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Archive for September, 2010

[the australian] THE world’s richest man, Mexican telco tycoon Carlos Slim Helu, said today Julia Gillard’s $43 billion National Broadband Network seems expensive.

Mr Slim, speaking at the Forbes Global CEO Conference in Sydney today, said: “It’s too much money.

“It is not necessary to invest so much money, because technology is changing all the time,” he said.

Mr Slim said $7000 a home to connect about six million homes was too expensive.

And he criticised the reliance of the project on fibre, emphasising the need for wireless services.

“You need to have a multi platform of everything; mobile, landline, fibre, cable and copper,” he said.

“You need to have all these. You need to have a very good fibre network and rings and you need to have a loop of fibre to sustain when you have a problem in one place that the communications don’t get interrupted.

“But with copper and cable you can give 20 or 30 MhZ. I think fibre is not enough. You need to have a good network of wireless. “

Mr Slim controls Telmex and Telnor phone companies in Mexico and also has a stake in The New York Times Co.

The NBN is a fibre optic cable network to be rolled out across Australia at an estimated cost of up to $43 billion.

Communications Minister Stephen Conroy later hit back at Mr Slim’s suggestion that the NBN was too expensive.

“Mr Slim’s comments about the NBN are no surprise given he has become the world’s richest man by owning a vertically-integrated monopoly,” Senator Conroy said.

“Mr Slim has clearly not read the implementation study and we will forward him a copy.

“The implementation study provides a detailed analysis of the cost to deliver the NBN.

“The study found that the $43 billion total capital cost is a conservative estimate and there are opportunities to significantly reduce the build cost. The heads of agreement between NBN Co and Telstra will also reduce the cost of the build by billions.”

Senator Conroy said fibre to the home was the “optimal future-proof technology” with a lifespan of 30-50 years, while wireless was a complementary technology that would never match it.

“According to the implementation study, NBN Co will generate sufficient earnings by the end of year seven so that the investment required by government will peak at $26 billion, of which $18.3 billion will be required over the next four years.

“The implementation study confirms that the NBN Co can develop a strong and viable business case, generating stable and positive cash flows, and that the government will get a moderate return on its investment sufficient to cover its cost of funds.”

Mr Slim’s comments came after Telstra today said it wanted to finalise the terms of its $11 billion NBN deal by this Christmas.

David Thodey, the chief executive of the telecommunications giant, said he would then present the NBN participation deal for a shareholder vote by the first half of 2011.

It was towards that end, Mr Thodey told investors at its annual strategy day in Sydney, that Telstra hoped to finalise the terms of its participation by the end of this year.

The CEO said many variables could affect the timing of the deal, which will see Telstra paid $9bn to migrate its traffic to the NBN as it decommissions its copper network and leases its infrastructure to expedite the new network build, but he was hoping that a definitive agreement could be formed by Christmas.

“We need regulatory certainty and this is a fundamental tenet to this deal being finalised.

“There is still a lot of work to be done but we are actively working to get final definitive agreements and I’m pleased with the progress we are making,” Mr Thodey said.

“I would like to get them done by the AGM – that is our target. But if we could get agreement away by Christmas that would be tremendous.”

Mr Thodey told investors that the legislation designed to reform the telecommunications regulatory regime and laws to set the operating conditions of the NBN Co would need to be passed before a shareholder vote could be taken on the $11bn deal, but he said the final form of the deal could be agreed to before passage of those bills.

“In terms of the definitive agreement we want to conclude negotiations as soon as we can because that is not dependent on legislation. If the legislation is introduced later this year, or early next year, there is a good possibility that we could get it to shareholders by the middle of next year.

“The CCS (competition and consumer safeguards) bill contains a number of things we don’t like and we are working to get those changed.

“Work is progressing well on these.”

Some of those changes include the removal of caveats that threaten to deny Telstra access to the wireless spectrum it needs to evolve its Next G mobile network, and legislative threats to force the divestiture of Telstra’s stake in Foxtel.

Mr Thodey also assured investors today that Telstra could comfortably maintain its dividend payment in 2010-11.

His comments came as Telstra outlined plans to spend $1 billion revitalising its business.

“Telstra’s board has always been acutely aware of the importance of dividends to shareholders. Because of our strong free cash flow, Telstra could comfortably fund a 28 cent share dividend in 2010-11,” Mr Thodey said.

There had been some concerns that Telstra, the nation’s biggest telecommunications group, might cut its dividend payment as it battles tough competition in its key markets and sliding revenues in its once-core fixed line phone business.

Telstra shares have been languishing around all time lows amid concerns about its outlook.

Gillard’s National Broadband Network expensive, warns Carlos Slim Helu at Forbes conference

[cyprus mail] CONSUMERS are being made to pay excessive amounts in fixed charges for their landlines and their electricity bills, prompting MPs to call yesterday for immediate reductions, and counterbalancing measures.

The issue was discussed at the House Commerce Committee yesterday, which focused in particular on the Cyprus Telecommunications Authority (CyTA).

Speaking after the meeting, Committee Chairman, DISY’s Lefteris Christoforou, said apart from paying semi-government organisations (SGO) for their services, consumers are being made to pay a series of extra fixed charges, such as VAT or duties for emissions.

Referring to the CyTA’s landline telephone bills, Christoforou said fixed charges add up to around €16 a month, which he felt was plain overcharging.

“We feel the time has come to rearrange all these added charges and duties, so Cypriot consumers can finally feel some relief,” said Christoforou.

DIKO’s Angelos Votsis said MPs attempted to see if there was any way to reduce the €16 charge, which he said meant consumers were contributing €55 million to CyTA’s yearly revenue just by having a landline.

However he added: “From what we were told by the Telecommunications Regulator, it seems this reduction is not possible, as CyTA will have to cover the cost of its services offered with this fixed charge”.

George Varnava of EDEK said the discussion had led to one certain conclusion: “The two semi-state organisations – CyTA and the EAC (Electricity Authority of Cyprus) – are imposing excessive increases during a time of economic crisis.”

He claimed that around 70 per cent of CyTA’s total revenue came from fixed charges on landline telephone bills; “which we believe is unacceptable”.

Varnava called on the two SGOs to find ways to reduce these charges. “Electricity has increased by 13.5 per cent since last year,” he pointed out.

Despite the Committee’s plans to discuss electricity charges, the discussion didn’t go ahead as a spokesman for the Finance Ministry – who had been invited to explain the government’s plans to counterbalance the increase in electricity charges – never showed up.

Consumers being overcharged for phones and electricity

[compass] AGGRIEVED workers of the Nigerian Telecommunications Limited (NITEL) and its subsidiary, Mobile Telecommunications (Mtel), yesterday requested that President Goodluck Jonathan should tell Nigerians during his independence speech when their 29 months salary arrears would be paid.

The workers yesterday in Abuja carried placards with inscriptions such as “Jonathan, tell Nigerians when you will pay us our money”, “We are dying, save us”, “We want to join the golden jubilee celebration but pay us first”, and others.

They said they could no longer trust the promises made by ministers, noting that the only alternative left for them was for the President to address the Nitel/Mtel matter during his speech on October 1.

One of the protesting workers, Mr. Omorege Esosa, told the Nigerian Compass that for about 29 months, they were not paid salaries, “we have been denied our rights, and we all own this country, there is no way some group of persons will be having problems, we cannot feed our families and the nation is celebrating.

“We have just met with the Minister of Labour and Productivity, Mr. Chukwuemeka Wogu, bringing our grievances to the notice of the Federal Government that we will not leave Abuja without our monies paid.

“The minister assured us that our issue is on the table of President Jonathan but we want the president to make an independence statement concerning the Nitel/Mtel issue, to tell Nigerians the day the government will pay us before we can leave Abuja because the pains are just too much for us to bear, we are tired of listening to ministers.

“He told us too that the paper is on the President table for final approval, but such promises have been on over and over again and so we can not be deceived any longer, we want to join in the celebration of the golden jubilee but we don’t have money. We want to see the realities of the promises that is why we are doing a peaceful demonstration to get the attention of the whole world.

We want the world to know that some of us are suffering.”

Another worker, John Isaiah, said the government has been lying to the workers with the issue would be resolved and that they would take necessary action soonest.

According to him, “if Jonathan allows the Nitel/Mtel workers to die, who will he lead tomorrow? He should ensure he tells us and Nigerians when we will finally get our money”.

Efforts to get the Minister of Labour and Productivity proved abortive at the time of filing the report.

NITEL workers protest, demand Jonathan’s commitment on salary arrears

[shetland times] A major European cash boost has been granted to help the council develop a fibre-optic link with Faroe.

The SIC has been given £367,500 from the European Regional Development Fund (ERDF).

The funding will enable a connection to be made to the Faroese fibre optic cable, which runs between Faroe, Shetland and Orkney and the Scottish mainland.

Marvin Smith of the council’s telecoms project team said: “This funding will enable the council to progress the creation a fibre optic network for Shetland by putting in place the necessary infrastructure to link in to the Faroese cable.

“The project is vital to give Shetland a modern telecommunications structure and enable future broadband telecoms projects to materialise.”

Councillor Gussie Angus, the European spokesman, said: “I’m delighted that we’ve managed to secure external funding for such an important project.

“The council has taken an innovative step in deciding to take responsibility for coordinating and developing its telecommunications infrastructure and this is a project which will eventually bring benefits to the whole of Shetland.
“Improved telecommunications plays a significant role in today’s economy and as well as being vital for modern business brings many social benefits.”

Meanwhile, MSP Tavish Scott used secretary of state for Scotland Michael Moore’s visit on Monday to press the UK government to help to provide better, faster broadband connections across the islands.

Mr Scott said: “Shetland appreciates any new European funding to help the development of our broadband connections, so the news of the European Regional Development funding for the Shetland fibre optic network is welcome. But more is needed.

“As one of the most remote areas in the UK, we need a level playing field when it comes to broadband connections. Access to high speed broadband connections across Shetland is of vital importance to business and to our islands’ economy.

“I made the case in person today to the Liberal Democrat Secretary of State for Scotland for the UK government to provide further help to boost broadband access across Shetland.”

Council receives £367,500 of European money towards developing fibre-optic cable link

[tribune] A major telecoms operator yesterday welcomed the issuance of a survey seeking feedback on telephone number portability in the Bahamas, something that is viewed as “one of the last significant barriers to competition” in fixed-line and cellular telecommunications.

Responding to the Utilities Regulation & Competition Authority’s (URCA) survey release, Anthony Butler, Cable Bahamas’ president and chief executive, said the Bahamas was now following number portability trends established in other markets that had deregulated.

“It’s good for the consumer, and consumers tend to be identified by their phone numbers now,” Mr Butler told Tribune Business. “It’s more of a personal phone now. It follows the trends in other deregulated markets, and this market is also deregulating.”

Number portability allows consumers to retain their existing numbers when switching to another telecoms provider, thus enhancing choice and convenience, and making for a more competitive market.

Usman Saadat, URCA’s head of policy and regulation, said in a statement: “Number portability is one of the last significant barriers to competition and has several benefits, including enabling service provider choice, convenience to customers, and avoids having to inform friends, family and business contacts about a number change.’

URCA said that while the Bahamas Telecommunications Company (BTC) and Systems Resource Group (SRG), via IndiGo Networks, were the major fixed-line providers currently, there was the possibility of extra competition from Cable Bahamas and IP Solutions International. And number portability would become even more important when BTC’s cellular exclusivity expired in two years’ time.

Cable Bahamas is pushing number portability because of its impending entrance into the fixed-line market via its 100 per cent purchase of SRG, which is now awaiting regulatory approval. URCA yesterday extended the deadline for sector and public feedback on the proposed Cable Bahamas/SRG merger from Friday, October 1, to next Tuesday, October 5. Views have already been expressed that the deal could be “anticompetitive” and have a detrimental impact on the Bahamian market.

Edison Sumner, IP Solutions International’s president, told Tribune Business that the planned merger, which would create a ‘Triple Play’ provider of communications services in the areas of Internet, video, data and voice traffic, could impact the maintenance of a ‘level playing field’ in the telecommunications industry.

“I think it will have an impact on the market, and issue like a level playing field and competition,” Mr Sumner said. “Frankly, I think the deal is going to be anti-competitive to the market. I have similar concerns about the BTC deal [privatisation].”

The opposition from rival telecoms players, especially smaller ones and start-ups such as IP Solutions International, is both predictable and understandable, since they will fear the merged entity – together with a privatised BTC – will have enough market share, economies of scale and power to force out all rival operators. Both Cable Bahamas/SRG and BTC have their own infrastructure and networks, a priceless advantage, since other operators will either be forced to finance their own or rent/lease from the two incumbents.

Market observers have already privately told Tribune Business that Cable Bahamas’ decision to formally consummate its marriage with SRG, something that has been in the making for five-six years, seems to presume that the Bahamian communications market will effectively evolve into a duopoly, dominated by the merged entity and BTC at the expense of all others.

Indeed, Cable Bahamas has made no secret of its desire to obtain a cellular licence when that sector is opened post-privatisation, something that would further a duopoly position if granted. And, if Cable & Wireless becomes the privatisation partner for BTC, it will bring its video/TV offering to that company, positioning the two ‘incumbents’ to truly go head-to-head. Whether this happens at the expense of increased competition from rival operators is likely to weight heavily in URCA’s deliberations, with the regulator also having to take into account whether the Bahamas’ relatively small 300,000-350,000 population can sustain more than just Cable Bahamas/SRG and BTC. One source suggested that Cable Bahamas’ decision to move now on executing the call option to acquire SRG indicated it was extremely confident that it would pass all URCA’s Significant Market Power (SMP) obligations in short order. This requires it to complete the accounting separation for all its business lines, in addition to splitting off – or unbundling – its cable TV offering from its Internet business.

Last key barrier to competition