Telecom has committed a great deal, to gain much momentum with the support of the Chinese government,” the company said.
China’s TD-SCDMA, or time division-synchronous code division multiple access, technology competes with wideband-CDMA, developed by companies including Nokia and Ericsson AB, and Qualcomm’s CDMA2000 as 3G standards.
In October 2000, SK Telecom became the world’s first company to start 3G mobile-phone services. A year later, NTT DoCoMo Inc. was the first operator to offer W-CDMA, the most common standard for the high-speed service.
China’s government may issue its first 3G license within six months, China Netcom Group Corp. (Hong Kong) Ltd. Chief Executive Officer Zuo Xunsheng said in an interview in Hong Kong last week.
The Chinese regulator in February asked the parent companies of fixed-line operators China Netcom and China Telecom Corp. and China Mobile Ltd., the world’s largest cell-phone operator by users, to conduct trials of the TD-SCDMA standard.
Companies may spend 80 billion yuan ($10 billion) on 3G networks in China in the first year licenses are issued, according to estimates by Beijing-based researcher BDA China Ltd.
China added 38.4 million mobile-phone users in the first seven months of this year for a total of 431.8 million, according to government data.