Telecommunication Issue #11

Axiata stresses new identity; cuts IDD rates

Malaysian news source Bernama is reporting that Malaysian telecoms group Axiata, formerly TM International (TMI), plans to embrace its recent name change, and will introduce the new brand in the consumer space. To that end, Axiata has announced that, whilst it has not renamed its mobile subsidiaries, it has refreshed their respective logos to include the Axiata prism. Malaysia’s Celcom, Sri Lanka’s Dialog Telekom, Excelcomindo (XL) of Indonesia and Telekom Malaysia International Cambodia (TMIC) have all had their logos updated. In addition, Axiata has announced that it is cutting IDD rates across its network in the region by up to 50%, with the offer applying to calls made to Singapore, India, Bangladesh, Cambodia, Sri Lanka and Indonesia.

StarHub enlists in APG cable consortium

Singaporean telecoms group StarHub joined forces with the consortium set up to develop the Asia-Pacific Gateway (APG) submarine cable system that will link the Asia-Pacific region. Once completed, APG will span 8,000km linking eight countries, namely Malaysia, Singapore, Thailand, Vietnam, Hong Kong, the Philippines, Taiwan, China, Japan and South Korea. The link will utilise Dense Wavelength Division Multiplexing (DWDM) technology with a minimum design capacity of 4Tbps of data bandwidth. The other carriers in the APG consortium are Chunghwa Telecom (Taiwan), China Telecom (China), China Unicom (China), KT Corporation (South Korea), NTT Communications (Japan), PLDT (Philippines), Telekom Malaysia (Malaysia) and VNPT (Vietnam).

TM partners with Verizon Business to launch IP node

Malaysian incumbent Telekom Malaysia (TM) has launched a new Internet Protocol (IP) node in partnership with US-based Verizon Business, Bernama reports. TM expects the node, christened Platinum Transit IP, to position Malaysia as an internet hub for the Asia Pacific region, and the launch comes just four months after the two companies signed a memorandum of understanding to develop the hub. The operator expects the new infrastructure to provide faster connections among local ISPs, lower broadband costs and more reliable international connections. Commenting on the launch Datuk Zamzamzairani Mohd Isa, TM’s CEO, said: ‘The IP node will enable TM to offer high-end network services at competitive price, which will enhance its ability to offer high-quality IP-based services to local service providers and hence companies with operations in Malaysia.’

TIME dotCom focusing on wholesale and corporate data sectors

Malaysian news source Business Times is reporting that fixed line and broadband operator TIME dotCom (TdC) is planning to focus its attention on its data service offerings directed at the wholesale, enterprise and corporate market segments. It is understood that TdC plans to concentrate on these specific areas as it believes there is stronger growth potential. Commenting on the strategy Afzal Abdul Rahim, TdC’s CEO, said: ‘The focus on data service offerings will allow us to optimise our existing infrastructure and take advantage of the many opportunities currently available in the market place.’ The announcement followed the release of the operator’s financial results for the three months ended 31 March 2009, with TdC posting a 12.1% increase in revenue to MYR74 million (USD20.5 million). Net loss meanwhile narrowed by 61.7% at MYR34.7 million for the quarter, compared to MYR56 million in the same period last year. TdC attributed the improved performance to higher data revenues helping to offset the decline in voice revenue, while the reduction in losses was a result of lower depreciation and finance charges.

SE-ME-WE 3 CABLE FAILURE AT 282 KM away from Deep Water Bay CLS (HONG KONG)

Telecommunication Issue #10

XL claims a ‘first’ with ‘funbook’ mobile media service

Indonesian mobile operator Excelcomindo Pratama (XL) has launched a new mobile social networking application ‘XL funbook’, claiming a first for Indonesia. The operator’s new service allows users to share content with a variety of third-party social networking and web sites including Facebook, Friendster, Photobucket and many others directly from their mobile handsets or through XL funbook’s web site. The mobile client supports a number of operating systems such as J2ME, Symbian, and Windows Mobile and currently supports over 500 phone models from the likes of Nokia, SonyEriscsson, HTC, and Samsung.

Bayanat Al-Oula extends WiMAX with Samsung

Saudi mobile operator Mobily has announced that its broadband arm, Bayanat Al-Oula, has contracted Samsung Electronics to expand its WiMAX operations. Under the terms of the USD100 million deal Samsung will extend Bayanat’s WiMAX coverage from four cities to 20 by the end of 2009. Samsung will install 1,400 base stations to increase Bayanat's overall total to 1,800 nationwide. Mobily CEO, Khaled al-Kaf, said, ‘Bayanat's existing WiMAX network currently serves 30,000 subscribers. With this expansion, we will be able to increase Bayanat's WiMAX capacity by at least three times.’

Telecommunication Issue #9

1. TM’S FY2008 REVENUE UP 4.6% to RM8.67 BILLION

Telekom Malaysia Berhad (TM) finished the year 2008 with an improved performance driven by growth in broadband and data. For the financial year ended 31 December 2008, TM posted a revenue of RM8,674.9 million, a growth of 4.6% from RM8,296.0 million recorded in 2007. The Company continued to win new customers and maintained leadership position in the broadband segment registering 1.6 million customers as at end of 2008, a growth of 26.7% from 1.2 million customers a year ago.
TM also announced a proposed final gross dividend of 14.25 sen per share less tax of 25%, amounting to RM382 million. Combined with the interim dividend of 12 sen per share less tax of 26% paid in September 2008, the total dividend in respect of financial year 2008 is 26.25 sen per share, which translates into a total dividend payout of RM700 million

2. XL swings into loss despite strong subscriber growth

Indonesia’s third largest mobile operator by subscribers, PT Excelcomindo Pratama (XL), reported full-year losses of IDR15 billion (USD1.26 million) for 2008 despite increasing its subscriber base by a healthy 68% to 26 million, a fact it attributes to higher interest rates on loans it assumed and foreign-exchange losses. The company posted year-on-year revenue growth of 45% to IDR12.2 trillion, said XL president Hasnul Suhaimi, ‘driven by a 705% increase in our total [voice] minutes to 54.9 billion minutes, and 68% growth in our subscriber base.’ He added that the firm’s strategy of offering a high quality service at lower prices ‘helped us gain about 5% market share in terms of revenue’. Earnings before interest, taxes, depreciation and amortisation (EBITDA) climbed 46% y-o-y to IDR5.13 trillion last year, while the EBITDA margin remained stable at 42%. Hasnul said that XL booked higher than expected interest expenses in FY2008, relating to additional loans it took out. Excluding the impact of FOREX and other losses, the operator would have booked normalised net income of IDR348 billion, he added.

In 2008 Excelcomindo invested heavily in its networks and services, Hasnul noted, upgrading both its hardware and software platforms to improve subscriber and traffic capacity levels. XL deployed an additional 5,572 base transceiver stations (BTSs) last year, at a total cost of USD1.2 billion, to end the year with a total of 16,729 BTSs. The CAPEX forecast for 2009 is a less ambitious USD600-USD700 million, which will be targeted at selected investment projects, he said.

3. Saudi cellco sees stronger than expected sales

Zain Saudi Arabia, the cellular operator which began commercial operations last August, has reported revenues of SAR505.2 million (USD135 million) for the 120-day period from its launch to the end of December, exceeding its own revenue targets by 27%. Active customers totalled 2.01 million at the end of 2008, which the firm says represents a 7% share of all Saudi users. Gross profit for the period stood at SAR16 million, though hefty start-up and initial operating costs left the company facing a net loss of SAR2.28 billion. Zain competes with the Kingdom’s two established cellular providers, STC and Mobily.

SUBMARINE CABLE CUT

1. APCN2 System: Cable cut at Segment 1 between Kuantan (Malaysia) and Katong (Singapore)Cable Station at 7 KM from repearter 1.
2. APCN2 System: Cable Shunt Fault at Segment 7 between Shantau and Tanshui Cable Station.

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.