Thursday, September 08, 2011
Sunday, September 04, 2011
Kenya - Regulator has published a detailed analysis of ICT access by location
[Communications Commission of Kenya] More than 1,100 sub-locations in Kenya (out of a total of 7,149) lack access to voice telephony services.
According to statistics released by the Communications Commission of Kenya (CCK) today, only 893 sub-locations in the country have access to broadband data/Internet services, with a total of 85,000 broadband subscribers.
These statistics are part of the ICT Access Gaps Study findings released to stakeholders at a Nairobi hotel today. The Study, aimed at assisting CCK in developing the most appropriate framework for provision of affordable ICT services, was carried out by Apoyo Consultoria of Peru, South America.
According to the study, less than five percent of people living in rural areas use the Internet in spite of growth in the number of internet users from 1.7 million in 2007 to 10 million in June 2011. In most counties, Internet usage stands at below five per cent.
Mobile penetration grew by an average of 31% annually from 34% in 2007 to 65% by June 2011. Mobile subscribers on the other hand increased from 11 million in 2007 to 25million in June 2011.
At the sub-location level, more than 50% of the population uses mobile phones, with sub-locations in Nairobi, Kiambu and Nyeri counties leading with mobile telephone usage of about 70%.
In the postal/courier market, all counties have at least three PCK offices.
The main obstacles for increasing coverage in un-served areas include the high operation and maintenance costs occasioned mainly by lack of electricity, access to roads and cable vandalism. The Study identified low population, and high licence and spectrum fees as additional obstacles to universal access to voice and data services.
Opening the workshop, Information and Communications Permanent Secretary Bitange Ndemo said the Government would soon put in place the requisite policy interventions to address the access gaps identified in the Study.
He said the Government has facilitated international broadband connectivity and the construction of national terrestrial broadband network with a view to transforming Kenya to a knowledge economy. The remaining challenge, added Dr. Ndemo, is to expand broadband infrastructure to cover the last mile.
The PS challenged the Commission to explore mechanisms to spur the usage of the available broadband connectivity for e-learning and other socio-economic activities. He said the Postal Corporation of Kenya and the courier industry in general would benefit from enhanced business opportunities in light of impending uptake of e-commerce in the country.
Addressing workshop participants, acting CCK Director-General Francis Wangusi said the ICT Access Gap Study was part of the wider CCK initiative towards evidence-based regulation.
CCK releases ICT Access Gaps Study results
According to statistics released by the Communications Commission of Kenya (CCK) today, only 893 sub-locations in the country have access to broadband data/Internet services, with a total of 85,000 broadband subscribers.
These statistics are part of the ICT Access Gaps Study findings released to stakeholders at a Nairobi hotel today. The Study, aimed at assisting CCK in developing the most appropriate framework for provision of affordable ICT services, was carried out by Apoyo Consultoria of Peru, South America.
According to the study, less than five percent of people living in rural areas use the Internet in spite of growth in the number of internet users from 1.7 million in 2007 to 10 million in June 2011. In most counties, Internet usage stands at below five per cent.
Mobile penetration grew by an average of 31% annually from 34% in 2007 to 65% by June 2011. Mobile subscribers on the other hand increased from 11 million in 2007 to 25million in June 2011.
At the sub-location level, more than 50% of the population uses mobile phones, with sub-locations in Nairobi, Kiambu and Nyeri counties leading with mobile telephone usage of about 70%.
In the postal/courier market, all counties have at least three PCK offices.
The main obstacles for increasing coverage in un-served areas include the high operation and maintenance costs occasioned mainly by lack of electricity, access to roads and cable vandalism. The Study identified low population, and high licence and spectrum fees as additional obstacles to universal access to voice and data services.
Opening the workshop, Information and Communications Permanent Secretary Bitange Ndemo said the Government would soon put in place the requisite policy interventions to address the access gaps identified in the Study.
He said the Government has facilitated international broadband connectivity and the construction of national terrestrial broadband network with a view to transforming Kenya to a knowledge economy. The remaining challenge, added Dr. Ndemo, is to expand broadband infrastructure to cover the last mile.
The PS challenged the Commission to explore mechanisms to spur the usage of the available broadband connectivity for e-learning and other socio-economic activities. He said the Postal Corporation of Kenya and the courier industry in general would benefit from enhanced business opportunities in light of impending uptake of e-commerce in the country.
Addressing workshop participants, acting CCK Director-General Francis Wangusi said the ICT Access Gap Study was part of the wider CCK initiative towards evidence-based regulation.
CCK releases ICT Access Gaps Study results
Thailand - DTAC is to launch a 3G service in Bangkok this week, despite legal threats
[the nation] Total Access Communication (DTAC) will press ahead with the launch of its third-generation wireless broadband service in Bangkok this week as planned, despite a possible legal threat from its concession owner CAT Telecom.
DTAC has about a million subscribers with 3G-850-megahertz mobile phones, of whom about 400,000 are in Bangkok. It believes it has to debut the service now or it might lose premium subscribers to competitors Real Move and Advanced Info Service, which launched full 3G services last month.
CAT has warned DTAC that it should wait for a ruling by the Office of the Attorney-General on whether the launch of a commercial 3G service is appropriate under its CAT concession. The office recently warned DTAC that launching the service before its ruling could put the telecom at risk of legal action.
DTAC believes it can launch the service under a permit it secured from
the National Telecommunica-tions Commission to install and use a 3G network. It argues that this is not in fact the launch of |a new commercial service but |simply an upgrade of network data-transmission speeds for its customers.
A telecom-industry source said CAT had asked DTAC to withdraw its complaint at the Central Administrative Court against the state agency and its board in connection with the CAT-True Group deals on collaboration in 3G business first, and then CAT would urge the Office of the Attorney-General to expedite its ruling.
The source added that DTAC might want to wait to see how the new minister of information and communications technology handles the CAT-True deals. If the minister declines to look into the matter, DTAC might consider withdrawing its court complaint.
DTAC has said many times that its complaint against the deals and its 3G service launch are two separate issues.
CAT and True's subsidiaries Real Move and Real Future signed deals in January to develop jointly a nationwide 3G-850MHz service. In April, DTAC filed the court complaint against the legitimacy of the deals and against the CAT board for allowing the state agency to sign them with True group.
DTAC had its staff try the new 3G service last month. It will install 2,000 3G base stations by next year to cover 40 provinces, of which 400 are already available in Bangkok.
DTAC to go ahead wIth 3G launch thIs week
DTAC has about a million subscribers with 3G-850-megahertz mobile phones, of whom about 400,000 are in Bangkok. It believes it has to debut the service now or it might lose premium subscribers to competitors Real Move and Advanced Info Service, which launched full 3G services last month.
CAT has warned DTAC that it should wait for a ruling by the Office of the Attorney-General on whether the launch of a commercial 3G service is appropriate under its CAT concession. The office recently warned DTAC that launching the service before its ruling could put the telecom at risk of legal action.
DTAC believes it can launch the service under a permit it secured from
the National Telecommunica-tions Commission to install and use a 3G network. It argues that this is not in fact the launch of |a new commercial service but |simply an upgrade of network data-transmission speeds for its customers.
A telecom-industry source said CAT had asked DTAC to withdraw its complaint at the Central Administrative Court against the state agency and its board in connection with the CAT-True Group deals on collaboration in 3G business first, and then CAT would urge the Office of the Attorney-General to expedite its ruling.
The source added that DTAC might want to wait to see how the new minister of information and communications technology handles the CAT-True deals. If the minister declines to look into the matter, DTAC might consider withdrawing its court complaint.
DTAC has said many times that its complaint against the deals and its 3G service launch are two separate issues.
CAT and True's subsidiaries Real Move and Real Future signed deals in January to develop jointly a nationwide 3G-850MHz service. In April, DTAC filed the court complaint against the legitimacy of the deals and against the CAT board for allowing the state agency to sign them with True group.
DTAC had its staff try the new 3G service last month. It will install 2,000 3G base stations by next year to cover 40 provinces, of which 400 are already available in Bangkok.
DTAC to go ahead wIth 3G launch thIs week
Thailand - Govt and Shin Sat are in continued debate over satellite commitments and costs
[the nation] However much it has tried, Intouch Group, formerly known as the Shin Corp group, cannot avoid the political spotlight for long.
The group still has many hot issues on which it has to deal with Yingluck Shinawatra's government, which could draw it into close public scrutiny.
On the latest issue, its satellite-operator flagship Thaicom will have to talk with the new Information and Communications Technology Ministry on the country's attempt to reserve the 120 degrees east and 50.5 degrees east longitude orbital slots before its reservation rights expire in January and October next year respectively.
The ICT Ministry in the previous government gave the nod to Thaicom to help seek ways to maintain the reservation rights.
Intouch executive chairman Somprasong Boonyachai said Thaicom was in talks with some foreign satellite operators for possible deals to buy their satellites and reposition them to maintain the country's right to reserve the slots.
"But Thaicom has to talk with the new government on many issues, such as who will pay the cost of buying and repositioning the two satellites, which parties will manage them, and whether the two new satellites will be included in Thaicom's concession," he said.
Thaicom also still has to talk with the ICT Ministry on the plan, which was acknowledged by the previous Cabinet, to rectify Thaicom's concession amendments by having it resume its original concession conditions.
As part of that move, Thaicom has to build a backup satellite for Thaicom 3, Intouch has to raise its stake in Thaicom to the original 51 per cent from the current 41 per cent, and Thaicom has to return US$6.7 million (Bt201 million) in insurance proceeds to the ministry.
The ministry will discuss with Thaicom what to do with iPSTAR, which was perceived as not part of its original concession.
Somprasong said Intouch had yet to promise to raise its stake in Thaicom to 51 per cent, as it has to consider all aspects of the matter, including the share price.
Somprasong has continued to affirm that the Intouch Group has never been involved in politics. According to its latest survey, the group is perceived less as politically associated firm when compared with 2006 and 2007. He said the result of the survey makes him feel more relaxed.
In an attempt to get rid of its image as a politically linked company, in April Shin changed its group corporate logo to "Intouch". Its securities-trading name was also changed from SHIN to INTUCH, and Shin Group was renamed Intouch Group.
Thaicom also appointed the former head of IBM Thailand, Suphajee Suthumpun, as its chief executive officer, replacing Arak Chonlatanon.
Suphajee, 47, took over Thaicom's office on August 1. She was even speculated to be the future successor of Somprasong as Intouch executive chair.
Before joining Thaicom, she held the positions of managing director of IBM Thailand and general manager of Global Technology Services Group, IBM Asean.
Somprasong said Suphajee was qualified to run Thaicom. She has well-rounded knowledge of management, finance, and international markets, and puts forth a professional executive image.
Somprasong said Thaicom's business had bright prospects, given that the iPSTAR utilisation rate is expected to surge to 50 per cent next year from about 26 per cent at the present.
Thaicom currently has a broadcasting satellite, Thaicom 5. and broadband satellite iPSTAR.
'Apolitical' Shin Corp successor in the spotlight
The group still has many hot issues on which it has to deal with Yingluck Shinawatra's government, which could draw it into close public scrutiny.
On the latest issue, its satellite-operator flagship Thaicom will have to talk with the new Information and Communications Technology Ministry on the country's attempt to reserve the 120 degrees east and 50.5 degrees east longitude orbital slots before its reservation rights expire in January and October next year respectively.
The ICT Ministry in the previous government gave the nod to Thaicom to help seek ways to maintain the reservation rights.
Intouch executive chairman Somprasong Boonyachai said Thaicom was in talks with some foreign satellite operators for possible deals to buy their satellites and reposition them to maintain the country's right to reserve the slots.
"But Thaicom has to talk with the new government on many issues, such as who will pay the cost of buying and repositioning the two satellites, which parties will manage them, and whether the two new satellites will be included in Thaicom's concession," he said.
Thaicom also still has to talk with the ICT Ministry on the plan, which was acknowledged by the previous Cabinet, to rectify Thaicom's concession amendments by having it resume its original concession conditions.
As part of that move, Thaicom has to build a backup satellite for Thaicom 3, Intouch has to raise its stake in Thaicom to the original 51 per cent from the current 41 per cent, and Thaicom has to return US$6.7 million (Bt201 million) in insurance proceeds to the ministry.
The ministry will discuss with Thaicom what to do with iPSTAR, which was perceived as not part of its original concession.
Somprasong said Intouch had yet to promise to raise its stake in Thaicom to 51 per cent, as it has to consider all aspects of the matter, including the share price.
Somprasong has continued to affirm that the Intouch Group has never been involved in politics. According to its latest survey, the group is perceived less as politically associated firm when compared with 2006 and 2007. He said the result of the survey makes him feel more relaxed.
In an attempt to get rid of its image as a politically linked company, in April Shin changed its group corporate logo to "Intouch". Its securities-trading name was also changed from SHIN to INTUCH, and Shin Group was renamed Intouch Group.
Thaicom also appointed the former head of IBM Thailand, Suphajee Suthumpun, as its chief executive officer, replacing Arak Chonlatanon.
Suphajee, 47, took over Thaicom's office on August 1. She was even speculated to be the future successor of Somprasong as Intouch executive chair.
Before joining Thaicom, she held the positions of managing director of IBM Thailand and general manager of Global Technology Services Group, IBM Asean.
Somprasong said Suphajee was qualified to run Thaicom. She has well-rounded knowledge of management, finance, and international markets, and puts forth a professional executive image.
Somprasong said Thaicom's business had bright prospects, given that the iPSTAR utilisation rate is expected to surge to 50 per cent next year from about 26 per cent at the present.
Thaicom currently has a broadcasting satellite, Thaicom 5. and broadband satellite iPSTAR.
'Apolitical' Shin Corp successor in the spotlight
Thailand - Official has accused DTAC of violating the foreign ownership law
[the nation] Deputy Commerce Minister Alongkorn Ponlaboot today said Total Access Communication (DTAC) has breached foreign business law.
Alongkorn also recommended the Business Development Department to file charges against seven corporate shareholders of DTAC, believed to hold shares in DTAC on behalf of foreigners.
Alongkorn did not specify the names of the companies. On the shareholders' list as of December 2010, corporate shareholders of DTAC included Telenor Asia (Singapore) and Thai Telco Holdings Co Ltd. Holding shares in Thai Telco Holdings included Bolero Co Ltd, Abaroni Co Ltd and Sandalwood Holdings Co Ltd.
Banyong Limprayoonwong, director-general of the Business Development Department, said at a press conference today that Alongkorn could just give the recommendation given that he is a caretaker minister who has no authority in this case.
Banyong added that the Business Development Department, which enforces the Foreign Business Act BE2542, would stick to the original schedule: to decide within 7 days whether to file charges against "nominees" or to forward the investigation to the police.
DTAC reiterates its high commitment to do business in Thailand with high standard of good corporate governance.
In a statement, it said "we are in full compliance with the Thai laws and regulations. The company is willing to cooperate with the authorities and sincerely hope that the investigation process will be fair, transparent and not discriminatory. DTAC affirms that its customers, partners and all stakeholders as well as its business operations will not be affected by the ongoing entity investigation process."
DTAC breaches foreign business law: Alongkorn
Alongkorn also recommended the Business Development Department to file charges against seven corporate shareholders of DTAC, believed to hold shares in DTAC on behalf of foreigners.
Alongkorn did not specify the names of the companies. On the shareholders' list as of December 2010, corporate shareholders of DTAC included Telenor Asia (Singapore) and Thai Telco Holdings Co Ltd. Holding shares in Thai Telco Holdings included Bolero Co Ltd, Abaroni Co Ltd and Sandalwood Holdings Co Ltd.
Banyong Limprayoonwong, director-general of the Business Development Department, said at a press conference today that Alongkorn could just give the recommendation given that he is a caretaker minister who has no authority in this case.
Banyong added that the Business Development Department, which enforces the Foreign Business Act BE2542, would stick to the original schedule: to decide within 7 days whether to file charges against "nominees" or to forward the investigation to the police.
DTAC reiterates its high commitment to do business in Thailand with high standard of good corporate governance.
In a statement, it said "we are in full compliance with the Thai laws and regulations. The company is willing to cooperate with the authorities and sincerely hope that the investigation process will be fair, transparent and not discriminatory. DTAC affirms that its customers, partners and all stakeholders as well as its business operations will not be affected by the ongoing entity investigation process."
DTAC breaches foreign business law: Alongkorn
USA - 40% of adult consumers have smartphones with Android the most popular operating systems
[nielsen] Forty percent of mobile consumers over 18 in the U.S. now have smartphones, according to July 2011 data from Nielsen. Android is the most popular operating system, with 40 percent of mobile consumers reporting they have a smartphone with an Android OS. Apple’s iOS is in second place, with 28 percent.
Among those who say they are likely to get a new smartphone in the next year, approximately one third say they want their next smartphone to be an iPhone and one third say they want an Android device. However, among those who say they are usually the first to embrace new technologies, “Innovators” or the earliest of early adopters, Android leads as the “Next Desired Operating System” – 40 percent for Android compared to 32 percent for iOS. (Survey respondents were asked several questions to determine their attitudes toward new technologies.)
40 Percent of U.S. Mobile Users Own Smartphones; 40 Percent are Android
Among those who say they are likely to get a new smartphone in the next year, approximately one third say they want their next smartphone to be an iPhone and one third say they want an Android device. However, among those who say they are usually the first to embrace new technologies, “Innovators” or the earliest of early adopters, Android leads as the “Next Desired Operating System” – 40 percent for Android compared to 32 percent for iOS. (Survey respondents were asked several questions to determine their attitudes toward new technologies.)
40 Percent of U.S. Mobile Users Own Smartphones; 40 Percent are Android
Fiji-Tonga undersea cable - This is to be funded by the Asian Development Bank
[fiji times] THE Asian Development Bank (ADB) will assist in Tonga's high-speed Internet access by financing the development of a submarine cable system.
The ADB board of directors on Tuesday approved grant funds of $18.9million to help finance the establishment and operation of an 827 km submarine cable system from Tonga to the Southern Cross Cable in Fiji which will provide widely accessible information and communication technology (ICT) services.
"The new ICT services the cable will bring will improve Tonga's economic performance and delivery of public services," ADB said in a statement.
"The Tonga to Fiji Submarine Cable Project aims to improve existing businesses' efficiency and create new business opportunities, especially in the ICT sector.
"The cable technology will boost telecommunications, computer, information, maintenance and repair services.
"It will also allow ICT-based education, health, and government services to overcome the small island country's challenges - distance and scarce human resources."
The project is estimated to cost $61m and is being co-financed by the World Bank Group and Tonga Cable Limited.
The fibre optic cable will connect Tonga to the Southern Cross Cable, the main trans-Pacific link between Australia and the United States.
It will generate economic opportunities and social benefits starting mid 2013 when the cable is in place.
"The project aims to deliver good quality, affordable broadband Internet to Tonga's population of 100,000," said Robert Wihtol, director general of ADB's Pacific Department.
"In addition to the positive socioeconomic impact of the initiative, the project will contribute to regional integration."
The cable will increase the frequency and quality of communications among countries in the region, encouraging trade in services and will allow the region to form a sizeable market for digital products and services.
Tonga's Ministry of Finance and National Planning will be the executing agency for the project, which should be completed by 2016.
ICT project to link Tonga to the world
The ADB board of directors on Tuesday approved grant funds of $18.9million to help finance the establishment and operation of an 827 km submarine cable system from Tonga to the Southern Cross Cable in Fiji which will provide widely accessible information and communication technology (ICT) services.
"The new ICT services the cable will bring will improve Tonga's economic performance and delivery of public services," ADB said in a statement.
"The Tonga to Fiji Submarine Cable Project aims to improve existing businesses' efficiency and create new business opportunities, especially in the ICT sector.
"The cable technology will boost telecommunications, computer, information, maintenance and repair services.
"It will also allow ICT-based education, health, and government services to overcome the small island country's challenges - distance and scarce human resources."
The project is estimated to cost $61m and is being co-financed by the World Bank Group and Tonga Cable Limited.
The fibre optic cable will connect Tonga to the Southern Cross Cable, the main trans-Pacific link between Australia and the United States.
It will generate economic opportunities and social benefits starting mid 2013 when the cable is in place.
"The project aims to deliver good quality, affordable broadband Internet to Tonga's population of 100,000," said Robert Wihtol, director general of ADB's Pacific Department.
"In addition to the positive socioeconomic impact of the initiative, the project will contribute to regional integration."
The cable will increase the frequency and quality of communications among countries in the region, encouraging trade in services and will allow the region to form a sizeable market for digital products and services.
Tonga's Ministry of Finance and National Planning will be the executing agency for the project, which should be completed by 2016.
ICT project to link Tonga to the world
Pakistan - Regulator has suspended 11 service providers for non-payment of regulatory fees
[the news - Pakistan] Pakistan Telecommunication Authority (PTA) has suspended licences of 11 service providers’ for a month due to non-submission of audit accounts and non-payment of annual regulatory dues in the last couple of years.
“PTA is curbing the menace of grey traffic and willing to punish heavily all the defaulters. These operators have been given show cause notices but they are yet to deposit their dues to the regulator. Hence PTA comes with a harsh action by suspending licences of eleven operators,” sources in the PTA said.
Reliable sources disclosed that the Standing Committee of the Senate on Telecommunications and Information Technology is putting pressure on the PTA to put a hard hand on the defaulters and grey traffickers. The suspension of licences of these operators which came after continuous monitoring, shows the commitment and persistent efforts of the Authority.
The Authority had also asked operators to pay annual licence fees, which has been calculated on the basis of their annual gross revenues, along with late payment at the rate of 2 percent of the outstanding amount. However the operators failed to comply with the instructions and the Authority had to issue them show-cause notices under section 23 of Pakistan Telecommunication Authority (Re-organization) Act 1996.
PTA has directed all LDI, fixed line and cellular operators to suspend all telecommunication services, extended to these service providers under any agreement, with immediate effect till further orders.
The regulator said the licences of all the operators shall stand terminated in case of non-compliance upon expiration of one month after the date of issuance of suspension order. Moreover it may recover its outstanding dues as arrears through land revenue without any further notice and initiate recovery proceedings under section 30 of the Company Act.
The suspended operators are:
Ace Connect (Pvt) Ltd, ASCUL (Pvt) Ltd, Brogstelling Technologies (Pvt) Ltd, e-World (Pvt) Ltd, Gujjar Communication (Pvt) Ltd, Live Line Broad Band (Pvt) Ltd, Nom Communication (Pvt) Ltd, Samsung Voice Call (Pvt) Ltd, Vision Soft Technologies (Pvt) Ltd, Zain Business Empire (Pvt) Ltd and Eagle Technologies (Pvt) Ltd.
PTA suspends licences of 11 defaulting service providers
“PTA is curbing the menace of grey traffic and willing to punish heavily all the defaulters. These operators have been given show cause notices but they are yet to deposit their dues to the regulator. Hence PTA comes with a harsh action by suspending licences of eleven operators,” sources in the PTA said.
Reliable sources disclosed that the Standing Committee of the Senate on Telecommunications and Information Technology is putting pressure on the PTA to put a hard hand on the defaulters and grey traffickers. The suspension of licences of these operators which came after continuous monitoring, shows the commitment and persistent efforts of the Authority.
The Authority had also asked operators to pay annual licence fees, which has been calculated on the basis of their annual gross revenues, along with late payment at the rate of 2 percent of the outstanding amount. However the operators failed to comply with the instructions and the Authority had to issue them show-cause notices under section 23 of Pakistan Telecommunication Authority (Re-organization) Act 1996.
PTA has directed all LDI, fixed line and cellular operators to suspend all telecommunication services, extended to these service providers under any agreement, with immediate effect till further orders.
The regulator said the licences of all the operators shall stand terminated in case of non-compliance upon expiration of one month after the date of issuance of suspension order. Moreover it may recover its outstanding dues as arrears through land revenue without any further notice and initiate recovery proceedings under section 30 of the Company Act.
The suspended operators are:
Ace Connect (Pvt) Ltd, ASCUL (Pvt) Ltd, Brogstelling Technologies (Pvt) Ltd, e-World (Pvt) Ltd, Gujjar Communication (Pvt) Ltd, Live Line Broad Band (Pvt) Ltd, Nom Communication (Pvt) Ltd, Samsung Voice Call (Pvt) Ltd, Vision Soft Technologies (Pvt) Ltd, Zain Business Empire (Pvt) Ltd and Eagle Technologies (Pvt) Ltd.
PTA suspends licences of 11 defaulting service providers
Mobile - Analyst challenges the view that smartphones generate enough revenue to pay for network investments
[fierce wireless] The gospel in the wireless industry the past few years has been that increasing smartphone penetration will deliver immediate and significant benefits to carriers: higher ARPUs and stickier customers.
However, in a research note entitled "The Dark Side of Smartphones," Credit Suisse analyst Jonathan Chaplin challenges that conventional wisdom. Chaplin argues that ARPU growth has been disappointing, smartphone-driven costs are rising faster than ARPU, pressuring margins, and capital expenditure requirements are rising, again due to smartphones.
Chaplin said three things need to happen for the smartphone situation to improve: competitive intensity needs to return to pre-Verizon (NYSE:VZ) iPhone levels, carriers need more spectrum to blunt capex costs, and there needs to be industry consolidation.
Some carriers are clearly feeling the "dark side" effects of smartphones. For example, MetroPCS (NASDAQ:PCS) said it will increase capex this year from a previous estimate of $700 million to $900 million to a new target of $900 million to $1 billion. On the company's earnings conference call, CEO Roger Linquist said, according to a SeekingAlpha transcript, that the increase is "primarily driven by an increase in capacity expenditures for future subscriber and data growth driven by the popularity of our Android handset offering."
Are smartphones worth the cost to carriers?
However, in a research note entitled "The Dark Side of Smartphones," Credit Suisse analyst Jonathan Chaplin challenges that conventional wisdom. Chaplin argues that ARPU growth has been disappointing, smartphone-driven costs are rising faster than ARPU, pressuring margins, and capital expenditure requirements are rising, again due to smartphones.
Chaplin said three things need to happen for the smartphone situation to improve: competitive intensity needs to return to pre-Verizon (NYSE:VZ) iPhone levels, carriers need more spectrum to blunt capex costs, and there needs to be industry consolidation.
Some carriers are clearly feeling the "dark side" effects of smartphones. For example, MetroPCS (NASDAQ:PCS) said it will increase capex this year from a previous estimate of $700 million to $900 million to a new target of $900 million to $1 billion. On the company's earnings conference call, CEO Roger Linquist said, according to a SeekingAlpha transcript, that the increase is "primarily driven by an increase in capacity expenditures for future subscriber and data growth driven by the popularity of our Android handset offering."
Are smartphones worth the cost to carriers?
Mobile - Networks are almost full requiring significant investment in upgrading to cope with demand
Traditional network management practice says that network element usage level should not exceed 70% of its capacity. If it does - it is time to do something - buy more or manage it better. So, according to a recent Credit Suisse report - it is time to do something for wireless networks, globally. For North America, where current utilization at peak time reaches 80% it is even urgent.
Survey mobile networks are near full
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