Indosat contracts Nokia for GSM expansion

Indonesian cellco Indosat has selected Nokia to expand the GSM network of its subsidiary Satelindo in Bali and Java (excluding Jakarta and surrounding areas). Under the terms of the deal, the value of which has not been disclosed, Nokia will supply radio network and circuit and packet switched core networks, and cellular transmission for East Java. It will also include the Nokia NetAct network and service management system, which ensures speed and service quality to customers, as well as network planning, implementation and optimisation services. Satelindo claimed 12.7 million mobile subscribers at the end of September.

Meanwhile, the Indonesian government has revealed plans to issue a new regulation in 2006, which will require telcos to set aside 20% of their capital expenditure to buy local products.

upay ¶ 5:23 PM //

The Indonesian government plans to issue a regulation requiring telecommunications companies to set aside 20% of their capital expenditure to buy local products.

The new regulation, to be effective next year, is expected to boost the domestic industry, Post and Telecommunications director general Basuki Yusuf Iskandar said.

Iskandar said the domestic industry has gained little from the thriving telecommunications industry over the past several years.

He said telecommunication products produced in the country have a foreign content of 90%.

The official said the country's telecommunications market, excluding handsets, was valued at $2.5 billion this year and most of the spending is for imports of networks equipment produced by foreign vendors.

© Asia Pulse

upay ¶ 4:07 PM //

PT Bakrie Telekom hopes to launch an IPO in December or January next year, offering up to 20% of its shares, a local daily reported.

The subsidiary of PT Bakrie & Brothers hopes to earn between Rp500 billion ($49 million) to Rp750 billion from the IPO, the daily quoted the company's president as saying.

The Bakrie group is set to maintain the majority share of at least 51% in the telecommunication subsidiary. Currently the Bakrie Group owns 78.63% of Bakrie Telecom with Richweb Investment owning 2.94% and CMA Fund 21.34%.

The funds expected to come from the IPO will be used to finance installation of networks in various areas in Java.

© Asia Pulse

upay ¶ 1:08 PM //

It's quite shocking when a senior manager at a major Japanese wireless operator points out that i-mode is basically passe'.

The words weren't as severe as that, but the executive, from one of DoCoMo's competitors asserts that DoCoMo's wireless data strategy no longer focuses on the traditional perception of i-mode as a platform for accessing the Internet with a mobile phone.

"DoCoMo's whole service focus now is actually on transactions and not on content," he said over his Heineken in the sleek surroundings of the Isola bar in Hong Kong.

Obviously, statements from a company's competitor must be taken with a pinch of salt, but the topic certainly roused my curiosity enough to look into a bit further.

No, i-mode isn't exactly dead because it continues to contribute a significant part of DoCoMo's ARPU (some 26% for the quarter ending June 30, 2005). While the actual amount of ARPU from i-mode (2G and 3G) is down about 7%, the decline is consistent with the overall drop in revenue per user.

Certainly, money from i-mode has helped DoCoMo slow the erosion of ARPU and more important, insulate its balance sheet. In 2004, the operator recorded service revenue of some $43 billion. i-mode's 26% would equal some $11 billion!

Yet, despite the huge market value of i-mode, there are signs that the platform that launched the wireless Internet is fast approaching middle age.

For starters, ARPU from i-mode is declining at a steady pace. For example, 2G i-mode users spent about 2,000 yen in the second quarter of 2004. A year later, they spent 1,550 yen, or 23% less. DoCoMo's 3G business is faring significantly better, registering much lower ARPU erosion, but erosion nevertheless.

At the same time, subscriber growth is slowing down and the penetration rate is now over 90% of DoCoMo's overall customer base.

It's safe to say that i-mode as a business has quietly slipped past its peak. Put another way, the wireless Internet has reached commoditization in a little over five years since i-mode was launched in 1999. With commoditization comes continual price decline.

All of which suggests the available revenue from the traditional i-mode platform of ringtone downloads and information services will shrink. So it should come as no surprise that DoCoMo is probably putting less emphasis on it, thus confirming the claim from my friend from Japan.
Besides, i-mode revenue for DoCoMo consists primarily of a monthly subscription fee to the service, packet charges for accessing the platform and a percentage of the subscription fees to content providers, all of which are supported in a well functioning ecosystem - albeit in a (very) slowly declining overall market.

DoCoMo is now focused on enabling transactions using its handsets.
DoCoMo's FeliCa service, which allows i-mode handsets to pay for things, is the company's fastest growing business. In less than a year since its launch in August 2004, over five million FeliCa-enabled users have signed up.

Between February and April, the number of FeliCa transactions doubled from 320,000 to 690,000 and the trend is likely to accelerate. So while traditional i-mode services offer a steady revenue stream, FeliCa is certainly looking like the new growth opportunity.

More importantly, FeliCa allows DoCoMo to explore additional business opportunities, such as becoming the clearinghouse for these transactions or adding credit to the payment system.
So as i-mode's revenues decline as it enters maturation, DoCoMo has found a way to evolve beyond i-mode by linking its services to traditional "brick and mortar" businesses via transactions. In that sense, transactions are the new mobile content - at least in terms of new revenue growth. It will be interesting to see if FeliCa generates as much overseas buzz as i-mode did.--Telecomasia.net

upay ¶ 2:54 PM //

Sep 2, 2005
Telecom Asia Daily

China signed agreements to invest $20 billion in Indonesia to build scores of electricity, telecommunications and other infrastructure projects over the next 20 years, a news report said.

Indonesian Vice President Jusuf Kalla also said the rupiah's recent depreciation which saw the currency fall to a four-year low against the dollar, earlier this week, offered the Chinese an opportunity to get more for their money.

"There is now a good opportunity for Chinese businessmen to invest in Indonesia due to our favorable and competitive exchange rate," Kalla said on a visit to China, according to The Jakarta Post. "You can buy land and invest in machinery cheaper than before."

The two sides signed six MOUs and four agreements involving Indonesian state enterprises and their Chinese counterparts in many projects including gas transmission, electricity, telecommunication, mining, housing development and the medical sector.
Indonesia badly needs foreign investment to keep the economy growing and produce the jobs for the millions of new graduates.

It has struggled to attract foreign investment in recent years, in the face of widespread corruption and government red tape.

But a weakening rupiah and a more stable government has increased the country's prospects and helped foreign investment jump 74% in the first seven months of this year.

upay ¶ 1:43 PM //

After a decade of remarkable growth, the international Internet is showing substantial signs of maturity. According to TeleGeography's latest survey of Internet backbone providers, global cross-border internet traffic grew by just 49 percent in 2005, down from 103 percent in 2004. The Internet's fastest growing regions, Asia (76%) and Latin America (70%), produced only modest traffic growth by previous years' standards.

The rate of traffic growth going forward may hinge most on the underlying growth in broadband subscribers, which has begun to slow in many developed markets. As of mid-2005, the combined average traffic on all cross-border backbone routes stood at just under 1 Terabit per second (Tbps). TeleGeography projects that average traffic will range from 2 to 3 Terabits per second by 2008.

An important secondary sign of market maturity is stabilization in Internet backbone access pricing. TeleGeography's latest pricing survey shows that in the 12 months up to mid-2005, prices fell less sharply than in previous years. In 2004, backbone access prices around the world fell about 50 percent over the previous year. This year prices fell between 23 and 33 percent, and many providers have stated that they have no plans to reduce prices further.

This new research is presented as part of the completely updated Global Internet Geography, available as either an updated online subscription service or as a 414 page printed report. Key features include:

- Internet traffic and bandwidth forecasts through 2008
- Review of traffic by application: Web/P2P/email/VoIP
- Analysis of backbone growth, geographic coverage, and pricing
- Profiles of 77 backbone operators, including network maps
- Top routes, traffic, and users for 64 countries

upay ¶ 4:53 PM //

China’s Internet Network Information Centre has released statistics which show that the country is now home to 130 million internet users, making it the world’s second largest internet market behind the US. The market grew by 18.4% in the first six months of the year. There were 53 million broadband subscribers at the end of June, up 23.8% from the start of the year.

upay ¶ 12:37 AM //

True Corp’s Thai mobile operator TA Orange says it expects to end 2005 with 4.2 million users, up from the 3.38 it started the year with. The cellco is the main protagonist in the cut-throat price war currently enveloping the mobile market and it continues to target low-revenue users in Thailand’s rural areas. TA Orange currently has around 4.1 million users and an estimated 20% market share.

upay ¶ 12:34 AM //

Two of Indonesia’s leading operators, PT Telkom and PT Indosat, predict that the country’s telecoms market will double, or triple, in terms of revenues by 2010. Telkom president director Arwin Rasjid forecasts that, excluding handset sales, the industry will be worth between IDR141 trillion (USD14.37 billion) and IDR181 trillion, up from IDR48 trillion last year.

Arwin predicts that by 2010 the number of main lines in service will have doubled from the current figure of around nine million (a teledensity of less than 5%), internet usage will triple to about 48 million users, and cellular penetration will rise from 35 million to more than 100 million – or 42% of the population.

Indosat’s president director Hasnul Suhaimi backed up his counterpart’s claims saying that the rapid pace of growth seen over the last twelve years would continue as telecoms penetration in Indonesia remains relatively low, compared to its regional neighbours.

However, the task of extending the reach of telecoms services to all will not be an easy one. Arwin highlighted the problems of the country’s geography - a key challenge for telecoms companies looking to develop their infrastructure. “As of last month, our division in the eastern part of Indonesia could only cover 29% of regencies and 9% of villages in the whole of the island of Papua,” he said.

upay ¶ 12:26 AM //

VSNL Buys Top VoIP Carrier

India's incumbent international operator, VSNL, announced today that it had agreed to buy Teleglobe, the largest international voice over IP (VoIP) carrier in the world -- and former Canadian monopoly overseas voice carrier. Should the deal meet with shareholder approval and pass regulatory review, the merged company -- which also includes the recently integrated Tyco Global Network -- would become one of the largest multinational providers of voice, Internet, and bandwidth services.

The data below are drawn from the reports and databases of TeleGeography Research, the authoritative source for statistics and analysis on international communications:

VOICE
Teleglobe became the largest carrier in the 30 billion minute international VoIP market when it acquired ITXC in 2004. Although VoIP represented under 15 percent of the global call market in 2004, it is growing at double to triple the rate of the traditional public switched voice market. Combined with Teleglobe's wholesale voice operations around the world, VSNL will become the fifth largest carrier of voice minutes in the world.

source: TeleGeography

INTERNET

Although VSNL is a significant carrier of voice minutes in its own right, its international Internet infrastructure has been limited to a few routes out of India. With the acquisition of Teleglobe, VSNL will be adding backbone Internet connectivity to 14 new countries, bringing its total to 17. Still, the combined VSNL and Teleglobe international Internet backbone puts it only in the top 30 of global backbone providers. This may change rapidly if VSNL builds out its Internet infrastructure to serve India's growing demand for corporate bandwidth.

source: Global Internet Geography

BANDWIDTH
By purchasing Teleglobe, VSNL will be pairing Teleglobe, a major wholesale services provider, with the Tyco Global Network, a major provider of wholesale submarine and terrestrial network capacity that VSNL acquired recently. As of early 2005, Teleglobe owned or controlled part of 90 submarine and terrestrial network systems, as well as satellite connectivity around the world. Although other carriers, such as AT&T and MCI, may connect to more individual city locations, few companies are known to control capacity on as many different systems.

source: International Bandwidth

upay ¶ 4:45 AM //