Tuesday, December 30, 2008

Telenor banks on its Asian experience to grow India

TELENOR ASA - which has been in Asia for more than 10 years - is banking on its Asian experience to grow its India business.

The company said it will embark on three main strategies on its mobile business in India, pretty much like how it transformed DiGi.Com Bhd into the country's fastest growing mobile company.

Head of the Telenor Asia opeartions Sigve Brekke said:

"Firstly, is to form a company which has a very unique culture.

"Secondly, is to take on the attacker's mindset -- never being happy with what you have, always try to improve and do things better.

"Thirdly, is to be close with the customers.

For the full story, pls check this out:

Omsk appeals court in favour of Telenor... but is this the end of the legal battles?

NORWAY'S biggest phone company Telenor ASA said that a Siberian court has overturned a rulling that could have cost Telenor US$2.8 billion in damages.

In August, a court in Khanty-Mansiysk, also in Siberia, found Telenor liable for damages after delaying OAO VimpelCom's takeover of a Ukrainian mobile operator. The Omsk appeals court canceled the decision by the Khanty-Mansiysk court yesterday, on the grounds of gross violations of the Russion law.

The court will reconsider the case on February 19.

The case is one of several court battles between Alfa Groupand Telenor ranging from New York to Siberia over control at ZATKyivstar GSM and VimpelCom.

The claim in Khanty-Mansiysk was filed by Farimex Products Inc.,which owns 0.002 percent of VimpelCom. Telenor has said Farimex is a front for Russian Oligarch Mikhail Fridman’s Alfa Group

Telenor controls 56.5 percent of Kyivstar and 29.9 percent of VimpelCom. In 2001, Telenor formed a partnership with Fridman,who controls the rest of Kyivstar and 44 percent of VimpelCom.

ZATKyivstar is Ukraine’s biggest mobile-phone company, while VimpelCom is the second-largest wireless provider in Russia.

Thursday, December 25, 2008

Celcom-Tune Talk pact won't threaten rivals, said OSK.

Following are some of the highlights in the research note:

"The investment in Tune by Celcom confirms market talk months ago and represents a direct
investment in a MVNO."

"Tune was slated to launch commercial service in 2Q08, but the launch was reportedly postponed pending the award of a Network Services Provider (NSP) licence from the Malaysian Communications and Multimedia Commission (MCMC)."

"Overall, we are neutral on the investment given that MVNOs have very patchy track record overseas and are not likely to be a major threat to incumbent operators."

"The launch by Tune will raise competition up a notch, putting further pressure on operators’ margins, which are already crimped with the introduction of MNP in October. We expect sentiment on TMI to continue to be weak on protracted concerns over the potential dilution from a value destructive equity exercise. Investors are advised to adopt a longer term view on the stock and accumulate on weakness as value emerges."

You can also check out the newsreport here:

Wednesday, December 24, 2008

Celcom to invest in Tune Talk

Celcom (Malaysia) Bhd, wholly-owned by TM International Bhd, will invest over RM2.6 million on Tune Talk.

Celcom also has the option to increase its stake to 16 per cent within three years of commercial launch or when Tune Talk has over 1.5 million customers, which ever comes first.

With the higher stakes in Tune, Celcom is able to increase board representation to 4 from 2 of the
7 board seats.

Both companies have been in talks for over a year.

Currently, Celcom also has MVNO arrangement with XOX and Merchantrade. However, it does not own stakes in those MVNOs.

Monday, December 22, 2008

DiGi CEO talks about industry competition and its outlook for 2009.

Mobile phone operator DiGi.Com Bhd - the company behind the ever popular DiGi Yellow Coverage Man - expects competition to remain stiff next year, and expects further pressure on prepaid tariffs.

It has yet to see any impact on new entrants, such as U Mobile.

I met up with the CEO Johan Dennelind last week and following are the excerpts of the Business Times interview:

Q: Have you seen any impact on new entrant?

Dennelind: I have seen a lot of adex (advertising expenditure) and share of voice, but I have seen very little impact on the revenue market share, none basically. If you count SIM cards, yeah, maybe it's noticeable. But, so far very much according to what I expected. It is very hard (for the new entrants) to come into the market, which currently has three very strong players, and many positions have been taken.

Q: What can investors expect from DiGi next year? Will there be weaker earnings?

Dennelind: We have our guidance, and that still stands, which is clearly in these days, it is a very tough guidance, I must say.

Q: Is it true that DiGi is the number one player in terms of foreign worker market segment?

Dennelind: Probably. We are well close related with great value for money.

Q: Lately, your rivals lowered call rates, one on the prepaid segment while the other on the foreign worker segment, what is DiGi going to do about it?

Dennelind: We'll fight for the value proposition day and night. If someone slashes rates, we will make sure that we stay competitive. We won't let go of that.

Q: Do you see price wars in 2009?

Dennelind: We don't have price war. But I expect continuous price pressure. I hope we avoid price war.

Q: What's the difference between price war and price pressure?

Dennelind: Price war is when you completely deteriorate the market and everybody undercuts on a big scale. That's not good for the consumers, not good for the operators, consumers will get bad quality eventually, because you trigger a lot of traffic. And the operators will not be able to sustain the quality of service in eroding margins. I hope we can be rationale about it, which we have been.

DiGi CEO on 3G and Mobile Broadband

Below are excerpts of the interview with DiGi CEO Johan Dennelind:

Q: When are you going to launch 3G? Will it be early Q1 or late Q1?

Dennelind: The sooner the better. But, I don't want to rush it. I want to make sure we have a solid go-to-market strategy.

Q: So, you don't want to rush it (to launch 3G). Does it mean 3G launch could be dragged until Q2?

No. Then that will be very disappointing.

Q: Do you think DiGi can be the number one in mobile broadband space in three years?

When that happens, I think we should rent one of the twin towers and have a huge party. That's not going to happen. We are realistic, but ambitious. We want to have a fair share in the mobile broadband market, and overtime, we are aiming for one-third of that market. Whether that is number one or number two in the market, that remains to be seen. We shouldn't be far away from that.
To get a third of the mobile broadband market share is going to take more than three years, but we are here to stay.
I hope where we go in, we can surprise positively and deliver on their expectations. To do that, it's going to be a momentum driver, that's why we are not rushing and taking our time to launch.

Q: What can you promise potential DiGi 3G users?

Dennelind: I promise that we will try as hard as we can to live up to the expectations.

DiGi a net gainer in MNP

NOT surprising at all.

DiGi.Com Bhd, Malaysia's third largest mobile operator, said it is a net gainer in the mobile number portability (MNP) race so far.

Its chief executive officer Johan Dennelind, in a Business Times interview last week, said the net gain is still "insignificant" so far, it is more of a "morale booster" for the company and is not expected to have a significant reaction on the market.

He also squashed rumours about signing up 5,000 customers from rival operators, saying that daily net gains is in the range of hundreds, not thousands.

Below are the excerpts of the interview:

Q: Any surprises on Mobile Number Portability (MNP), so far?

Dennelind: Back tracking a bit first, just to remind you, leading to mobile number portability, there were no awareness campaigns done by us or anyone. Basically, when we launch, there was very little awareness among the public. We didn't expect a quick pick-up. So, what surprised me was that actually people were porting and changing, and they were trying out new operators. This has given us the opportunity to prove to our existing customers and new customers that we are a good choice. That has pushed us to really deliver on our value proposition. What has surprised me a little bit is that people really appreciate the quality enhancement that DiGi has made over the past years. We have invested close to RM1 billion this year. To have invested heavily on network has paid off on the quality side. So, people porting in are saying: "Wow! Your quality is really better than where I came from." That's the good news, and maybe we should start talking more about our quality than we have done in the past.

Q: How did DiGi perform since MNP was launched?

Dennelind: So far so good, I would say. In terms of numbers, we are net gainers. I'm not going into the details of the numbers, because I still feel it's early days, but we are encouraged by the net gaining position. It's not by much, but it still feels good to know and it's a morale boost for the organisation. Being a net gainer means more people porting into DiGi than leaving DiGi. We won't take any customers for granted, we have to make sure we own the trust of the customers. Every port in is a success, every port out is a failure to us. So, when we are a net gainer, it is more a morale booster.

Q: There are rumours that as many as 5,000 subscribers from other operators port into DiGi daily. Is that true?

Dennelind: It's not true. Those numbers were way too high. We don't port in thousands, we port in hundreds, per day.

Q: Do you think MNP has changed the mobile industry landscape?

Dennelind: It's too early to tell. But, I still think MNP can change the way operators treat its customers, it's a trigger for that. Because we are doing more for our customers now, we are treating them better, we are giving them better service, given them better quality and given them better touch-point experience with us. And, that should pay off. I think indirectly MNP is pushing the industry to be better.

Q: Do you think MNP will be the main play for DiGi to gain market share?

Dennelind: Well, it definitely removes the last barrier for the postpaid segment. Postpaid has been tough for us, because we came in late, and number savvy people want to keep their numbers. I think we don't have that barrier anymore. I hope it will increase our revenue market share for postpaid, and I have seen some encouraging signs in that direction. So, if we do everything correctly over the next few years, and the others don't, we can gain market share (via MNP).Nevertheless, there are still a lot of virgin users out there, people who want to leave prepaid and move to postpaid. A lot of companies using fixed line, they want to go mobile. The penetration rate is not saturated yet, there's still growth in the market.

For more details on his views on other areas such as 3G, 2009 outlook and competition landscape, pls read it at:

Wednesday, December 17, 2008

China to issue 3G licenses as early as year-end.

The head of China's Ministry of Industry and Information Technology Li Yizhong said it will issue three third-generation (3G) licences as early as this month, or in early 2009.

This will trigger at least 200 billion yuan of spending in 2009 as operators upgrade networks to offer faster services.

Green Packet Bhd, which earnings got hurt partly due to lower sales in China, should see its revenue in China to pick up again, once licenses are issued.

Green Packet chief executive officer Puan Chan Cheong, during one of the media briefing few months back, said income from China took a beating as Chinese mobile operators are putting their capex on hold as their are awaiting for the government to issue the high-speed mobile phone licenses.

Tuesday, December 16, 2008

Industry news update

Below are the some of the top industry news during the first two weeks of December.

Dec 1: Indonesian mobile operator PT Mobile-8 Telecom had its credit rating cut by Moody's Investors Service to Ca, from Caa2, after bondholders rejected a debt revamp plan.

"The downgrade reflects the fact that Mobile-8's current liquidity sources are not sufficient to cover early repayment of the notes and therefore a default on the notes after the grace period looks unavoidable," Moody said in a statement.

Dec 3: Italy's biggest phone company Telecom Italia SpA cuts its revenue growth forecast for a fifth time in three years, because of deteriorating economy. It also said it will cut another 4,000 jobs in Italy, to help reduce cost.

In March, it expects 2009 sales to grow by 1-2 per cent. Now, it expects sales to be "in-line" with 2008.

It also added that it may sell as much as 3 billion euros of assets in Europe and Cuba, while keeping its Brazilian mobile-phone company.

Dec 5: Motorola Inc had its credit rating lowered by two levels to BB+ by Standard & Poor's because its declining handset business is eating into its profits.

Motorola's mobile phone business has lost about US$2.8 billion in operating income since the start of 2007.

Motorola lost its top ranking in the US mobile phone market, the world's biggest market, to Samsung last quater. It had a 21.1 market share while Samsung had 22.4 per cent.

Dec 10: South Korea will abolish the Wireless Internet Platform for Interoperability, or WIPI, requirement on mobile phones from April next year.

The WIPI requirement was implemented since April 2005.

This means mobile phones in Korea need not to be embedded with platform, paving the way for Apple Inc, to sell its iPhones in the country next year.

Overseas handset makers have been restricted from selling their products in South Korea because of the WIPI, a wireless Internet platform developed to help content providers avoid additional investment to provide services to different carriers.

Friday, December 12, 2008

How is Indonesia's mobile industry taking shape?

Came across an article from a research house few hours ago. The report, published in November, contains some vital information on Indonesia's mobile industry.

The report was prepared by IE Market Research Corp's research associate Wency Yee.

Below are some of the points Yee highlighted:
1. "ARPU in second quarter 2008 was US$5.64, among the lowest in the world and ARPU declines accelerated to 22.1 per cent year-on-year, compared to 15.7 per cent year-on-year in first quarter 2008."

2. "At 11 per cent, Indonesia has by far the highest level of churn among the 200+ mobile operators we cover."

3. "This makes Indonesia's mobile operator environment one of the most challenging in the world, with operators caught in a low-ARPU, high churn market environment."

4. "However, despite this environment, Ebitda margins among Indonesian mobile operators are some of the highest in the world with reported Ebitda margins at 56 per cent in Q2 2008."

The research house predicts that operators in Indonesia will hit Ebitda margins of 63.8 per cent in 2010. Subscriber base is also expected to increase from 116.4 million in Q208 to 130.9 million in 2010.

For more info, check out www.researchandmarkets.com

Thursday, December 11, 2008

Maxis cut prepaid call rates to defend market share...

The price war continues.

Market leader Maxis Communications Bhd - with more than 40 per cent mobile subscriber market share - has slashed its prepaid tariff by about 10 per cent, from 36 sen to 33 sen, for calls to all networks.

Currently, DiGi's prepaid call rates is at 36 sen a minute. Celcom's XPax and Prabayar Celcom Blue is offering 35 sen and 45 sen a minute.

Let's look at the rates in detail:

1. Maxis Hotlink -- 33 sen a minute.
What's the catch? Answer: Must top up RM30.

2. DiGi -- 36 sen a minute. **DiGi 1-Low-Flat-Rate
What's the catch? Answer: Must use more than RM30, before the rates can be adjusted from 48 sen to 36 sen.

***2A. DiGi's new Prepaid I like -- 36 sen a minute, without automatic adjusted rate feature.

3. Celcom XPAX -- 35 sen a minute
What's the catch? Answer: Only for calls within Celcom networks. For calls made to non Celcom networks, rates can go as high as RM2.60 a minute (depending on where the calls are made to).

4. Prabayar Celcom Blue -- 45 sen a minute.
What's the catch? Answer: paying 45 sen a minute and there's still a catch?!

5. U Mobile Prepaid -- 48 sen a minute.
No catch. Per second billing, each second cost 0.8 sen. Pretty much more suitable for people who likes to keep the conversation short.

Update (Dec 19) : The rates for DiGi was referring to DiGi's 1-Low-Flat-Rate prepaid tariff, which comes with adjustable rate features. Thank you reader for pointing this out.

Wednesday, December 10, 2008

P1 expands its coverage

Keeping to its words, Packet One Networks (Malaysia) Sdn Bhd (P1) - a unit of Green Packet Bhd - has expanded its coverage in Klang Valley for its P1 WiMAX services.

P1 wants to make its wireless services available and accessible to 25 per cent of population by end of this year.

The company - which launched its wireless broadband services in Johor recently - will now also offer its services to areas like:

1. Taman Sentul Jaya, Taman Datuk Senu, Bandar Baru Sentul (all three in Sentul),

2. Taman Air Panas and Danau Kota in Setapak, Taman Sri Rampai in Wangsa Maju,

3. Taman Bukit Maluri, Bandar Menjalara,

4. Subang Hi-Tech Park, Subang Jaya and Subang USJ.

5. Klang, namely Taman Bunga Melor, Taman Botanic, Bukit Tinggi, Taman Perindustrian Pandamaran, Taman Chi Liung, Jalan Bukit Kuda, Port Klang’s town centre, Taman Selatan, and Taman Emas.

6. PJ's SS3, Paramount Garden and Sungei Way SS9.

7. Bangsar’s Telawi area.

8. Kampung Baru in Kuala Lumpur.

9. Selected parts of KL’s city centre including Jalan Chan Sow Lin and Jalan Peel, Taman Bamboo in Segambut, the Crystal Crown area in Jinjang and Taman Lawa (also in Jinjang).

It will rollout its services in Penang and other parts of Johor next year.

P1 W1MAX’ promotional subscription starts at RM89 monthly for the 1.2Mbps package and RM199 for the 2.4Mbps package.

Wednesday, December 3, 2008

Malaysian mobile operators competiting on foreign workers market

Yesterday, Celcom launched its "Celcom Prabayar Sukses", a prepaid plan that is specially made for the Indonesian foreign worker segment.

Sukses customers can call XL subscribers for as low as 35 sen. More than 50 per cent cheaper than what Hotlink and DiGi are offering.

Its CEO Datuk Seri Shazalli Ramly believes the new plan is the answer to overtake DiGi.Com, which he believes is the current market leader in terms of IDD market. Celcom is currently in third place, behind Maxis and DiGi.

Here's for comparison:

35 sen a minute to 5 favorite XL users.
45 sen a minute to other XL users
38 sen a minute to fixed line in Indonesia
48 sen a minute to other mobile phone users in Indonesia (9pm to 9am, off peak)
58 sen a minute to other mobile phone users in Indonesia (9am to 9pm, peak)

Hotlink and DiGi
71 sen a minute to mobile phone users in Indonesia
39 sen a minute to fixed line users in Indonesia

TM's iTalk
45 sen a minute to either fixed or mobile lines in Indonesia
55 sen a minute to both fixed and mobile if customers chose mobile call back service

Clearly, Sukses rates are significantly more attractive than Hotlink and DiGi's -- users can save at least 18 per cent if they call to any mobile phone users in Indonesia. Marginal savings when users call fixed line numbers .. (who calls fixed line numbers these days anyway? ;-))

At the same time, its pricing does not really impose a threat on sister company TM's iTalk IDD cards.

It will be interesting to see how DiGi and Maxis Hotlink react to this....


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