UFB legislation gives Telecom a ‘free pass’, Vector says
Legislation governing the rules of the government’s $1.35 billion roll-out of ultra-fast broadband will give Telecom Corp. a free pass,†according to rival bidder Vector Ltd.
Vector chief executive Simon Mackenzie told Parliament’s Finance and Expenditure Committee the Telecommunications (TSO, Broadband and Other Matters) Amendment Bill would give free rein to the dominant Telecom.
The supplementary order paper tabled by Communications Minister Steven Joyce last month would leave Telecom free to acquire any other local fibre company or telecommunications firm without regulatory oversight by the Commerce Commission, enabling an unregulated copper business to price in a predatory manner,†Mackenzie said.
It’s really important that Parliament and the rest of New Zealand recognises the supplementary order paper bestows significant market and competition benefits to Telecom and does so when not required,†he said. If Telecom sees separation as an issue for its bid, then surely that’s Telecom’s issue.â€
Simon Fuller, chairman of the New Zealand Regional Fibre Group, told the committee Telecom would get special treatment from the SOP over how it would structurally separate, as it would decide how to reallocate its assets and liabilities between the two entities. He said he was concerned that the minister wouldn’t see the phone company’s proposals for 40 days, essentially making it a fait accompli.
With the minister’s office running the stream of a potential Telecom demerger, the Regional Fibre Group was worried Crown Fibre Holdings’ negotiation with the phone company was under the assumption it would separate, but with no detail about how that would occur.
The bill and SOP were intended to ensure Telecom can’t build a dominant position in the telecommunications environment that will emerge as fibre-optic cable and wireless services gradually replace today’s copper-based telephone networks. Telecom has made it to the priority list to win a chunk of government funding, along with Vector and some of the Regional Fibre Group’s members.
Vector wants a calmer approach on regulation, with the principles established by industry and government at the start of the process. That would give capital markets and rating agencies more confidence around the future certainty of the regime, as would a bipartisan approach to the legislation.
The issue of forbearance, which essentially excludes regulatory oversight of the winning bids, initially offers some certainty, but that may falter as longer-term issues emerge, he said. The view to front-load regulation in principle was endorsed by the Regional Fibre Group.
Antony Royal, a spokesman for unsuccessful rural broadband bidder Torotoro Waea, told the committee it appeared there was a lack of vision on the part of the government as to what the end-game is.
My worry here is that we’re going down a really fast track of trying to stitch what we have together to try and make something work without actually figuring out where we actually want to go in the long term,†he said. I think that we have missed an opportunity to really look at where we’re going in telecommunications in the future.â€
Telecom pushes out time of split of network arm
Telecom Corp., which is in the box seat to win the lion’s share of the government’s $1.35 billion roll-out of high-speed broadband, has pushed out the timeline to carve out its network business.
Chief executive Paul Reynolds said the target of structural separation by the end of June has been extended as it continues talks with the government’s Crown Fibre Holdings. Telecom was named a priority bidder for 25 regions, including Auckland, in December in what’s been a protracted negotiation with the government, and has offered to demerge its Chorus unit, which owns the fibre cable and copper line networks, from the service delivery unit.
Paul Richardson, who helps manage $300 million in equities for BT Funds Management, said the consensus view is that if Telecom has to split to be a part of the government-subsidised fibre roll-out. That’s probably one of the better outcomes†and should be heartening for Telecom, which will have to sell the demerger to shareholders to get it across the line.
The company is in a very difficult position if it does not contemplate some sort of structural move to form part of the broadband rollout,†Richardson said. If it is outside the fibre project it will be very difficult to defend its patch, so that’s a risk to the company.â€
In return for splitting its business, Telecom has indicated it expects substantial regulatory relief from the requirements imposed on the copper-wire service. Last month the Commerce Commission recommended some reprieve on the regulation of limited bundles that are resold by the phone company’s rivals.
The shares rose 0.4% to $2.28 in trading today, and have gained 4.2% so far this year.
Vodafone loses 35,000 NZ customers in 2Q
Vodafone New Zealand Ltd., the country’s biggest mobile phone operator, lost 35,000 customers in the second quarter.
The phone company has 2.44 million people on its network, according to the first-half report of its British parent, down from 2.48 million in the previous quarter. Most of those customers were on pre-paid connections, with the percentage of pay-as-you go clients falling to 68.7% from 69.5%. Over the same period, Telecom Corp., Vodafone’s main rival, shed 19,000 customers.
New entrant Two Degrees Mobile Ltd. has probably been the major beneficiary, with the Commerce Commission’s latest benchmarking report on the state of the industry finding the third network increased competition and offers significantly lower pricing†than its bigger rivals.
Over the three months through September, 37,200 people ported their mobile phone numbers, where they take the number to a different carrier, according to Telecommunications Carriers Forum data. The Commerce Commission today said in a draft decision that it plans to extend its ruling on portability for another six years.
Shares in Telecom fell 0.9% to $2.16 in trading today.
China Mobile, Larger Than Vodafone, May Say Net Rose (Update2)
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
Hong Kong.
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
Sichuanand
Zhejiang.
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
Chinathan 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.
Source- http://www.bloomberg.com
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