Three for Armentel

The Armenian telecommunications minister brought some clarity to the sale of OTE's 90% stake in national operator Armentel by announcing that there are three parties in contention -- Vimpelcom, MTS (Sistema) and VTEL Holdings. This contradicts earlier reports that Etisalat had made the highest offer for the shares at around E480m. Indeed, the minister said the Middle East telco had dropped out of the bidding, according to Reporter.gr. The government, which holds 10% of Armentel, has the first right of refusal on the holding being sold by OTE. Evaluation of the three bids has not begun yet.

October 18, 2006

Privatisation Process for Vietnam's Telcos Begin

The threee biggest Vietnamese telecommunication companies including VinaPhone, MobileFone and Viettel are to be privatised in early 2007, said Tran Duc Lai, Vice Minister of Posts and Telematics, according to VietNamNet Bridge. Creating companies with share capital should be a preparatory step towards privatisation. The first company to get the treatment will be Vietnam Mobile Telecom Services Company (VMS), owner of MobiFone. This should be complete in 2006. The state will retain a controlling stake. The official said there was interest in buying shares in VMS from Comviq, Telenor, France Telecom and two British companies. The state's aim is to lower its share of the investment cost by attracting outside investors.

October 18, 2006

A new silicon-based optical device has the potential to improve the speed, cost, and reach of fiber-optic networks.

The fiber-optic networks that zip video clips and other data around the Web rely on devices made of expensive semiconductor materials for many operations, making it difficult to expand bandwidth inexpensively. Now, researchers at Alcatel-Lucent Bell Labs, in Murray Hill, NJ, have designed a crucial optical component--a filter that cleans up signals as they travel through a network--that is made completely of silicon. It performs better than many other filters, and because it's made of silicon, it can be mass-produced cheaply and integrated easily with electronic systems.

In addition to improving fiber-optic networks, the silicon filter has the potential to finally bring the speed of photonic data transfer, which is much faster than copper wiring, to computer circuit boards and microprocessors, says Sanjay Patel, technical manager of integrated photonic research at Bell Labs. Indeed, he says, chips that contain both photonic devices, such as the filter, and electronics, could be key components in all optical and cellular communication systems, as well as inside computers.

Over the past couple of years, there have been several key advances in using silicon--the mainstay of electronics--for photonics. Historically, photonic devices--such as lasers and detectors that produce and collect light, modulators that encode bits of data on that light, and equalizers and filters that clean up signals--have been made out of expensive semiconductors such as indium phosphide and gallium arsenide. But in 2005, researchers at Intel announced the first silicon laser, and soon thereafter, a handful of other organizations, including MIT, Cornell, and the University of California, announced other silicon-photonics firsts. (See "Intel's Breakthrough.")

Filters are an important addition to the growing family of silicon photonics. When a signal travels through a fiber-optic cable over great distances, it inevitably becomes distorted. Along the way, filters and other devices make the signal cleaner by collecting the light and modifying the waves' phase (the relative position) and amplitude (its brightness).

Patel explains that the team's device combines, into one structure, two classical techniques used for making filters. In the researchers' design, light enters one end of the filter, where it is split into beams. These beams travel through a series of loops--called ring-resonators--where the light's phase and amplitude are adjusted. Then the beams recombine and the "cleaned-up" signal is sent on its way. The trick to making the device in silicon, Patel says, was to use the type of resonator architecutre that works well even if the rings aren't perfect. In other words, the filter design is able to withstand the natural variations that occur during silicon device fabracation.

The Bell Labs work is "a great step forward," says Alan Willner, professor of electrical engineering at the University of Southern California. "It's not just a filter," he says. "It's a superfilter." The device is one in a set of tools that could increase performance of optical systems over longer distances and allow them to carry more data, Willner adds.

The research will be presented today at the Optical Fiber Conference in Anaheim, CA. Patel says that it may still be three to five years before the filter makes its way into an actual product.

April 16, 2007

Swisscom targets technology investments

Swisscom has mandated Swiss venture capital firm Vinci Capital to find investment opportunities among local high tech companies with strong growth potential. This will be via a new fund called Mona Lisa, in which Swisscom is taking a SFr20m stake. Mona Lisa will invest alongside a fund called Renaissance Technologies II, which is supported by 45 Swiss pension funds. Vinci Capital will manage both funds, providing it with SFr70m to invest. Daniel Ritz, Chief Strategy Officer of Swisscom, was quoted saying the cooperation with Vinci Capital would strengthen innovation at the telco. Olivier Tavel and Christian Waldvogel, managing partners of Vinci Capital, have a background in the telecom sector. Separately, Swisscom also announced last week that it is closing its micropayments service Easypay by March 2007. Turnover with the service has been disappointing, and it is loss-making. Swisscom Fixnet launched the service for pre-payments over the internet in June 2004.

Axel Springer stake for sale

US private equity firm Hellman & Friedman is looking to sell down its German media holdings - it mandated Deutsche Bank to sell about 10% of its shares in leading publisher Axel Springer AG. Hellman & Friedman has held 19.4% of the company since autumn 2003. The 10% stake will be sold in a domestic and international private placement by year-end, market conditions permitting. For the company, the placing offers the chance to increase its tiny free float. Hellman & Friedman also has a significant minority holding in broadcaster ProSiebenSat.1, as part of the Saban Capital-led group. This move appears to recognise that there is little chance of a merger between Axel Springer and ProSiebenSat.1.

Orascom has eyes on Hutch International

Orascom Telecom CEO Naguib Sawiris said he wants to gain control of Hutchison Telecommunications International Ltd, the emerging markets operator of Hutchison Whampoa, reports Reuters. Orascom currently owns 23%, having bought 19.3% last December for US$1.3bn, and exercised an option since then to buy a further 3.7% of the Hong Kong-listed vehicle. HTIL gives Orascom exposure to a range of emerging markets where it is not currently present, particularly in India, Indonesia and Vietnam. Standing in the way of further purchases is the tricky issue of valuation. Whatever number the two sides settle on, it is likely to be big, and add to Orascom's financing challenge, which include managing the debts of Wind in Italy.

CenterTelecom to borrow offshore

Russian operator CenterTelecom plans to tap the offshore debt market by the end of 2006, CFO Alexander Lutsky told Reuters. He added that he is in talks with potential lead managers. CenterTelecom is 38% owned by state telecom holding company Svyazinvest. It offers fixed-line, internet and cable TV services in the Central Federal District. It reported net profit of R224m (US$8.31m) in the first half of 2006 on revenues of R13.9bn. It made a loss of R166m in the same period in 2005. The CFO said there are plans to boost capital expenditure from R4bn this year to R5.5bn in 2007. In February, Telecom Finance reported that CenterTelecom sold its 30-40% hodlings in Belgorod Mobile Communications and Smolensk Mobile Communications to Tele2, reflecting its move to fixed line communications.

BTC plans to invest E205m

Bulgarian incumbent operator BTC plans to invest BGN400m (E205m) this year in its fixed and mobile networks, CEO Martin Staub was quoted saying by Reporter.gr. The funds are aimed at upgrading the fixed network to digital technology, and launch its mobile operator Vivatel. BTC belongs to Icelandic private equity firm Novator. It claims a 40% share of the fixed line telephone market. In September T-Wire reported that Vivatel awarded a contract to Nokia to improve its GSM network and prepare for the introduction of 3G.

IP TV revenues to touch 10 billion mark by 2014

While the Internet has long been considered a technology of the future for TV, it is now having a measurable impact on traditional sectors, indicating its time has come. Digital media is changing the consumption of TV from 'home' to a 'watch anywhere' activity. Content has become interactive rather than passive forcing traditional media companies to change their behavior and business models to adapt their offering to consumer demand. The biggest negative for broadcasters and content suppliers is the potential for online TV and video to hurt their existing business models. To date its harmful impact has been limited and there are examples of a beneficial affect, with broadcasters reporting improved TV ratings for programmes showcased online.

The challenge for the TV industry is to monetize this massive interest in online content.

New research from R4B shows that IP TV services will generate revenues of US$10 billion in 2014, from close to US$600 Million in 2006. North America will be the largest revenue-generating region, accounting for 60% of the 2014 global total followed by Western Europe and Asia Pacific. Advertising will consistently outperform rest of the services including subscription-based services in terms of revenue generation accounting for 40% of the 2014 global total.

April 19, 2007

Service Delivery Platforms Bringing SOA (Service Oriented Architecture) to Telecommunications Companies

Telecommunications companies will be investing billions of dollars over the next five years on service delivery platforms (SDPs) in order to bring the benefits of on-demand services to their wireline and mobility enterprise customers, according to R4B.

SDPs are computing platforms and software that support emerging standards such as IMS and SIP while continuing to inter-work with legacy protocols.

IMS, SIP and Service Delivery Platforms adoption by carriers will facilitate the delivery of on-demand telecommunications services by integrating network element performance with critical business processes.

Functionally, these SDPs will enable the adoption of a service-oriented architecture (SOA), making it possible to reuse individual service components in order to quickly build a new enterprise service, as well as to separate and execution of new service applications from the underlying network.

These platforms will loosen the knot that ties network elements to business processes, thus increasing carrier flexibility when it comes to BSSes and service creation, which should translate to quicker time to market for new services.

This loose coupling of business processes means that carriers will also be able to work more efficiently with their business chain partners, while at the same time would be able to leverage insights from customer data using Business Intelligence technology.

Telecom MarketHawk, April 2007 Issue