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China Telecom Plans to Buy Wireless Network From Parent March 22, 2011, 4:54 AM EDT
By Bloomberg News
(Updates with comment from analyst in fourth paragraph.)
March 22 (Bloomberg) — China Telecom Corp., the country’s biggest fixed-line carrier, said it plans to buy the mobile- phone network it now leases from its parent company after the number of users more than tripled in the past year.
China Telecom will complete the purchase of the third- generation CDMA mobile phone network by the end of next year, Chairman Wang Xiaochu said at a press conference in Hong Kong today. He said the network is valued at about 90 billion yuan ($14 billion) and that the purchase will be funded with debt. He said a price for the acquisition hasn’t been decided.
China Telecom boosted the number of 3G phone users to 12.3 million at the end of last year, from 4.1 million a year earlier, by increasing the variety of handsets on offer. The network purchase will raise earnings, Wang said. The listed- company’s CDMA network capacity lease fee rose 59 percent to 13.3 billion yuan last year, the company said today.
“The reason why they are buying the network is because the leasing fee they are currently paying to the parent company is more than the depreciation of the assets and related finance charges,” Kelvin Ho, a Shanghai-based analyst at Yuanta Securities Co., said in a phone interview today. “If they buy, it will be cheaper and they will save costs. The parent will try to price it attractively so it will be accretive.”
China Telecom rose 2.3 percent to HK$4.49 at the 4 p.m. close of trading in Hong Kong.
The company said today profit excluding gains from connection fees rose 42 percent to 2.67 billion yuan in the three months ended Dec. 31. Sales rose 5.1 percent to 56.2 billion yuan.
–Mark Lee and Ed Lococo. Editors: Chua Kong Ho, Vipin V. Nair
To contact the reporters on this story: Mark Lee in Hong Kong at firstname.lastname@example.org; Edmond Lococo in Beijing at email@example.com
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China, the world’s largest mobile- phone market, will double annual spending on fourth-generation network equipment in each of the next four years, according to forecasts from IHS ISuppli.
China’s investment in 4G will double to $100 million this year from $50 million last year as trials get under way in six cities, El Segundo, California-based IHS ISuppli forecasts. Spending will jump to $300 million in 2012, $600 million in 2013 and $1.3 billion in 2014, according to the forecasts.
China’s Ministry of Industry and Information Technology in December gave China Mobile Communications Corp., the world’s largest carrier by subscribers, approval to begin large-scale tests of its 4G TD-LTE network in Shanghai, Hangzhou, Nanjing, Guangzhou, Shenzhen and Xiamen. IHS ISuppli projects those trials will reach 100 million subscribers with 100 base stations.
The nation’s other two carriers, China United Network Communications Group Co. and China Telecommunications Corp., will start deploying 4G systems between 2012 and 2013, the report said.
China granted the first licenses for third-generation wireless networks that allow mobile phones to surf the Web in 2009. China was home to 859 million mobile-phone users at the end of last year. Only 47 million, or 5.5 percent, had upgraded to 3G service as of the end of December, according to data from the Ministry of Industry and Information Technology.
–Edmond Lococo. Editors: Terje Langeland, Anand Krishnamoorthy
To contact Bloomberg News staff on this story: Edmond Lococo in Beijing at +86-10-6649-7507 or email@example.com
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The Telecom network is up and stable, with most mobile sites working and all exchanges operational with a combination of mains and generated power following Tuesday’s Christchurch earthquake, the company says.
Telecom urged people in Christchurch to minimise the use of mobile phones and use text messages instead of calls when possible, to free up the network for emergency response workers.
However, as the network is operational people should use their phones for important calls.
Telecom teams on the ground and across the country were working around the clock to provide every support possible, it said.
Yesterday, the telco said it had 60 generators providing backup power to network sites still without mains power.
It had collected more than 3000 analogue landline phones which were being readied for distribution.
The “old fashioned phones” did not require electricity, and Telecom asked people to drop any spares to Telecom stores during retail opening hours.
The company said today more than 27,000 calls had been made from 260 free Telecom payphones across Christchurch.
Two extra payphones were stationed at Pioneer Stadium and Burnside High School welfare centres.
A third free payphone was on its way to Christchurch from Auckland.
Free WiFi spots were also available at Telecom Riccarton Mall, Cafe Zero on Cashmere Rd, and the Westpac Centre in Addington.
Telecom said Christchurch customers could have their landline number diverted to another number for free by calling them on 120 and business customers on 125.
A Chinese telecoms firm is bidding to install mobile phone transmitters in the London Underground in time for the 2012 Olympics, it has been reported.
According to the Sunday Times, Huawei is offering to put in the £50 million phone network free of charge as a gift from one Olympic nation to another.
The paper said mobile network operators Vodafone and O2 had agreed to pick up the tab for installation work, while Huawei would hope to make an income from maintenance fees.
A Transport for London spokesman said: “Transport for London and the Mayor of London are currently in discussion with mobile phone operators and other suppliers about the potential provision of mobile phone services on the deep Tube network.
“Given the financial pressures on TfL’s budgets, any solution would need to be funded through mobile operators with no cost to fare or taxpayers. Discussions are ongoing.”
Conservative MP Patrick Mercer said an underground mobile network of the kind already installed in Hong Kong and Paris would be “extremely helpful” for emergency workers in the event of a terror attack.
But he warned it “absolutely answers a terrorist’s prayers”, by providing a means of detonating devices on the Underground.
Mr Mercer told the Sunday Times: “Whoever takes the decision has to be aware it is a double-edged sword.
“It has been proven that a proportion of the cyberattacks on this country come from China. I wonder when the eyes of the world are upon us whether there is sense in using a Chinese firm to install a sensitive mobile network.”
Copyright (c) Press Association Ltd. 2011, All Rights Reserved.
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Deutsche Telekom AG’s slow build-out of its T-Mobile USA network, once a shortcoming, may be turning into an advantage for Europe’s largest phone company.
The unit, the fourth-largest mobile-phone operator in the U.S. after Verizon Wireless, AT&T Inc. and Sprint Nextel Corp., accounts for about a quarter of the German company’s sales and has seen profit slide as it missed out on Apple Inc. iPhones. With the emergence of Google Inc.’s Android software, the lower- priced handset market targeted by T-Mobile is growing fast.
“The irony is that being late to the party means they are entering the party at just the right time for them,” said Robin Bienenstock, an analyst with Sanford C. Bernstein in London with an “outperform” rating on Deutsche Telekom shares. “They’re late because historically they underinvested and that in turn forced them into being a cheap and cheerful discounter.”
Deutsche Telekom Chief Executive Officer Rene Obermann and T-Mobile CEO Philipp Humm must demonstrate they can retain customers and boost revenue and profit, analysts said. The executives will unveil their strategy for the U.S. market in New York tomorrow and need to show that they’re prepared to buy or partner with a rival by next year to get spectrum to build a next generation network, called 4G or Long-Term Evolution.
“They might not need LTE to cater to capacity and speed before 2013, but in 2012 they will face a marketing challenge,” said Ameet Shah, a director at consulting firm PRTM in London.
Verizon Wireless activated its LTE service last month, while AT&T expects to start selling faster speed LTE services this year. T-Mobile won’t want to be left behind, he said.
“Consumers will want the latest devices, on the fastest network, and getting them to sign up for 18- to 24-month contracts in 2012 will be hard when Verizon has its new network up and running,” Shah said.
T-Mobile USA, which doesn’t offer iPhones in the U.S., saw annual customer growth slow to 10 percent from more than 40 percent between 2002 and 2008. In 2009, it had a 3.2 percent net new customers and the share of high-margin customers slipped to 79 percent from 89 percent in 2003.
Shares of Deutsche Telekom, based in Bonn, fell 6.2 percent last year. They slid 0.2 percent to 9.59 euros as of 10:35 a.m. in Frankfurt.
T-Mobile USA sales fell 1.6 percent to $21.5 billion in 2009, while operating income before interest, depreciation and amortization fell 3.4 percent to $5.92 billion. In the quarter ended September, revenue at the unit fell 0.6 percent at $5.35 billion and Oibda slid 15 percent. Bienenstock sees T-Mobile USA sales rising between zero and 1 percent this year.
“We currently have the fastest network there,” CEO Obermann said in an interview with newspaper Bild am Sonntag on Jan. 15. “But we also need aggressive marketing and a very customer-friendly price policy. We need to sharpen our arguments for why customers should come to us and stay with us.”
Since 2008, T-Mobile has struggled to catch up with rivals on coverage. It spent more than $9 billion to expand its 3G network and update the speed to so-called HSPA+.
It expanded its smartphone line-up, with 41 percent of them now running on Android, according to Mark Donovan, senior vice president for mobile at researcher ComScore Inc.
“They’ve really pushed hard to bring smartphones to the masses,” said Donovan from Reston, Virginia. “They’ve also been very aggressive on pricing of data.”
According to eMarketer, Android surpassed Apple in November to become the second-largest smartphone platform in the U.S. after Research In Motion Ltd.’s BlackBerry. Apple came in third. The number of U.S. smartphone users is expected to increase to 84.4 million in 2012 from 60.2 million in 2010.
T-Mobile will eventually need more spectrum, said Daniel Hays, a partner at PRTM in Washington. Its current network can support growth into 2012 and 2013 and has allowed T-Mobile USA “to have a credible data offering without having to rush into the arms of a potential partner,” he said.
Among them are Clearwire Corp., majority-owned by Sprint, and billionaire Philip Falcone’s wireless communications venture LightSquared Inc., which need to sell spectrum or find partners to build a next generation network on their frequencies.
Clearwire is struggling to raise funds as it loses support from Sprint. Meanwhile, LightSquared is racing to fulfil an accord reached with the U.S. Federal Communications Commission to employ a combination satellite-terrestrial network for 100 million Americans by the end of 2012 and 260 million by 2016.
That pressure may make spectrum available to T-Mobile at a discount, Bernstein’s Bienenstock said.
Clearwire may seek to sell assets, including some spectrum, spokesman Mike Digioia said. “We have talked to T-Mobile in the past,” he said. LightSquared spokesman Blair Kutrow declined to comment on potential partners.
Sprint’s 900 Mhz spectrum may be “a lot more complementary” for T-Mobile USA, Bienenstock said. Cristi Allen, a Sprint spokeswoman, declined to comment.
For now, Deutsche Telekom says it’s not interested. Last week, Chief Financial Officer Timotheus Hoettges reiterated that the company isn’t looking for large acquisitions. It has said if it had to go it alone, it could.
Bienenstock isn’t convinced. “I think they’re going to talk to Sprint this year,” she said.
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Verizon Wireless’ announcement that it is expanding its faster 4G network to Augusta and Aiken was part of a flurry of similar announcements this week by wireless carriers as they seek to capture more wireless and mobile customers.
Verizon, AT&T, Sprint and T-Mobile all said they were introducing new 4G smart phones and tablets this year, though Verizon has been the only one to mention the Augusta market specifically so far.
The city was one of 140 markets chosen for the expansion of Verizon’s 4G Long Term Evolution network, said Kate Jay, the company’s spokeswoman for Georgia and Alabama.
“It’s really about lightning fast speeds,” she said. “The speed of our 4G network is up to 10 times faster than our 3G network.”
Jay did not have a specific date the expansion would occur.
Glenn Cannon, walking out of the Verizon store in Mullins Crossing shopping center on Friday, said he is looking forward to the faster downloading speed of the new network.
Cannon, who uses the original Droid mobile phone, said he mainly uses his smartphone for e-mail and navigation purposes.
“Obviously, faster is always better,” he said. “I think it will be very beneficial.”
The coverage area will include Augusta, North Augusta, Aiken and the Interstate 20 corridor.
Verizon’s 4G network’s initial launch last year included Atlanta and Athens.
The 4G network will be available on 4G-compatible devices, Jay said. Those include a slate of new products Verizon said this week it is launching, including smart phones from HTC, Motorola LG and Samsung, tablets from Samsung and Motorola and two notebooks from HP.
AT&T said in a news release Wednesday that it plans to launch its LTE services by the middle of the year and introduce 20 4G devices by the end of 2011. Like Verizon, it currently offers only two laptop cards that are compatible with the faster next generation network.
Sprint Nextel Corp. announced Thursday it will offer BlackBerry’s 4G PlayBook tablet by the summer, and T-Mobile also said it would offer its first 4G tablet in a partnership with Google.
Jay said expanding Verizon’s 4G network is a priority for the company.
“We really have an aggressive expansion plan,” she said. “By the end of 2013, we plan to have 4G everywhere that 3G is.”
Gracie Shepherd contributed to this article.
Hackers have broken into the mobile phone GSM network and can now eavesdrop on your calls using dirt cheap handsets, according to security researchers at the Chaos Computer Club Congress.
Two researchers, Karsten Nohl and Sylvain Munaut, showed off a toolkit they developed over the last year for getting access to other people’s calls.
They were able to demonstrate how they could locate and seize a uniquely identified phone, along with intercepting call and text data sent from the phone to the base station.
A vital part of the process is using cheap Motorola phones, costing only €10 ($13) which can have their firmware replaced by an unfiltered open source alternative, the duo told the BBC. This new firmware allows the user to see all of the data being broadcast from a base station.
The ability to make this attack requires intimate knowledge of the technology and software involved, preventing an Average Joe from spying on his neighbours, but there are some concerns raised about the ability to target a unique phone, which could lead to eavesdropping on high-profile targets, such as politicians and celebrities.
The toolkit will not be released to the public, but it’s likely that hackers will figure out the missing pieces of the puzzles for themselves. Mobile operators were prompted to improve their security to combat the gaping hole in their networks.
With an estimated five billion GSM mobile phones in the world, that’s a lot of phone calls that are now at risk. If only Coulson had known.
By SPENCER E. ANTE
Verizon Wireless will distribute a phone made by Motorola Inc. to run on its speedy new 4G network next year, the carrier’s chief operating officer, John Stratton, said in an interview Tuesday.
The comments mark the first time the carrier has identified a handset maker for the closely watched launch and represents an important vote of confidence in Motorola, which could soon be competing with Apple for the attentions of its most important carrier.
Verizon Wireless launched its high-speed, fourth-generation network earlier this month, but has yet to introduce any mobile phones that can use it. The network, which employs a technology called Long-Term Evolution, promises wireless Internet connections that are as fast as land-based cable modems or fiber optic technology.
“We’ve got LTE smartphones around the horizon,” Mr. Stratton said. “Motorola will be right there.”
Motorola has previously said it would make devices that work on LTE networks in 2011, but declined Tuesday to comment on the specific timing or distribution of those devices.
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[December 16, 2010]
Econet to Invest U.S.$300 Million in Network Expansion
Dec 16, 2010 (The Herald/All Africa Global Media via COMTEX) — ECONET Wireless Zimbabwe says it will have invested an additional US$300 million on expanding and upgrading its network by February next year.
This would take cumulative investment in mobile phone operations to about US$1 billion as the firm has already ploughed in over US$600 million.
Econet chief executive Mr Douglas Mboweni said the mobile firm had spent the money on equipment, technology upgrades and expansion projects.
Mr Mboweni said the US$600 million investment by Econet could easily rank as the biggest in the country by a single company over the last 20 years.
“From the time we started operating in October 1999 up to the time we published our financial results in February this year we had spent about US$600 million.
“Between February this year and part of next year we are looking at putting another US$300 million to upgrade the equipment that we have and also extend network coverage throughout the country,” said Mr Mboweni.
He said that advanced equipment would enable the mobile telecommunications firm to grow its subscriber base and improve efficiencies. The mobile phone operator has seen its subscriber base grow from just over one million at the beginning of last year to over five million as of last month.
Mr Mboweni said the company would set its next subscriber target at the beginning of the next financial year in March depending on service demand.
Asked to explain the reasons behind the challenges subscribers were having accessing services, Mr Mboweni said that was a result of upgrades to the network system, which comprises technology from different suppliers. Econet has over the years bought equipment from Ericsson in Sweden and ZTE of China. Upgrading the equipment sometimes disrupted the network.
Econet is now the country’s largest mobile phone operators followed by Telecel, which has about 1,2 million susbcribers and NetOne at about 600 000 subscribers.
In the half year to June Econet churned out a set of impressive financial results reporting an 80 percent jump in revenue to US$235,5 million compared to US$131,5 million for the same period ending August 31 2009.
Profit before tax stood at US$64,3 million, an increase of 36 percent on the same period the previous year while the firm’s earnings before interest, tax, depreciation and amortisation stood at US$114,9 million to give earnings per share (EPS) of US$0,38 up from US$0,24 last year. The performance of the company, which includes results of its subsidiaries, was attributed to an increased mobile telephony subscriber base.
Zimbabwe’s largest mobile phone company introduced prepaid roaming services to cater for the high cross-border traffic especially into South Africa.
Econet has since sought to capitalise on its large and increasing subscriber base by introducing products such as Ecolife, a collaborative life assurance product with First Mutual Life.
The product gives subscribers life cover from the country’s second largest insurer based on the prepaid airtime bought. Econet has also expanded its 3G coverage beyond Harare to other major cities and towns, a development set to contribute significantly to revenues in the future.
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AT&T customers in Calhoun County may have noticed problems with their mobile phone service in recent days. A company spokesman says engineers are working on the problem.
“We certainly apologize to the folks that are being inconvenienced by this,” said the spokesman, Mike Barger.
Barger said that some customers experience degradations in service when the company is upgrading its networks to the higher-capacity 3G standard. AT&T announced just such an upgrade in Anniston and surrounding communities in late November, saying the changes would be complete by the end of the year.
But Barger said Friday he did not know if the upgrade was the cause of the recent problems in Calhoun County.
In some cases, the problem manifests itself when someone tries to call an AT&T cell phone customer and the customer doesn’t receive the call. If the caller leaves a voicemail, the customer might receive it immediately or hours later.
Anniston resident Jermario Stewart said that happened to him on Thursday.
“I didn’t think much of it,” Stewart said, because the service here is normally spotty, he said. Stewart said he’s looking forward to the 3G upgrade so he can get more use out of his iPhone 4, the high-end smart phone made by Apple Inc. The phones can access the Internet much more easily when connected to a 3G network.
Metro editor Ben Cunningham: 256-235-3542.