The below is a compilation of recent announcements and events occurring between January and February 2005. Coverage includes factors affecting the global landscape such as 3G development, technological milestones, and player movements. A closer look at network expansions and operator movements in Greater China, India, Russia, Japan, Korea, and Southeast Asia is also presented.

Global Factors

3G Development

Global Mobile Suppliers Association

The trade body announced in late January that there are currently 64 WCDMA (Wideband Code Division Multiple Access) networks in commercial operation in 31 countries while another nine networks have approached launch stage. The GSA also said that 56% of the 129 WCDMA license holders in 43 countries have rolled out or are gearing up to. As of the end of 2004, there were approximately 16.3 million WCDMA subscribers. 123 GSM (Global System for Mobile Communications)/GPRS (General Packet Radio Service) operators in 72 countries also look to the upgrade their networks.

UMTS Forum

The forum announced that the global UMTS subscriber base reached 16 million over 60 networks, driven by strong demand for UMTS handsets in Europe and continued network rollouts.

Technology Milestones

Motorola

Motorola completed initial HSDPA (High Speed Downlink Packet Access) trials with five European operators and speeds of 2.9Mbps were documented at the edge of an outdoor UMTS (Universal Mobile Telecommunications Service) cell using a single HSDPA device. The trial system matches the capabilities of the commercial HSDPA infrastructure slated for launch in the second half of 2005.

Nortel

Nortel and Qualcomm announced that they have made the first end-to-end calls over HSDPA. Using a commercial network from Nortel and handsets that adopt Qualcomm's MSM6275 chipset, calls were made over a live air connection to a moving automobile to show stability. Mobile services such as high-resolution gaming and audio-visual functionality were tested.  

Oki

Oki Electric Industry has started shipping samples a high-output, gallium nitride-based transistors for base stations. The new transistor will help reduce size of base stations for 3G mobile phones and PAS (Personal Access Phone System) handsets and lower power consumption. Sample shipments of devices incorporating the new transistor are slated for early 2006, and mass production will commence in the second half of 2006.

Industry Player Movements

LG Electronics

LG Electronics and Nortel agreed to set up a joint venture to supply telecommunications equipment and networking systems with a focus on WCDMA technology. Both companies expect to finalize the deal in the second quarter of 2005.

NEC

NEC has set up a Hong Kong unit, called NEC Telecommunications, to operate and maintain mobile phone networks for Huchison Telecommunications International. The new firm, established with an initial capital of HK$5 million, started operation on 10th January and will target the Chinese market in the future.

SBC

SBC Communications in the process of buying AT&T for US$16 billion in cash and stock, pending approval by regulators. Under the agreement, approximately 15 billion would be in the form of SBC stock while the remainder would be paid to AT&T shareholders in the form of a one-time dividend out of AT&T's own cash reserves. The merger will combine AT&T's national and global networks and expertise with SBC's strong platforms and skills in wireless and broadband business.

SK Telecom

SK Telecom and Earthlink have agreed to set up a US$440 joint venture, called SK-Earthlink, to provide voice and data services in the US market. Over the next three years, the two companies will each invest US$220 million in the venture, which will first lease network capacity from a US operator for mobile phone services. SK-Earthlink expects to roll out services in the third quarter of 2005 and hopes to garner three million subscribers in the US market by 2009.

Verizon

Verizon Communications has forged a US$6.7 billion deal - US$4.8 billion in stock and US$488 million in cash - with long-distance provider MCI. The acquisition will enable Verizon to leverage MCI's nationwide and global Internet Protocol networks. The addition of enterprise customers will also help benefit Verizon's wireless business, Verizon Wireless, a venture between Verizon Communications and Vodafone Group.

Greater China

According to MII  (Ministry of Information Industry), the mobile subscriber base in China rose approximately 3.2% to 334 million in 2004. fixed-line subscriptions reached 316 million in 2004, registering nearly 8.2% growth from 2003. The ministry further predicted that mobile subscriber numbers are likely to grow to 402 million while fixed-line base to 360 million by the end of 2005.  

Furthermore, Chinese information industry totaled around US$69 billion in business revenue in 2004, marking a 12% increase year on year. The telecommunication sector raked in a revenue of approximately US$ 63 billion. China's mobile connections reached 334 million and a total of 214 billion short messages have been delivered and received throughout 2004.

The ministry also granted some of the 500 million RMB (US$60.4 million), dedicated to the country's IT and electronics industry, to ZTE and Huawei Technologies to support research and development into integrated telecommunications systems and standards.

China will begin the third-phase of testing 3G technologies after March 2005, running trials on commercialized networks.

There would be further reforms on its management of telecommunications fees in a bid to liberalize the sector, without elaborating on the specific timeframe.

China Putian

The state-owned enterprise and Canada's Nortel will enter into a joint venture partnership to develop and sell 3G equipment and devices in China. Under the agreement, China Putian will hold 51% stake, while Nortel will own the remainder. Both companies gave no details of the value of the investment. The new venture, tentatively called Putian-Nortel Telecommunications Equipment, will be located in Wuhan, capital of Hubei Province and be finalized by the end of June 2005. Business focus will be on TD-SCDMA (Time Division-Synchronous Code Division Multiple Access) and WCDMA devices and solutions, as well as related network engineering and optimization services.

China Telecom

China Telecom proposed to the authorities in February that it join with competitor China Netcom to acquire one of the two mobile networks operated by China Unicom. China Unicom has nationwide networks, which operate on both GSM and CDMA systems.  

Nokia

Nokia announced in January that it has signed a GSM expansion contract with Jiangxi Mobile, a China Mobile's subsidiary. Nokia has started to deliver equipment and expects to complete the network expansion during the first quarter of 2005.

NTT DoCoMo

To boost its capabilities of gathering information, raise profits, and consolidate connections with public and private sectors, the Japanese operator set up offices in Shanghai and Singapore in January 2005. Each office will accommodate around four employees for the time being.

T3G

T3G Technology, a Chinese firm dedicated to promoting the TD-SCDMA standard, has finalized a third round of financing, adding Motorola as a key investor. However, the amount of the investment was not disclosed. Motorola would hold the smallest stake as the result of the investment. Previously Royal Philips Electronics and Datang each held 40.4% and Samsung 19.2%.

UTStarcom

The company inked a US$120 million contact with China Telecom in February to expand PAS networks in the eastern provinces of Jiangsu and Zhejiang and the southwestern province of Sichuan. UTStarcom also secured another contract valued at US$40 million from China Netcom to expand the company's current PAS networks in the central provinces of Shandong and Henan, as well as in Beijing. 

ZTE

ZTE and Macau-based Portugal Telecom signed an R&D memorandum of understanding in January to strengthen their range of new devices and services in the global telecoms market.

Vibo

The Taiwanese operator decided to adopt WCDMA technology instead of cdma2000 for its 3G business after a series of assessments. The strategic swerve was associated with opposition from dominant players such as Chunghwa Telecom, TCC (Taiwan Cellular Corp.), and Fareastone. Vibo also looked to secure another 5MHz bandwidth from the government and launch services in the fourth quarter of 2005.

Japan

From fiscal 2005, Japan's Ministry of Internal Affairs and Communications will provide subsidies to allow for construction of relay stations and other telecommunications facilities at a pace three times faster than now. Such move will significantly enhance mobile phone reception in around 500 poorly-covered cities, towns, and villages over a period of four years.  The subsidies, amounting to some three billion Yen (US$28.5 million; US$1=105.1 Yen) each year, cover half the costs of leasing fiber optical circuits from Nippon Telegraph and Telephone and others.

In a separate development, the Japanese government has opted not to allocate spectrum in the 800MHz range to Softbank, citing that allowing a new entrant in the already crowded bandwidth might lead to poor reception among some handset users. On the other hand, NTT DoCoMo and KDDI will likely receive approval for the same requests. The authorities said a study on the issue is still on-going and a definite decision has not been made.

Hitachi

Beginning from March 2006, Hitachi will supply and install nearly US$958 million worth of base-station equipment to KDDI. The consignment will last until March 2012. Called EV-DO Rev.A, the equipment will enable KDDI to provide an enhanced 3G service to its customers.

NTT DoCoMo

NTT DoCoMo is also planning to discontinue taking new prepaid subscriptions by the end of March 2004, citing such services are increasingly exploited in crimes due to the difficulty of identifying their subscribers.

Samsung Electronics

Samsung Electronics agreed in early January to provide telecommunications equipment, along with technological support, for KDDI's 3G service. The US$800 million deal will start from March 2006.

Korea

To prevent fights for subscribers from escalating in the Korean market, the government fined the three dominant operators a sum of 679 million Won (US$661,740; US$1=1,026.1 Won) at the end of January for rejecting subscribers' request to discontinue services. SK Telecom was fined 380 million Won (US$370,367), KTF 200 million Won (US$194,898), and LG Telecom 90 million Won (US$87,702).  

In early January, Korea also launched trial operations of the world's first satellite-based television service over mobile phones. The system, dubbed DMB (Digital Multimedia Broadcasting), adopts technology developed by Japan's Toshiba and allows handset users to watch high-definition digital TV programs.

LG Telecom

The Korean government fined LG Telecom four billion Won (US$3.9 million) in late January for illegally subsidizing mobile phones. To secure its subscribers and attract new ones from competitors SK Telecom and KTF, LG Telecom offered handsets for free or under 100,000 Won (US$97.5) between January 8th and January 20th.  

India

According to government statistics, the mobile subscriber base in India had amounted to 47.3 million by the end of 2004. CDMA subscriptions totaled 9.9 million, while the GSM subscriber base grew to 37.4 million.

Bharti

The second largest Indian mobile operator has secured two European loans - US$254 million from Swedish export credit agency EKN and another US$100 million from Finnish company Finnfund - to expand its mobile business. With the new loans, Bharti is aiming to launch mobile services in under-penetrated states in northern and northeastern regions. The loans will also be used for paying Bharti's equipment providers Telefon AB LM Ericsson and Nokia for installing new networks and upgrade existing ones.

BPL Mobile, Airtel

Microsoft signed deals with two Indian cell phone companies, BPL Mobile and Airtel, to deliver e-mail and instant messages via SMS (Short Message Service). Together with mobile data services firm Mobile 365, the two companies rolled out Mobile-mail and MSN messenger in January over SMS. However, they did not say whether to charge these two services or offer them for free.

Southeast Asia

Maxis Communications

The Malaysian mobile phone operator said it would invest US$100 million in Indonesia's NTS (Natrindo Telepon Seluler), which offers mobile services under the name of Lippo Telecom, in return for a 51% stake. Despite its relatively small subscriber base of 25,000, NTS holds a nationwide GSM900 license and a WCDMA license.

SinTel

In early February, the Singaporean operator unveiled a range of mobile content to support the commercial launch of its WCDMA network in the first quarter of 2005. The content will include music videos, news programs, and games. Sintel also announced that its subscriber base had achieved almost 62 million by the end of 2004.

StarHub 

To boost revenues from data services, the Singaporean operator entered into a partnership agreement with NTT DoCoMo to provide i-mode services exclusively in Singapore by the fourth quarter of 2005. Under the agreement, StarHub will offer i-mode services over both its 2.5G and 3G networks while DoCoMo will provide its patents, branding, marketing, knowledge, and technology.

True Corp

The Thai operator's mobile subsidiary awarded a US$133 million contract to Alcatel to upgrade and expand its GSM network.

Russia

ZTE

ZTE announced in January that it will install a CDMA450 network in the port of Murmansk in Northern Russia, for Skylink. The equipment can be easily upgraded to 1x EV-DO if necessary.

MTS

The Russian mobile operator added another 4.7 million to its subscriber base, driving up the 2004 subscriptions to 34.2 million. The performance more than doubled MTS's subscriber base of 16.7 million in 2003.