Telecommunication Issue #8

DiGi announces CAPEX for 2009, 30% set aside for 3G investment

Malaysia’s third-placed mobile operator, DiGi Telecommunications, is planning to spend more than MYR1.1 billion (USD318.9 million) in 2009, Reuters reports. DiGi, which trails Maxis Mobile and Celcom in the mobile market, is set to invest a significant amount towards its 3G services, with the company’s chief executive, Johan Dennelind, noting, ‘Our guidance for 2009's capital expenditure is MYR1.1 billion to MYR1.3 billion, of which 30% will go to 3G networks.’

Telecommunication Issue #7

International long-distance is going mobile

Amidst relentless pressure on prices and a growing array of international communications services, international voice traffic continues to grow. According to new data from the annual TeleGeography study of the international voice market, international voice traffic reached 343 billion minutes in 2007, and is projected to reach 385 billion minutes in 2008.

Mobile phones have been a key driver of growth, due to subscriber growth in developing countries and the recent emergence of low-cost international mobile calling plans. In 2007, nearly one-third of international calls were placed from mobile phones, and 45% of international calls were terminated on mobiles. Current trends suggest that by 2009, more international calls will be made to mobile phones than to fixed lines.

Telecommunication Issue #6

TM defends international tender decisions for HSBB project

Malaysian fixed line and broadband operator Telekom Malaysia (TM) has defended its decision to offer four tenders worth a total of approximately MYR10 billion (USD 2.82 billion) to international companies, according to local news source Business News. The operator was responding to a report issued by the Malay Chamber of Commerce (DPMM) which criticised its tender process for the high speed broadband (HSBB) project. TM claims its decision to award the tenders to international companies was only due to the fact that no domestic company could provide the necessary technology. TM also noted that the tender process had not been completed. DPMM president Syed Ali Attas however said that TM had given priority to foreign suppliers, and effectively blocked local companies.

Saudi Zain signs a million subs in first month

Zain Saudi Arabia, the cellular operator which launched the country’s third national mobile network in August, says it had signed almost a million subscribers by the end of September. ‘Things are moving much faster than expectations,’ company executive Marwan Al-Ahmadi told Reuters. Around 90% of Zain’s subscribers have signed to pre-paid packages. The firm says it expects to turn its first profit in its second full year of operation and it aims to have networks covering up to 95% of the population within two years, up from 55% currently. ‘Our ultimate aim is to get a third of the market,’ Al-Ahmadi said. ‘This is definitely not going to happen in the short term... I believe we should be able to achieve it in the range of five years.’

Wireline licensee looks to USD3bn rollout

The Saudi Arabian fixed line licensee Optical Communications Co, which is led by US telco Verizon Communications, is expecting to spend USD3 billion on deploying infrastructure. Verizon has taken a 15% stake in the venture, with other investors including Millicom International Cellular and a number of local partners. ‘For the moment, we have set a USD3 billion budget for the optical wire infrastructure alone,’ a company executive told Reuters. Optical Communications hopes to raise some of the cash it will need to launch its operations through an initial public offering next year, the executive added. A launch is scheduled for 2010.

XL secures USD214m loan from EKN

The Jakarta News reports that publicly listed mobile operator Excelcomindo Pratama (XL) has signed a deal with Swedish export credit guarantee agency EKN concerning a USD214 million loan for the purchase of equipment from Ericsson of Sweden. XL says the facility, which was arranged by ABN AMRO Bank Stockholm Branch and Standard Chartered Bank, is the first tranche of the total USD400 million facility provided by EKN. The funding will be used to fund part of the cellco’s CAPEX plans for 2008/09. The mobile operator has increased its capital expenditure target for 2008 from USD1 billion to USD1.25 billion, a significant portion of which will be used to upgrade its networks as subscriber numbers rise sharply. XL had 22.9 million mobile subscribers at the end of June 2008, up 124% year-on-year. Last month XL secured a USD140 million syndicated loan from four international banks – DBS Bank, Economic Development Canada, The Bank of Tokyo-Mitsubishi UJF and Chinatrust Commercial Bank – to help finance its ambitious rollout objectives.

Penang’s free internet projects move forward

Malaysian news source The Edge Daily is reporting that the free Wi-Fi internet project in Penang will proceed, despite opposition to the scheme expressing concerns about health implications. The project will see the entire state gain free access to internet services, and the project is due for completion within two years. Two operators have agreed to invest in the state, REDtone, which pledged MYR10 million (USD2.8 million) to the scheme, and Packet One Networks (P1), which said it would invest MYR20 million. The state government is still understood to be looking for additional partners in the project. Free Wi-Fi access is expected to launch in public areas around Komtar next week, courtesy of REDtone. P1 will meanwhile roll out WiMAX services, although this will be a paid-for service.

Telecommunication Problem #2

SUBMARINE CABLE PROBLEM

Three international submarine cables in the Mediterranean Sea were damaged on Friday, 19 December, causing significant disruptions to internet and voice traffic in Egypt, Saudi Arabia, India and all of the Gulf states. The fault is thought to have occurred between Tunisia and Italy. The three damaged cables are the FLAG Europe-Asia cable, operated by India’s Reliance Globalcom, and two consortium cables, SEA-ME-WE3 and SEA-ME-WE4, owned jointly by several telecommunications companies. Additionally, there were reports that the GO-1 cable connecting Malta with Sicily had been damaged on the evening of Thursday, 18 December. It was not immediately known if the outages were connected.

The current series of faults is reminiscent of the submarine cable faults that occurred in January 2008. Friday’s events have the potential to create worse disruptions: while the January 2008 accidents broke two of the three cables connecting Europe with Asia via the Middle East, the most recent cable failures have caused faults on all three. France Telecom (FT) projects that service on all cables will be restored by 31 December. Until then, many carriers in the Middle East and South Asia will need to route their European traffic around the globe, through South East Asia and across the Pacific and Atlantic oceans.

New cable construction should help to prevent such outages in the future, according to TeleGeography Research Director Alan Mauldin: ‘Many new cable systems are slated to enter service between Europe and Egypt in the next few years, including Telecom Egypt’s TE North cable, Orascom's MENA system, FLAG's HAWK cable, the IMEWE consortium cable, and the EIG consortium cable.’ Though constructing multiple cables does not guarantee against outages, the introduction of these new systems will provide additional routing options and improve resiliency.

A team of FT’s marine engineers arrived at the site of the damage to the SEA-ME-WE3 and SEA-ME-WE4 cables at 13:30 GMT yesterday (Sunday). The capacity situation had ‘improved’ in India, Singapore and Reunion by 15:00 GMT on the same day, according to an FT spokesman quoted by Reuters, whilst the Egyptian government reported that more than 80% of its internet capacity had been restored, although there remained some ‘tangible impact on call centres’. Meanwhile, Reliance said in a statement to Reuters this morning (Monday) that a repair ship was on its way to the site of the FLAG cable breakage, and that it expects to complete repairs this week. The actual cause of the cut remains unclear, although it is thought unlikely to have been a deliberate attack, with a ship’s anchor being put forward as a likely culprit.

1. Flag Cable System: Cable cut at Segment D between Alexandria (Egypt) and Palermo (Italy) on 19 Dec 2008 at 08:06 UTC .
2. SMW4 Cable system: Cable cut at near Alexandria Segment 4 on 19 Dec 2008 at 07:28 UTC
2. SWM3 Cable System: Cable Cut at Segment 8.8 F2 at about 3KM from R822(Nearer to Mazara) on 19 Dec 2008 at 07:22UTC.

NOC (each cable system) is unable to provide restoration because other cables SMW3, Flag & SMW4 are also failed on the same segment.
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Note:
Cable Cut : Whole cable break (Optical fiber break) and traffic affected.
Shunt Fault : The cable insulation is damaged causing a contact at sea of the power feeding conductor and create zero potential. Normally in this case the traffic not affected.

Telecommunication Problem #1

SUBMARINE CABLE CUT

1. Flag Cable System: Cable cut at Segment B SS1 between Estepona Cable Station at 8.75 KM toward Branching Unit (BU).

2. SWM3 Cable System: Cable Cut at Segment 2.14 between Hong Kong Cable Station toward BU6.

3. APCN Cable System: Cable cut** at Segment 3 B15 43Km from Changi cable Station.

4. SAFE Cable System: Shunt Fault** at 8Km from St Paul Reunion to 1st repeater.

Note:

Cable Cut : Whole cable break (Optical fiber break) and traffic affected.

Shunt Fault : The cable insulation is damaged causing a contact at sea of the power feeding conductor and create zero potential. Normally in this case the traffic not affected.

Telecommunication Issue #5

TIME dotCom sells payphone subsidiary

Malaysia’s Business Times is reporting that TIME dotCom (TIME) is to sell its payphone subsidiary TIME Reach, divesting its stake to local pre-paid fixed line telco Paycomm for MYR8.3 million (USD2.29 million). The sale is expected to be completed by the end of February 2009. The move comes as TIME looks to focus on its more profitable operations, which include subsidiaries TT dotCom, which offers voice, data and video communications, and TIME dotNet, which offers internet services. TIME’s chief executive officer, Afzal Abdul Rahim, commented, ‘We are highly committed and are in the midst of identifying several recovery programmes with an objective of returning TIME to profitability in the long term. TIME Reach will be the only asset divestment made by TIME in the near future and recovery of the group will mainly focus on strengthening our operational capabilities, improving competitiveness as well as cost management.’

P1 WiMAX launches in Johor

Packet One Networks (P1) has announced that its WiMAX-based broadband services have been launched in the Johor region, its first region of operation outside of the Klang Valley state, the Star Online is reporting. P1 chief executive offer Michael Lai has also reiterated plans for the operator’s rollout of WiMAX services, stating, ‘P1 will expand the coverage of P1 WiMAX to Skudai, Batu Pahat, Muar, Segamat and Kluang by the end of 2009 and Yong Peng in 2010. P1 expects to cover at least 70% of the population in Johor Baru by the end of next year and 30% of the Malaysian population by mid-2009.’ According to TeleGeography’s GlobalComms database, P1 launched its WiMAX network using the 2.3GHz band in August 2008 in the Klang Valley, and the company expects to have 600 base stations in operation by the end of 2008.

Qtel agrees to up Indosat offer price, reports say

Qatar Telecom (Qtel) has reportedly agreed to increase its offer price to raise its ownership in Indosat. Reuters writes that Indonesia's capital market regulator reported Qtel’s decision on Friday, pushing shares in the mobile phone firm up 20%. Qtel is holding a tender offer to acquire more Indosat shares and is hoping to increase its stake to the maximum limit allowed under local law, 65%, after it bought a stake from Singapore Technology Telemedia for USD1.35 billion in June, which increased its ownership to 40.8% from around 10%.