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[ft] BTis preparing to open up its underground ducts so that rivals can run their own high- speed broadband networks through the telecoms company’s infrastructure.

Action by BT could allow competitors to lay their optical fibre cables without the expense of digging up pavements.

BT’s willingness to open up its ducts marks an important policy shift and emphasises the intensifying political and business pressure it faces.

Last month the Conservatives pledged that, if the party were to win the next general election, they would legislate to force BT to open up its ducts . The Tories hope their legislation could stimulate market-led investment that would ensure superfast broadband networks reach rural as well as urban areas.

BT stressed it had been talking to Ofcom, the telecoms regulator, since last year about opening up its ducts and that its decision was not a response to the Conservatives.

BT to share its tunnel network with rivals

[argus leader] South Dakota moved closer this week to becoming the first state to prohibit a controversial issue facing the telecommunications industry.

In question is a practice known as access stimulation, often referred to as “traffic pumping.” While the debate is conducted in the technical language of telecommunications law, at stake is millions of dollars made by a few rural phone companies working with out-of-state firms to offer free conference calls and pornographic chats.

The kicker is that telecommunications giants – such as Qwest, Verizon and AT&T – are forced to pick up the bill.

Following spirited testimony Wednesday before the State Affairs committee, the panel voted to recommend legislation favoring the national companies.

“This is a complicated issue,” said Dusty Johnson, commissioner of the South Dakota Public Utilities Commission, who did not take a position on the legislation, said in an interview.

“The whole notion of access charges is very foreign to people,” he said. “Consumers don’t pay access charges – it is what one telephone company charges another telephone company to use its network. It is behind the scenes for a lot of consumers.”

Big phone companies try to end rural windfall

[communications direct news]

Significance – Russia’s Federal Antimonopoly Service has indicated that it disapproves of Alfa’s presence in two of the country’s three mobile operators, but Alfa has insisted it will persist with its consolidation plans.

Implications – It is likely that the regulator has an eye on the state’s eagerness to control MegaFon through national fixed-line holding Svyazinvest.

Outlook – Having established a reputation as an aggressive, litigious player in the Russian telecoms market, Alfa is likely to fight its corner with regards to MegaFon, leaving the state and regulator with their work cut out in trying to manoeuvre MegaFon into Svyazinvest’s hands.

Russia’s Federal Antimonopoly Service (FAS) has publicly indicated its opposition to the expansion plans of Altimo, the telecoms arm of Russian holding Alfa. Altimo holds a 44% stake in VimpelCom, the country’s second-largest mobile player, as well as a 25% stake in MegaFon, the third-largest player. In recent months, it has indicated its plans to merge its VimpelCom stake with Ukraine’s largest mobile operator, Kyivstar, in conjunction with fellow VimpelCom and Kyivstar shareholder Telenor, as well as plans to merge its stake in MegaFon with its 4.99% stake in Turkey’s Turkcell, in conjunction with fellow MegaFon and Turkcell shareholder TeliaSonera.

Igor Artemyev, head of the FAS, has indicated that the regulator would be “glad” if MegaFon exited either MegaFon or VimpelCom, voicing his disapproval at Alfa’s ownership of stakes in two of the country’s three top-tier mobile operators. However, Alfa has insisted that it has no such plans, instead reiterating in a statement quoted by Dow Jones that it is “striving to follow the process of consolidation in the telecommunications sector”.

Outlook and Implications

* The Fight for MegaFon: It is understandable that the prospect of Alfa’s growing influence over two of Russia’s three leading mobile players is of concern to the country’s regulator, given that these three players between them commanded 84% of the country’s 208 million subscribers nationwide at end-2009, according to IHS Global Insight estimates. However, it is also very likely that the regulator has an eye on the state’s own eagerness to gain control of MegaFon through national fixed-line holding Svyazinvest. The holding is 75% minus one share owned by the Russian government, which in recent weeks has confirmed that it is interested in acquiring a controlling stake in MegaFon in order to facilitate entrance into the upper echelons of the country’s mobile market. While it seems likely that Svyazinvest will be able to gain the 31% in MegaFon held by billionaire oligarch (and reputed Kremlin supporter) Alisher Usmanov, in order to gain control of MegaFon, Svyazinvest would also need to gain a further stake and neither 43.8% MegaFon shareholder TeliaSonera nor Alfa have given any indication that they are willing to sell up. It remains to be seen whether the Russian regulator can exert any prohibitive power over Alfa as Svyazinvest seeks to gain control of MegaFon.

* Alfa’s Famous Aggression on Show Once More: With a cast list including VimpelCom, MegaFon, Alfa and the Russian state, this affair could become a high-profile dispute to rival the recent saga involving Telenor and VimpelCom in the Russian telecoms sphere. It is of little surprise to seasoned observers of the sector to see Alfa in the thick of the action for the holding has forged a reputation as a particularly aggressive and litigious player, always prepared—and at times seemingly almost eager—to fight its battles in law courts. Having spent years slugging it out with Norway’s Telenor for control of VimpelCom—a dispute eventually settled in October 2009—history suggests that Alfa would have no problem in fighting its corner in any potential contest with the Russian state regarding control of MegaFon. If Alfa is truly set on maintaining and consolidating its MegaFon stake, the state and regulator will have their work cut out in trying to manoeuvre MegaFon into Svyazinvest’s hands and some sort of compromise agreement may have to be suggested.

Russian Regulator Voices Unease at Alfa’s Growing Influence in Mobile Sphere

[ihs] The European Union (EU) has announced it has opened an infringement procedure against France, deeming the country’s “telecoms tax” on operators illegal. France has recently introduced the specific tax, on the turnover of telecoms operators, as part of their licence agreements, in a move to offset the ending of advertising revenue from public TV channels. However, the European Commission has now suggested that this tax constitutes an administrative charge that is incompatible with European law, adding that there is a serious risk that the cost will be passed on to customers at a time when prices should be coming down. According to European rules, an administrative charge levied in connection to licencing can only cover certain specified costs—and not a rolling, ongoing tax. The French Government now has two months to reply to the letter of formal notice, which the Commission sent today.

Significance: Telecoms commissioner Viviane Reding has already expressed serous doubts about the tax, saying not only does it seem incompatible with the European rules, it also concerns a sector that is now one of the major drivers of economic growth. She added that as the EU is trying to reduce consumer bills by cutting termination rates and call, data and roaming charges, such a fresh demand on operator profits was most unwelcome. France Telecom has recently stated that it sees high-speed broadband rollout as its key strategy in the country’s saturated markets, and although the three leading fixed-line operators France Telecom, Vivendi’s SFR, and Iliad are carrying out experiments in shared fibre roll-out in three regions near Paris, these are somewhat limited, and former incumbent France Telecom in particular has been shy to invest without some regulatory pledges that it will be able to get a fair return on its investment if it is forced to open these networks to rivals. Despite the funding pledge, France’s regulator must also act to allay operators’ fears, if it hopes to bring broadband connectivity and competition in French telecoms up to the level of its European neighbours.

EU Opens Inquiry Into Legality of French Telecoms Tax

[zawya] The Gulf Bridge International (GBI), a newly established privately owned submarine cable operator in the Middle East will provide a landing station to Vodafone Qatar for GBI’s cable in Qatar. An agreement to this effect was signed by the two companies.

The GBI cable system, which will utilize the latest subsea fiber cable technology, will connect all the countries of the Gulf region to each other and provide onward connectivity to Europe and Asia.

Commenting on the agreement, Hamad Al Mannai, GBI’s executive vice chairman said “GBI is excited to have Vodafone Qatar as a landing partner in Qatar. The international connectivity requirement to and from Qatar is growing rapidly, as Qatar develops its knowledge based economy. Partnering with Vodafone Qatar, we will be able to address that growth besides enabling the outreach of a valuable infrastructure as a key asset to the Qatari nation.”

“This new landing station will enable Vodafone to bring better service and better value as well, ultimately making a world of difference for all people in Qatar,” said CEO of Vodafone Qatar Grahame Maher

Ahmed Mekky, GBI’s CEO said, “We believe that once operational, the GBI cable system will play a key role in facilitating communications and enabling the region to grow both socially and economically. “

Scheduled to launch in 2011 and designed to operate for up to 25 years, the GBI cable system will connect all the Gulf countries via a core ring, which can re-route traffic thereby increasing resilience.

With a design capacity of up to five terabits per second on certain cable sections, the GBI cable system will have the capability to meet the rapid growth in demand that has been forecast for traffic originating and terminating in the Gulf, the company said yesterday.

Vodafone signs landing station deal with GBI