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Welcome to ITI Digest, your free weekly round-up of selected news articles from ITI, the leading telecoms news and information provider.
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25th May 2007
Magyar Telekom to construct next-generation IP network in Hungary
The expansion of services based on Internet technology and broadband facilities has become an integral part of Magyar Telekom's business strategy. As part of the upgrading process of its IP backbone network, the company has deployed two CRS-1 terabit routers from Cisco Systems Inc that allow a significant increase in network reliability and the satisfaction of future capacity demands.
Magyar Telekom is the first to use this router and transport technology in Hungary. Introducing the Cisco IP Next Generation Network (IP NGN) architecture opens up new opportunities to provide services beyond traditional Internet technology, to upgrade the telecommunications infrastructure, as well as to develop and deploy services based on individual application and customer management.
The IP NGN structure provides an open platform to differentiate services. Integrated media services, in addition to video and IPTV and value-added services, will also become available. In addition, corporate users have a growing need for VPNs offering higher availability (IP VPN), which can only be built using devices such as the CRS-1 that can be upgraded and serviced in the course of operation, without service outage.
With this major upgrade, Magyar Telekom uses a proactive approach to prepare its network for increasing customer demand for broadband Internet services and to accommodate the network for future increases of bandwidth, an important consideration for facilitating widespread use of the IPTV service introduced in 2006. As a result of the latest technological investments, customers too will be able to experience the significantly increased network capacity and higher network availability.
The rapid roll-out of broadband accesses is one of the primary strategic objectives of Magyar Telekom. The number of broadband Internet service subscribers is continuously increasing all over the country. In 2006, there was a significant increase in the number of broadband subscribers of Magyar Telekom. At the end of March 2007, over 628,000 broadband Internet connections were registered with Magyar Telekom. Commercial IPTV service was launched in 2006 and ADSL without phone service was introduced in March 2007. Klip, a service already available, offers free phone calls to other Klip users over the Internet without any per minute charge, monthly fee or call set-up fee. Customers pay only the regular Internet fee. If Klip users call a non-Klip user or a client in another network, only a low per minute charge applies without any call set-up or monthly fee. And, following the practice of the previous years, Magyar Telekom increased the bandwidth of its ADSL service for no extra charge to the customers.
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25th May 2007
Indonesian operators to build US$1.5bn fibre-optic network
A group of seven Indonesian telecommunications operators are to build a countrywide fibre-optic network, according to the Financial Times. The US$1.5 billion Palapa Ring project will involve the laying of 57,000km of cables across all 440 districts and is expected to take two years to complete. The cable will provide a boost for the country’s overloaded telecommunications infrastructure and improve connection with the nation’s remote regions. The first phase of the project, which was first proposed two years ago, will cover eastern Indonesia.
In a statement issued on May 24, the government said the project is intended to provide Indonesia with "high-quality, safe and cheap" telecommunications infrastructure.
"This network should support the equal development and expand the economic potential of the regions and also boost the competitive climate in the telecoms sector," the government said.
PT Telekomunikasi Indonesia (Telkom), the country’s largest telecommunications operator, will take a 45% stake in the consortium. PT Bakrie Telecom (BakrieTel), PT Indonesian Satellite Corporation (Indosat), PT Excelcomindo Pratama (XL), Powertek Utama Internusa and Macca System Infocom will each have 10% and Infokom Elektrindo 5%.
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25th May 2007
Ericsson and Telstra run world's first live 40Gbit/s optical transmission trial in Australia
Ericsson AB and Telstra have successfully completed what they claim to be the world's first live network trial for next-generation 40Gbit/s optical transmission technology in Australia.
The technology trial demonstrated that Telstra's existing 10Gbit/s dense wave division multiplexing (DWDM) transmission technology, which carries voice, data and video, can be increased to 40Gbit/s without major changes to the network.
Dan Burns, Telstra Executive Managing Director, Network and Technology said: "This trial was commissioned as a part of Telstra's forward planning to meet expected growth on the inter-capital networks. It demonstrates the capability of the Telstra Next IP network and effectively positions Telstra at the forefront of industry development to implement high capacity long distance transmission. Enabling 40Gbit/s connections between Telstra's IP core routers, will allow us to expand our network capacity in line with expected growth in IP traffic."
The trial was conducted over Telstra's existing 10Gbit/s 1,121km coastal and 1,244km inland optical fibre routes from Sydney to Melbourne.
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25th May 2007
LOUNET to merge with Elisa
Elisa Corporation and LOUNET Oy have signed a merger plan according to which LOUNET will merge with Elisa. Elisa Group currently owns 80.51% of LOUNET, which offers telecommunications services in western Finland. The business activities of the companies participating in the merger complement each other as a whole, and combining these activities will generate a stronger and more competitive entity. The merger will also simplify Elisa's current group structure.
According to the merger plan, LOUNET shareholders will receive a merger consideration consisting of new Elisa shares. 0.07 new Elisa shares will be given in exchange for each LOUNET share (corresponding to 70 new Elisa shares in exchange for each LOUNET share certificate). Furthermore, the Board of Directors of LOUNET Oy has proposed that LOUNET distributes a dividend, the amount of which will be €150 for each LOUNET share certificate. Elisa has agreed to vote in favour of the Board's proposal for the distribution of the dividend.
A decision regarding the merger will be made at LOUNET's extraordinary shareholders' meeting to be held in Turku on July 5, 2007. Approval of the merger requires that at least two-thirds of the shares represented at the shareholders' meeting and of the votes given are in favour of the merger.
The merger is expected to take effect from September 30, 2007.
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24th May 2007
Swisscom purchases stake in Transmedia
After the launch of Bluewin TV and the purchase of holdings in multimedia companies as part of a move to strengthen its position in the fields of media and entertainment, Swisscom AG is now acquiring a 35% stake in the VoD specialist, Transmedia. The stake in the Geneva-based company represents a further step in Swisscom’s alignment as a multimedia provider.
Swisscom’s 35% participation in Transmedia follows on from its capital shareholdings in the online TV service, kyte.tv, and the software developer for virtual camera settings, LiberoVision. Transmedia claims to be a leading enterprise in the VoD market. The company acquires content and makes it accessible to digital TV operators or ISPs via a virtual library.
As an agency, Transmedia supplies individual VoD titles to digital TV providers. It also offers its own VoD channel for live concerts (i-concerts), including top international hits on demand, as well as live performances by local artists. Transmedia distributes i-concerts to international telecommunications companies and cable operators, such as Free, Telenet, Club Internet or BT Vision; until now the channel has not been available in Switzerland.
Founded in 2003, the Geneva-based company employs around 20 people. Swisscom already maintains commercial relations with Transmedia. Some of the French language VoD content offered on Bluewin TV stems from Transmedia. The company’s live music channel i-concerts are mainly found on IPTV platforms. Some of the music offerings are also planned for Bluewin TV.
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24th May 2007
Another consortium enters privatisation talks with BCE
The Strategic Oversight Committee of the board of directors of BCE Inc has announced that another group is entering into discussions to explore the possibility of taking the company private and that members of the group have signed non-disclosure and standstill agreements with BCE on a non-exclusive basis. The consortium includes Cerberus Capital Management, LP and a group of Canadian investors.
The company had previously announced its intention to review all strategic alternatives with a view to further enhance shareholder value. The review is currently expected to be completed in the third quarter of 2007.
BCE said that no assurances can be provided that any offer, if made, by any bidding group, now formed or to be formed in the future, will be accepted by the board of directors or that this review of alternatives will result in any specific action being taken by the company.
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23rd May 2007
Mobistar to acquire VOXmobile
Mobistar, a mobile operator in Belgium, has signed an agreement to acquire 90% of Luxembourg-based VOXmobile. In December 2006, the shareholders of VOXmobile authorised a bank to investigate the strategic options for the company. After the approval of its board of directors, Mobistar made a binding take-over offer that was accepted by VOXmobile. Mobistar will acquire 90% of the VOXmobile shares for €80.3 million. This amount equals proportional the estimated value of the company, minus its debts after capitalisation of the shareholders loans.
VOXmobile supplies mobile and fixed telephony and Internet services. The company has licences for GSM 900/1800, UMTS and fixed telephony, and uses its own network. In May 2004, commercial activities were started up and in two years VOXmobile succeeded in obtaining a market share of 20% in the grand duchy. In 2006, VOXmobile had a turnover of €27.673 million and a net result of -€5.75 million. The group, consisting of VOXmobile and its two branches TOPLINE distribution and MOSKITO productions, employs about 100 people. The shareholders of VOXmobile are BIP Investment Partners SA and AUDIOLUX SA, which each own 37.5 %, and BIKO, an investment company.
Mobistar, which already has commercial agreements in place with VOXmobile, said it is looking for geographic expansion and extra growth. The acquisition also provides opportunities for joint product development and economies of scale in network investments and purchasing activities.
VOXmobile will continue to exist as a separate entity and will continue to use its own infrastructure. The agreement stipulates a continuity of the present management, which will remain the owner of 10% of the company's capital. The transaction is expected to close no later than July 2, 2007.
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23rd May 2007
Clearwire completes first phase of mobile WiMAX field trial
US-based Clearwire Corporation has announced the successful completion of the first phase of one of the country’s first mobile WiMAX field trials. The field trial in the Portland, Oregon suburb of Hillsboro, jointly conducted with Intel Corp and Motorola Inc, is using infrastructure equipment based on the IEEE 802.16e standard and relying on Clearwire’s spectrum in the 2.5GHz frequency band. The first phase of the field trial focused on coverage, capacity and speed associated with the air interface.
“The successful completion of the first phase of our mobile WiMAX trial is a significant milestone in our efforts to commercially deploy true mobile broadband services in the US,” said Scott Richardson, Clearwire Chief Strategy Officer and a WiMAX innovator instrumental in the creation and development of the WiMAX standard. “By demonstrating initial performance consistent with the WiMAX industry standards, we are making great progress in our ability to evolve our networks to take advantage of the benefits of a standards-based technology for future Clearwire subscribers.”
WiMAX is a standards-based wireless technology for providing high-speed, last mile broadband connectivity to residents and businesses and for mobile wireless networks. The first phase of the trial achieved the coverage, capacity and speed guidelines as set by the WiMAX Forum.
Clearwire, Intel and Motorola are working on both the standards process and the development of network infrastructure that will enable the delivery of fast, reliable and mobile broadband services. The first phase of the field trial covered 15 square miles in Hillsboro using a mobile WiMAX laptop card, the first to be based on WiMAX. Individuals testing the card received true broadband connections with multi-megabit speeds. The next phase of the mobile WiMAX field trial will expand to cover 145 square miles and a greater number of users and devices on the network.
“With the completion of the first phase of our field trial we are on track to deliver the first integrated mobile WiMAX solution with next-generation Intel Centrino processor technology in 2008,” added Sriram Viswanathan, Vice President, Intel Capital and General Manager, WiMAX Program Office. “We look forward to the next phase of our field trial that will include more people, wider coverage and greater mobility to ultimately help deliver the true promise of WiMAX.”
“The early results of this field trial validate that the design features and functionality of our mobile WiMAX infrastructure solutions can deliver the performance our customers expect,” said Fred Wright, Senior Vice President, Wireless Broadband, Motorola Home and Networks Mobility. “This milestone is a great step toward the commercial readiness of our collaborative effort to bring a truly mobile broadband service to market.”
Clearwire, founded in October 2003 by Craig McCaw, is a provider of wireless high-speed Internet service. Headquartered in Kirkland, Washington, the company launched its first market in August 2004 and now offers service in 38 US markets, covering approximately 8.9 million people in more than 400 municipalities in Alaska, California, Florida, Hawaii, Idaho, Minnesota, Nevada, North Carolina, Oregon, Texas, Washington and Wisconsin in the US, as well as 1.2 million people in Ireland and Belgium. In addition, wireless high-speed Internet services are offered in Mexico and Denmark by Clearwire’s partners, MVS Net and Danske Telecom.
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23rd May 2007
Huawei Technologies and Symantec to form joint venture
US-based Symantec Corporation and Huawei Technologies have announced that the two companies are forming a joint-venture company. The new company will develop and distribute security and storage appliances to global telecommunications carriers and enterprises.
Businesses around the world are building and maintaining IP networks and IT systems that support a growing number of connections. This requires balancing increasing performance and availability requirements with system security and data integrity. The joint venture will help carriers and enterprises address these challenges by offering security and storage appliances.
"Symantec is a software leader that offers world-class security and storage technologies that our customers are demanding," said Ren ZhengFei, Chief Executive Officer, Huawei. "The partnership with Symantec is part of Huawei's all-IP and FMC (fixed mobile convergence) strategy. Network security will definitely form the foundation as telecom networks migrate toward an all-IP environment. The partnership will enable us not only to provide leading network security solutions to carriers, but also to deliver professional security and storage solutions to enterprises, helping our customers build a safer and more efficient network."
The new company will be headquartered in Chengdu, China, with Huawei owning 51% of the venture and Symantec owning 49%. Huawei will contribute its telecommunications storage and security businesses, including its integrated supply chain and integrated product development management practices. Additionally, the new company will have access to Huawei's intellectual property (IP) licences, research and development (R&D) capabilities, manufacturing expertise and engineering talent, which includes more than 750 employees. The venture's services and support infrastructure will draw upon Huawei's model for customer service and technical support, including worldwide technical support and call centre operations.
Symantec will contribute some of its enterprise storage and security software licences, working capital, and its management expertise into the new company. Symantec will also contribute US$150 million towards the growth and expansion of the joint venture.
The joint venture is expected to close in late-2007, pending the receipt of regulatory and governmental approvals.
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22nd May 2007
TPG sells Freenet stake to VATAS
TPG, a global private investment firm, has agreed to sell its 12.45% stake in German telecommunications provider, freenet AG, to a subsidiary of Berlin-based private investment firm, VATAS, for an undisclosed sum. At the same time, TPG-Axon sold its 6.22% stake in freenet to the same buyer. TPG and TPG-Axon became shareholders in mobilcom AG in 2005 and were supporters of mobilcom's merger with its affiliate company freenet.de that was finally completed in March 2007.
A spokesperson of VATAS Group said: "The mobile Internet will be the big growth market in the telecommunications sector for years to come. As a result of the merger of mobilcom AG and freenet.de AG the new freenet AG has an excellent position as well as opportunity to gain market share. The management has created shareholder value over a long period of time. This together with the unique positioning of freenet AG in the marketplace has convinced us of the substantial upside potential of our investment in freenet AG."
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22nd May 2007
Kingston upon Hull City Council to sell stake in Kingston Communications
Kingston Communications (Hull) plc has received notification from Kingston upon Hull City Council, pursuant to the Relationship Agreement dated June 22, 1999, of the Council’s intention to sell the 157,499,999 ordinary shares it holds in Kingston subject, inter alia, to market conditions. The sale, if completed, would represent the entire stake the Council holds in Kingston.
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22nd May 2007
Ericsson selected as supplier and integrator to expand WIND's optical network
Ericsson AB has been selected by Italian Internet provider WIND Telecomunicazioni as a provider for metro and core optical transport technology and systems integrator to support its fixed IP broadband access.
The contract awarded to Ericsson includes a DWDM solution to increase transmission capacity of 1,600km of existing fibre cables and broadband remote access server (BRAS) technology to improve fixed broadband access performance.
Ericsson's turnkey solution incorporating the Marconi-branded multi-haul metro and core platform will handle broadband end-user traffic allowing WIND to underpin its offering. The deployment will ensure that WIND, Italy's largest Internet provider, can provide high-capacity Internet access for subscribers and support next-generation Internet services.
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22nd May 2007
Q-Tel and ATCO purchase majority stake in Burraq Telecom of Pakistan
Qatar Telecom (Q-Tel) and A. A. Turki Corporation for Trading and Contracting of Saudi Arabia (ATCO) have announced the completion of their joint-venture investment to purchase a 75% stake in Burraq Telecom of Pakistan.
Burraq is an established operator licensed to offer a full range of telecommunications services across Pakistan, including long-distance international and wireless local-loop. The company also has associated spectrum at different frequencies. Burraq has recently completed a limited rollout of its Broadband Wireless Access (BWA) network in all of Pakistan’s 14 regions. The company generated revenues close to US$20 million in the last fiscal year by transacting 240 million minutes through international call termination and prepaid calling card services.
Following the investment of the Q-Tel/ATCO joint venture and further capital contributions, Burraq plans to invest approximately US$80 million in the coming few years to deploy and operate BWA/WiMAX networks within Pakistan.
The Q-Tel/ATCO investment in Burraq is a part of the joint venture’s strategy to jointly develop and operate BWA services, including WiMAX and other complementary services, in markets in the Middle East, Asia, and North Africa. Q-Tel owns a 51% stake in the joint venture.
“With this new Q-Tel/ATCO investment, Burraq will be able to provide broadband wireless access to consumers in our home market,” said Mr Asad Karim, CEO of Burraq. Mr Karim continued by saying that “combining the local know how of our existing management with the international technical and financial assets of our new partners totally changes the scope, speed, and quality of deployment of Burraq services."
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21st May 2007
ALLTEL to be acquired by TPG Capital and GS Capital Partners
ALLTEL Corporation has signed a definitive merger agreement to be acquired by TPG Capital and GS Capital Partners (GSCP), in a transaction valued at approximately US$27.5 billion.
Under the terms of the merger agreement, TPG Capital and GSCP will acquire all of the outstanding common stock of ALLTEL for US$71.50 per share in cash. The purchase price per share represents a 23% premium over ALLTEL's closing share price prior to media reports of a potential transaction published on December 29, 2006. ALLTEL intends to pay its regular quarterly common share dividend until closing.
ALLTEL's board of directors has unanimously approved the merger agreement after a review of the company's strategic options, and has recommended the approval of the transaction by ALLTEL's shareholders. Completion of the transaction, which is currently expected to occur by the fourth quarter of 2007 or by the first quarter of 2008, is contingent upon customary closing conditions, including approval by ALLTEL's shareholders and certain regulatory approvals. Shareholders will be asked to vote on the proposed transaction at a meeting that will be held on a date to be announced. Scott Ford, ALLTEL's chief executive officer, will remain in his current role.
"This transaction delivers substantial and certain value to our shareholders while providing the company with long-term partners who share our commitment to our customers, employees and the communities we serve," said Mr Ford. "TPG and GSCP are long-term investors who are willing to make the investments necessary to continue to grow our wireless business in all of our markets. This transaction also ensures our customers can continue to rely on ALLTEL to deliver high-quality service and leading edge products and services."
Acquisition financing will be provided by Goldman Sachs, Citigroup, Barclays and RBS.
ALLTEL is the owner and operator of the nation's largest wireless network and has 12 million wireless customers.
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21st May 2007
Columbus Networks installing new undersea fibre route
Columbus Networks has announced that it is installing a new "multi-million dollar" undersea fibre route that will link Colombia directly to Florida and offer users improved network redundancy, reliability, performance, and bandwidth availability throughout the pan-Caribbean and Americas region.
Columbus Networks’ Colombia-Florida Sub Sea Fibre Project, dubbed CFX-1, includes more than 2,400 kilometres of high-capacity fibre-optic cable and will have a branch into Jamaica. It seamlessly connects with the ARCOS-1 undersea ringed network forming two large sub-rings for alternate routing and redundancy. The express link will have three new landing stations in Cartagena, Colombia, Morant Point, Jamaica, and Boca Raton, Florida, US. Work on the new undersea network project is underway.
“CFX-1 is the largest network expansion project our company has undertaken since it was acquired by Columbus Communications in September 2005,” said Paul Scott, President of Columbus Networks, a subsidiary of the Bridgetown, Barbados-based communications company. “This project demonstrates Columbus’ ongoing commitment to invest in the region and help stimulate new economic growth and expansion.”
Columbus Networks awarded the contract for building the network to Tyco Telecommunications, a business unit of Tyco Electronics. Tyco’s project plan for CFX-1 is on schedule and the new system is expected to be in service by June 2008.
Columbus Networks provides broadband and IP services to telecommunications carriers, cable television companies, ISPs and network integrators throughout the pan-Caribbean and Americas region. Columbus Networks is a 94% owner and principal operator of the Americas Region Caribbean Optical-ring System (ARCOS), which connects the US, Mexico, Central America, South America, and the Caribbean. Columbus Networks provides more than 11,000 kilometres of undersea fibre-optic network through the company's ARCOS network combined with its new undersea link to Trinidad that is scheduled for activation in October and its affiliate company’s sub-sea networks in the Bahamas (Caribbean Crossings) and Jamaica (Fibralink). The company is also constructing a 1,000 km sub-sea network extension to Trinidad, which is expected to be operational in October 2007.
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21st May 2007
SonaeCom in negotiations for acquisition of fixed-line operator ONI
SonaeCom SGPS SA recently disclosed that it is in talks to acquire fixed-line telecommunications unit ONI SGPS SA, although no agreement has been reached, according to Dow Jones Newswires.
SonaeCom "is currently undertaking negotiations with ONITELECOM - Infocomunicações SA concerning the possible acquisition of part of the activity developed by such company in the electronic communications market," the company said.
In November 2006, Energias de Portugal SA sold ONI to US-based private equity group Riverside Co. for €160 million.
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