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may 2014

it is rare in this day and age for telecoms operators to be planning service

launches in truly unchar-tered territories, but two big players are currently doing exactly that.

Qatar’s Ooredoo and Norwegian operator Telenor will launch in Myanmar in the coming months, a market that a number of people have referred to as the telecoms industry’s final frontier. The pair are boldly going where

mobile penetration is unknown, but certainly under the 10% mark, and where the climate and lack of infrastructure present serious challenges. The chief executives of both companies spoke to Total Telecom recently to explain how they are getting on (p.8).

It’s a marked contrast to the surrounding markets in the Asia-Pacific region, which are for the most part characterised by either the

sheer scale scale of their mobile markets or by how advanced they are. The AP29 (p.13), a ranking of the biggest operators in the Asia-Pacific by revenue, is dominated by Japan and China, the former home to some of the most advanced telcos in the world and the latter to three operators that between them have 1.25 billion mobile customers.

This month our News & Views section (p.3) focuses mainly on the Asia-Pacific, but since telecoms is a truly global industry we have also included the big news from the rest of the world on p.6.

Mary Lennighan, editor mary.lennighan@totaltele.com @TelecomEditor

Telcos prepare for launch in Myanmar, but there’s plenty going on elsewhere in the Asia-Pacific too

FINAL FRONTIEROpINION

FEATuRE FRESH

FACESOoredoo and Telenor are gear-ing up to be the faces of a new mobile industry in Myanmar. See how they are progressing on p.8

Dates for your diary and details of the must-attend events in the telecoms industry over the coming months

NBN Woe: Australia’s NBN Co is scrambling to find the means and the money to satisfy demand

Playing leapfrog: China’s telcos make the biggest gains in the AP29, but Softbank’s Sprint buy will bring big changes

Fresh Faces: Four firms are gearing up to launch mobile services in Myanmar, one of the last untapped markets

Enabling enterprises to be more agile and productive with solutions from BAE Systems.

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a round-up of the major stories from the asia-Pacific region and beyond in the past few months, as reported on www.totaltele.com

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ANALySISIN bRIEF

GENERATION GApWhile operators in a number of Asian markets have launched or are planning to launch fourth-generation mobile services, others have yet to get going on 3G. Pakistan in April conclud-ed its long-awaited 3G licence auction, with four of the country’s five operators taking part and all four coming away with spectrum. The auction raised a total of US$1.1 billion. Only one of the four took the opportunity to bid for the 1800-MHz spectrum Pakistan has earmarked for 4G services as well though: China Mobile’s local unit Zong agreed to pay an extra $210 million for its 4G spectrum and is already marketing itself as Pakistan’s “first and only 4G operator”.

Analysts remain unconvinced that Zong will have a significant advantage over its rivals though. Moody’s analyst Yoshio Takahashi predicts that in the next two-to-three years 4G subscribers will make up less than 3% of the Pakistani mobile market, compared with 10%-15% for 3G services, “given the expected higher tariffs for 4G services.”

While demand for 4G services may have yet to materialise, the telcos are keen to bring their 3G offers to market. Market leader Mobilink has said it plans to launch services later this year, while Telenor noted that its local unit has a 3G-ready network already in place and plans a rapid rollout of services as soon as it receives the required clearances.

Pakistan is not the only market still awarding 3G licences. In neighbouring Afghanistan the government issued the country’s fifth 3G licence to Afghan Wireless Communications Company (AWCC) in March, reportedly for $25 million. As it stands, 3G services are available in 20 of Afghanistan’s 34 provinces. The state aims to boost 3G coverage to 80% of the population and territory within a year.

5G TECH TRIALSNTT DoCoMo announced plans to start trialling emerging 5G technologies this year in partnership with Alcatel-Lucent, Ericsson, Fujitsu, NEC, Nokia and Samsung.

2G SHuTdOwN Thai mobile operators True Move and Digital Phone Co have been ordered to close down their 2G services by the end of June to free up the spectrum for 4G.

VIETNAMESE wHIRLThe Vietnamese government gave the go-ahead for mobile operator MobiFone to be separated from its state-owned parent ahead of privatisation.

buNdLING upJapan may ease restrictions preventing NTT from offering discounts on fixed and mobile bundles. KDDI and Softbank are lobbying for the rules to remain.

IN bRIEF

pROFILE

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NEwS FROM CHINA

1.25 bILLION

MObILE SubS IN CHINA AT THE ENd

OF MARCH (operators)

pHONE MAKERS GROwHuawei and Lenovo each captured a 5% share of the global smartphone market in the first quarter of 2014, putting pressure on the likes of Samsung and Apple, according to Strategy Analytics.

ALu GETS €750M dEALAlcatel-Lucent signed a €750 million deal to supply China Mobile with 4G and IP networking technology.

SHARE ANd SHARE ALIKEChina’s big three telcos are in talks to establish a joint venture tasked with building and maintaining base station infrastructure, they dis-closed in stock exchange filings.

MVNO LAuNCHChina got its first mobile virtual network operator (MVNO) in May in the shape of Telephone World Digital unit T.Mobile. The service uses China Telecom’s network.

CAREFuL budGETINGSince he took over as the new CEO of Australia’s NBN Co at the start of the year, Bill Morrow has been a busy man.

Following a strategic review, the government in April issued a new set of objectives to NBN Co, which amongst other things will see it place less focus on running fibre right into the premises and instead look to use a mixture of technologies including various FTTx architectures, HFC, satellite and mobile. Naturally, the revised plan is designed to weigh less heavily on state coffers. The government said it expects the NBN rollout will now cost A$41 billion, to which it will contribute a maximum of A$29.5 billion.

It wasn’t long before the call for more money came though. NBN Co in May published the results of a study that showed it will need another A$1.7 billion to fund rural the broadband rollout. “We need to think smarter about the way we use technology,” Morrow said as he explained that NBN Co had underestaimated demand in rural areas and will need to double the number of fixed wireless base stations it deploys to 2,700, extend the reach of its FTTN network to a further 25,000 premises and secure additional radio spectrum.

wE NEEd TO THINK SMARTER AbOuT THE wAy wE uSE TECHNOLOGy

TM buyS p1Telekom Malaysia agreed to pay 350 million ringgit (€77 million) for a 57% stake in WiMAX operator Packet One. It will use its spectrum and cell sites for LTE.

HK OKS pCCw-CSL dEALThe Hong Kong Communications Authority has given the go-ahead to PCCW parent HKT for its $2.43 billion CSL buy, albeit with conditions.

SRI LANKA’S FIbRE pLANSri Lanka Telecom unveiled details of its new fibre-to-the-home (FTTH) network through which it will offer 50-Mbps and 100-Mbps Internet services.

JOb CuTS AT OpTuSAustralia’s Optus announced a plan to cut 350 jobs as part of a business restructuring designed to reduce costs.

2dEGREES SHARES LTE pLAN New Zealand’s smallest mobile operator 2degrees is trialling LTE services in 1800-MHz spectrum ahead of a July launch.

ANALySIS

OpINION

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SubSIdy SMACKdOwNFor all its advancements in LTE technology, South Korea has a serious prob-lem with excessive smartphone subsidies that is harming the profitability of its three operators, SK Telecom, KT Corp and LG U+, and regulators can’t seem to rein them in. The latest round of staggered 45-day sales bans–the preferred punishment for offering illegal subsidies–have come to an end, and all three are back in the market.

South Korean law forbids discounts of more than 270,000 won (€190); however, this threshold is routinely breached because competition is fierce. So fierce in fact that when it transpired that the sales bans would coincide with the planned 11 April launch of the Samsung Galaxy S5, the telcos simply ignored the launch date and put the device on sale two weeks early.

The government is in the process of passing a new law that will further limit subsidies and require handset makers to disclose the factory price and RRP to authorities. Unless these rules are backed up by harsh punishments, it is difficult to see Korea’s telcos taking them seriously. The Korea Com-munications Commission (KCC) threatened to bring criminal charges against their CEOs if they did not adhere to the latest round of sales bans. It seems extreme, but that would likely be the most effective means of ending exces-sive subsidies once and for all.

TELCO pARTyIt’s all go in India, with consolidation, spectrum auctions and next-generation networks on the agenda, not to mention that at the time of writing, the national elections look set to bring about a change of government.

The competitive landscape is shifting. In February, India raised $9.8 billion from the auction of 1800-MHz and 900-MHz spectrum. One notable bidder was Reliance Jio Infocomm, the only player in the market to own nationwide TD-LTE spectrum. The telco picked up frequencies in 14 circles, including Delhi, Mumbai and Kolkata.

Another player was notable for its absence from the list of winning bidders: Tata Teleservices, which offers mobile services as Tata DoCoMo. Its future is the subject of intense speculation after Japan’s NTT DoCoMo announced it will sell its 26.5% stake. A buyer has yet to be announced, but industry watchers believe Vodafone is in the frame. Further, many suspect the UK operator, which took full control of its Indian unit in April, is preparing to launch a full takeover bid for Tata Teleservices, a move that would see it overtake Bharti Airtel to become the country’s biggest operator by subscrib-ers. However, it remains to be seen whether a new govern-ment would give such a transaction the green light.

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bIG NEwS

bIG dEALSNuMERICAbLE wINS SFRFrance’s Numericable won the race to acquire Vivendi’s mobile unit SFR, beating Bouygues Telecom with a bid of €13.5 billion and a 20% stake in the merged entity.

NEw MObILICITy MOVECanada’s Telus has brokered a new, C$350 million deal to acquire smaller rival Mobilicity after its at-tempt last year was blocked due to spectrum transfer rules.

dJEZZy dEALVimpelcom agreed to sell a 51% stake in Algeria’s Djezzy to the state for $2.64 billion, bringing to an end a long-running dispute over the mobile operator’s ownership.

VOdA buyS ONOAfter months of speculation Vodafone announced a €7.2 billion deal to buy Spanish cableco Ono. The deal is expected to close in Q3, pending regulatory approvals.

SHApE SHIFTINGThe telecoms and TV landscape is changing by the day. If media reports are to be believed, AT&T is readying a bid worth as much as US$50 billion for satellite TV provider DirecTV. The merged entity would be on a stronger footing to compete with Comcast/Time Warner Cable (TWC), presuming that deal gets the go-ahead from regulators; in a bid to ease competition concerns Comcast has agreed to divest 3.9 million subscribers, the prime beneficiary of that arrangement being Charter Communications. Nonetheless, Dish Network chairman Charlie Ergen in May warned that the deal would lead to “an unprecedented concentration of power,” particularly in the broadband market.

Dish is waiting in the wings in the mobile space, ready to pounce if Sprint’s reported plan to take over T-Mobile fails to happen. Also in the mobile market, Verizon has agreed to pay $210 million for Cincinnati Bell’s mobile operations, while AT&T closed its $1.19 billion acquisition of prepaid specialist Leap Wireless.

puTTING IT IN NEuTRALThe European Parliament got a mixed reaction when it voted in April to protect network neutrality. While many supported the move, some claimed it would negatively impact on telcos’ ability to effectively manage their networks. At the same time, lawmakers also backed a plan to phase out mobile roaming charging within the EU by late 2015. Meanwhile, in the US the FCC is working on a revision of its own net neutrality rules after critics warned the regulations in their current form would create a two-tier Internet.

MICROSOFT’S A pHONE COMicrosoft closed the acquisition of Nokia’s mobile phones business. Nokia retains its manufacturing plant in Chennai, the subject of its tax dispute in India.

NOKIA’S NEw LEAdERHaving divested its mobile devices business, Nokia named Rajeev Suri, head of its newly-named ‘Networks’ business, as company CEO.

HOME ANd AwAyAmerica Movil faces a raft of new regulations in its home market, having been named as a dominant player. In Europe it made a €7.15-per-share takeover offer for Telekom Austria.

M-pESA COMES TO EuROpE Vodafone brought M-Pesa to Europe for the first time, launching the mobile money service in Romania.

COLT EXITS CARRIER VOICE UK-based Colt is winding down its carrier voice business as part of a strategic review designed to relieve margin pressure and spur revenue growth.

IRAQ ALLOwS 3G The Iraqi government has approved the allocation of 3G licences to the country’s existing mobile operators. It has yet to specify when it will award the licences and how much they will cost.

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the days of having to shell out the equivalent of a year’s salary for a

SIM card in Myanmar are coming to an end, with four companies gearing up to launch new mobile services in the near future.

International operators Telenor and Ooredoo, who emerged victorious from the 2013 licensing contest that attracted a staggering 92 entrants, are pressing ahead with network rollouts, while state-owned Myanmar Post and Telecommunications (MPT) and ISP Yatanarpon Teleport (YTP), a joint venture between the state and local companies, are in the latter stages of looking for partners to support their own mobile rollouts. Those partners will be international operators that failed to win licences last year. MPT reportedly plans to join up with Japan’s KDDI, while YTP will choose between Orange, Thailand’s True Corp and Malaysia’s Axiata.

“It’s probably going to turn into the most competi-tive market on the planet,” says Ross Cormack, CEO of Ooredoo Myanmar. To see what he and his counterpart at Telenor have to say about the market, read on...

Four firms are gearing up to launch services in one of the last remaining untapped telecoms markets

FRESH FACESMyANMAR’S NEw OpERATORS

10% MObILE

pENETRATION IN MyANMAR

(estimate)

65m THE ESTIMATEd

NuMbER OF pEOpLE IN THE

COuNTRy

THIS IS ALMOST THE LAST FRONTIER IN TELECOMS...IT’S ALL TO pLAy FORross cormack, ooredoo

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Qatar’s Ooredoo in January said it aimed to launch mobile services in Myanmar’s major cities within six months. Ross Cormack, CEO of the telco’s Myanmar unit, tells Total Telecom how the network build is progressing.

How is the rollout going?We’ve built the first switch-ing centre, the first data centre and that’s been up and running since the beginning of the year; we did our first call in January. We have got our IT running and it’s doing everything it should at this stage. We’re building transmission, we’re building fibre and we’re working with towers companies to roll out the radio infrastructure.

We’ve got two towers companies: MTC and Pan Asia Towers. They have a large number of leases which they’re turning into building permits for us. We’ve got some low hundreds of base stations and towers starting to go up. By the time we’re ready to launch we’ll have approximately 1,000 towers in the central part of the country which is the most populous. We’re building a pure 3G network at 900 MHz and 2100 MHz.

Are you’re getting much local support and are you still looking at network-sharing?Yes. The permitting process for the towers, for example, which is our biggest chal-lenge at the moment, is one the government is actively helping us with. The country wants to get its communica-tions rolled out as quickly as possible–we promised to reach 97% of the population with 3G by the end of five years–and encouraged passive infrastructure sharing from the get go. That’s why we are swapping the coordinates of our towers with the other operators as we secure permits and likewise their tower compa-nies are reaching out to our tower companies. That should speed up the rollout and lower the cost to the operators and also to the customers because that cost saving will get passed on.

How much of a challenge is the lack of infrastructure?It’s complicated rather than being a problem. 70% of the population don’t have access to power, so a very large percentage [of towers] will need a generator. There are brown-outs even in the cities and there isn’t any power at all in most of the rural areas,

so you need a mixture of green power and diesel. You’ve got to maintain the generators so you need a small army of people going round the country. And the country’s huge. It’s twice the size of the Philippines: 2,000 km long by 900 km wide. The road infrastructure is quite poor. You soon get to off-road tracks which in rainy season become very waterlogged. And the rain itself slows down the build.

But all of this is known to people living in the country. The [biggest] issue is the sheer quantity of work going on. We exhausted all the steel in the country in the first couple of weeks, so steel had to be brought in. There is enough concrete, but there are all sorts of other things you need more of, strange things like connectors.

The operating expendi-ture for running the power is probably higher, but we’re saving on the power-sharing and that sort of thing. There are pluses and minuses.

Teledensity is around 10%, but is demand for mobile services as big as it looks?Yes, I would say it is. The measure of that is the real price you have to pay for a SIM. My SIM cost me $140

Ross Cormack, CEO of Ooredoo Myanmar, paints a picture of pent-up demand for mobile services and a challenging operating environment

TwO STEpS FORwARdMyANMAR’S NEw OpERATORS: OOREdOO

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and some people pay $400 or $500. I asked a group of school teachers and they paid $500-$600 a piece for their SIMs. They were state teachers so earned $50 a month. I call that demand. Clearly they either saved up for a long time or the family all chipped in. In rural areas the average number of people using a [mobile] number is three. There is a huge pent-up demand.

So how do you make mobile services more affordable?It’s a scale game. There’s a critical mass where you can deliver affordable services and make a return that allows you to keep investing.

We’re putting a lot of effort into training our staff so that as people come into stores or call the contact centre we can explain in simple terms how to use the services. We’re attracting Myanmar people to our business who are incredibly well educated, energetic young people. Of 800 people, nearly 75% are Myanmar [nationals] and we’ve got 30,000 qualified CVs.

Does going straight to 3G affect the price of a handset?Yes it does, but smartphones are becoming much more affordable, so you don’t have to pay Apple prices by any means. We’re looking at sub-$50 and even less.

Secondly, we’re launching into a market that already has some knowledge of data. There is a data offering by

MPT and our advantage [over that] will be to deliver fast data, reliably, and with little latency.

The third part of the equation is that we will have services that will be very interesting as apps on the phones that we supply. They will be simple services, like simple mobile banking, some agriculture, some health apps and other things. I don’t want to say too much because I’m telling our local competitors more than they need to know!

How far off is the demand and ability to pay for 4G?It’s more dependent on the availability of the frequencies

than anything else. Our network is being built 4G-capable so it’s just software programming from our offices to upgrade the base stations, plus the licence fee paid by us to the infra-structure provider. But I don’t have any forecasts on when the frequencies will be available. Going to 3G of the quality we will offer will be quite an advance on what people are used to. Then we can measure how effectively we could launch 4G and talk to the government about it.

THE pERMITTING pROCESS FOR THE TOwERS IS OuR bIGGEST CHALLENGE AT THE MOMENT

You are putting fibre in the ground. Is there an opportunity for fixed services?We have an integrated licence, so we’re able to provide international services, ISP, fixed etc, so yes we will plan to do that. Our fibre at the moment is an intercity fibre backbone, which goes out to the towers, but we’re also building international connectivity as well so we can control the end-to-end data experience.

We will have fairly rudimentary business services initially. The launch is about the mass-market, but we will have a business team and the services will get more sophisticated. We

will need metropolitan networks in the big cities, so by the time you’ve got those connecting up your backhaul in cities you’re fairly close to main businesses anyway.

When do you plan to launch?It’s Q3. We’ll be more precise when we’re closer to the date. Even though I’ve done start-ups in other countries I would say this is definitely the most challenging. I’ve often said to our team that we take two steps forward and two back every day!

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Telenor began recruiting for staff for its new Myanmar business at the start of this year, at which time it said it aimed to launch services there within eight months. Petter Furberg, CEO of Telenor Myanmar, gives us the low-down on what it’s like to build towers, roll out mobile services and recruit staff in the world’s newest telecoms market.

How far have you got with network rollout? Are you on track to launch within the eight months you specified? Telenor is on track to meet our stated schedule. A clear network rollout plan has been developed to deliver high-quality voice services and data speed connections to all states and regions.

We have chosen Ericsson, Huawei and Wipro to support our efforts. We have also selected infrastructure providers Apollo Towers and Irrawaddy Green Technology (IGT), to build and manage telecom towers and will collaborate extensively with many local companies including partners within the distribution, network, power and IT sectors.

In April, we carried out the first voice and video call

on our live core network in Myanmar.

Is network-sharing important to your strategy?We remain open to collabo-ration with other operators in the market and we support the government’s drive for infrastructure sharing as that is in the interest of all parties. We have had excellent cooperation with all areas of the Myanmar government.

When do you see demand for 4G services and how are you future-proofing your network?Our goal is to provide network coverage to 90% of the population in Myanmar within five years of the network rollout therefore we are focused on providing voice and data services to the mass market. Our initial offering will be voice and data services, which we will launch over 3G and 2G simultaneously. Our network will be 4G-ready but it is not

Telenor Myanmar CEO Petter Furberg explains how his company is using its experience in India, Pakistan and Bangladesh as it prepares for launch

TRIEd ANd TESTEdMyANMAR’S NEw OpERATORS: TELENOR

OuR EXpERIENCE IN bANGLA-dESH, pAKISTAN & INdIA HAS pLAyEd A ROLE IN SHApING OuR MyANMAR STRATEGIES

possible to speculate on when there will be demand for that service.

What are the main challenges you face in rolling out mobile services in Myanmar?In Myanmar, many factors have to be considered when building the telecom network, including build-out of the telecom towers, geographical terrain, population dispersion, infrastructure such as roads and power generation, among others. We still have much work to do and the key challenge we face at this stage is tower building.

How is the recruitment drive going? What balance do you expect to strike between local and overseas employees?Our staff recruitment has been very successful. We recently announced the official opening of our company’s headquarters in Yangon (in Bahan Township) and have approximately 300

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full-time employees, including State Liaison Officers who represent local stakeholders in various states and regions. The over-whelming majority of our employees are locally hired, with overseas staff being recruited when the experi-ence and skill level cannot be found in Myanmar.

What lessons have you learned from your other developing Asia-Pacific deployments?Our greenfield experience in Bangladesh, Pakistan and India has played a significant role in shaping our network and service strategies in Myanmar where we will build everything from the ground-up. In addition, we will bring key learnings from

India where Telenor has established an advanced distribution system that reaches far-remote and rural areas. This includes building a distribution network of 100,000 retailers in Myanmar within five years of the network and service rollout.

How are you going to make handsets affordable for people on a very low income?We believe our pricing plans, developed based on our experience in other develop-ing markets, will enable most people in Myanmar to enjoy Telenor’s voice and data services. Telenor will also support a broad variety of handset brands and offer competitive telecoms services and prices that will

be tailored to Myanmar’s consumers. We are working to develop our pricing strategy and will be prepared to share specific details on our pricing plans closer to the network launch.

Do you have any targets for the business that you can share?It is too early to announce such targets, but we are confident this investment will deliver on our promise to the people of Myanmar and also provide an appro-priate return to shareholders. Our goal is to be the market leader in Myanmar.

Telenor targets EBITDA break-even in Myanmar within three years from the time the license was award-ed, which was 5 February.

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pLAyING LEApFROGChina’s telcos make the biggest gains in the AP29, but Softbank’s acquisition of Sprint will mean big changes next year

REVENuE RANKING: THE Ap29

the Asia-Pacific’s telecoms operators are increasing their

influence on the global stage. The region contributed 29

companies to the most recent Total Telecom Global 100 ranking of the world’s biggest operators by revenue, up from 27 a year ago. The two newcomers–South Korea’s SK Broadband and StarHub of Singapore–did not have a significant impact on the total revenues generated by the AP29, but their presence demonstrates

how the region’s telcos stack up against their peers elsewhere in the world.

Together the top 29 Asia-Pacific telcos brought in the equivalent of €410 billion in revenues, or 32% of the total turnover of the 2013 Global 100, up from €402 billion and 31% the previous year. More than half of the sum came from Japan and China, whose major telcos generated €278 billion in revenues or 68% of the regional total, virtually flat compared with last year.

But the biggest operators from China and Japan have

been playing leapfrog. China now occupies three of the top five places in the AP29, China Unicom having added €4.4 billion to its revenues since the last report to take it into fifth place above Softbank, while China Telecom took third spot away from KDDI. Together the three Chinese operators booked revenues of €131 billion, up from €119 billion last year. And when the 2014 Global 100 report is pub-lished later this year we are expecting another strong

performance from China. In the most recent financial year the three grew their combined revenues by 11% in local currency terms to 1.21 trillion yuan, or around €142 billion, based on May 2014 exchange rates.

However, that is not to say that the operators do not face some challenges.

China Telecom posted robust revenue and profit growth in the first quarter of 2014, but its mobile customer numbers are under pressure. It ended Q1 with 183 million mobile customers, 2.38 million fewer than it had

three months earlier. It attributed the decline to “increasing market competi-tion driven by the launch of LTE services and strength-ened marketing promotion by the peers.” The customer loss is particularly galling for the telco since in February it launched its TD-LTE network. It has yet to disclose how many 4G customers it has attracted.

China Mobile, on the other hand, is keen to share its 4G numbers. The world’s largest mobile operator had 2.79 million customers signed up to its TD-LTE service by the end of March, just over three months after it launched. However, the company’s bottom line is suffering. In the first quarter China Mobile reported a 9.4% year-on-year decline in profit to 25.2 billion yuan (€2.95 billion). It blamed competition for the fall, both from over-the-top (OTT) players and its rival telcos.

That said, its net income remains significantly higher than the rest of the AP29 and its 781.08 million-strong mobile customer base still generates a massive turnover. China Mobile’s Q1 operating revenue came in at 154.8 billion yuan (€18 billion), which is more than all but

CHINA NOw OCCupIES THREE OF THE TOp FIVE pLACES IN THE Ap29

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the top seven in the AP29 generate in a year.

Despite strong growth, China Mobile has some way to go before it becomes a serious challenger to Japan’s NTT, which once again claims the top spot in the AP29 (and the number two position in the full Global 100). In euro terms NTT’s revenue declined compared with the previous year, but that was down to the exchange rate. In local currency terms its turnover crept up by almost 2%.

The telco’s domestic mobile unit, NTT DoCoMo, accounts for around 42% of group turnover and like its neighbours in China has also been suffering as a result of increased competition from OTTs and customer churn. For the year to the end of March 2014 the mobile unit posted a slight 0.2% decline in operating revenue to ¥4.5 trillion (€32 billion), while net profit fell 5% to ¥464.7

billion. DoCoMo said it is taking a number of measures to boost its position, including offering a broader device range, improving its network and partnering with companies in vertical sectors. In addition, as of 1 July the company will implement a new operating structure to help it to tap new sources of revenue.

Japanese authorities are currently debating whether to lift a restriction that prevents NTT from offering discounts on fixed and mobile service bundles, a move that could give it a boost. However, rivals KDDI and Softbank are lobbying against this plan, claiming it would distort competition.

Despite KDDI and Softbank’s slide down the AP29 table–both increased

revenues in local currency terms but were hit by the exchange rate fluctuation–Japan remains the biggest single market, its three telcos generating €147 billion in revenues between them.

Softbank in particular has had a busy year, which will lead to a big change in next year’s Asia-Pacific ranking. It closed the acquisition of Sprint in mid-July, from which date it has consolidat-ed the US mobile operator’s numbers into its own. As such, its latest financials, for the 12 months to the end of March 2014, show massive growth. Softbank’s 2013/14 revenues grew by 108% to ¥6.67 trillion, or around €48 billion, putting it third in the table.

NTT DoCoMo has also expanded outside of its home

GLObAL 100 2013 REVENuE SpLITS

Source: Total Telecom, operators

Asia pacific 31.93%Europe 34.20%North America 24.28%Latin America 5.58% Middle East & Africa 4.01%

34.20%

4.01%

31.93%

5.58%24.28%

Japan36%China 32%Korea 9%India 6%Australia 4%Singapore 3%Hong Kong 3%Others 7%

36%

7%

3%

3%

4%

6%

9%32%

THE ASIA-pACIFIC 29 GENERATEd €410 bILLION IN REVENuES

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HEAdLINERank Rank Company Country Revenue Em Net income/loss (Asia) (G100) (Asia-pacific rank in 2012) 2012-2013 2012-2013 in Em 2012-20131 2 NTT (1) Japan 88,602 5,8772 4 China Mobile (2) China 67,126 15,4973 10 China Telecom (4) China 33,906 1,8014 11 KddI (3) Japan 30,324 2,0665 12 China unicom (6) China 29,816 8506 14 Softbank (5) Japan 27,973 3,0087 17 Telstra (7) Australia 18,237 2,7138 19 KT (8) South Korea 16,891 7899 27 SK Telecom (10) South Korea 11,573 79210 28 bharti Airtel (11) India 11,467 32311 29 SingTel (9) Singapore 11,432 2,20712 39 LG u+ (13) South Korea 7,742 -4213 40 Hutchison whampoa (12) Hong Kong 7,674 NA14 46 pT Telkom (14) Indonesia 6,171 1,46915 47 Chunghwa Telecom (15) Taiwan 5,719 1,06616 61 bSNL (16) India 4,020 -1,27417 66 AIS (17) Thailand 3,473 85618 69 Idea Cellular (20) India 3,205 14419 72 pLdT (21) phillipines 3,006 65120 73 Reliance Communications (19) India 2,934 10621 79 Telecom New Zealand (18) New Zealand 2,490 14122 80 pCCw (22) Hong Kong 2,469 25023 81 Tata Communications (25) India 2,456 -9324 82 Telekom Malaysia (23) Malaysia 2,430 31825 84 Maxis Group (24) Malaysia 2,180 45226 89 TOT (26) Thailand 1,894 21827 91 SK broadband (new) South Korea 1,776 1928 92 Taiwan Mobile (27) Taiwan 1,751 38229 98 StarHub (new) Singapore 1,497 222

The 2013 Global 100 is based on the latest published revenue and net income figures for operators’ full financial years: predominantly ending 31 December 2012, but also 31 March 2013, 30 June 2013, 31 March 2012 (BSNL) and 31 December 2011 (TOT). Some of the ranked companies’ activities span non-telecoms indus-tries. In these instances, we have extracted telecoms-related revenue, but corresponding net income data by segment was not always available.

The AP29 includes all Global 100 operators within the widely-recognised Asia-Pacific region, but excludes

those based in the Middle East, since Total Telecom has a separate Middle East and Africa segment.

We used historical mid-market rates at noon eastern time on the day of reporting, provided by www.xe.com. Mid-market rates are derived from mid-point between the buy and sell rates of large-value transactions in the global currency markets. As our analysis does not use consistent exchange rate comparisons, some companies may benefit and others lose from a conversion of their figures into euros. Conversion into euros is indicative and provides no like-for-like comparison.

METHOdOLOGy

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market, but last month it revealed that it expects to sell out of its Indian business Tata DoCoMo, its joint venture with Tata. Industry watchers are tipping Vodafone as a possible buyer and some say the UK operator could make a move for Tata’s stake in the mobile operator too. Absorbing Tata DoCoMo would make Vodafone India’s largest mobile operator by subscrib-ers, pushing it ahead of Bharti Airtel.

Bharti, India’s highest-ranking operator in the AP29, rose one place to break into the top 10, its revenue having grown by 12%. Idea Cellular and Tata Communications both climbed two places up the

table to 18th and 23rd respectively; the only other operator to gain two spots was the Philippines operator PLDT. Overall, the five Indian operators in the ranking generated €24.1 billion in revenues, or 6% of the total, one percentage point more than in last year’s report.

The biggest faller in this year’s ranking was New Zealand’s Telecom Corp, which slipped three places to number 21 on the back of a continued downward trend in revenue; the telco’s top line fell by 8.5% in local currency terms. Change is afoot at Telecom though. In February Telecom an-nounced that later this year it will be rebadged as ‘Spark’.

Commenting on the announcement, Telecom CEO Simon Moutter said the new name will “better reflect what our customers expect from us,” and will enable the telco to “appeal to a broader range of customers in a competitive market place.” Essentially, the operator is keen to highlight its transition from simply providing telecom services to being a provider of digital, cloud and entertainment services.

Telecom is not the only one on that journey; it’s a transformation telcos are making throughout the Asia-Pacific and beyond.

Mary Lennighan, editor mary.lennighan@totaltele.com @TelecomEditor

14 - 15 October 2014London, UK

2 day strategic conference jam packed with networking opportunities. Attended by the most senior level of decision makers from

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Partnering, innovation and new services for wholesale carriers

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FIXEd FAST-LANEMobile data is booming but still modest in volume terms compared to fixed. By the end of 2013, quarterly fixed data use had surged to 823,000 TB, com-pared to 28,000 TB for mobile.

GEOGRApHy: AuSTRALIA

NbN wOEAustralia’s NBN Co is scrambling to find the means and the money to satisfy demand

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20.3m MObILE SubS IN AuSTRALIA

(ABS, Dec 2013)

$5.2bn NEEdEd TO

MEET dEMANd IN RuRAL AREAS

(NBN Co)

THE INTERIM SATELLITE SERVICE HAS bEEN A TRAIN wRECKMalcolm turnbull, comms Minister

OuTbACK OF bEyONdNBN Co’s coverage has more than doubled over the last nine months to over 512,000 premises, while uptake has risen to 166,000 from 70,000. In early May NBN Co said it activated 3,718 premises in one week, most of which took fixed-line services.

Source: NBN Co

NbN ROLLOuT RuMbLES ON

Q22013

Q32013

Q42013

Q12014

600,000

500,000

400,000

300,000

200,000

100,000

0

prem

ises

n premises passed n Activated

Source: Australian Bureau of Statistics

dATA uSAGE dOwN uNdER

900800700600500400300200100

0

Tb (t

hous

ands

)

dEC2009

dEC2010

dEC2011

dEC2012

dEC2013

n Fixed n Mobile

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