Posts Tagged ‘3G’

Nokia launches first handset on China Mobile 3G standard

nokia logoHere at Emerging Voice, we have been following the the whole Nokia / China Mobile / 3G story for a good while, you can pick up on some of those previous posts here : Nokia in China

Today, Nokia has finally launched it’s first TD-SCDMA compliant handsets the Nokia 6788, which was built from the ground up for China Mobile.


Nokia (NYSE: NOK) today announced the Nokia 6788, its first device for TD-SCDMA – China’s domestic 3G standard, at an event in Beijing. The Nokia 6788 is the result of close collaboration between Nokia and the world’s largest mobile phone operator, China Mobile.

Speaking at the event, said Olli-Pekka Kallasvuo, CEO of Nokia: “Nokia sees TD-SCDMA as being central to the successful evolution of 3G in China, and so is fully committed to this 3G standard. With a wide range of integrated China Mobile applications, the Nokia 6788 marks a new level of collaboration with China Mobile and offers enriched experiences to China’s 3G users. Nokia plans to introduce more TD-SCDMA phones in the near future, further boosting the development of this 3G standard in China.”

“We are excited to see the launch of Nokia 6788,” said Mr. Lu Xiangdong, Vice President of China Mobile Communications Corporation. “With extensive experience in the China market, Nokia will provide Chinese consumers with TD-SCDMA solutions that are perfectly catered to their needs. Such cooperation between the world’s largest operator and the world’s leading mobile phone manufacturer will provide an important boost to the development of TD-SCDMA in China.”

The Nokia 6788 is specifically designed for China Mobile’s (NYSE: CHL) network and offers rich data services. It is an all-in-one device that provides its users with faster Internet speeds and download times. Featuring a 5-megapixel (2592 x1944) camera with a dual-LED flash, a 2.8″ QVGA display, and the hugely-successful Symbian S60 platform, the Nokia 6788 allows people to instantly share the things that matter to them most.

& here’s some pics

Nokia 6788

we apologise for the Engadget style of this post, but it’s been a long time coming !!

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Vodafone steps up to the plate, backed up by Emerging Markets

vodafoneLast week Vodafone Group (NYSE:VOD) released an interim management statement that considering the current economic climate, I consider to be pretty upbeat. I have been a long term holder of Vodafone stock on the London Stock Exchange & have over the last year traded the NYSE traded ADR up & down on swings. However with the current market, I am now looking for some growth & value plays. Looking a little closer at the report & doing some quick analysis of some of the major themes contained, I am now quite bullish on VOD going forward & will be picking up some shares for my investment portfolio. As of writing Vodafone was trading at £121.00 in London & $19.64 in New York.

Comment from : Vittorio Colao, Chief Executive

“In the first quarter the service revenue trend in Europe was consistent with the previous quarter and we continued to see good growth in India and South Africa. Our total communications strategy is delivering well, with organic data revenue up 19% and organic fixed line revenue 7% ahead of the comparative period. Free cash flow generation was strong at £1.9 billion, up 21%. The Group has reaffirmed its guidance for the full year.”

Highlights from the report :

  • Group: Revenue £10,743 million, up 9.3%
  • Group data revenue of £888 million, up 19.4% on an organic basis
  • Free cash flow of £1,896 million, up 21.2%; net debt at 30 June 2009 of £31.2 billion
  • Cost reduction programme on track
  • Proportionate mobile customer base of 315.3 million; 8.0 million net additions during the quarter
  • Europe: Service revenue up 4.4% driven by FX benefits. Data revenue up 17.8%. Fixed line revenue up 5.7%
  • Africa & CEE: Service revenue up 26.3% including Vodacom acquisition,Vodacom organic growth of 5.2% offset by weakness in CEE
  • Asia Pacific and Middle East: Service revenue up 21.8%
  • India service revenue growth of 23.0%

Interesting to see Vodafone making a point of mobile data revenues & 19.4% grwoth is a pretty impressive statistic. Much of this being driven out of Europe, where one of the big booms in mobile data is the popularity of 3G wireless broadband dongles (USB sticks) on “Unlimited” packages, which all the major operators have adopted. Vittorio Collao announced a major cost cutting initiative last November 2008, targetting cost reductions of $1.45Bn by  the end of the 2011 financial year in order to offset the pressures from inflation and the competitive environment and to enable investment in revenue growth opportunities. Savings of more than 65% of this target are expected to be generated by the end of the current financial year.

Vodafone has been at the forefront of network sharing, originally this started in the UK with Orange, now the group has signed a pan-European deal with Telefonica-O2, which will see network sharing being implemented in Germany, Ireland, UK & Spain. Analysts see this as a huge positive, as the deal is set for a ten year term & should save each company in the region of $350 million per annum. The growth figure of 8 million subscribers runs in line with analysts global forecasts for 2009 of circa 13%, as Vodafone is one of the higher value operators in each of its markets, the fact that it is expanding subscribers in a high churn market is positive.

“Old” Europe is the only area where Vodafone operates both fixed & mobile services, predominantly in the UK, Ireland, Spain, Potugal & Germany, where it is the second largest provider of broadband via its Arcor business unit. Having already discussed the cost savings initiative with Telefonica, the main story here is on how Vodafone are manbaging to reduce churn & promote ARPU via new services. Vodafone is far & away the leader in all of these markets regards business services (excepting Germany, which is dominated by T-Mobile), with consumer playing a strong supporting role, crucially the majority of these accounts are postpaid, which is reflected in higher service revenues than is the norm in this sector.

Another area that Vodafone is finally catching onto is the machine-to-machine market, or M2M. The company has made some recent investments in this sector & is set to benefit as the market grows from $4.2Bn in 2008, forecast to rise to $12.5Bn by 2012. It’s not all good upbeat news though, as recent EU intervention in roaming charges has had a detrimental effect on voice service revenues aceross the board. Retail termination costs have hit this part of the business very hard, with only Netherlands showing minimal growth of 0.6% mainly due to MVNO operations, whilst at the other end of the scale, Greece voice revenues sank by 15%.

In “new” Europe (CEE) & Africa, the atypical Emerging Markets,  we are presented with a mixed bag, however the region saw service reveues grow by 26.5%, mainly due to Vodacom (of which more later). Vodafone has seen serious competition in Romania, where no less than 6 operators are competing for one of the lowest ARPU generating populations in Europe, the situation not being helped by the extremely poor performance of the Lei versus the Euro. Similarly, Turkey has not been the shining star that Vodafone had expected when it launched their in 2005. However, now that 3G services are finally being launched, Collao today announced that the company would be investing up to $675 million in network infrastructure over the next 12 months, as Turkey has very low fixed line connections, mobile broadband is set to be a revenue enegine. I also have a feeling that as & when Turkey accedes to the EU, plenty of “rural” grant funding will be made available for the three network operators to provide near 100% coverage. At time of writing, there are some rumours of Turkcel & Vodafone entering into limited network sharing on 2G (GPRS) services, but these remain unconfirmed.

Meanwhile, Africa has seen a real boost this year, with Vodafone finally acquiring a majority interest in Vodacom South Africa from Telkom, as we discussed earlier this year in Consolidation hits Rainbow Nations telecom sector; Vodacom is now the flagship Vodafone brand in sub-Saharan Africa & has recently listed on the Johannesburg Stock Exchange. Another hit in this region is Vodafone’s 40% majority holding in Kenya’s Safaricom. Jointly the two companies launched the mobile payment platform M-Pesa back in 2007 & it has gome through a number of modifications & upgrades since then, winning a United Nations award along the way. The service has 5.75 million users signed up in Kenya & now that it has been proved & tested, look to Vodafone to launch M-Pesa in a number of new regions in Africa, such as Nigeria, Ghana & South Africa. An interesting video on Safaricom & M-Pesa can be viewed here : Michael Joseph

Vodafone’s controversial investment in Essar , seems to be paying off handsomely, as the Indian carrier now operates in all 26 mobile circles across the sub-continet. Service revenues jumped by 23% with the subscriber base leaping 56%, or  by 77 million subscribers in the last year. Vodafone will also be launching M-Pesa in India this year & it is thought that up to 17% of the subscriber base will ustilese the m-payment system. Vodafone-Essar recently applied & was granted both a national Internet Service Provider & National Long Distance licences, from the Indian Government, as expectations run high on the “last mile” being finally opened. The NLD licence will have an immediate effect, as Vodafone will now be able to backhaul its own national STD voice traffic & not have to rely on local carriers, which will be a welcome development since mobile voice terminations have fallen by 5% in India in the last year.

In Asia Pacific, there is only one big story & that is the merging of Vodafone Australia & Hutchinson Whampoa’s 3 in order to create a realistic competitor to government owned Telstra. The new Vodafone-Hutchinson Australia is a 50-50 JV, which will carry the Vodafone brand & now has a combined cutomer base of just over 6 million users. Vodafone will be looking to leverage its Vodafone Live! content platform here & significant cost savings on network (roaming charges) can be expected, the combined networks now have 98% coverage of metropolitan areas across the country. Vodafone will also receive a deferred payment of AU$500 million from Hutchison-Whampoa, to reflect the difference in the joint business assets (network).

So all in all, a home run for Vodafone in its first quarter of the current financial year. Considering the global economic environment, I feel that this is a great performance (although possibly helped along by currency rates) & that if the management team can keep a firm grip on the operating companies, Vodafone should be one of the strongest performing telecoms companies for 2009-2010. Continued expansion in both India & Africa, along with the introduction of services such as M-Pesa will attract & hold valuable customers. I’m long on the ADR, having bought in last week at $18.68 & am looking for it to exceed $23.50 within three months.

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Nokia gets thumbs up from China

china-mobile2Following on from the distribution of 3G licences earlier this year for China’s three mobile networks, China Mobile, China Telecom & China Unicom, along with the convoluted technology demands imposed by the regulator, signs are that Nokia will be sitting a little higher up the table at the tea party, as Chinese news portal Xinhua reports :

“China hopes Nokia will enhance cooperation with China’s information sector and play an active role in developing China’s TD-SCDMA industry, Chinese Vice Premier Zhang Dejiang said”

As we reported earlier this year, China looks to 3G networks to help stimulate economy, each of the operators is working on a different standard, China Telecom will work on the US standard CDMA 200, Unicom has gone down the W-CDMA route, whilst China Mobile (NYSE : CHL) has invested a veritable fortune in its home-grown standard TD-SCDMA.

From a political standpoint, it is pretty much a given that TD-SCDMA will not be allowed to fail, as the government is very much behind these moves. So what does this mean for equipment vendors ?

Basically, it has resulted in Western vendors like Alcatel-Lucent & Ericsson being marginalised when it comes to participation. Alcatel (NYSE : ALU) has managed to win business in 14 regions to partially satisfy China Unicoms requirements, whilst also signing $230 million worth of contracts with China Telecom.

“The drive for 3G (in China) is a very important stimulus for what I think is a very exciting market to come,” Ben Verwaayen, chief executive of Alcatel-Lucent, told reporters in Beijing yesterday. “If you look to the market and the economic crisis today, it is good to see that China is going to play a more prominent role than ever before.”

Ericsson (NYSE : ERIC) has stated that it has picked up 30% of China Unicoms 3G network requirements, leaving Chinese vendors Huawei & ZTE to fight over the spoils, with Huawei reportedly being the big winner.

So what about Nokia ?  Back in March, Nokia-Siemens Networks (NSN), a subsidiary of the Finnish mobile giant, announced the signing of framework agreements with both China Mobile and Unicom for up to US$1.1 billion in orders. NSN is one of the less recognised parts of Nokia’s business, however, it is definitely a division not to be ignored, Q1 2009 showed that NSN contributed  34% of group revenues.

Nokia has already provided major infrastructure deployments on China Mobile’s Phase II deployment of 3G network, on its testing rollout in Hainan province. Now with equipment currently being deployed across 28 major cities throughout China, Nokia Siemens Networks has provided the top performing city networks based on 3G TD-SCDMA commercial readiness, as laid down by the Chinese telecoms regulator.

“We are very confident of our 3G TD-SCDMA solution and feel proud to showcase its capabilities. Nokia Siemens Networks has provided us such tremendous on ground support, that our 2G and 3G TD-SCDMA networks are optimized and ready to handle high throughput and access rates demanded by cutting edge applications,” said Zhou Chengyang, President of Hainan MCC. “We have laid a solid foundation to launch commercial services in the Hainan province and are looking forward to working closely with Nokia Siemens Networks towards large scale and high quality TD-SCDMA services.”

So the expectation is that this suuccess will bleed over into Nokia’s main revenue driver, handsets. China Mobile is now becoming more of a commodity player with regards to handsets, as it is now looking to more rural areas for subscriber growth. My expectation is that Nokia will play a major part in this area, as discussed in a previous post, Nokia has a very strong back-catalogue of handsets to pick from & also enjoys higher margins in the low end sector than its competitors.

Having picked up on the Nokia ADR (NYSE : NOK) earlier this month & also enjoyed the $0.52 dividend yesterday, I had planned to drop 50% of my holding to place elsewhere. With this mornings news on official support for Nokia, I will now be holding a little longer term, looking for a target of $18.50 towards the end of the year.

China Mobile starts to push 3G strategy & partnerships, good news for Dell ?

china-mobile1Following on from the 3G licence distribution that we reported on MyStockVoice late last year, China looks to 3G market to stimulate economy, market leader China Mobile has unveiled a number of new partnerships & device releases that show the direction it is taking in the medium term. After the on-off discussions with Apple regarding the iPhone, the wireless carrier seems to be pitching heavily into the PC hardware vendors, as well as choosing suppliers to expand its TD-SCDMA network to cover rural mainland China.

China Tech News reports this morning that China Mobile (NYSE : CHL) has selected six PC makers, including Lenovo Group, Founder Technology, Tongfang, Haier, HP, & Dell, as its 3G netbook partners. What is more interesting is the strategy behind this, following Western mobile operators who have been pushing mobile broadband dongles since 2007, China Mobile will offer subsidies to users who buy its 3G netbooks. Consumers will be able to enter  the serial numbers of the device and the numbers of the built-in TD-SCDMA module of the netbook, with their mobile phones to activate the 3G services.

Dell (Nasdaq : DELL) have already announced their first joint hardware offering with CHL, the Inspiron Mini 10. Dell is obviously keen to tap into the huge potential of the Chinese mobile internet market, IDC has forecasted that the market will explode by 276% in 2009 alone. This carries on from existing deals Dell has struck with Vodafone, AT&T, Starhub & Maxis.

“Dell actively listens to its customers to provide highly stylized, personalized products with unparalleled connectivity. China Mobile’s fast mobile broadband 3G service perfectly complements the wireless and entertainment capabilities of the sleek, portable Inspiron Mini 10.” — Michael Yang, vice president & general manager of Greater China Consumer

“China Mobile is China’s only operator solely focusing on mobile communications with the world’s no. 1 network and the largest customer base. We are happy to add Dell’s Inspiron Mini 10 to our growing number of 3G mobile broadband devices, providing travelers and social networkers with easy and convenient wireless Internet access.” -– He Zhili, Marketing Director of CMCC

Now with the Chines propensity to build homegrown standards, TD-SCDMA being a prime example, China Mobile looks as though it is ready to turn its back upon the traditional handset vendors. Rumours abound that it is looking into releasing its own mobile operating system, Open Mobile System (OMS), which is based on Google’s Android, however utilising operator specific variations at all layers. In a final snub to Apple, CHL is also rumoured to be building it’s own app store to support OMS. As Dell has not made made any significant inroads, to date, into the Western mobile markets, China Mobile could provide a much needed distribution channel. There are positives for both parties, Dell is new to the handset game & so would be expected to be flexible in how it develops handsets, China Mobile has a distribution base of more than 470 million subscribers, a very juicy number.

Market research firm Interfax has reported that Lenovo has already been tapped up to partner with China Mobile on an Android based handset :

“We will collaborate with China Mobile to launch an Android phone, and we will cooperate closely over research and development relating to the open source platform,” Wang Yan, a brand manager at Lenovo Mobile, said.

Meanwhile, China Mobile is forging ahead with its network rollouts, AsiaInfo Holdings, Inc. (Nasdaq : ASIA) has announced that it has been selected to provide networking equipment with 11 China Mobile subsidiaries, to support China Mobile’s Phase II TD-SCDMA rollout. The new system will support wireless broadband service, data card service, mobile video and other 3G-related services. In 2007, AsiaInfo provided BOSS software for Phase I of China Mobile’s TD-SCDMA network construction, thus becoming the first vendor to develop billing and customer relationship management software to accommodate China’s 3G rollout.

“Pushing forward the construction and operation of the TD-SCDMA network is one of China Mobile’s key goals for 2009, and our longstanding relationship with the carrier brings us a number of opportunities in the 3G realm,” said Steve Zhang, AsiaInfo’s president and chief executive officer.

Spending on wireless infrastructure equipment in China is expected to rise to $6.2Bn in 2009, up 13.2% from $5.5Bn in 2008. In contrast, global carrier spending on wireless infrastructure gear in 2009 is expected to decline by 3.5%to $39.7Bn, down from $41.1Bn in 2008. It is clear that a lot of companies are banking on 3G in China & China Mobile’s dominance of the sector to see them through to 2010, when the wireless markets will look to expand in resppnse to consumer demand. Dell’s courting of China Mobile could be a big pay day for the computer manufacturer, as traditional routes to market dry up on declining retail spending in Western markets, China could provide a much needed fillip. Personally I am not ready to move on Dell just yet, however, it will be interesting to see what falls out of this relationship & I will be monitoring closely.