TelecomAsia_January2010

www.telecomasia.net: Subscribe to Asia’s best daily telecom news service

sP

ublished By

Google vs China • Sharing data • SKT CTO • Grasping the cloud • Mini-cable boom

Packet-optical convergenceTelcos weigh their options on when and where to flatten the layers

The path to all-IP mobileNetworks should evolve to flat-IP architectures only when the economics are justified

Inside:

Asian Telecoms Business and Technology January/February 2010

Mobile broadband comes down to earth as operators struggle with margins and flat-rates

Reality Hits!

GOLD MEDIA PARTNER

Subscribe to Asia’s best daily telecom news service: www.telecomasia.net

Contents Volume 21 Number 1 Jan/Feb 2010

18

26

3638

3330

6www.telecomasia.net Telecom Asia Jan/Feb 2010 1

COVERSTORY

18 Reality sinks in Mobile broadband subs and traffic may be rising, but the wide-eyed optimism of a year ago fades as operators deal with flat revenue growth and risky flat-rate plans

FEATuRE

TECHNOLOGY

26 Joining the layers to saveDespite strong interest in packet-optical convergence, telcos are weighing their options on when and where to flatten the layers

INSIGHT ROuNDTABLE

30 New ways to partnerTo move seriously into applications and revenue sharing operators need to be able to target attractive customer segments. This requires partnering in new ways and sharing data

ONE-TO-ONE

33 Delivering the promise of mobileSK Telecom CTO Lee Myung Sung talks about applying mobile to boost productivity of a wide variety of businesses

TELEPRESENCE PANEL

34 The path to all-IP mobileNetworks should evolve to flat-IP architectures only when the economics are justified

CLOuD COMPuTING

36 Start small and tread lightlyThe key is to match cloud computing’s capabilities with a non-core project that will improve the bottom line

COLuMNS

TANNER

6 Goodbye flat-rateOperators need to reign heavy users, but any move away from flat rates requires meaningful metrics, like a meter widget showing data usage in real time FORuM

32 From data-centric to mass marketThe value of 3G licenses will rise as the focus shifts from data-centric multimedia in developed markets to low-end subscribers

INSIDELINE

38 Time to grasp the cloudIt’s time for telcos to offload their engineering operations and focus creatively on the customer

Contents Volume 21 Number 1 Jan/Feb 2010

Managing Director Jonathan Bigelow [email protected]

Group Editor Joseph Waring [email protected] Technology Editor John C. Tanner [email protected] Reporter Fiona Chau [email protected]

Art Director Dick Wong [email protected] & Design Manager Pauline Wong [email protected]

Group Publisher Gigi Chan [email protected] Sales & Marketing Executive Candace Ho [email protected] HR & Admin Manager Janis Lam [email protected] HR & Admin Executive Angela Cheng [email protected]

Business Manager Eunice Chan [email protected] Accountant Ivy Chu [email protected] Assistant Cannis Wong [email protected]

Circulation & Distribution Director John Lam [email protected] Circulation Manager Allie Mok [email protected] Executive Karena Wong [email protected] Senior Circulation Assistant Shipman Kwok [email protected]

News Editor Robert Clark [email protected] Brisbane: Nicole McCormick Canberra: Dylan Bushell-Embling London: Michael Carroll New Delhi: Ruth David Tokyo: Mike Galbraith

Editorial and publishing officeQuestex Asia Ltd501 Cambridge House, TaiKoo Place, 979 King’s Road Quarry Bay, Hong KongTel: +852 2559 2772 Fax: +852 2559 7002Website: www.telecomasia.netSubscription Hotline: +852 2589 1313 Subscription Fax: +852 2559 2015E-mail: [email protected]

Questex Media Group LLC275 Grove Street, Newton, MA 02466 Tel: +1 617 219 8300

President & Chief Executive Officer Kerry C. GumasExecutive V.P. & Chief Financial Officer Tom CaridiExecutive Vice President Tony D’AvinoExecutive Vice President Jon LeibowitzExecutive Vice President Gideon Dean

TELECOM ASIA (ISSN 1681-181x)is circulated to telecommunications carriers (PTTs) and to the communications departments of businesses, industries and others who use and operate commercial and private networks. It is edited for planning, engineering and operational managers responsible for the design, installation, marketing and mainte-nance of public or private telecom systems and networks.

TELECOM ASIA (USPS 019-325) is published eleven times yearly by Questex Asia Ltd, 501 Cambridge House, TaiKoo Place, 979 King’s Road, Quarry Bay, Hong Kong. All copies distributed in PRC are free of charge. Subscription rates: 1 year HK$480 (Hong Kong only) US$86 (within Asia) and US$96 (outside Asia), 2 years HK$840 (Hong Kong only) US$152 (within Asia) and US$168 (outside Asia). Single/Back issue (if available) HK$50 per copy (Hong Kong only) US$9 (within Asia) and US$10 (outside Asia) plus US$5 handling charge per order. Printed in Hong Kong. Postage paid in Hong Kong. U.S. Mail-ing Agent : International Mail Distribution Inc, A Division of Security Delivery Service, 52-09 31st Place, Long Island City, NY 11101-3229. Periodicals postage paid at Long Island City, NY. © 2010 Questex Media Group LLC. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage or retrieval system, without permission in writing from the publisher.

POSTMASTER: Send address changes to: Telecom Asia, 501 Cambridge House, TaiKoo Place, 979 King’s Road, Quarry Bay, Hong Kong.

Total circulation: 13,959Qualified Circulation: 12,126 Non-Qualified Circulation: 1,833 Source: Jun 2008 BPA Statement

SALES CONTACTSAsia PacificGigi Chan Group Publisher, Questex Asia Ltd.Tel: +852 2589 1338 Fax: +852 2559 7002 E-mail: [email protected]

Jessie Cheung Questex Asia Ltd.Tel: +852 2589 1310 Fax: +852 2559 7002 E-mail: [email protected]

JapanShigeru Kobayashi Japan Advertising Communications, Inc.Tel +81 3 3261 4591 Fax +81 3 3261 6126 Email [email protected]

TaiwanVirginia Lee Spacemark Media ServicesTel: +886 2 2522 2282 Fax: +886 2 2522 2281 Email: [email protected]

uSA & CanadaKip OngstadSales ManagerTel: +1 714 540 5110Email: [email protected]

EMEAZena CoupéTel: +44 1923 852537 Fax: +44 1923 839765 Email: [email protected]

FIRST MILE

8 Wi-Fi on trains Kazakhstan’s national railway uses a Wi-Fi mesh network, linked to a

single auto-pointing VSAT on the roof, to offer free service on 1,300-km route

INDuSTRY ANALYSIS

10 Foreign smartphones invade Korea

12 More 3G delays due to spectrum shortage

12 Bharti buys into Bangladesh

13 Google faces off with China’s implacable censorship system

14 Series of new intra-Asian cables planned

NEWS MAP

16 Asian telecoms this month Asia news round-up

REGuLARS

10 Insight

40 Telecom Career

42 Events Calendar

46 Backpage Briefing

ONLINE SECTIONS

www.telecomasia.net HigHligHts

Daily News Our broad coverage of Asian and global telecom news

www.telecomasia.net/news

Opinion Telecom Asia’s senior editors unload on the latest technologies and business models

www.telecomasia.net/opinion

The Wrap Highlights of the week’s major developments by Robert Clark

www.telecomasia.net/thewrap

BusinessWeek Online Tech coverage from the global business magazine

www.telecomasia.net/bwol

White Papers Vendors hold forth on latest technology concepts

www.telecomasia.net/whitepapers

Events This year’s trade shows and conferences

www.telecomasia.net/events

Telecom Asia China editionIn-depth news analysis, opinion, white papers and case studies for telecom professionals and executives in China

http://cn.telecomasia.net

IndustryViewThe inside view from industry execs

www.telecomasia.net/industryview

BloggeryMissives on telecom trends and the wireless future from John Tanner, Robert Clark and more

www.telecomasia.net/blogs

Carrier Ethernet AsiaKeep updated on the latest news, analysis and

developments in the Carrier Ethernet sector with this monthly newsletter. The latest

edition will be out on Thursday, Jan 11.

www.telecomasia.net

4 Jan/Feb 2010 Telecom Asia www.telecomasia.net

13th Annual Telecom Asia Awards

Winners of Asia’s longest-running and most prestigious telecom industry awards will

be announced at a ceremony on April 20 at the Capella in Singapore. This year’s event includes a two-day

conference for senior telco executives – Telco Strategies 2010.

For details, please go to awards.telecomasia.net

Mobile World CongressTelecomasia.net editorial team will be on site, providing live in-depth coverage through the four-day event from Barcelona.

www.telecomasia.net

TM

The iPhone gets a lot of credit for kick starting the mobile broadband era, but the real enabler has arguably been

the introduction of flat-rate data plans. But while users loved it, cellcos gave in reluctantly, fearing the risk of being relegated to bit-pipe status. Now, with mobile data traffic drasti-cally outpacing revenue growth from mobile data services, the inevitable flat-rate backlash has begun.

Well, it’s mainly begun in the US, where executives at 3.5G rivals AT&T and Verizon have declared flat-rate un-sustainable and its days numbered as they lumber on to LTE. In December, AT&T wireless chief Ralph de la Vega said the cellco is looking at providing “incentives” to heavy users to cut back, but in the longer term, they were go-ing to have to get back to usage-based pricing.

Verizon CTO Dick Lynch made a similar statement a month later, say-ing that LTE pricing will have to be different from 3G pricing, likely in the form of a basic monthly fee and usage-based pricing for bandwidth consumed. These aren’t just US sen-timents, either – I have heard some cellco execs in Asia voice similar con-cerns.

The problem with the above strat-egies is that they rely on one of the most unreliable metrics in the in-dustry: the consumer. De la Vega was vague on details on how to incentivize heavy users, but it apparently involves requiring them to understand how mobile data networks and apps work so that AT&T can ask them not to use the service for what they’re paying to use it for.

Good luck with that. Usage-based pricing relied on similar knowledge, and look how that worked out. De la Vega can talk all he wants about edu-cating the customer on what a mega-byte is. I, for one, know perfectly well what a megabyte is – that doesn’t mean I want to access my Facebook page on my handset or my dongled laptop

with one eye on the meter. (That said, a meter widget that actually shows you your per-MB data bill in real time would be helpful – although it will likely convince users to use the service less if there’s no flat-rate option.)

Another possibility – and one that US cellcos are already pursuing, as well as some 3G operators in Asia – is tiered pricing that creates value relat-ed to either the speed of the service, the amount of data you can download or the types of devices you can use. So, for example, you can pay less for 3.2 Mbps and more for 21 Mbps, and the monthly fee could also be determined by whether you intend to use feature phones, smartphones and/or dongles.

Whether consumers go for the higher prices (or churn to cheaper competitors) remains to be seen, but the good thing about this approach is that it’s a simple sell (and upsell). It also paves the way for cellcos to launch device-based packages that combine the usual phones and dongles with newer wireless devices like e-book readers, cameras and even telematics in cars.

Packages based on speed could be problematic, depending on how it’s done. There has been talk of position-ing connection speed as a QoS value-add for “priority” users, but that invites more customer-perception issues. If a website is taking forever to download, the user is still going to blame the cell-co’s access network. You could explain that the problem is a congested server or router, of course. You might as well explain to them what a megabyte is, while you’re at it.

To be fair, usage-based data pric-ing is certainly going to be a key ele-ment of 4G once service providers have the ability and the flexibility to gauge just how much bandwidth users need for a given app and device. But that’s many years away, and it won’t be worth much if it’s presented to us-ers in the form of confusing plans and baffling metrics that encourages them to use the service less. TA

John C. Tanner is global technology editor – [email protected]

tANNER l John C. Tanner

The flat-rate mobile broadband backlash


I know perfectly well what a megabyte is – that doesn’t mean I want to access my Facebook page on my handset or my dongled laptop with one eye on the meter

first mile l edited by John C. Tanner

8 Jan/feb 2010 Telecom Asia www.telecomasia.net

Wi-Fi on the rails in Kazakhstan

T he idea of installing Wi-Fi on passenger trains has been around as long as the idea of installing wireless broadband on airplanes.

But despite a number of trials and a handful of service launches – most of them in the UK and Europe – Wi-Fi on trains has been slow to catch on, especially in Asia.

There have already been trials in India, Australia, Japan and China, the latter of which showcased Wi-Fi connectivity on its high-speed train during the 2008 Beijing Olympics. But so far, only NTT Com-munications in Japan has announced any concrete plans. It will extend its HotSpot Wi-Fi service to N700 bullet trains in March this year – a full year behind schedule.

High-speed VSATTo find a fully commercial Wi-Fi service

onboard a moving train anywhere near Asia, you’ll need to go to Kazakhstan.

Kazakhstan Temir Zholy, the country’s national railway company, last August intro-duced Wi-Fi on the Tulpar train serving the 1,300-km route between Almaty and Astana. The VSAT-based system – the first in the region – was put together by government-

owned incumbent telco Transtelecom, serv-ice provider Astel and satellite equipment and services vendor Gilat Network Systems (the turnkey supplier for the project).

The network consists of a Wi-Fi mesh network in the train cars (which allows cars to be coupled and decoupled without having to worry about reconnecting physical net-work cables) linked to a single auto-pointing VSAT on the roof that tracks the satellite’s location while the train is in motion to provide a backhaul connection of 2 Mbps downlink and 256 kbps upstream.

The use of satellite as the backhaul for a train may sound like an obvious solution, but few train operators have actually used it to enable Wi-Fi. NTT Com, for example, is relying on a “leaky coax” solution – a cable running along the train route providing a wireless 2-Mbps connection.

Most players in the UK and Europe, however, are using either dedicated Wimax networks or 3G connectivity. But such solu-tions have their own challenges, from sup-porting high-speed handoffs to the familiar issue of providing consistent coverage in the rural zones where cross-country trains typically run – and where cellular coverage is

typically weak or even non-existent.“This is especially an issue in countries

like Kazakhstan, where there is no cellular coverage at all outside the cities,” says Gilat marketing VP Doron Elinav.

That said, VSAT-based IP backhaul for trains has its own challenges, from VSAT form factors and physical clearance to line-of-sight problems (i.e. tunnels) and the actual cost of the bandwidth link.

One thing that’s not an issue, says Elinav, is the latency typically associated with run-ning IP links via geostationary satellites, thanks to optimization software integrated in the VSAT that, among other things, pri-oritizes VoIP traffic.

Elinav said Gilat plans to add a GSM pico cell to the mix to support cellular voice.

One other issue is, of course, the busi-ness model – should passengers pay to surf, or should it be complementary?

The Kazakhstan service is opting for the latter, says Elinav. “It’s more about getting more people onto trains who might other-wise fly. If you can convince more business-men to take the train, there’s more value in that to them than charging an extra $10 or $20 for internet.” TA

As Asia entered 2009 it had close to 2.3 billion telephone con-nections – 575 million fixed and 1.7 billion mobile. By end-2009, accord-ing to a report from Budde.com, the total number of connections was on track to hit 2.7 billion; but the total fixed numbers again fell to about 560 million.

Indonesia was actually one of only two markets in the top ten to expand its fixed network – jumping 71% between 2007 and 2008 (from million 17.8 million to 40.4 million) and continuing in 2009 on the back of widespread deployment of WLL technology. Vietnam added almost a million subs in 2008, and its penetra-tion (34%) is now at the same level as Japan.

Both China and Japan lost 7% of

their fixed-line subs in 2008, while Pakistan lost 10%, and India and South Korea each fell 4%.

Despite declining from 365 million subscribers at the end 2007 to an es-timated 325 million at the end of last year, China still represents almost 60% of the region’s total subscriber base.

Of the 35 or so countries in Asia, the top 10 accounted for about 90% of the region’s fixed-line services by 2009.

In developing countries where governments have tried to force the pace of fixed-line roll-outs, the reported noted that the success rate has been mixed. In the Philippines and Indonesia these programs have been conspicuously ineffective, with 5% and 15% penetration respectively. TA

Continued decline for fixed Top ten fixed-line markets (ranks by subs)

stAtsNAP

Country Subscribers Penetration Year on year (million) growth, 2007-2008

China 325.0 25% -7%

Japan 42.0 33% -7%

India 37.0 3% -4%

Vietnam 30.0 34% 4%

Indonesia 35.0 15% -4%

South Korea 22.0 45% 71%

Taiwan 13.0 57% 0%

Pakistan 4.4 2.5% -10%

Malaysia 4.3 15% -2%

Hong Kong 3.7 53% 0%

Source: BuddeComm based on ITU and industry data

iNsiGHt ONe mONtH’s teleCOm reseArCH

>> Global mobile revenues to hit $1t in 2013Worldwide mobile service revenue will top $1 trillion in 2013, with a decline in voice income more than offset by mobile data spending. According to Informa Telecoms & Media’s latest forecast, data revenue will grow to over $330 billion that year, from $208 billion in 2008. By the following year, data revenue and ARPU will surpass voice revenue and ARPU in the advanced Japanese market. While 2G technologies still account for 90% of the world’s subscribers, this figure will fall to 70% in 2012. By 2014, 50% of the world’s subscribers will be on 3G and above technologies, with one-third of the world using 3.5G+. That year, global mobile penetration will reach 92%.

Global Mobile Forecastwww.informatm.com

>> Prepaid subs to drive mobile broadband boomThe number of prepaid mobile broadband users in the Asia-Pacific region will increase tenfold to 160 million over the next three years, with the region leading the world by subscriber additions. A Tariff Consultancy report shows that in many countries, the majority of mobile broadband users are prepaid subscribers. The bundles offered by operators are also becoming more varied and complex – for example, Australia’s Optus, India’s Reliance and Indonesia’s Telkomsel all offer at least eight different bundle options, with data allowances of up to 8GB. Data allowances are meanwhile increasing, with some operators offering no-contract monthly allowances of up to 25GB, at prices comparable to fixed broadband services.

Pre Pay Mobile Broadband Serviceswww.telecomspricing.com

>> China’s 3G rollouts spark mobile data boomChina’s 3G rollouts are spurring a wireless data boom, with revenue from non-voice services rising to $19.3b in 2009. Researchers iSuppli said that wireless data revenue rose 18.9% in 2009 and will nearly double to $31.5 billion from 2008 to 2013. And as mainstream adoption of 3G increases, non-messaging revenue is poised to exceed messaging revenue, reaching $20 billion in 2013. Chinese operators spent a combined $6.3 billion on mobile infrastructure in 2009. Spending in 2010 is set to dip by 2.4% and continue to fall over the next five years – but never below $5.5 billion. China Mobile will maintain a stable market share of around 60% over the next few years, despite growing pressure from China Telecom and China Unicom.

China’s Mobile Infrastructure Market in 2009www.isuppli.com

>> IMS market gets boost from LTE migrationThe global IMS market is set to more than double in value to $17.3 billion over the next five years. A study from ABI Research revealed that $8.4 billion was spent on IMS during 2009. But the growing pace of LTE deployment is expected to help the market flourish. Until now, LTE adoption – and therefore IMS spending – has been constrained by the data-centric nature of LTE. Most operators still earn 70% of their revenue from voice and SMS services. But now that a group of operators and OEMs have agreed on a voice standard for LTE, that stumbling block has been cleared. The only remaining hurdle for IMS is the cost and complexity of the technology.

IP Transformationwww.abiresearch.com

Foreign brands set to invade Korean mobile

B ooming sales of iPhones and the launch of the first Android-based

handset seem certain to shake up the Korea’s mobile market this year.

Smartphone sales are set to soar, driving a surge in mobile data, while handset subsidies are back on the agenda.

The basic business models of operators are being revised with the creation of open rather than closed app stores and portals, and the aggres-sive rollout of Wi-Fi networks by SKT and KT.

Before the launch of the iPhone on November 28, market leader SK Telecom dominated the local smart-phone market with around 420,000 smartphone subs for its ten-model line up as of December 31 (up from 90,000 a year before thanks in part to the launch of Samsung’s Omnia2 at the end of August).

Data from last year also show foreign models given the cold shoulder; SKT has only around 20,000 Blackberry subs.

Until the arrival of the iPhone, rival KT hadn’t even managed to double its smartphone subs over the year, which began the year at 50,000 subs. But that changed rapidly and 250,000 iPhones were sold in the first six weeks, many at the expense of rival operators.

SK Telecom was also talking with Apple, and it appeared that Korea’s two biggest cellcos might both

become iPhone distributors. However, SK Telecom de-

cided to fight the iPhone inva-sion head on with Android, rushing Motorola’s Motoroi into shops early this month. Both sides are preparing for a bloody marketing bat-tle focusing initially on the iPhone, Omnia and probably the Motorori.

SK Telecom has already announced 15 new Android-based models for this year and says that 50% of its two-million handset sales this year will be Android phones. Both KT and SK Telecom have announced huge investments to support smartphones by building out Wi-Fi networks and setting up open applica-tion stores.

Not surprisingly, 2010 forecasts for smartphone sales have been revised rapidly – from one million just weeks ago to four million.

Korean handset makers must be horrified to see the two main carriers in bed with Apple and Motorola, and local consumers scrambling to get their hands on foreign-made handsets. It appears Korea, long an isolated smartphone backwater dominated by local brands, is being transformed into an open market full of foreign models.

Samsung reportedly lobbied strongly against the changes in legislation that made it possible for the iPhone to be sold in Korea. KT in January admitted that relations with Samsung had been damaged. TA

– Mike Galbraith


iNdustry ANAlysis

www.telecomasia.net

Bharti gets Warid for $300m

A fter two failed attempts to acquire South Africa’s MTN, Bharti Airtel has gained con-trol of a key target outside

its home market.India’s biggest operator said in Janu-

ary that it had acquired a 70% stake in Bangladesh operator Warid Telecom for $300 million. Warid is wholly-owned by the Dhabi Group, which will retain a 30% interest after the transaction closes.

Bharti has also pledged to subscribe to fresh equity in Warid and pump funds into the company. “The overall invest-ment will be in the region of $1 billion,” Bharti said in a statement.

“Bangladesh, with a population of over 160 million and teledensity of 32%, is a very promising market for telecom services,” Bharti chairman Sunil Mittal said.

As of November 2009, Warid had 2.92 million subscribers and a market share of 5.9%, making it Bangladesh’s fourth largest cellco.

Bharti also said it would launch a dedicated offshore arm on April 1 to spearhead the group’s expansion into the south Asia region.

The operator has appointed Manoj Kohli, currently CEO for India and South Asia, to head the new unit.

Other international targets on Bharti’s radar reportedly include Kuwait’s Zain and Luxembourg-headquartered Millicom. The company retains plans to enter the African mobile market, but has given up on acquiring MTN since its planned $23 billion merger was blocked by South African lawmakers.

The operator sees international expansion as crucial for revenue growth, because of slowing growth and low mar-gins. Indian market has one of the lowest ARPUs in the world, with an effective calling rate of around $0.01 per minute, according to Wireless Intelligence. TA

– Dylan Bushell-Embling

I ndia’s communications ministry scaled back its 3G plans due to a shortage of spectrum as another auction deadline came and went.

The ministry had planned to conduct the auctions starting on January 14 but has set a new tentative starting date of February 12 or 13. The government is eager to conclude the auctions by end-March, so the funds raised will be reflected in the annual budget.

A draft document prepared by the government states that only three blocks of spectrum will be sold per circle instead of four as previously set down.

But the government is now consider-ing issuing four licenses in five of India’s 22 circles, and three in the rest of the country.

The lack of spectrum is down to a tussle between the ministry and defense, which had been allocated the spectrum as a dedicated band. The Defense Ministry had originally intended to keep the spec-trum until a dedicated defense network had been built, and had to be coaxed into relinquishing it on a rolling basis.

I t’s the internet dust-up the world has seemingly been waiting for.

It began when Google chief legal officer David Drummond announced on the company blog on

January 14 that the company would no longer censor its Chinese search results. He said Google’s servers had come under attack from China-based hackers aimed at stealing the company’s intellectual property.

The company later revealed that the Gmail accounts of some human rights activists within China and else-where had been breached. It said it has begun an internal investigation to see whether any Beijing-based staff had been involved in the attacks.

Unreparted in ChinaThe news of Google’s decision was widely-reported in

China. However, early reports of the hacking of activ-ists’ email accounts were scrubbed, and China has not acknowledged the breaches.

In its initial measured response, the government claimed the internet was open in China and that it would seek talks with Google.

But the rhetoric ratcheted up quickly, with state-con-trolled media accusing Google of acting in concert with the US government. Many said the search firm was leav-ing the market because it trailed Baidu by a long margin.

By coincidence, Google’s announcement came a day after Baidu had gone off air because of an attack on its US-hosted DNS server by the “Iranian Cyber Army.” Baidu sued its US registrar, a move seen by some as po-litical theatre intended to highlight that Chinese compa-nies were also victims of hackers.

US Secretary of State Hilary Clinton called on the Chinese government to conduct a full and transparent investigation into the Google attacks.

Google’s decision has had a direct impact on its new Android handset business. Unicom put its Android hand-set launch on hold, and the future of Google’s device business in the market remains highly uncertain. TA

– Robert Clark

This lack of spectrum could mean that only one winning bid-der receives a license immediately, with the rest having to wait until July or September for frequencies to become available.

Another factor contributing to the delay is a lack of agreement over the auction rules. For example, the government has not decided whether to demand operators pay the entire winning bid upfront, or to request payment in installments.

Meanwhile, Bangladesh took another step closer to conducting its own 3G auction, setting June as the target date to finalize its 3G licensing guidelines.

The Bangladesh Telecommunications and Regulatory Commission (BTRC) expects to auction at least four slots of spectrum by the end of the year.

UK-based mobile firm Vodafone – which does not hold a stake in any of Bangladesh’s six mobile operators – is said to have approached the regulator to bid for 3G spectrum.

Market leaders Telenor-backed

Grameenphone, Orascom-owned Banglalink and NTT DoCoMo-backed Axiata Bangladesh will also be gunning for 3G licenses. Bangladesh Telecom, the second smallest operator – 45% held by Singtel – is also expected to bid.

Over in Australian regulator ACMA is also considering a spectrum auction, mulling whether to sell off most of the 2.5-GHz band as LTE spectrum. The sale could reap the government up to A$1 billion ($920.1 million). TA

– Dylan Bushell-Embling

India cuts back 3G plans due to spectrum shortage

Google’s China show

iNdustry ANAlysis iNdustry ANAlysis


TIhe intra-Asian capacity market looks about to go through a construction phase, with a series of new

cables now being planned.The firmest of these is the South-

east Asia Japan Cable system (SJC), backed by several of the companies behind the Unity trans-Pacific cable, including Google, SingTel and KDDI.

The $400 million system running from Singapore and Indonesia to Japan is potentially the world’s biggest ever cable, the consortium says. It has a design capacity of 17 Tbps and can be upgraded to 23 Tbps.

The 8,300-km cable is to be opera-tional by the second quarter of 2012, said SingTel when it joined the group in January. At the Japan end it will link to the Unity cable, whose launch date has been put back from early 2010 to the middle of the year.

Other members of the SJC consor-tium are SingTel’s Philippines affiliate Globe Telecom, the SingTel-Bharti JV Network i2i, Indian carrier Reliance Globalcom, Singapore-owned Teleme-dia Pacific and Indonesia’s Telkom.

One Unity investor not in the SJC group is Pacnet, which is seeking back-ers for a planned $150 million system linking India to Singapore.

Pacnet announced the West Asia Crossing (WAC) system on December 9, with an initial design capacity of 6-8 Tbps. It would link Chennai to Malaysia and Singapore and would interconnect with Pacnet’s EAC-C2C cable system, which serves southeast and northeast Asia.

Pacnet is also aiming to extend connectivity into Bangladesh and Sri Lanka, but currently it is still seeking investors.

The other new cable announcement

is for a new subsea system linking Singapore to Perth and connecting to Sydney via Nextgen Networks’ existing terrestrial fiber.

Nextgen Networks, a subsidiary of developer LendLease, last month joined hands with Singapore telco Matrix Networks and its Indonesian affiliate NAP Info to announce the new system.

Matrix and NAP Info own and operate the Matrix Cable system that joins Singapore and Jakarta. Nextgen operates terrestrial fiber between Perth - the Australian landing point for the new cable - and Brisbane.

The proposed network, with an initial design capacity of 2.56 Tbps and a service offering from carrier neutral POPs in Singapore, Jakarta and Sydney, could be completed as soon as Novem-ber 2011, the parties said.

“There is significant demand to introduce a new open access cable system between Singapore and Sydney,” said Jim Schweigert, Matrix Networks executive vice-president. TA

– Robert Clark

SingTel, Google lead mini-cable boom with $400m SJC system

iNdustry ANAlysis


newsmapasian telecoms this month

subscribe to asia’s best daily telecom news service: www.telecomasia.nets

BeijingSearch engine Baidu comes under fire from iranian hackers, who took the site offline for several hours. The hackers are protesting US intervention in iranian affairs, with China targeted due to its US ties.

Zhang Chunjiang is stripped of his roles at China Mobile - including vice-chairman, party secretary and vice president - after state pros-ecutors launch a probe into his professional conduct during a previous appointment.

BangkokThe House of Representatives drafts a bill that would create a unified national broadcasting and telecom regulator, with complete control over the allocation of telecom, TV and radio spectrum.

Communications minister Ranongruk Suwunchwee pledges that 3G services will be available nationwide by 2011, declar-ing the network rollout by state-owned operator TOT to be the ministry’s top priority.

ColomBoThe government invites malaysian operators maxis and Telekom malaysia to invest in its maiden $150m satellite project. Both operators express an interest – if the venture is commercially viable.

SeoUlSk Telecom announc-es it will launch more than 12 android-powered smartphones in South korea this year, and launches its first such device, the motorola motoRoi.

Lee Sang-chul takes the helm of the newly-con-verged LG Telecom and announces plans to expand the company’s services beyond the traditional telcom sec-tor, transforming the firm into a “personal value provider.”

Vendors lg and Samsung sign sepa-rate deals to embed Skype’s VoiP software into their 2010 inter-net TV models, taking advantage of Skype’s new HD video chat functionality.

z Google ceases filtering search results in China, after alleging China-based hackers have been conducting illegal cyber-sur-veillance on the search firm’s services. This may leave Google unable to offer services in China.

z Cisco restructures its APEJ business, splitting the unit into a China group – covering China, Hong Kong and Taiwan – and an Asia-Pacific group, including Australia, Korea and ASEAN.

z Google launches its hotly anticipated own-branded smart-phone, the Nexus One, in Hong Kong, Singapore, the US and the UK – to disappointing initial sales. Google is selling the device unlocked through its own website, as well as through carrier partnerships.

z Teliasonera names Ericsson and Nokia Siemens its main LTE equipment vendors, snubbing Huawei – which had installed the Nordic operator’s first commercial LTE network in Oslo.

z HP and Microsoft partner to develop new cloud services platforms, and jointly allocate $250m toward the development of applications and virtualization solutions over the next three years.

z Alcatel-Lucent launches a green telecom initiative, with the ambitious goal of making the world’s communications networks 1,000 times more energy efficient. Carriers such as China Mobile and AT&T are already on board.

z Huawei and Samsung separately announce plans to enter the booming e-reader market, with Huawei announcing a local partnership with Tianjin Jinke to jointly develop e-publishing solutions.

z Apple acquires mobile advertising firm Quattro wireless for a reported $275m, effectively confirming plans to enter the mobile advertising market in competition with Google.

z Motorola shelves plans to auction its home and networks mobility division – the vendor’s largest single unit – after report-edly receiving unsatisfactory bids up to $2b below its $4b-$5b asking price.

z Gartner predicts that mobile users will spend $6.2 billion this year in mobile app stores, downloading 4.5b apps. By comparison, the global mobile ad market is expected to be worth just $600m.

z Nokia wins a long-running UK legal battle with German pat-ent licensing firm IPCom, which had been attempting to wring $17.1b worth of GSM patent licensing fees from the handset vendor.

z Opera appoints a new CEO, after the departure of co-founder Jon von Tetzchner from the role. He is replaced by chief commer-cial officer Lars Boilesen.

z An Egyptian court blocks France Telecom’s attempted $2.2b takeover of Egyptian mobile operator ECMS, after ruling that the bid was too low. France Telecom considers appealing the ruling.

z SingTel takes control of Ireland’s largest carrier, Eircom, after purchasing a majority stake in the company from Eircom Hold-ings for $202m. It is Eircom’s fifth change of ownership in a decade.

movem

ents

16 Jan/Feb 2010 Telecom Asia www.telecomasia.net www.telecomasia.net Telecom Asia Jan/Feb 2010 17

Hong kongHutchison Whampoa makes a $4.23b offer to take loss-making subsidiary Hutchison Telecom international (HTil) private. The company, which already owns 60% of HTil, does not intend to increase its Hk$2.20 ($0.28) per share offer.

Local operators i-Cable and City Telecom separately announce plans to offer free-to-air TV services in Hong Kong. PCCW reveals it plans to submit a bid for its own free-to-air license.

DelHiHuawei’s Indian subsidi-ary allocates $500m toward research and manufacturing in Bangalore for the next five years, as part of an effort to dispel negative perceptions of the Chinese vendor in the country.

india mulls lowering the number of 3g slots offered in the upcoming auction to three, due to an ongoing spectrum shortage. Win-ners may also have to wait until September to launch services.

The government approves plans to sell a 10% stake in state-owned operator BSNL, while holding a meeting to discuss ways to improve the company’s deteriorating profitability.

TaiPeiHandset vendor HTC reports a 31% decline in Q4 profit to $175.4m. But by December the company was back to growth, with its first year-on-year earnings increase since july.

DHakaindia’s Bharti airtel agrees to pay $300m for a 70% stake in Warid Telecom from sole current owner the Dhabi group. Warid had 2.92m subscribers and a market share of 5.9% as of november.

SyDneyTelstra slashes the prices of its mobile broadband data plans, in the response to the narrowing of its lead in subscriber figures com-pared to competitors Optus and Vodafone. But the prices are still not as attractive as the rival offerings.

nextgen networks and Singapore opera-tors matrix and naP make plans to build a 2.56-Tbps subsea cable linking Singa-pore and Perth. The proposed could be completed as soon as november 2011.

SingTel mulls floating a 25% stake in Austral-ian subsidiary Optus, in a move which could raise up to $3.7b. Sing-Tel reportedly values the unit at over $12b.

aUCklanDTrade regulator NZCC warns Telecom NZ to stop breaching New Zealand competition law, after convicting or warning the incumbent operator eight times over its behavior since 2003.

SingaPoReSingTel, Google and five other com-panies sign an agreement to build what could become the world’s largest ever cable, the Southeast Asia Japan Cable System (SJC), with a design capacity of 17 Tbps and upgradable to 23 Tbps.

m1 prepares for the February launch of a two-month lTe trial, using network gear supplied by nokia Siemens networks. The trial could pave the way for m1 to begin commercial lTe services as early as late-2010.

Telecom regulator BTRC announces it is close to completing Bangladesh’s 3G regula-tions and aims to issue at least four licenses via open auction by June.

manilaglobe Telecom petitions the Philippine court of appeals to block regulator nTC from implementing its order forcing opera-tors to adopt per-pulse billing.

www.telecomasia.net Telecom Asia Jan/Feb 2010 19

coverstory coverstory


Mobile broadband has been a telecom growth story for the past two years. Connections and traffic have con-

tinued to expand, as has associated rev-enues, although not at the same rate.

Just look at the growth in prepaid mobile broadband users in Asia Pacif-ic. The segment – defined as PC-based internet connectivity using a USB mo-dem supporting download speeds at least 384 KB – is expected to increase tenfold to 160 million over the next three years, with the APAC region leading the world by subscriber addi-tions.

A report from Tariff Consultancy found that in many countries the ma-jority of mobile broadband users are prepaid subscribers.

The results of a joint Telecom Asia-Ovum Asia-Pacific mobile broadband survey show that although respondents still believe mobile broadband is good news for the industry, they are now more realistic about its benefits com-pared to the wide-eyed enthusiasm of last year.

The survey found a more mature mobile broadband market, where ex-pectations on margins are more realistic (although still overly optimistic), new

Mobile broadband: still growing but realism sinks inThe mobile broadband industry has grown up a lot over the past year. A survey shows expectations on margins are more realistic, new charging methods beyond flat-rates are being explored and the real threat to fixed broadband is better understood

By Joseph Waring

charging methods are being explored (with unlimited flat-rates unsustain-able) and the real threat to fixed broad-band is better understood (as more of a direct competitor).

Better margins?The majority of the telecom execu-

tives surveyed continue to see mobile broadband adoption as a significant boon to the industry, with 44% expect-ing mobile broadband to be a higher-margin business than mobile voice. That’s down from 52% a year ago, but still widely optimistic based on the rev-enue generated compared with the re-quired spending on capacity.

The number pf respondents think-ing margins will be lower increased from 24% last year to 32%. (See chart 1 below). Nathan Burley, an analyst in Ovum’s Asia-Pacific research team, says more realism has set in, “yet this is still a very optimistic view of the industry’s future.” Another 13% said they don’t know they will increase or fall.

Responses to this question also var-ied more than any other between dif-ferent markets. Industry participants doing business mostly in emerging markets were more likely to see mobile broadband as a higher margin service

Source: Ovum/Telecom Asia

A higher- or lower-margin business than mobile voice?

Chart 1

Higher

The same

Lower

Don’t know

44.2%

13.6%

31.5%

10.7%

44.2%

13.6%

31.5%

10.7%

Respondent profileThe Telecom Asia-Ovum online survey was conduced in December and early January and had responses from more than 320 telecom executives in 19 countries across Asia Pacific. Almost a quarter of those surveyed were mobile operators, and another 18% were integrated players. Management accounted for 28% of respondents, sales/marketing 28% and engineering/operations 23%. This was the second year the survey was conducted.

coverstory


The question is what respondents mean by “most effective”. Consum-ers undoubtedly prefer unlimited/flat-rate-based charging, however, it is unlikely the most effective method for operator margins. As a result, Burley noted that true unlimited/flat-rate-based charging is increasingly uncom-mon as fair-usage policies are imple-mented in Asia.

Not sustainableIn the US a strong backlash has

flared up, with both AT&T and Verizon declaring flat-rate unsustainable and its days numbered as the operators move to LTE. AT&T said in December that it will have to get back to usage-based pricing. Verizon said in Janauary that LTE pricing will have to be different from 3G pricing, likely in the form of a basic monthly fee and usage-based pricing for bandwidth consumed. We’re starting to hear similar concerns from cellco execs in Asia. (See column on “The flat-rate mobile broadband back-lash” on page 6.)

Many operators are seeing signifi-cant network congestion in urban cent-

ers, and one operator reported late last year that 40% of its traffic was being generated by 3% of its users.

“We are getting to a point where operators need to manage data usage or their business models will become unsustainable as the costs of managing exponential mobile data traffic escalate much faster than the revenues they can generate from all-you-can-eat plans,” Bridgewater Systems SVP David Sharp-ley told Telecom Asia.

The competitive nature of the mar-ket, however, makes flat-rates a neces-sary evil, says Ranga Thittai, product manager at InfoVista, so they’ll be around for a while. He says capex on network capacity can be kept in check through the use of systems that enable operators to optimally size their net-work.

“Operators need capabilities that al-low them to continually baseline traffic trends, predict traffic growth and estab-lish smart engineering limits (like 95th percentile load). The same offerings also monitor end-user quality to ensure that reduced network sizing does not com-promise end-user QoS,” he noted.

Some 19% of those surveyed think data volume-based pricing would be most effective while 9.5% are looking to a QoS/SLA-based model. Another 8% said speed-based charging would be best.

Burley says operators are beginning to explore many other charging meth-ods to provide tiered services and dif-ferentiate in the market.

Celcom in Malaysia started off charging per kilobyte, but customer bills went through the roof, so it moved to unlimited plans. It has tiered plans for different speeds while Maxis offers tiered plans based on volume. “We’re seeing if it’s the right pricing model,” said Harcharan Singh, GM of Celcom’s broadband division.

No clear key differentiator emerged for marketing mobile broadband serv-ices. However, 31% of respondents see coverage as the leading differentiator, followed by quality of service (23%),

(52% vs only 36% in developed mar-kets). Those in developed markets, fur-ther along in the adoption of mobile broadband, think that “the same” or “lower’” margins are more likely (42% of respondents answered lower vs only 22% in emerging markets).

Burley noted that: “When utilizing un-used capacity or signing on high-value early adopters, mobile broadband obviously will deliver good margins. However, as the service matures, limited ability to differentiate – hence strong, mostly price-based competition – and the ongoing capital investment required to support growth will put pressure on margins.”

The vendor segment, unsurpris-ingly, was the most adamant that mobile broadband would be a high-er-margin service (55%) while mo-bile operators were more negative on margins, with only 34% forecasting higher margins.

Over half of respondents think that unlimited/flat-rate-based charging models are the most effective way to charge for mobile broadband services. (See chart 2 below.)

“We are getting to a point where operators need to manage data usage or their business models will become unsustainable”


What is the most effective way to charge?

Chart 2

Data volume-based

Application-based

Time-based

Unlimited/Flat-rate-based 51.4%

18.6%

Quality of services/SLA-based 9.5%

6.3%

6.6%

Speed-based 7.6%

coverstory


coverstory

price (21%) and speed (19%). (See chart 3 above.)

There was a notable shift in the or-der of these criteria from the previous year’s survey. Last year price topped the list with 29% seeing it as a key differen-tiator, coverage was second (28%) and speed third (26%).

We can only assume that that low-cost mobile broadband service alone will not secure customers’ acquisition, loyalty or differentiation.

All-you-can-eat pricing strategies can lead to pricing wars that curb sub-scriber loyalty, says Amir Ofek from Amdocs. These strategies also miss the opportunity to collect revenue from high-bandwidth subscribers who are willing to pay a premium for better service.

He says that without distinguish-ing between mobile data traffic type or priority, network capacity is being de-ployed on the basis that every data bit costs (and is priced) at the same level. “There is no discrimination when roll-ing out new capacity as to its value.”

Burley points out that coverage for a long time was important to differen-tiation in the mobile voice market. “It will also be, if not more so, for mobile data.”

While “price” dropped to third

from first last year (falling 8 percentage points), that was a just a dip compared to the freefall for value-added services, which plunged from 16.5% thinking it was a key differentiator a year ago to only 3.7% this year.

Obviously, users are not attaching much value to operator VAS services, especially for big-screen devices. The main selling point is connectivity.

Burley says niche services will be of value in certain segments and potential-ly reduce churn – yet they won’t be key a differentiator. He suggests that opera-tors choose VAS investments and focus on areas very strategically.

He says potential applications for both big- and small-screen mobile broadband VAS are integrated solutions across access networks and bundled of-ferings, security or device management with GPS location. In the enterprise space, the ability for IT departments to control mobile assets, VPNs, and roam-ing may add value.

Browsing remained the leading traf-fic generator, but its dominance dropped from 42% of respondents seeing it as the main traffic driver last year to 36% this year. The big winner was video, with ex-pectations video will be the main driver of traffic growth increasing from 22% last year to 32%. (See chart 4 above.)

Those in emerging markets were even more likely to see browsing as the key traffic driver while those in devel-oped markets where more likely to see video as the main driver.

Both peer-to-peer and LBS were a distant third and fourth, little changed from a year ago when 16% saw P2P as a major growth catalyst and 12% expect-ed LBS to drive growth.

Access is the killer appSimilar to last year, but only more

emphatically in the clearest result of the survey, 83% of respondents believed non-operator content would drive more traffic than operator content. That’s up from 76% in 2009.

Internet-based third-party content is both driving user demand for mobile data and traffic across devices.

Revenues will mostly be generated by data access with content and premi-um services remaining niche services. Most value and revenues generated by content and new services will not be captured by operators. Efficient data provisioning is, therefore, essential to operator strategies, Burley insists.

Almost a quarter of operator re-spondents stated operator content will drive more traffic. One reason for this may have been the traffic intensive na-


ture of some operator services such as mobile video.

With little change from a year ago, laptops/netbooks and handsets were expected to fuel growth. Almost 90% of respondents said these two broad categories of devices would account for most traffic growth. Looking at specific segments, mobile operators and those in developed markets were more likely to select laptops/netbooks.

The PC category was the big looser from last year (slipping to just 4% from 10%), presumably as respondents see a shift to mobile PC form factors. (See chart 5 above.)

Mobile broadband is clearly both a complement and competitor to fixed broadband, creating new broadband usage cases while also directly compet-ing against fixed broadband in some segments.

Last year 63% of respondents saw mobile broadband as more a comple-ment than competitor to fixed broad-band. This year, with more a detailed look at the impact, we found 35% of those surveyed expecting a significant impact and substitution. Another 40% said was would have some or limited im-pact and substitution. Just 16% though it would have no impact and was only complementary. (See chart 6 above.)

“We agree with the consensus, mo-bile broadband revenue streams will not entirely be generated by new product categories, but will steal revenue from the fixed broadband market as opera-tors compete directly,” Burley said. For many consumers, especially in emerg-ing markets, fixed broadband will be irrelevant.

Investment requiredDue to the business models adopt-

ed, especially the common unlimited/flat-rate plans offered by so many mo-bile operators, traffic has been growing exponentially. This growth has created a major strain on operators’ backhaul and access networks.

Representing similar results to last year, 66% of respondents believe back-haul capacity is, or will be in the next 12 months, an issue in the provisioning of mobile services. The same number as last year (17% reckon backhaul won’t be a restraint on mobile services. (See chart 7 on page 24.)

The responses to this question did differ by market. Interestingly, those in developed markets where more likely to see backhaul as a constraint compared to those in emerging markets, despite more options generally available in those markets.

In Malaysia, more than half of re-spondents stated backhaul as “currently a restraint on mobile services.”

Over 59% of industry respondents believe wireless backhaul technologies will achieve greater growth than wired backhaul in 2010. This result is the same as last year.

Operators were more likely to sug-gest wired technologies would be de-ployed, with 41% selecting that op-tion.

Capacity constraints in backhaul are a more pressing concern than in the access network. Burley says this differs by market. For example, in dense areas radio network capacity is more likely to be an issue while in rural areas backhaul may be the bottleneck.

Regardless, respondents still believe access capacity is still under pressure. A total of 65% believe radio access capac-ity is, or will be in the next 12 months, a constraint on mobile services. However, 21% do not forecast radio capacity be-ing a constraint in the foreseeable fu-ture. (See chart 8 on page 24.)

Just under half of vendor respond-ents saw radio access as a constraint on network capacity in the next 12 months, significantly above the over-all average. Malaysian respondents again were also above average in see-


What application will be main driver of traffic growth?

What device types will drive the most traffic growth?

What impact will mobile broadband have on the fixed broadband market?

What is the most important differentiator?

Speed

Price

Coverage

Quality of Service

Other

19.0%

20.5%

31.2%

23.2%

2.4%

VAS 3.7%

Laptops/netbooksHandsets

PCs

Other consumer electronics devices

Machine-to-Machine

Other

48.3%

41.3%

4.1%4.1%

1.9%

48.3%

41.3%

4.1%4.1%

1.9%

Chart 3

Browsing

Video

P2P

Location based services

Other

Audio

1.9%

36.0%

4.4%10.4%

15.5%

31.9%

1.9%

36.0%

4.4%10.4%

15.5%

31.9%

Chart 4 Chart 5 Chart 6

Significant impact and substitution

Some impact with substitution occuring

None. Mobile broadband will only complement fixed broadband

Large impact in all but small segments

Limited impact

Fixed broadband is dead

30.0%

34.6%

10.1%

1.2%

8.3%

15.9%

30.0%

34.6%

10.1%

1.2%

8.3%

15.9%


coverstory

to other cost cutting initiatives such as site or network infrastructure sharing and even operator consolidation as they seek to support growth and be as effi-cient as possible.

Solving the capacity crunchTo keep up with traffic growth, ex-

cluding adding capacity, 41% of opera-tors said they’d look at offloading traffic to ease constraints, especially through Wi-Fi. Another 13% would consider offloading to femto cells. (See chart 9 below.)

ing radio access capacity as restraint mobile services.

Burley says significant investment is required to support traffic growth in capacity upgrades through technology upgrades, network expansion and infill, and use of additional spectrum via re-farming and auctions.

“There has been a lack of investment in capacity across some operators lead-ing to network issues, although short-term capacity demands should be able to be met with sufficient investment.”

Inevitably operators will also turn

Other traffic management tech-niques, such as throttling and use of policy control, as well as new charging schemes also received strong support from respondents as solutions to traffic growth.

Burley says there is no silver bullet to dealing with traffic growth and nu-merous solutions to manage capacity need to be used.

Bridgewater’s Sharpley agrees. “It’s not an either-or situation. Operators will need to deploy a toolkit of strate-gies to manage explosive mobile data traffic growth, including policy control, data traffic offload, and migration to 3G and 4G.”

Research from Chetan Sharma Con-sulting (sponsored by Bridgewater Sys-tems) shows that by deploying a combi-nation of these strategies, operators can reduce costs by more than 60% over the next three years with savings of 20-25% from data offload to Wi-Fi or femto-cells, and over 10% from policy control alone.

Sharpley also sees opportunities to combine data offload and policy con-trol. For example, operators can use policy control to “surgically offload” certain applications to another access network or apply policies that offload traffic based on network conditions or a subscriber’s location. TASource: Ovum/Telecom Asia

Excluding installing more capacity, what is the most effective solution to deal with traffic growth?


Do you think backhaul capacity is: Do you think radio access network capacity is:

Chart 7

Chart 9

Chart 8

Will be a restraint onmobile services in the

next 12 months

Won’t be a restraint onmobile services for the

foreseeable future

Currently a restraint on mobile services 51.4%

18.6%

7.6%

9.5%Don’t know

Currently a restraint on mobile services

Will be a restraint on mobile services

in the next 12 months

Won’t be a restraint on mobile services

for the foreseable future

Don’t know

19.0%

20.5%

3.7%

31.2%

Wi-Fi and offloading traffic ofthe macro network

Other traffic managementtechniques such as throttlingand use of policy control

New charging schemes(QoS, SLA, etc)

Femto cells

Other

41.0%

5.7%

12.6%

18.9%

21.8%

41.0%

5.7%

12.6%

18.9%

21.8%


the same conclusions in the last six months.

Infonetics, meanwhile, found in a survey last year that two-thirds of serv-ice providers plan to combine their data and transport operations sometime next year. And vendors are now jockeying for position to help them do just that.

We have the technology The technological advances enabling

the push to packet-optical convergence are already here: Ethernet-over-SDH, ROADM (for wavelength-switching), ASON (Automatically Switched Optical Network), GMPLS (which allows MPLS to run on the control plane) and OTN (Optical Transport Network) switch-ing.

technology

OTN is one of the key technologies mentioned in Verizon’s P-OTS strat-egy. Verizon intends to implement a “wavelength-centric OTN-compliant network” supporting multi-vendor in-teroperable OTN-compliant (G.709) interfaces.

“OTN is key because it brings a lot of the good manageability stuff from Sonet/SDH to optical, so you can see the traffic, detect faults, all the opera-tional management stuff and granular-ity from SDH,” Changaroth says.

It also supports legacy TDM traf-fic, which is crucial to packet-optical convergence, he adds. “TDM may not be growing by leaps and bounds as much as IP traffic, but it still generates a huge amount of revenue for telcos, so

anyone who says they can just get rid of that TDM Sonet/SDH layer is kidding themselves.”

Bandwidth and cost efficiencies

Of all the benefits of flattening the IP and optical layers, there are two re-curring themes: more efficient band-width usage and lower costs.

“By bringing several layers of their network together, service providers can reduce the number of devices in the network, the space and power con-sumption,” says Luc Ceuppens, market-ing VP of high-end systems for Juniper Networks. “That will help them not only get capex down but prepare for the future services they want to run over

technology

Bringing packets into the light

The term “convergence” may be one of the most over-used and overhyped words in telecoms, but there’s no better way to describe the

current interest in flattening the IP and optical layers of the network.

The idea of packet-optical conver-gence – which in broad terms means taking packet networks (namely Carrier Ethernet), Sonet/SDH and DWDM and flattening them down into one network that does everything those layers do separately – has been around for some time.

However, in early 2009, US opera-tor Verizon threw the gauntlet down to vendors when Stuart Elby, VP of network architecture at Verizon Net-

Telcos want to flatten their packet and optical network layers, but the right solution depends on how optical-centric or packet-centric your vendor is

By John C Tanner


work & Technology, said at an OFC conference that it intended to trans-form its global network into a packet-optical transport system (P-OTS) that would combine Layer 1 and Layer 2 functionality and into a much more efficient and cost-effective network with an integrated control plane. And Verizon wanted suppliers to come up with boxes that would help them achieve it.

The basis for Verizon’s demand was an internal analysis that found IP transit traffic patterns and demand for flexible routes were so dynamic that IP traffic at the optical layer often didn’t have to touch the network routers.

“That adage of ‘switch where you can, route where you must’ has never

gone away, and Verizon wanted its IP transit traffic that didn’t need routing to stay in the optical layer,” explains Anup Changaroth, product marketing director for Asia for Nortel Networks’ MEN business recently purchased by Ciena. “It’s a very costly affair to put routers in place and take your IP traf-fic up to that layer if you don’t need to.”

Verizon concluded that to support those dynamic traffic patterns and by-pass routers, “it made more sense to have the optical layer using MPLS-TP as the key switching mechanism. And they’ve been driving vendors to look at that,” says Changaroth, adding that car-riers in Japan and elsewhere have done their own internal studies and reached

these networks.”Ronen Mikdashi, AVP and head of

the product marketing department at ECI Telecom, agrees that packet-optical convergence will help reduce capex and opex, but adds that the savings don’t just come from the hardware.

“In this type of convergence, soft-ware should support all the layers in a single management system to sup-port end-to-end provisioning, which reduces time to market, response time to customer needs for expansion, and other things that can also help to reduce costs,” he says.

Meanwhile, bandwidth efficiency gains are a matter of having the flex-ibility and sufficient granularity to fill lightwaves to capacity, Mikdashi says.

“If you have a 40G WDM channel and you’re only using 10 Gbps of it be-cause your Ethernet service only runs at 10G, you can multiplex several other low-bit subservices onto it, running as low as 2 Mbps,” he says. “You can fill it with 4 x 2.5G or 10 x 1G or 100 x 100 Mbps and so on – any combination you like, so all your channels are fully utilized.”

Alcatel-Lucent – which fired the first shot in the packet-optical convergence wars with its converged backbone trans-formation (CBT) strategy launched in September – touted its ability to groom traffic not only at the wave level, but also the sub-port level using ODUflex technology, an emerging ITU standard due for completion next year, which provides higher granularity by enabling VLANs or pseudowires within a port to be logically or virtually mapped to the same wave.

Result: carriers can maximize ca-pacity without spending more money on extra core routers, and yield capex

savings of “at least 30%, in addition to savings in power, space and operational complexity”.

Optical-centric or packet-centric

A minor war is already brewing over just how much money telcos can save depending on whose solution they choose – or rather, how focused their convergence strategy is on bringing the packet layer to DWDM or the other way around.

There is a difference, says Ceup-pens of Juniper – and one that tends to be defined by the core expertise of the vendor.

“You have players in the optical world and the packet world and they’ll each approach this new product in their own way,” he says. “Optical-centric ven-dors will develop optical transport with some packet capabilities, and packet-centric vendors will develop packet-ori-ented gear with some optics integrated into it.”

Perhaps unsurprisingly, Juniper says the latter approach will ultimately save telcos more money in the long run. A cost analysis from Juniper reckons that that a packet-centric integration solution (i.e. MPLS-based with OTN switching) would cost 65% less than a traditional optical network, while an optical-centric solution (i.e. hybrid router and MPLS/OTN switching) would save just under 50%.

That said, Ceuppens admits the cost model makes specific assumptions that won’t apply uniformly to different net-works.

Which is as well, since operator de-cisions on a packet-optical convergence strategy will be determined by the ar-

chitecture already in place, says Mik-dashi of ECI.

“Some operators want a very intel-ligent Ethernet network with some ba-sic WDM capabilities, but others that already have a complicated optical layer want an intelligent optical network with mesh capabilities, ROADM, etc, and a basic Ethernet layer,” he says.

It also depends on what TDM and Ethernet services they have at the time, Mikdashi adds. “If their network is dominated by Ethernet and IP services, they can deploy a packet-optical net-work that’s more oriented on Ethernet and is stronger on Ethernet capabilities than optical. So there’s no one rule of thumb.”

Ceuppens agrees, and adds that despite the fact that operator interest in packet-optical convergence is high, actual implementation is going to take time as telcos weigh their options on when and where to flatten the packet and optical layers with minimal disrup-tion to existing services.

“It will be slow because of the amount of legacy equipment and ar-chitecture carrying live traffic,” he says. “As a service provider you don’t want to mess with your customer. So very often they work with overlays – create that NGN and then migrate customers over to that. It’s only when it’s proven that the new network is cost-effective that they’ll make the effort to migrate customers over to it.”

There will also be one other conver-gence issue that telcos will have to re-solve, adds Mikdashi – interdepartmen-tal convergence.

“For many Tier 1 operators, the packet divisions and optics divisions are usually separate,” he says. “So telcos do have to look at how this is going to affect those two divisions.”

Changaroth of Nortel agrees. “Or-ganizationally SDH/optical and IP op-erate as separate business units. So op-erators will be more challenged to drive them to work more closely together. Some are already doing it, but it will still be an issue for many.” TA


technology

“Optical-centric vendors will develop optical transport with some packet capabilities, and packet-centric vendors will develop packet-oriented gear with some optics integrated into it”

INSIGHT ROuNdTable INSIGHT ROuNdTable


Preparing for the content

New government licenses for spectrum have creat-ed a flood of new players in the mobile broadband space. In a short time, the

cost of devices and services has come down tremendously, fueling uptake, traffic and a search for new pricing and business models.

Competition has never been fiercer, making economies of scale more criti-cal than ever at every point in the value chain. With network and device costs tumbling, attention is shifting to appli-cations that will drive usage and profit-ability.

For operators to move seriously into applications and sharing revenue they need to be able to target attrac-tive customer segments and partner in new ways. This means sharing customer data with partners that bring more traf-fic and help you build customer rela-tionships.

These were he key messages at Tel-ecom Asia’s Insight Roundtable, held in Kuala Lumpur last month, which pulled together a handful of operators and analysts to discuss “Capitalizing on the growth of mobile broadband”. Par-ticipating in the event, hosted by Intec, were P1 CEO Michael Lai, GM for Cel-com’s broadband division Harcharan Singh, Frost & Sullivan’s director of ICT practice for Malaysia Delesh Ku-mar, MD of Value Partners Hong Kong Jenny Ng and Damian Harte, Intec’s senior strategist for content innova-tion and initiatives, group editor Jospeh Waring was the moderator.

The mobile broadband market is in hyper drive across much of Southeast Asia. The industry had been playing out

in similar fashion to the traditional mo-bile ecosystem, with two to three opera-tors in most countries serving 20 to 30 million subscribers.

But that changed when governments started offering spectrum to new play-ers to boost competition in an attempt to expand broadband penetration. The industry has seen new technologies like Wimax as well as a flood of new players. There are 12 players in Malaysia and a staggering 18 in Indonesia.

“We’ve never seen this level of com-petition,” said Kumar from Frost & Sul-livan. The issue moving forward is many don’t have the scale to optimize ebitda margins, bargain with CPE and equip-ment vendors, and leverage backhaul as-sets. He noted that at every point in the value chain economies of scale matters.

Celcom’s Singh doesn’t see scale as the overriding issue. “Of course we all

wish there were fewer players [laugh-ter]. But the cost of dongles and base stations have dropped sharply and IP transit is more affordable.”

He said that while ebitda margins are much lower than voice, they are still positive. “We’re now looking at what other services we can sell on this pipe to boost revenue.”

He said penetration in Malaysia isn’t increasing at a significant rate – new adds are customers of other operators, so there’s a lot of cannibalization.

“There are some issues with back-haul, since the cost of putting in fiber is huge, but our bigger challenge is radio access, especially transmission,” Singh said.

He said Celcom has learned a number of lessons since 2007. “When we started, there was a lot of congestion in the core. We fixed that, then there

was congestion in the IP transit, which is expensive with few players in Malay-sia. We’ve starting local peering with Google. We fixed the transit. Now we face huge issues in the RAN.”

He has seen scenarios where a base station is using about 60% of its capac-ity and in a week is at 100%. It’s a major issue because Celcom offers a seven-day money-back guarantee and customers’ tolerance level is low.

P1’s Lai agreed that economies of scale is critical. “You can talk about 12 local players, but Malaysia really only has five active players. In a short time device prices have come down tremen-dously, which will boost adoption and help push toward mass-market.”

With network and device costs tum-bling, he said the next big factor is the application part, which is what is gong to drive usage and profitability.

Focus on coverageIntec’s Harte asked if value-added

services are a big part of P1’s revenue projections?

“Not now. For a greenfield operator like us the No 1 job is to build cover-age as fast as possible,” Lai said. “Once we get the network connecteds we’ll provide other valued-added services to get consumers’ attention and increase margins.”

Singh said Celcom is still looking at providing quality of services. “Broad-band is new and adoption is picking up, so we want to assure customers’ there is a certain level of QoS. There’s no point doing lots of apps if the basics aren’t there.

“I’ll be frank, we’re struggling with the basics to a certain degree. We don’t think there will be one super app that will drive usage.”

Ng from Value Partners said that be-fore operators can move seriously into applications and sharing revenue, they have to encourage companies to work with them to target attractive customer segments.

She noted that the youth market is an easy target, which is more entertain-ment driven. But it may not be the high-est margin segment, because they are not the ones willing to pay for content.

Ng suggests that rather than pro-vide only access, operators need to offer more integrated services with commu-nications solutions. She noted that 30-40% of those in the 25- to 40-year-old

group with mobile broadband use it as a complementary service to their fixed service.

Taking a page from AT&T’s an-nouncement last December, she said operators need to education consum-ers that if they use more, than need to pay more so they have differentiation of services.

“So customers willing pay a premi-um will have a better quality of services; this is how you maintain the brand.”

Harte said a major issue at this stage is that a bad experience will keep users from upgrading their services.

Lai said that has to be a given. “As we continue to grow so fast, quality of services is essential.”

Singh said that once the experience is good, users tend to move to higher-value packages. At the start about 85% new users went for the low-end packag-es, now that is down to 66%. In response to low-volume users, Celcom launched unlimited daily and then weekly pack-ages.

He said the daily plan has had no impact on the monthly subs, and week-ly didn’t affect the daily plan, which increased threefold over a couple of months.

The jump to VASLooking at the road to value-added

services in markets that are building out the networks, Ng gave the example of China where data usage accounts for some 27% of ARPU. And that’s on Edge

Michael Lai, P1 Harcharan Singh, Celcom Jenny Ng, Value Partners Hong Kong

“Operators need to embrace ‘non-telco’ ways to work with partners”

A move into applications and revenue sharing means managing partners in new ways and sharing data with those that drive traffic and help you build customer relationships


– before 3G network rollouts – and high even compared to developed markets.

She said China Mobile used to work with as many partners as possible to drive daily usage. Then it started to try to understand customers better, and differentiated those that could provide sticky content and those that could bring customers back. For those that drive content consumption, the opera-tor would have a different working re-lationship and share customer data and even help them offer more customized solutions for the customer.

“These are the things to think about when you expand your subscriber base and have to start managing your part-ners that bring more traffic and help you build customer relationships, in-stead of just being an access provider,” she said.

She emphasized that segmentation is very important, because it impacts where you put your infrastructure in-vestment and how you manage your content partners.

Harte said it’s about making it easy to work with partners. “Perhaps some operators have been guilty of being a bit too arrogant in the way they worked with partners.” He said that relationship needs to evolve to one where there is true partnering.

In dealing with the new breed of partners, Ng said operators need to embrace “non-telco” ways to work with partners and acknowledge the new en-vironments. “It doesn’t immediately drive business but is a way help bring more customers.”

Harte said a recent survey found what’s most important for operators is not ARPU but maintaining the existing customer base and market share.

Kumar points out that with part-nering it all boils down monetization. “When there is money being made, it doesn’t matter if you’re a big or small player, everyone gets along and there’s no issue over who owns the subscriber.”

The problem now with partner-ships, he said, is that the monetization part is not clear.

Kumar noted that it’s becoming more apparent that there is no killer app that will differentiate a company, “actually it will be a killer process that can measure changes in the subscriber base and work with unlimited part-ners.”

Lai said telcos are staring to realize that it’s not the application that matters but the benefits that application can bring to customers that can be mon-etized. “This change of thinking is criti-cal moving forward.”

Looking at barriers in Malaysia to mobile broadband adoption, Kumar said internet penetration is fairly high (50%), with most people connected at work and many at school.

Fixed-line replacementIt comes down to perception of

value. He said Frost & Sullivan did a fo-cus group and found that among peo-ple who use the internet but don’t have a broadband subscription, the main reason was they don’t use it enough to justify a subscription. “There is a large segment of consumers who aren’t heavy users.”

He said the entry of new players has encouraged people to evaluate their options and to consider mobile broadband as a replacement for fixed service.

“But right now they are willing to wait. In the next one to two years, when the overall value improves – pricing and quality of service become more compel-ling – you’ll start to see low-volume us-ers move to mobile broadband, because it offers flexibility. You’ll see pay as you use packages.”

He said operators need to go to the 15-20% users who are happy to use the internet only at work and give them a reason to sign up at home. TA

INSIGHT ROuNdTable

Delesh Kumar, Frost & Sullivan – Malaysia

Damian Harte, Intec

TelepReSeNce paNel TelepReSeNce paNel


Paving the path to all-IP mobileThe move to a flat-IP architecture is less of a technology issue than an economic one

Mobile data traffic growth has put the spotlight on the need for cellcos to adopt efficient and flexible

all-IP architectures. But cellcos and IP experts at a online discussion in Janu-ary say that IP networks should evolve only if the economics are justified. The event, moderated by Telecom Asia glo-bal technology editor John C Tanner and sponsored by Cisco, was held via telepresence at sites in Hong Kong, Sin-gapore, Sydney and Mumbai.

John Tanner: What types of devices are customers using and what impact is that having on your IP resources and your network?

Christian Daigneault: Dongles are generating about 80% of all our traffic at this point. The other 20% is mostly smartphones, and traffic for both has grown by about the same factor – 18 to 20 times – since we launched HSPA+ nine months ago. And this is not stop-ping. When we talk about the iPhone, and those type of phones, we see new de-vices like this coming out on a monthly basis, so this is not going to stop.

Stephen Chau: In our network, more than 80% of our traffic is generates by the dongles. Also, we are offering a resi-dential fixed-broadband-type service [using HSPA as the last-mile link]. So from that perspective, if you include that with the dongles, that actually rep-resents more than 90% of the total data traffic volumes.

Anthony Goonan: I can relate com-pletely to that 90% figure. And within that, about half of our data is just straight http-type traffic. Around 10% of it is YouTube and other streaming-type services. High-end smartphones,

for Telstra at least, are contributing seven to ten times as much data as a standard-feature phone. And our data traffic in Telstra is roughly doubling every eight months.

Lam Hong Kit: One thing to add on the point of http traffic, from what we see, that’s not only just for http web, but also progressive downloads. I don’t know the exact split, but a big portion of http comes from the video via the progressive download, and YouTube is one part of that.

Tim Mark: Our colleagues in the US, and even some of them outside the US, are seeing traffic doubling every six months because of video and telepres-ence – all the traffic has been doubling. We’re really seeing that from the infra-structure side.

Jayesh Easwaramony: Basically what is happening is you’re creating a much bigger addressable market for serv-ice providers. So if you look at mo-bile broadband, instead of having one household broadband connection, you are actually selling four connections – each laptop will have a connection. Also, we talk about smartphones and netbooks, but there’s also going to be another entire set of devices – which could be tablet PCs or e-book readers – which are going to further the gap be-tween netbooks and smartphones.

Hong Kit, how much is this driving internet traffic on the international links?

HK: Before 12 months ago, a lot of mobile operators were under their mother company, which also owned a fixed-broadband service, for example, and they were bound together because the traffic was relatively small. After 2008-2009, they began to have high

enough growth demand that they were able to spin off, and they could come di-rectly to us to buy IP transit. And in the past 12 months, some of the customers have doubled their bandwidth. Traffic growth for our mobile customers has been 100% to 120%.

What kind of impact is all this having on the mobile IP architecture?

CD: Well, we have HSPA+ and all-IP to the cell sites, and if you have fiber or high-capacity microwave, there’s no bottleneck with the radio access or backhaul. For the core, at this stage it has been a bit easier to grow the capac-ity. There will come a point where you want to simplify your core, but I don’t think the complexity is at this level to-day.

SC: I agree. In Hong Kong, there’s not as much concern about network loading because we’ve already been building up the network to accommo-date the traffic to meet the broadband need, not just the mobile usage.

AG: One thing that we found in Telstra, because we’ve got a common core for our 3G network and HSPA+ network, as we went through the speed evolution, we would find parts of our IP network that were in fact causing bot-tlenecks, and they weren’t exposed un-til the air interface speeds went up. So there are bottlenecks within your core that you just don’t know are there, and we need to look at how we can identify those and remove those in a cost-effec-tive manner.

Given all that, just how urgent is it for mobile operators to migrate to a flat-IP architecture with LTE?

CD: I think it’s a question of vol-ume and throughput. And right now at 21-Mbps, I don’t see it as a bottleneck. There is the claim that with flat IP or LTE, we’ll get better 10-20 millisecond latency vs the over-100-millisecond la-tency we have now. That would make a big difference, but I think a lot of it is due also to the LTE radio access and NodeB.

AG: No one’s going to pay the engi-neers to make it flat for the sake of be-

ing flat. We’re not loading things onto our existing network, we’re unloading things off. So we’re doing incremen-tal things at the moment and it’ll take a technology change to really move to true flat architecture.

SC: It has to be something that’s justified. When LTE is ready, should we then jump on it? My question is still: why? By all means, if there’s a good rea-son to get a much more efficient net-work architecture, you can always do that. It’s not a question of technology; it’s a question of business evaluation.

JE: I think this flat-IP decision is more like when you buy a car, you want to first look at its looks, and then look at the fuel efficiency. So I think it’s that kind of a decision — it’s not necessary as of now. I guess it is a desirable state, but is it an essential state? Maybe not at this point of time. In terms of re-ally understanding cost efficiencies, I don’t think operators have completely grasped the cost economics of their network. I mean, they can do it techni-cally, but if you present a business case to the CFO, I think that modeling goes a bit haywire, so I think that’s something which operators need to work on.

AG: I think you make a really good point there. The engineering group want to have the latest and greatest de-vices in customers’ hands, the device distribution people want to give the cheapest ones out there, and the pric-ing folk want to drop the prices to be cheaper than what you can move a bit around the network. So you’ve got these three parties with diverse models and

“My job [CTO] is to make sure when we build anything, we understand the business rationale”

THE CASTStephen Chau, SmarTone Vodafone CTO

Christian Daigneault, CSL CTO

Jayesh Easwaramony, Frost & Sullivan’s director of ICT consulting and head of telecom research

Anthony Goonan, Telstra’s director of wireless fundamental planning

Lam Hon Kit, Tata Communications’ senior director of IP product management and development, global IP and VPN services

Tim Mark, Cisco Systems’ senior manager of strategy planning and business operation, Asia Pacific service provider operations

you have to make sure those three dif-ferent needs get aligned, and it’s a real challenge.

Christian, does your CFO get the economics?

CD: Yeah. [laughter] We have a CFO and a CEO who is also a previous CFO, so he’s very focused on the dollars and the business case. Our challenge on the technology side is that we need to reduce the costs, because that’s the only thing in our control. We increased our traffic by 18 times in the last year, maintaining the same backhaul. So we have reduced our cost by 18 times for the backhaul. It also means very strong negotiation with our vendors. Vendors are coming with all those claims of reducing costs by do-ing it this way. Very often you don’t see the cost savings. So you really need to understand the economics of your net-work costs to be able to drive the costs down.

SC: This is why, as a CTO now, I al-ways call myself the most non-technical guy in the company [laughter]. The rea-son is that I want to be even more up-front on the overall cost structure rather than just focus on the technology, be-cause there’s a lot of factors that affect the whole cost structure, not just the stuff we’re buying. It’s the whole value chain and how we work together with the international bandwidth provider, the domestic leased-line provider – they have their own costs they need to adjust as well. But my job is to make sure when we build anything, we understand the business rationale. TA

one-to-one

Beyond mobileSK Telecom CTO Lee Myung Sung articulates his company’s vision for innovation and its pursuit to change the game

Telecom Asia: Regarding SK Telecom’s commitment to what it refers to as “Blue Ocean” strategies – how is this being developed and what specific goals does SK Telecom have in this regard?

Lee Myung Sung: SK Telecom was one of the earliest players to introduce music and financial payment services and LBS. However, while these services have not achieved the target financial accomplishments that we had targeted, we strongly believe that this is an indus-try that it is very promising with much more potential.

What our CEO refers to as “Blue Ocean” strategy is not only the conver-gence theme that we have always pur-sued but other areas as well. We believe that telecommunications, especially mobile, can contribute to enhance the productivity of other industries as well. SKT believe that by applying and utiliz-ing its ICT infrastructure in Korea we can enhance the productivity of busi-nesses in various sectors.

Our new focus is not only to use our mobile industry infrastructure but also to seek areas that can enhanced the pro-ductivity of the businesses of a wide va-riety of areas and to use it actively, when we go global.

How exactly does SK Telecom leverage its ICT to drive further developments, and within SKT what characteristics are required to continually drive the ability to innovate?

What really drives us is firstly to maintain our leadership in our core business which is the mobile business. On top of that we must fully understand our customer base as they demand dif-

ferent resources and capabilities. And that includes culture and organization changes, we have not yet decided how we are going to change but we are look-ing in a new direction and we are look-ing at what we need to best cater to our customers. The first step is to redefine our customers and then look at the needs of each customer group.

In terms of our technology we obvi-ously leverage our world-class network and infrastructure to deliver a new breed of service plus look to technology to better capture customer informa-tion.

So can you indicate what these changes or new directions might be?

We’re just starting on this change process – it’s a very big change and you must understand that we are a large or-ganization so things will take some time to change. We have decided the general direction for this change to follow and it will take us into new areas – very likely beyond the mobile space, but I can’t dis-close what they are now.

A lot of people talk about the consum-erization of technology. Now how do you harness that trend and how do you make use of the potential knowledge that you can get from consumers?

We already have a very advanced infrastructure and platform in place. Therefore, when we develop new serv-ices we can just simply use our existing platform and complete the developing process in a very rapid way.

In terms of meeting consumer needs and reaching out to them we have many measures in place to do this, via the web, and other channels which all

increase our interaction with consum-ers. We are keen to use consumer inter-ests and insight to incorporate into our product development process.

I think we’re a very consumer-ori-ented company and to have succeeded in this industry for this many years we have definitely had to be effective in listening to customers and have them participate in the operations and devel-opment of the products.

If you look ahead to the next two three years within your industry, what do you predict to be the best game changing shift? Is it going to be at device or operating system level?

I honestly think in the immediate future, concepts like Facebook – we call this direct e-commerce – will have huge influence on consumers especially in the way we consume media and content. Facebook users produce and consume the way they want so that e-companies like Verizon may have less impact and less influence on the direction of servic-es they must provide – increasingly it is the consumer that will decide and have most impact on profits. TA

by Chee Sing Chan

Lee Myung Sung


Cloud Computing

Match capabilities with biz opportunitiesUnderstand cloud computing’s capabilities and match those to non-core projects that can improve the bottom line

By Stefan Hammond


2009 was the Year of the Cloud for most tech vendors. But if you ask 27 different vendors to define “cloud computing,” you’re likely to end up with 27

different answers.By its strictest definition, anything “in

the cloud” uses computer resources not physically present at the point of origin. A mainframe accessed by “dumb-termi-nals” (a typical setup in past decades) might qualify using that definition.

But that doesn’t help us understand what’s going on in the early years of our new century. Cloud computing in 2009 is the greatest shift in the computing par-adigm since individual firms started ag-gregating computing power in the form of mainframes and servers and allocat-ing it to their employees. The “cloud” analogy works because much computing nowadays is conducted wirelessly, and the main avenue is the formless internet. When college students made up some-thing called “Hotmail” in the 1990s, it was so you could communicate by email outside of an educational or corpo-rate network. Maybe this wasn’t strictly “cloud computing,” but it reflected the concept.

Cloud evolutionNowadays, many of us use our email

archives as a primary record-keeping mechanism, and our historical email files are an important resource.

But what happens if the email files are not backed up regularly? Whether your primary email is a part of a cor-porate network or simply your personal copy, odds are good that you have your email set to delete the messages from the

server as soon as they are downloaded to the PC. And even if a copy of the emails may still exist somewhere in the bowels of the IT department, recovering these emails can be a major issue.

But if you’re using a network-based service, such as Gmail, then all of the email would be “safe.” This has the ad-vantage of potentially recovering not only the correspondence itself, but also the vast majority of important files.

Even though accounts from provid-ers like Gmail don’t have licensing fees, they’re a way of storing emails and at-tached files in “the cloud”.

On the enterprise-level, cloud com-puting can be used for far greater things. The next year or two may see radical shifts as firms like Google and salesforce.com gear up their cloud-centric prod-ucts, as netbooks continue to proliferate.

It’s an interesting time for technol-ogy, and some of Asia’s tech experts are intrigued.

“At the beginning of 2009, I thought cloud computing was just hype or at best that it was simply another name for out-sourcing,” said Linda Hui from F5 Net-works. “There were not many companies

in the market actually providing cloud computing services. The name we heard frequently was salesforce.com which I feel – and many others feel – is ‘software-as-a-service’, a fraction of what cloud computing is about.”

“However, as 2009 progressed and more and more companies – such as IBM, AT&T, Amazon and SingTel – be-gan to provide cloud computing services, the situation changed. There was the re-alization that a temporary infrastructure could be set up and that potential cus-tomers could pay for what they use, and that virtualizing resources was becoming a reality. So now I see cloud computing as a more concrete proposition and I be-lieve that it will really take off in 2010.”

From servers to serviceEven Microsoft has gotten on the

bandwagon. “Cloud computing is about taking the complexity out of IT without sacrificing the capabilities, said CEO Ste-ve Ballmer in an interview. “At Microsoft, this means that anything that has been a server needs to be a service so that cus-tomers can choose whether to run on-premise, in the cloud or take a hybrid approach.”

Ballmer added that “around 70% of customers using Microsoft Online Serv-ices have moved from legacy platforms: for example, Proctor & Gamble, Glaxo Smith Kline, Coca-Cola Enterprises and Blockbuster Video have all made the move.”

According to a recent IDC research sponsored by Microsoft, looking into the adoption of SaaS, 26% of Hong Kong companies with 25-500 employees are already deploying or considering deploy-


ing SaaS. “That’s three times the regional average,” said David Hooper, informa-tion worker group lead, Microsoft Hong Kong. “The vast majority of the cloud applications are communication and collaboration based such as email, cal-endaring, web conferencing and instant messaging.”

Which projects are right for the cloud? Some IT functions are perfect for the cloud, while others need to stay in your data center.

Budget-minded CEOs are telling IT managers to look into cloud computing to reduce the amount of expensive hard-ware running their data centers, CFOs are interested because they’ve heard the model can slash costs associated with new IT projects, tech-savvy employees are asking for it because they think it sounds cool. IT departments large and small feel obligated to at least look into cloud computing’s potential to save money, reduce overhead and increase ef-ficiency and flexibility.

What’s more, those IT shops that drag their feet might find overeager us-ers are beating them to the cloud, warns James Staten, an analyst at US-based Forrester Research. For example, “ap-plication developers are using the cloud and not telling IT,” he said. To avoid be-ing caught unaware, IT should take the lead in deciding what goes into the cloud and determining how to get it there, said Staten.

Emerging best practicesIn a report published in September,

Forrester Research outlined the follow-ing best practices for cloud computing:• Conduct functional and scalability

testing and development work.• Deploy short-lived and highly vola-

tile Web applications.• Runquick,grid-typehigh-perform-

ance computing analysis.But where to start? What’s the best

way for an IT manager to determine whether his company’s corporate cul-ture is suited for shipping computing tasks to web-based third parties? What expectations should service providers be

Cloud Computing

required to meet? How should the suc-cess – or failure – of a cloud computing project be measured?

These are not questions to be taken lightly, since the success or failure of a company’s foray into the cloud will in-fluence corporate perceptions of the model going forward.

The Corporate Executive Board, a research and membership organization designed to support the functions sur-rounding CEOs, has studied corporate adoption of cloud computing through its Infrastructure Executive Council and its Data Center Operations Council, both of which are headed by practice manager Mark Tonsetic.

Tonsetic’s advice to IT managers: find a project that supports a business oppor-tunity and could be easily moved into the cloud to cut costs and resources – some-thing that doesn’t involve core compe-tencies and moving it offsite shouldn’t create a security risk. In other words, find a project where moving some or all func-tions to the cloud would improve the bottom line but the company wouldn’t face disaster if security or availability was compromised.

Tonsetic isn’t alone in advising com-panies to tread lightly into the cloud – se-curity risks are created when companies move sensitive information beyond the limits of their own data centers. And, as proven by a number of recent high-pro-file outages of cloud services provided by Google, Microsoft and others, availabil-ity is a real concern.

“Look at your portfolio of applica-tions and services and decide which are commodities, not core competencies,” Forrester’s Staten advises. “Those are your candidates for cloud.”

Worth doing rightEmbarking on a cloud computing

project may take extensive research and preparation, but the payoff can be signif-icant when everything is done correctly. In order to realize the promised reduc-tions in cost, companies need to make sure they pick the right projects to send to the cloud.

“From a business point of view,” said Tonsetic, “it’s important to understand cloud computing’s capabilities and match those to opportunities, then evaluate dif-ferent technologies and vendors.” TA

China’s SaaS market is expected to grow at 56% next year to reach $171 mil-lion in revenues by the end of 2010.

A report from Springboard Research showed that demand for SaaS will increase in the next two to three years and the growth rate will far exceed

that of the traditional IT industry, including the on-premise software market.Springboard’s survey of Chinese enterprises indicated that three out of four re-

spondents interviewed are already subscribing to SaaS solutions, while out of the remaining, more than half are likely to subscribe to SaaS in the next 12 months. Also, almost 100% of respondents in China reported being “aware” of the SaaS concept, compared to only 52% last year. In terms of vertical industries, SMBs in retail, logis-tics, manufacturing, services and circulation report higher SaaS adoption.

“The appeal and growth of SaaS in China are based on the advantages of SaaS applications compared to traditional software such as lower upfront costs, easier maintenance and quick roll-outs,” said Devin Wang, business analyst for emerging software at Springboard Research. “We see aggressive demand for SaaS in China in the coming months, as corporate IT budgets continue to be under tighter scrutiny and enterprises look to hire fewer technical staff,” he added. TA

China’s SaaS Market pegged at $170 million in 2010

L ast year marked a turning point for 3G in the Asia-Pacific re-gion, with adoption set to ramp up significantly over the next

five years (see chart). The balance of 3G subscribers will be shifting to emerg-ing markets as the timely combination of government initiatives, opex benefits and steadily declining device ASPs work together to help drive the 3G penetration rate to nearly 40% in the Asia-Pacific re-gion by 2014. The adoption and applica-tion of 3G will help emerging markets in the region meet their demands at a gov-ernmental, economic and societal level.

Key driversFor governments and regulators, is-

suing 3G licenses provides an opportu-nity to increase competition. The com-bination of providing greater broadband coverage along with standard voice and messaging services is enticing given that it addresses two issues prevalent in most emerging markets: low fixed-line broad-band penetration and inefficient mobile market competition.

In addition, allowing mobile opera-tors to provide internet access services through 3G networks immediately boosts competitive pressure on incumbents, since the trend toward fixed-mobile sub-stitution can be leveraged with wireless mobile broadband packages to provide attractive bundles.

Furthermore, spectrum is used by gov-ernments to create new revenue sources – another major driver behind 3G licensing. As 3G technology is repositioned from be-ing suitable mainly for data-centric multi-media in developed markets to also being appropriate for low-end subscribers and mass-market business models, the value of licenses in emerging markets will rise.

From an economic point of view, two things are working in unison to lower op-erating expenses for carriers rolling out 3G networks. First, greater demand for 3G infrastructure is driving down prices, particularly as global vendors work to keep up with the price erosion caused by Chinese vendors ZTE and Huawei. The outcome is that depreciation costs de-crease for operators, positively affecting bottom lines.

Charles Moon is a manager on Pyramid Research’s Asia Pacific team

Forum l Charles Moon

3G repositioned for low-end


Second, improvements in design are resulting in more power-efficient and smaller base stations, lowering power and site procurement costs. Power savings can equate to the equivalent of 12-15% of 2G consumption levels, and some 3G base stations are small enough to be carried, allowing co-location within current 2G base station sites.

The long-term goals for any operator should be to leverage the benefits associ-ated with 3G rollouts into greater mar-ket share at both ends of the economic spectrum. A large and loyal customer base provides a strong foundation for a platform from which many different cus-tomer segments can be engaged and, ulti-mately, monetized. The declining cost of 3G related devices will enable operators to achieve more creativity and be more flex-ible in their offerings to consumers.

Until now, attention has been focused on 3G as an expensive technology enabling wireless broadband access as well as media and smartphone functionality. However, the ongoing shift in 3G positioning to ap-peal to low-end subscribers has far greater implications for operators than securing a small, albeit lucrative, customer segment. The combination of high bandwidth and an operator’s billing and payment sys-tems provides a platform that any indus-try vertical can tap to provide services or

sell goods. Operators need only focus on their core strengths – marketing and bill-ing/operational support systems integra-tion – and market dynamics will exploit new efficiencies created by faster networks and smarter devices.

On the demand side, pricing is argu-ably the most important factor in deter-mining take-up of a particular device in emerging markets. Sub-$50 devices have historically been classified as the very-low end, suitable for those subscribers who make up the dominant prepaid segment in emerging markets. What is interesting to note is that this sub-$50 category origi-nally consisted of handsets from smaller device makers, or were stripped-down 2G devices, but we are now seeing ODM 3G devices from Chinese vendors approach-ing the $50 mark.

As the price of 3G devices decreases, more people will be able to afford devices with 3G capabilities and thus gain access to new sources of information. On a so-cietal level, this can serve to narrow both the knowledge gap as well as the digital di-vide, empowering people with knowledge that is applicable in their daily lives.TA

45%

40%

3G

as

perc

enta

ge o

f to

tal

mo

bil

e s

ub

scri

pti

ons

Asia-Pacific 3G subscriber penetration

Source: Pyramid Research

35%

30%

25%

20%

15%

10%

5%

0%2006A 2007A 2008A 2009E 2010E 2011E 2012E 2013E 2014E

Ericsson names Mandersson global services head

Ericsson has ap-pointed its CDMA chief Magnus Mandersson as head of global services business unit. He will lead 40,000 professionals in areas such as managed services, systems integra-tion and consulting.

Replacing Manders-son as CDMA head is Rima Qureshi, who is currently heading a strategic program for a major North American operator and Ericsson Response. She will head the CMDA operation with its 2,500 em-ployees in North America and China.

BT appoints global services chiefJeff Kelly has joined

BT as CEO of its Global Services division. The US-born Kelly worked at global IT services firm EDS for 25 years, most recently running its $10 billion business in the Americas. He will take over from Hanif Lalani, who is leaving BT after 26 years to pursue personal business interests. Lalani has also resigned from the BT board.

HTIL forms independent board committee

Hutchison Telecommunications In-ternational Limited (HTIL) has estab-lished an independent board committee comprising Kwan Kai Cheong and Kevin Westley, both independent non-execu-tive directors of Hutchison Telecom.

Cisco revamps Asian ops Cisco has announced an executive

reshuffle to accompany the restructur-ing of its Asia-Pacific operations. A new China group – comprising China, Hong Kong and Taiwan – will be split off from the company’s existing APEJ unit. The

group will be led by current Asia-Pacific chief Owen Chan.

The remaining unit will be responsi-ble for Cisco’s Asian operations outside of China and Japan – including Austral-ia, Korea and ASEAN. It will b run by Cisco Japan head Ezard Overbeek.

Chan will relocate from Hong Kong to Beijing to take on his new position, reporting directly to Robert Lloyd, EVP of worldwide operations.

Jim Sherriff, the chairman of the new China group, will continue “devel-oping and leading” Cisco’s China strat-egy, Cisco said. Vice-chairman Thomas Lam will be responsible for CSR, corpo-rate affairs and university relations.

Tata Communications taps managed services head

Tata Communica-tions has appointed Dav-id Wirt as its global head of managed services.

Wirt will take charge of managed services’ commercial business and data center engi-neering and operations, as well as the outsourcing business. Prior to joining Tata Communications, he was VP and MD of Greater China & Korea at EDS.

Orga Systems appoints CEOOrga Systems has appointed Ramez

Younan as CEO, effective immediately. Younan has replaced Rainer Neu-mann, who left the company earlier this month. He has announced plans to fo-cus on driving internationalization and growth.

Avaya APAC taps presidentAvaya Asia-Pacific has appointed

Francois Lancon as its new president. He replaces John DiLullo, who will take control of the company’s operations in Canada and Latin America. Lancon previously served as president of EMEA and Asia-Pacific for Nortel Enterprise Solutions, which was acquired by Avaya in December.

New secretary-general for ABUAsia-Pacific Broad-

casting Union (BAU) has appointed Javad Mottaghi as its next sec-retary-general. Mottaghi is currently director of the Asia-Pacific Institute for Broadcasting De-velopment (AIBD). He succeeds David Astley, who has been secretary-general since July 2002, but will leave the ABU at the end of June. Mottaghi’s starting date is yet to be announced.

Acronis names Apac presidentAcronis has promoted Bill Taylor-

Mountford as president of its Asia-Pacific operations. He will be based in Singapore, overseeing the operations in the APAC region. Previously Taylor-Mountford was GM of Acronis ANZ.

Eli Harari joins Telegent boardTelegent Systems has appointed

SanDisk founder Dr. Eli Harari as an independent board member. Harari has served as CEO and as a director of SanDisk since 1988.

Arbinet appoints new SVP Brian Troesch has

joined Arbinet Corpo-ration as SVP for prod-uct and business devel-opment, as part of its renewed emphasis on voice and mobile prod-ucts. Troesch has more than four years of management experi-ence in international telecom and mo-bile data services, most recently as VP of Americas for Belgacom ICS.

tel

eco

mc

ar

eer

Contacting TelecomCareer

Advertising: Gigi ChanTel: 852 2589 1338 Fax: 852 2559 7002E-mail: [email protected]: Fiona ChauTel: 852 2589 1333 Fax: 852 2559 7002E-mail: [email protected]


Magnus Mandersson

Rima Qureshi

Jeff Kelly

Javad Mottaghi

Brian Troesch

David Wirt

eventscalendar


Networking opportunities

across Asia

For full details of the events, visit www.telecomasia.net To list an event, contact Candace Ho at [email protected]

Date Event Location

February 15-18, 2010 GSMA Mobile World Congress Barcelona, Spain

February 16, 2010 Global Mobile Awards Barcelona, Spain

March 08-09, 2010 Femtocells Asia Singapore

March 08-10, 2010 Asia Billing & Revenue Assurance Bangkok, Thailand

March 08-10, 2010 Mobile Backhaul Asia Bangkok, Thailand

March 17-18, 2010 M-Commerce World Summit Singapore

March 18-19, 2010 Vietnam Digital Marketing Ho Chi Minh City, Vietnam

March 22, 2010 Satellite Industry Forum India New Delhi, India

March 23-24, 2010 Mobile Network Evolution Singapore

March 23-25, 2010 CTIA Wireless Las Vegas, USA

March 23-25, 2010 Convergence India New Delhi, India

March 24-25, 2010 Frost & Sullivan OSS BSS Asia Pacific Summit Singapore

March 24-25, 2010 Mobile Commerce Summit Asia Manila, Philippines

April 13-14, 2010 Wimax Forum Congress Asia Taipei, Taiwan

April 13-16, 2010 International ICT Expo 2009 Hong Kong SAR, China

April 14-15, 2010 Mobile Marketing Forum Asia Singapore

April 14-15, 2010 China Next Gen Broadband Summit Beijing, China

April 20, 2010 Telecom Asia Awards Singapore

April 20-21, 2010 Telco Strategies 2010 Singapore

April 27-28, 2010 Annual Mobile VAS Summit 09 Kuala Lumpur, Malaysia

April 28-29, 2010 Mobile Marketing Forum Asia Singapore

May 18-20, 2010 Vietnam Telecoms International Summit Hanoi, Vietnam

May 25-26, 2010 Minimizing Churn & Building Customer Profitability Singapore

May 26-28, 2010 Music Matters Hong Kong SAR, China

June 15-18, 2010 CommunicAsia/ EnterpriseIT Singapore

June 16-17, 2010 AppsXchange Asia Singapore


PREshowMobile world Congress l Barcelona l February 15-18

Turning vision into actionN

ew technologies and emerging developments in the wireless world are not the only focus of this year’s Mobile World

Congress, as the event will also highlight the benefits that the mobile space lends to both society and the environment.

Adopting the theme “Vision in Ac-tion,” the 2010 MWC will have some of the most sought-after experts in the wireless industry discuss topics as di-verse and specific as embedded mobile broadband, LTE, femtocells and cloud computing, side by side with more sweeping issues such as new business strategies and growth opportunities driven by mobile.

Other key issues to be discussed in the four-day conference and exhibition, which will take place on February 15-18 in Barcelona, include new mobile appli-cations, services and content, associated business models and channels to mar-ket, as well as the benefits of mobile on society and the environment.

Speaking at the conference are in-dustry stalwarts Ben Verwaayen, CEO of Alcatel-Lucent; Chang Xiaobing, chair-

man and CEO of China Uni-com; Hans Vestberg, presi-dent and CEO of Ericsson; Eric Schmidt, chairman and CEO of Google; Guo Ping; chairman of Huawei Com-munications; Tadashi Onod-era, president and chairman of KDDI Corporation; César Alierta, executive chairman and CEO of Telefónica; and Vittorio Colao, chief executive of Voda-fone.

The conference will allow participants to hear what these experts have to say about the new device marketplace, mo-bile entertainment and life-style, mobile security, next-generation networks, mobile advertising, m-health applica-tions for universal healthcare, and the move toward a sus-tainable green future.

To ensure that the mobile industry will have a brighter future, issues such as segmen-tation and pricing, compelling customer service, mergers and acquisitions, and network man-agement and shared services will also be discussed.

Event participants will be treated not only to keynote sessions, but also to more than two dozen conference sessions spanning various technology and business topics and led by industry experts from all over the globe.

Apart from the conference, the 2010 MWC also features an exhibition of more than 1,300 companies that will display the latest products and tech-nologies seen defining the mobile land-scape of the future.

An awards ceremony will likewise be held to recognize the industry’s best.

Those interested in application de-velopment are also in for a treat. The 2010 MWC will have “an event within an event,” dubbed App Planet, which would focus on the fast growing appli-cation developer community.

Last year’s MWC played host to around 47,000 mobile industry profes-sionals from 182 countries, more than half of whom were C-level executives. Some 9,000 of these guests were repre-sentatives of various mobile operators worldwide. TA


Mobile operators must be the only people in the business world not interested in the cloud.

It’s a mystery why. Cloud services - or “network-based services” as they used to be known - are cellcos’ best bet for regaining the initiative from the smartphone guys.

I was thinking this recently as I spent several hours transferring my address book from my PC to a well-known internet brand because it can sync them with my mobile phone.

A tiresome task – but surely my mobile service provider could have done that. And maybe it does, in which case they should be shouting it from the rooftop. I’m not aware of any cellco in Asia does it.

Take it from me, if you’re hosting my contact book, I’m locked in.

Even the smartest mobile devices are limited in their functionality and screen real estate, so added network-based functionality becomes critical.

Phones are also vulnerable to being lost or stolen. Contacts are just one part; how about backing up my photos, my texts, emails and documents?

I keep getting calls from my operator offering to insure my device for HK$520 ($67) a year. No one calls me about offering something much more useful, which would be to back up my data.

Apple charges $99 a year for its MobileMe address book and backup service. Telcos could charge less than half that for the same service.

That’s just the beginning. You’d think telcos would know that the address book is the launching point for any communication. Hosting a database of thousands of contacts is a big win in itself. You can build an online business around that, not least in the essential area of social media sites.

But while the cloud offers cellcos the chance of an end-run around the handset firms, customer care is one area where it can work in partnership with them.

Telcos run some of the most

sophisticated customer service systems of any business. Long-suffering customers might scoff, but telecom operators are certainly way ahead of, say, software firms, whose idea of customer care is a disclaimer before a user download.

Complex

Google learnt this last month when it decided to sell its new Nexus One phone directly to customers. The reason for that is clear enough; Google doesn’t want to share the end-user with anyone else. After that debacle Google must decide whether it builds its own customer care platform or works with a partner that has one.

Smartphones are complex and increasingly new customers are going to need help. Apple has indeed been fortunate in that cellcos are willing to share their service revenues while bearing the brunt of the customer care; operators should be billing their partners for providing that service.

Telcos keep missing these opportunities and the reason they do is because of the way they think about their business. They’re too focused on networks and technologies. How much senior management time is taken up with talking about HSPA, LTE and network operations?

Over the years they’ve ridden fresh waves of technology – from voice to text to mobile broadband – and today they’re still expecting some big new concept to turn up that will ward off the dreaded “dumb pipe”.

The concept operators really need to embrace is the customer. That doesn’t mean reading the results of a focus group. It means a business culture of spending 24/7 in the customers’ shoes and seeing the world that they see.

Telecom operators in the 21st century are still structured around their engineering operations just as they were in the 20th century. It’s time to offload those networks and start focusing creatively on the customer. TA

insideline l Robert Clark

Robert Clark is a technology journalist – [email protected]

Grounded cellcos need to grasp the cloud

Telcos keep missing opportunities… because of the way they think about their business. They’re too focused on networks and technologies


backpagebrieFing

SpinVox’s crash to earth

China’s TD-SCDMA pipe dream

Huawei stirs up AustraliansOn January 4, Chinese vendor Huawei came out in support of the

Australian government’s open-access National Broadband Network. Bloggers then raised speculation again that Huawei had connections with the People’s Liberation Army.

So, will Huawei gain a piece of the Australian government’s A$43 billion ($39.9 billion) NBN project?

Firstly, Huawei will very likely make the long short list of network vendors from which only two will succeed. Secondly, it is worth mentioning that Prime Minister Kevin Rudd is well known for pursuing warm relations with the Chinese (and he can tell you so in Mandarin if you like….)

The latter however may not be enough to get Huawei over the finish line due to lingering national security concerns. Some reports have even said that Huawei in Australia has been investigated by the Australian Security and Intelligence Organisation (ASIO) over its ownership ties.

Huawei has vehemently denied any ownership links to the PLA or that it has been investigated by ASIO. TA

Thailand’s Information and Com-munications Technology Ministry says it is unsure whether Thaicom (formerly Shin Satellite) can legally launch its next bird, Thaicom 6.

So it is seeking the opinion of the Office of the Attorney General.

But wait: The ICT has investi-

gated Thaicom’s contractual status. And it appears from a committee report that yes indeed, a new contrac-tual obligation needs to be inked for Thaicom 6. But it will check with the OAG first.

Enter Thaicom. Thaicom says its current concession does not permit it

to launch Thaicom 6.Oh, and while it’s at it, it says

it will launch Thaicom 6 only if its current concession is extended by 15 years from 2021.

Such is the bureaucratic red tape we’ve come to expect from Thailand. TA

Thais at it again…

China’s Vice Premier Zhang Deijang this month urged China’s three mobile operators to strengthen TD-SCDMA’s supply chain.

Yeah right. Like China Unicom and China Telecom, which are deploying W-CDMA and 1xEV-DO services respectively, are going to start promoting TD-SCDMA on the world stage.

Fact: the great white elephant TD-SCDMA was pushed on China Mobile by the government.

Fact: China Mobile lobbied and lost to pursue W-CDMA.

Fact: China is in the midst of a 3G tariff battle.

Fact: Unicom and China Telecom are seriously unlikely going to sing the virtues of TD-SCDMA. TA

In a rapid fall from grace, UK-based mobile software developer SpinVox was this month sold for just $102.5 million to rival US firm Nuance, having been valued at $500 million in 2008.

The brainchild of high-profile executives Christina Domecq and Daniel Doulton, SpinVox’s claim to fame was that it had developed software for converting

voice mail messages to text or email.Or had it?

In an embarrassing admission, Domecq was forced to reveal recently that SpinVox’s system was only 85%-90% automated. Yes, in some instances, SpinVox was using people

in call centers to convert the voice-to-text messages!Double Ouch. TA

TelecomAsia_January2010

Documents

Transcript of TelecomAsia_January2010