telecomasia201112-dl

Just like friends who help each other to reach for the sky, Huawei can do the same for your business. Thats because we pioneer innovations that are based on our customers needs: which is why 45 out of the worlds top 50 telcos choose Huawei as a partner. Proof that with good collaboration, the sky is the limit.

Fat dumb pipe Smart grid dreams Browsers need OS Open to investors

A s i a n Te l e c o m s B u s i n e s s a n d Te c h n o l o g y l w w w. t e l e c o m a s i a . n e t l D e c 2 0 1 1 / J a n 2 0 1 2

Bring It OnTelecom players braced and ready for 2012Published By Inside:

Vietnam RoundtablePublic and private sectors need to be aligned to develop ICT-enabled services

Readers Choice Awards13 equipment and software suppliers win 21 awards

ContentsSubscribe to Asias best daily telecom news service: Coverstory

Volume 22 Number 10 Dec 2011/Jan 2012

www.telecomasia.net

12 Bring It OnTelecom Asia surveys telecom executives about the outlook for next year. Result: they like their chances in terms of both market growth and making money from it. Also, data will be a big dealfeAture Vietnam roundtable

20 Bridging the gapThe government and the private sectors need to be aligned to develop ICT-enabled services, with clear government frameworks to boost cost efficiency and encourage scalereaders Choice Awards

24 telecom Asia names top vendorsHuawei and Cisco were the big winners in this years Telecom Asia Readers Choice Awards both taking home three trophies. Thirteen equipment and software suppliers received 21 awards, which were presented a ceremony in Singapore by representatives from nine service providersCOlumNS tanner

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7 Here we go againAnother clumsy attempt in US to curb piracy overshoots the mark with vague language that has mobilized the internet giants against itforum

23 Power firms smarten up the gridTelcos look to tap the smart grid opportunity. But with narrow bandwidth requirements, the upside may be limitedPoulos Points

44 Nothing wrong with being a dumb pipeAs retail revenue declines, the wholesale model LightSquared is following may be an attractive alternative for many

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72 Dec 2011/Jan 2012 Telecom Asia

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45www.telecomasia.net

Weve found a way to accelerate your journey into the future with LTE.Just as a bridge enables high volume traffic, Huaweis SingleRAN LTE solutions deliver equivalent benefits: accommodating high capacity and the ability to evolve networks from GSM, UMTS, CDMA and WiMAX. Huaweis SingleRAN LTE solutions are backed by considerable experience gained from building commercialized LTE networks for many of the worlds leading telcos, including the worlds first and fastest LTE network in Norway. These are the values your business needs to reach the future faster.

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Contentsfirstmile

Volume 22 Number 10 Dec 2011/Jan 2012Managing Director Jonathan Bigelow [email protected] Group Editor Joseph Waring [email protected] Global Technology Editor John C. Tanner [email protected] Senior Reporter Melissa Chua [email protected] Online Editor Fiona Chau [email protected] Art Director Dick Wong [email protected] Production & Design Manager Pauline Wong [email protected]

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An OS for your browserMozilla says browsers need an OS for better web apps

INDuStrY ANAlYSIS

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three APAC countries open doors to foreign investors

Group Publisher Gigi Chan [email protected] Account Director, Asia Pacific Jessie Cheung [email protected] Asst. Sales & Marketing Manager Candace Ho [email protected] HR & Admin Manager Janis Lam [email protected] Accounting Manager Nancy Chung [email protected] Accountant Ivy Chu [email protected] Accounting Assistant Cannis Wong [email protected] Accounts Clerk Mavis Chan [email protected] Circulation & Distribution Director John Lam [email protected] Assistant Circulation Manager Allie Mok [email protected] Senior Circulation Assistant Shipman Kwok [email protected] Contributors Canberra: Dylan Bushell-Embling London: Michael Carroll Tokyo: Mike Galbraith

NewS mAP

10 Asian telecoms this monthAsia news round-up

reGulArS

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Insight

42 events Calendar 43 telecom Career 45 Backpage Briefing

Editorial and publishing office Questex Asia Ltd 13/F, 88 Hing Fat Street, Causeway Bay, Hong Kong Tel: +852 2559 2772 Fax: +852 2559 7002 Website: www.telecomasia.net Subscription Hotline: +852 2589 1313 Subscription Fax: +852 2559 2015 E-mail: [email protected]

SAleS CONtACtSAsia Pacific Gigi Chan Group Publisher, Questex Asia Ltd. tel: +852 2589 1338 fax: +852 2559 7002 e-mail: [email protected] Jessie Cheung Questex Asia Ltd. tel: +852 2589 1310 fax: +852 2559 7002 e-mail: [email protected] Japan Yoshiomi Okamoto EMS Inc. tel: +81 3 3327 5756 email : [email protected] North America & emeA Zena Coup tel: +44 1923 852537 fax: +44 1923 839765 email: [email protected] taiwan Virginia Lee Spacemark Media Services tel: +886 2 2522 2282 fax: +886 2 2522 2281 email: [email protected]

Questex Media Group LLC 275 Grove Street, Newton, MA 02466 Tel: +1 617 219 8300 President & Chief Executive Officer Kerry C. Gumas Executive V.P. & Chief Financial Officer Tom Caridi Executive Vice President Tony DAvino Executive Vice President Jon Leibowitz Executive Vice President Gideon DeanTELECOM ASIA (ISSN 1681-181x)is circulated to telecommunications carriers (PTTs) and to the communications departments of businesses, industries and others who use and operate commercial and private networks. It is edited for planning, engineering and operational managers responsible for the design, installation, marketing and maintenance of public or private telecom systems and networks. TELECOM ASIA (USPS 019-325) is published ten times yearly by Questex Asia Ltd, 13/F, 88 Hing Fat Street, Causeway Bay, Hong Kong. All copies distributed in PRC are free of charge. Subscription rates: 1 year HK$480 (Hong Kong only) US$86 (within Asia) and US$96 (outside Asia), 2 years HK$840 (Hong Kong only) US$152 (within Asia) and US$168 (outside Asia). Single/Back issue (if available) HK$50 per copy (Hong Kong only) US$9 (within Asia) and US$10 (outside Asia) plus US$5 handling charge per order. Printed in Hong Kong. Postage paid in Hong Kong. U.S. Mailing Agent : International Mail Distribution Inc, A Division of Security Delivery Service, 52-09 31st Place, Long Island City, NY 11101-3229. Periodicals postage paid at Long Island City, NY. 2011 Questex Media Group LLC. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage or retrieval system, without permission in writing from the publisher. POSTMASTER: Send address changes to: 13/F, 88 Hing Fat Street, Causeway Bay, Hong Kong. This issue is sponsored by

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Telco Strategies 201215th Annual Telecom Asia Awards and Executive ConferenceApril 18-19, 2012 Bangkok

Transformation and Strategies for GrowthThe search is on for Asias best-run telecom carriers with the 15th Annual Telecom Asia Awards the regions longest-running and most prestigious telecom industry awards. The 2012 awards include an executive-level conference Telco Strategies 2012 - which brings together leading thinkers from Asias telecommunication operators for knowledge sharing and to celebrate the industry leaders of the past year. The combination of awards and conference makes this the must-attend telco event in Asia.

Official Media

Find more information about the Telecom Asia Awards and Telco Strategies 2012 at

www.telcostrategies.com

Organizer

To attend this event: JP Chirayath - [email protected] +65 6395 4597 Sponsorship opportunities: Gigi Chan - [email protected] +852 2589 1338 For information about the Telecom Asia Awards: Joseph Waring - [email protected]

www.telecomasia.net HIGHlIGHtS

Follow us on:

ONLINE SECTIONS

VideosThe revamped video channel brings you more in-depth interviews with top telcos insiders and expert commentary on the latest business and technology trends www.telecomasia.net/videos

Daily NewsOur broad coverage of Asian and global telecom news www.telecomasia.net/news

CommentaryIn-depth analysis from Telecom Asias senior editors and leading telecom research firms, including Ovum, Maravedis, ACG Research and more www.telecomasia.net/commentary

4G Insight AsiaThis monthly newsletter brings you the latest news, analysis and developments in the 4G technology trends www.telecomasia.net

BloggeryMissives on telecom trends and the wireless future from John Tanner, Tony Poulos, Joseph Waring and Michael Carroll www.telecomasia.net/blog

BusinessWeek Online

Billing and OSS AsiaKeep updated on the latest news, analysis and developments in the OSS and BSS sector with this monthly newsletter. The latest edition will be out on December 15 www.telecomasia.net/term/OSS+and+BSS

Tech coverage from the global business magazine www.telecomasia.net/bwol

White PapersVendors hold forth on latest technology concepts www.telecomasia.net/whitepapers

Events

Telecom Asia China editionThis twice-a-month newsletter is an essential source for Chinese telecom professionals http://cn.telecomasia.net/

This years trade shows and conferences www.telecomasia.net/events

Telecom Asia China editionIn-depth news analysis, opinion, white papers and case studies for telecom professionals and executives in China http://cn.telecomasia.net

Time for a change?Find your next job on the Telecom Asia jobs portal the best place to post and find latest openings in the region. http://jobs.telecomasia.net/

IndustryViewThe inside view from industry execs www.telecomasia.net/industryview


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John C. Tanner

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tANNer

SOPA: stop me if youve heard this before

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ust once Id like to be able to write a column without having to vent about some new controversial internet regulation aimed at protecting intellectual property that could end up doing more harm than good. Not this month. Sorry. This time, its the Stop Online Piracy Act (SOPA), also known as the Protect IP Act, a law being debated in the US Congress as we went to press that is ostensibly aimed at nonUS websites engaging in copyright infringement of US intellectual property (to include selling counterfeit drugs) but rather typically for these sorts of laws written so badly that it covers a lot more than its intended target. Whats striking about SOPA is that much of it proposes powers that copyright holders have tried to attain through similar legislation for years, such as forcing the removal of blacklisted websites from search results, and forcing ISPs to stop rendering the DNS of such a site, a move that many people who understand how the internet works have said repeatedly is a terrible idea.

Another similarity to previous bills is that the language is amazingly vague as to what websites qualify for prosecution under SOPA. Essentially, it applies to any website (or just a portion of it, even if its just one page) directed toward the US that is alleged to engage in, enable or facilitate infringement, and/or the website owner is alleged to have taken steps to avoid confirming a high probability of infringement. Critics of the bill say that criteria could just as easily be applied to legal file-sharing sites like RapidShare and digital locker services like Dropbox, as well as user-generated content services like YouTube and Soundcloud, and in fact any social networking site whose users so much as share a link to an allegedly infringing site or page. Little wonder web companies like eBay, Facebook, Google, LinkedIn, Mozilla, Twitter and Yahoo officially oppose SOPA.

Where the proof?

Also like previous anti-piracy bills, most of this would happen with little or no judicial supervision at all. If a media company thinks your site fits the above criteria, an allegation (as opposed to proof) is all it takes to run afoul of SOPA. SOPA does contain at least one relatively new twist: the ability of rights holders to cut off funding for offending sites by forcing advertisers and transaction companies (such as PayPal, Visa and MasterCard) to stop processing payments for them. Still, so much of SOPA sounds so familiar that its getting harder to believe claims by major media companies that theyve embraced the digital content business model. Maybe individual executives get it, or even individual media companies. But at the macro level, by which I mean at the level of industry organizations like the MPAA and IFPI, Im not so sure they do. Thats not to say that they see no future in digital content. In fact, some insiders have recently predicted that media companies will start phasing out physical formats like DVDs and CDs within the next few years in favor of streaming and downloads now that they know users will pay for it. But legislation like SOPA strongly suggests that media companies would much rather embrace digital if they can do it with the same (or even bigger) levels of control and legal copyright power they had with physical media, as well as unprecedented power over how customers consume it. None of this is to say copyright holders should have no legal recourse for infringement violations. But sledgehammer solutions like SOPA not only wont solve the piracy problem (there are always workarounds), but could also hinder innovation at a time when the comms/IT industry is moving to a broadband-driven cloud paradigm top-loaded with opportunity for everyone in the digital content value chain, particularly copyright holders. Its been web-based innovation that has largely shaped the digital media market as we know it it makes no sense to stop that innovation in its tracks now. TA

John C. Tanner is global technology editor [email protected]

So much of SOPA sounds familiar that its getting harder to believe claims by major media companies that theyve embraced the digital content business model

www.telecomasia.net

Telecom Asia Dec 2011/Jan 2012 7

fIrSt mIle

edited by John C. Tanner

Browsers need OS for better web apps: Mozilla

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Data boom prompts surge in Carrier EthernetThe global market for Carrier Ethernet equipment is on pace for 15.7% growth in 2011, following a 30.5% hike in 2010, and is showing no signs of showing down. Spending on such equipment will increase by more than two and a half times the expected increase in overall telecom capex for 2011, according to research firm Infonetics. Growth has been so strong that Infonetics has lifted its long-term forecast to $40.2 billion in sales in 2015, up from the initial projection of $37.5 billion. This strong performance is being driven by the ongoing move toward IP-based next-generation networks, with operators moving progressively moving to Ethernet transport instead of SONET/SDH. Customer demand specifically surging consumer and business data traffic is the prime motivator for the move. IP/Ethernet equipment is expected to make up 95% of all mobile backhaul spending by 2015 as these trends accelerate. Routers, Carrier Ethernet switches and optical gear together make up two-thirds of the total Carrier Ethernet market, with switches being the fastest-growing single segment. But growth in some segments including Ethernet microwave and VDSL equipment is slowing, and by more than Infonetics had anticipated. Cisco should be one of the biggest recipients of the market growth, as the vendor currently captures 45% of global Ethernet switch revenues, and has no close competitor. Also set to benefit are Avaya and Ciena, which lead the global Ethernet access device market.

he next big growth wave for mobile apps is widely expected to come from the web, via widgets and browsers supporting HTML5. ABI Research expects that over 2.1 billion mobile devices will have HTML5 browsers by 2016 (compared to 109 million in 2010). However, according to Mozilla creator of the Firefox browser the one thing missing from all this is an operating system for browser-based web apps. Which is why the company is developing one. Mozilla launched it collaborative Boot To Gecko project in July with the aim of developing an OS for both desktop and mobile browsers to run HTML5 apps. The idea from an engineering point of view is that you turn on your phone and it will boot into the web engine, says Jay Sullivan, VP of products at Mozilla. The difference between simply running an app in an HTML5 browser and running it on a browser OS, says Sullivan, is that the OS will make a web app look, feel and perform more like a native app. For example, you dont want to see the URL bar and the back-andforth buttons and all the browser chrome you want the app to feel more like a standalone thing, he explains. Its also a matter of the established user perception of native apps and web apps in terms of value, he adds. If it feels like its running on a website theres this feeling that it should be free, but if it feels like an app with one-touch launch and a dedicated simple experience, then it feels like something worth paying for. Right or wrong, thats where we are. If the idea of yet another app

OS on top of the various vertical OSs from Apple, Google, Microsoft et al sounds to developers like an exacerbation of the fragmentation issue they already face, Sullivan says they can rest easy. For a start, he says, proliferation of HTML5 will allow developers to write most of the core code for their apps in HTML5, then create a thin wrapper to adapt it for, say, iOS or Android, rather than rewrite their core code multiple times. That will reduce fragmentation. Sullivan says that not every browser needs its own OS, but we dont really see anyone leading the way to build such a thing, and we think somebody should. Another key element to web apps thats also missing, says Sullivan, is an ecosystem that enables web apps developers to make money. When you look NTT DoCoMos i-mode days, what made that work wasnt the technology [c-HTML], it was that when you built something and got it in the shop, the cheques would come every month. That piece is whats missing on the web. What this means for operators, Sullivan says, is a golden opportunity to harness the huge base of HTML developers to create a really compelling ecosystem of content. You dont need to create a new ecosystem because its already there and theres millions of people who know how to code for it, he says. Whoever figures out how to put a beautiful store around that, add value with billing relationships and things like that, and deliver a web-based device is going to have the richest ecosystem. The network operator who understands that first is going to win. TA

Doubt-digit growth continuesCarrier Ethernet equipment sales

Source: Infonetics Researchwww.telecomasia.net


INDuStrY ANAlYSIS

awmakers from three Asian nations took steps in November that could ensure more opportunities for foreign investments into their respective telecom sectors. The Bangladesh Telecommunications Regulatory Commission set the terms and a June 2012 date for its belated 3G auction. The regulator announced that the spectrum auction will be open to both domestic and foreign bidders. If a prospective new entrant wins the bidding for 3G spectrum, the BTRC will also let them apply for a 2G license, which could make the 3G licenses a more attractive proposition. Pakistans prime minister, meanwhile, gave provisional approval for the terms of the nations own 3G auction, including allowing international participation. Under the proposal, which still requires several stages of approvals, an initial three 10-MHz blocks of spectrum will be auctioned to the highest bidders, whether they be existing or new players. But any new player winning a license in the auction would not be allowed to commence services until after March 2013, when a moratorium on the issue of new telecom licenses lapses. The terms also specify the auction of more 3G or 4G spectrum in the future, with an aim of allocating licenses by March 2013, so that services can start shortly after the moratorium expires. There will, however, be one existing telecom license up for grabs. The government also plans to auction off the defunct license once owned by Pakistans Instaphone. The government revoked Instaphones license in 2008 alleging failure to pay outstanding dues. Instaphone appealed the move, but lost. Meanwhile, Thailands new regulator the NBTC is scheduled a hearing to consider the pros and cons of loosening or doing away with recent regulation limiting foreign investment in the nations own telecom sector. The new rules, introduced by NBTCs predecessor NTC, were designed to prevent foreign dominance of the telecom sector, by curbing the alleged practice of foreign companies using nominees to increase their effective stake in a Thai operator beyond the currently permissible 49%. But the NBTCs commissioner told local media the new regime believes that the rules could be considered contrary to Thailands free trade principles. Operator True Move had in June accused Norways Telenor of owning an effective 70% of DTAC through nominees. The dispute cast new light on the issue of foreign ownership of Thai telecom firms, and led to the development of the rules. TA Dylan Bushell-Embling

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APAC nations open doors to foreign investors

INSIGHt

ONe mONtHS teleCOm reSeArCH

>> LTE growth unabated by economic woes

The market for mobile RAN infrastructure is booming, driven by accelerating LTE and W-CDMA deployments. DellOro estimates that the mobile RAN market grew 20% year-onyear during the third quarter, with LTE equipment constituting one-half of this gain, and W-CDMA equipment accounting for a further third. The growth momentum indicates that macroeconomic uncertainties have not dampened operators network upgrade plans, with a number of operators sticking to aggressive LTE rollout schedules. Ericsson and Alcatel-Lucent continue to be the top LTE vendors, with their market shares increasing to 44% and 30% respectively. Mobility infrastructure quarterly report www.delloro.com

>> Telcos mobile wallet plans under threat

Google and Apple will provide both threats and opportunities to operators mobile wallet ambitions. According to ABI Research, operators will provide 75% of mobile wallet services in 2012, but this will shrink to 63% in 2016 as Google Wallet gains traction with consumers. The researchers also expect Apple to come out with a competing service in 2012, further contributing to market share erosion. But Google Wallet and Apples service will provide operators, which prefer not to directly develop mobile wallet infrastructure, the opportunity to partner to provide mobile wallet services to consumers. Mobile wallet strategies www.abiresearch.com

>> VAS adds $10 to broadband sub price

Broadband value-added service (BVAS) revenue grew to $57.5 billion at the end of 2010, up from $48.8 billion a year earlier. Analysis from Point Topic indicates that BVAS including VoIP and IPTV added 37% to the price of a broadband connection in 2010, pushing the average monthly subscription from $28 to over $38. But the growth is still below trend compared to prior years, and the extent of 2011s growth remains to be seen. By the end of the year, each broadband line supported an average of 1.95 value-added services. VoIP is the most valuable BVAS, with global VoIP revenues (excluding Skype) reaching $17 billion at the end of 2010. Broadband tariff benchmarks http://point-topic.com

>> Big data creates demand for business analytics

Over 65% of APEJ CIOs consider business analytics to be a top priority in the big data era. But so far just 29% of organizations are currently evaluating business analytics tools, according to an IDC survey. While the market for such big data analytics tools is still in a nascent stage, take-up from operators as well as banks, governments and other major organizations will soon help stimulate adoption in the region. Asia/Pacific (excluding Japan) business analytics 2012 top 10 predictions www.idc.com

www.telecomasia.net


asian telecoms this monthBeijing The government launches a probe into allegations of price-fixing by China Telecom and China Unicom. China Telecom lifts the lid on plans to become an MVNO in the US, mainly targeting Chinese expats and students, and expands a partnership with AT&T. China Mobile discloses plans to complete second-stage TD-LTE testing by June next year, and to subsequently move to large-scale commercial trials. China Unicom and Telefonica extend their partnership to cover access to select PoPs in APAC, Europe and Latin America.

Hong kong PCCW spins off its telecom operations into a separately listed business trust.

Bangkok New regulator NBTC considers relaxing laws limiting foreign investment in Thailands telecom sector, suggesting they may contravene the nations free-trade principles. State-owned CAT ponders allowing TrueMove, DTAC and DPC to buy back their networks, which would otherwise need to be relinquished to the operator under existing build-operatetransfer arrangements. DelHi Indias Central Bureau of Investigation launches a probe into Bharti Airtel, Vodafone and one other private operator, as well as a former telecom ministry chairman, over allegations of a fresh 2G spectrum conspiracy. DHaka The government sets a June 2012 date for Bangladeshs long-awaited 3G auction and grants state-owned TeleTalk a six-month exclusivity period to conduct a 3G trial. Hanoi Hanoi Telecom makes a submission to competition regulators claiming that stateowned operators EVN and Viettel should not be allowed to merge.10 Dec 2011/Jan 2012 Telecom Asia

Fitch Ratings warns that Indias six smaller Indian operators and state-owned BSNL and MTNL are in for another tough year in 2012.

Bharti Airtel, Vodafone India and Idea Cellular threaten to seek a refund on their 3G auction payments if not allowed to continue with an intra-circle roaming pact.

islamaBaD The prime minister gives preliminary approval to Pakistans 3G auction terms, including allowing foreign participation.

Operators are ordered to start censoring SMS containing any of a list of nearly 1,700 words or phrases, including idiot and damn, deemed by regulators to be obscene. Rival XL Axiata reveals it is eager to sell 7,000 of its own telecom towers and hopes to raise 14 trillion rupiah ($1.55b) from the sale.

jakarta PT Indosat reaches a preliminary deal to sell some of its telecom towers to Tower Bersama Infrastructure for as much as $500m.

www.telecomasia.net

movementsseoul Nearly 1,000 2G mobile users file a class-action suit against regulator KCC, seeking to overturn a decision to allow KT to shut down its 1,800-MHz 2G network. Price pressures including a recent tariff cut bite into SK Telecoms Q3 profit, which falls 41% year-on-year. Researchers estimate Samsung will have supplanted Ericsson as APACs top LTE base station vendor in 2011, due mainly to deals won for domestic rollouts. z A US government committee launches a full probe into the alleged national security implications of US companies using gear from Chinese vendors including Huawei. z The GSMA estimates that global mobile connections exceeded 6b at the end of November. z The body also forecasts that APAC will house close to half of the worlds 11b connected devices by 2020. z Fujitsu becomes the first UK company to take advantage of a court order that incumbent operator BT must offer access to its fiber infrastructure on fair and non-discriminatory terms. z A wireless managed services firm publishes a report claiming that Android returns and repairs are costing operators $2b per year. z Telenor reaches a deal with Google to offer a branded shelf on the Android market and to enable carrier billing on the apps bought through the portal. z Analysis shows that APAC is now responsible for sending out more than half of the worlds spam. z A report claims that that APAC operators spent $400m on mobile internet infrastructure capex in Q2, with the market for such gear growing 30% per year. z Huawei buys Symantec out of the companies former security solutions joint venture. z The US FCC launches a rare competition probe into AT&Ts proposed $39b T-Mobile USA purchase. T-Mobiles largest shareholder, the German government, declares the deal dead. z Network analytics solutions firm CarrierIQ draws the ire of privacy officials over claims its software logs keystrokes and the contents of SMS without users consent. z The EC singles out Germany, France, Italy and Spain for now being six months late in implementing changes needed under new telecom consumer protection rules. z Fresh rumors of a Facebook IPO circulate, with the latest round of speculation suggesting a $10b IPO, which would give the firm a $100b valuation. z RIM slashes $300 from the US RRP of its PlayBook tablet due to poor sales, and takes a $485m writedown to account for unsold inventories.

tokyo Softbank teases plans to hard-launch LTE services as early as February next year, after a soft-launch at the start of November. taiwan The government shaves two years from its planned 4G timeline, revealing plans to commence the auction process in 2013, instead of 2015.

NTT DoCoMo gives a target of reaching 30m LTE subscribers in 2015, up from 1.3m in 2011.

HTC denies widespread reports it is facing a ban on sales of 3G-enabled devices in Germany due to alleged patent violation.

singapore IDA is given new powers to enforce structural separation on an operator if necessary to ensure market competition. StarHub posts an 8% slump in Q3 profit, due largely to higher operating expenses.

M1 and regulator IDA spar over a $230k fine imposed on the operator due to a recent service disruption. SingTel partners with Symantec to offer a cloud-based email security solution to its domestic customers.

syDney NSN sues Vodafone Hutchison Australia for allegedly withdrawing funds from a network performance bond while the parties were still discussing compensation for VHAs network woes.

Industry body Communications Alliance plans a new scheme for dealing with piracy by its users, including sending warning notices, in response to pressure from the content providers.

kuala lumpur Maxis and Axiata both post declines in Q3 profit, despite reporting solid mobile data gains.

Maxis signs a capacity deal to use the new MEASAT-5 satellite for mobile backhaul to allow it to cost-effectively serve a larger percentage of the population. Smart starts taking registrations for public LTE trials in Manila, offering free access to 30 LTE sites until February.

manila Operators implement a regulator-mandated cut to inter-carrier SMS rates, and prepare to comply with new SMS delivery rate targets.

pyongyang North Koreas sole mobile operator, Koryolink, passes 800,000 subscribers. Co-owner Orascom reveals that the network now covers 94% of the population.

www.telecomasia.net


2012 teleCOmS BuSINeSS OutlOOK

Bring it onTelecom players braced and ready for 2012Telecom Asia asks telecom players about their business outlook for next year. Result: they like their chances in terms of both market growth and making money from it. Also, data will be a big deal John C. Tanner


www.telecomasia.net

ts that time of year again, where everyone wraps up the year by breaking out their amateur crystal balls and attempting to divine the future or at least enough of it to get a handle on what the new year will bring. Even if you dont take it that seriously, it can be admittedly a tricky business, especially in these days where the telecom industry is in a state of headspinning flux as the world goes both IP and mobile, and as consumers take the helm, changing business models and driving demand into uncharted territory. Telecom players understand that the industry is changing rapidly, but what changes concern them the most,

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and how are those impacting them as a business? So this year, Telecom Asia is taking a slightly more scientific approach to our year-end outlook. Last month, in partnership with Huawei Technologies, we conducted a online survey of telecom operators and vendors around the region to ask them about their business outlook for 2012 not just in terms of general technology trends and growth drivers, but also changes within the company itself, the internal as well as external pressures driving that change, and whether theyre at all confident in the face of all that change, or are bracing for the worst (the auspicious pop-cultural baggage that comes with a year like 2012 notwithstanding).

The executive summary goes something like this: Many telecom players are facing both new challenges (non-traditional competition) and familiar ones (regulatory restraints), and are responding by expanding their market horizons and focusing on data, VAS and content as the big growth drivers over old-school segments like voice. But overall, theyre pretty optimistic about their chances in terms of both market growth and making money from it.

Cautious optimism

Asked about how optimistic telecom players felt about growth prospects in their respective sectors, for the Figure 1

Changes expected in next 12 months

Source: Telecom Asia

Telcos are searching for new growth paths as they face declining ARPU and margins and increased competition from both traditional rivals and the over-the-top internet players. In cooperation with Telecom Asia, Huawei has supported this business outlook survey to gain insight into how service providers plan to address these formidable challenges. By leveraging the transformation from voice to data, pipe to content, human-to-human to machine-to-machine communication and communications technology to ICT, we believe the telecom industry will be able to converge broadband and digitalization for even greater development opportunities and turn challenges into growth opportunities. Jeff Liu, Huaweis president for the southern Pacific region

www.telecomasia.net


2012 teleCOmS BuSINeSS OutlOOKMost serious internal issues faced

Figure 2


most part respondents were generally upbeat with the caveat that less than half expressed some level of optimism compared to the previous quarter, with close to 22% expecting no change in growth prospects (which is another way

of saying that at least things wont get worse, growth-wise). That said, just under 30% said they were less optimistic compared to the previous quarter, and only 2.3% expressed zero optimism at all.

If telcos are upbeat about market growth, theyre even more upbeat about making money from it. Nearly 58% of respondents expressed some level of optimism about their financial prospects, though again most of that was compared to the previous quarter rather than being very optimistic. Less than 20% said they expected no change, leaving only 24% feeling pretty glum about their financial situation. That optimism is also reflected in responses regarding our question of what changes telecom companies are anticipating in the next 12 months (relative to this quarter). The majority of respondents said theyre expecting increases in sales/turnover and earnings next year, with less than 13% expecting a decrease in either figure (see chart page 15). On the change front, a slim majority (just over 51%) is also expecting an increase in outsourcing and managed services. A similar number expect prices to be stable in the next year, with over 38% expecting them to actually go down in the same time period. However, if the key word is change, many companies arent expecting very much change at all in a number of areas, such as R&D spend and wages/salaries, which are expected to remain stable in 2012 by the majority of respondents. Interestingly, that also goes for net-

Partnerships will go deepPartnership models will evolve in 2012, creating strategic challenges for everyone involved

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perators are excited by the revenue growth opportunity from the adoption of multi-device data services, but the associated cost increases are outpacing revenue growth and challenging profitability. In response, some operators are already adopting transformational partnerships, and we see three major areas where partnership models are likely to further evolve in 2012. However, this evolution will raise a number of new strategic questions for operators.

Vendor partnerships will get deeper. Operators have already embraced network and IT outsourcing as one area for business transformation. As innovations are made in network architectures, partnership models with vendors will get deeper. For example, one operator in Southeast Asia is currently evaluating a cloud RAN solution where a vendor is offering the equipment and the fiber connectivity between the centrally hosted equipment and tower sites. Examples like this show that vendors

are demonstrating greater willingness for deeper relationships, though operators are concerned about being committed to single vendors not only for equipment, but also for connectivity. Network-sharing partnerships will get deeper and will occur between players of different sizes. Passive network sharing is already the norm, but increasingly there is a recognition that for a transformational change in cost structure, deep passive sharing (including backhaul and transmission)www.telecomasia.net


work upgrades and IT upgrades, with at least half of respondents expecting no changes in those categories. Even larger percentages feel the same way about things like privacy policies and regulation (the latter of which may not be such a good thing, as well see below). Expectations for changes in capex/ opex spending vary more widely. Around 39% say there will be no changes in the next 12 months, but 34% are expecting increases, while 28% are expecting decreases. The survey results also present a mixed bag for employees over a third of respondents say they expect to decrease their workforce in the next year. On the other hand, over 30% of respondents say theyre expecting to increase their staff, suggesting that there will be hiring opportunities as well. (Its also worth mentioning that 37.5% of companies say theyll be increasing wages next year, so depending on how all this overlaps, the numbers could work out well for at least some people.)

30% of respondents say theyre expecting to increase their staff, suggesting that there will be hiring opportunities as wellthe results are fairly spread out, a likely reflection of the fact that every company has its own strengths and weaknesses, and many are also facing a lot of the same basic problems as they cope with the changing nature of the industry. In any event, one of the biggest commonalties is cutting costs. A little under half of respondents cited the ability to cut costs and reduce supplier speed as a major internal issue, with 48% ranking it at a major issue. The second most popular category: attracting and retaining qualified employees, which made the top of the list for 43% of respondents who named it as a key issue. Interestingly and encouragingly data security was the least-cited category. Only seven respondents listed it as an internal issue (four of which said it was their biggest internal issue). As for external pressures, perhaps tellingly, the biggest issue telecom companies say they face is competition from non-traditional companies entering the telecom space (think Apple, Google and OTT players). The vast majority (81%) of respondents ranked it in their top three, and almost 44% put it at the top of the list. Consumer demand got the secondmost amount of attention with 78% of respondents ranking it on their External Issues list (see chart page 18). Government regulation was a common item to make the top three, with 65% seeing it as a serious risk. Thats an arguably unsurprising result for the APAC region, given the current debates in many markets over issues like spectrum licensing, competition and government initiatives such as national broadband networks. Equipment costs were also a common concern for the majority of respondents. Related economic factors such as inflation, currency risk, interest rates and tax policies also made the lists of up to half of respondents.

Cutting costs, keeping talent

Every company faces pressures both inside and out, and we asked telecom companies to rank the top three external and internal issues theyll be dealing with in 2012. For internal issues (see chart on left),

and active RAN sharing are fundamental. Active RAN sharing has typically occurred between operators of similar size, especially in spectrum-scarce environments and for greenfield deployments, such as in the case of Hutchison and PCCW in Hong Kong. However, the recent RAN-share announcement from Maxis and U-Mobile in Malaysia demonstrates a newer trend of partnerships between unequal-sized players. Moreover, the agreement also covers 3G networks. Such agreements between two unequal partners for legacy networkswww.telecomasia.net

require practical decision-making on how to share the benefits from sharing networks. Device vendors will become partners to enable data services. In developed markets, handset subsidies are driving the rapid adoption of 3G devices, but in developing markets encouraging 3G device take-up remains a significant challenge, as customers are mainly prepaid. To accelerate adoption, operators are increasingly partnering with vendors: e.g. Smart in the Philippines with Samsung/ZTE to launch their Netphone

service. We expect similar partnerships to become more common in 2012 and, more significantly, to extend to strong and innovative local handset vendors such as Nexian in Indonesia. As operators look for handset partnerships, they also need to assess the role they are going to play in the device value chain in order to accelerate 3G handset take-up, and also the adoption of services. TA Amrish Kacker, partner, Analysys Mason [email protected] Asia Dec 2011/Jan 2012 15

2012 teleCOmS BuSINeSS OutlOOKMost serious external risks

On the bright side, political risk/terrorism was the least-cited category. Less encouragingly, however, graft and corruption while cited only slightly more than political risk/terrorism as an external issue was named by 45% of survey respondents (though of that group, only 22.5% of them named it as the most serious external issue).

Figure 3

Its all about data

Looking at the expected key growth drivers for 2012, data was unsurprisingly the most-cited business sector that telecom businesses expect to drive growth next year, although it accounts for just 37.5% of responses. However, that, along with the next two biggest sectors value added services (27.3%) and content (12.5%) paints a clear picture that traditional telecom rev-


Get a DNA transplantTo compete with Google and Facebook, CSPs need the organizational DNA to respondhe communications industry is being transformed by unprecedented innovation. This transformation favors companies like Apple, Google and Facebook, whose solutions disintermediate and commoditize many of the traditional offerings of communication service providers. CSPs have responded with a variety of technical and commercial strategies, including network upgrades to support the growing data service demands, and partnership strategies to better serve ecosystem demands. However, we believe that these efforts fall well short of what is needed. To survive and thrive, CSPs must transform their company culture to align with new industry dynamics, and bring operational changes to incentivize new business models. In essence this involves a DNA transplant that impacts virtually all facets of a CSP enterprise. For example: Market demands call for a shift from traditional product to consumer centric offerings. This requires CSPs to eliminate traditional technical and operational product silos and blurs the demarcation between16 Dec 2011/Jan 2012 Telecom Asia

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executive roles, such as between CTO and CIO, whose roles will ultimately converge. This creates feverish power struggles and often defers transformation initiatives until one executive eclipses the other, or market dynamics (such as competition) force cooperative change. Value creation is becoming diffused among an ever-increasing array of ecosystem players. Over-the-top application providers and device providers are essentially subordinating the role of CSPs. As this occurs, we believe that CSPs must focus on areas where they can attain sustainable differentiation, such as in service distribution, transaction management and customer experience. Competitive market dynamics are becoming more complicated. Traditionally CSPs have essentially adopted tit-for-tat-type competitive strategies among their peers. This approach has essentially stifled innovation and fueled opportunities for players like Apple and Google. CSPs must transform their competitive strategies with a focus toward market demand and to embrace both sustaining and disruptive innovation.

Given the complexities associated with transformation, it is unreasonable to assume that CSPs can achieve the necessary changes in one fell swoop. The transformation must be carefully planned and phased to maximize the likelihood of success. Throughout the transformation process, a multitude of issues will emerge, and CSPs must ask: Are the members of the corporation adequately incentivized to ensure the success of transformation initiatives? Can diverse service categories be handled under a unified strategy? What phasing should be used to incrementally enable transformation? As the communication industry transforms, it must contend with increasing disruption from players. It is these players, as opposed to the CSPs themselves, which will ultimately dictate the cadence and direction of industry change. CSPs must have the organizational DNA to respond accordingly. TA Phil Marshall, Tolaga Research [email protected]

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2012 teleCOmS BuSINeSS OutlOOKTop strategic focus in next 12 months

enue generators are fading into the background. Indeed, voice + SMS were at the bottom of the list, with only two respondents naming them as key growth drivers next year. That awareness of data, content and VAS taking prominence as the bigger business opportunities in 2012 segues nicely into the question of where telecom companies will be directing their strategic focus in the next 12 months (chart to the right). Indeed, by far the biggest strategy area that telecom companies will be focusing on is expanding into new market segments and/or geographical markets, as traditional sector growth levels out and local markets saturate. Over threequarters of respondents named expansion as their companys strategic focus, and almost 60% named it as the top priority. Beyond that, the next highest categories were reducing costs and focusing more on sales and marketing (the latter being particularly indispensable when chasing new market segments, of course). A little under half of respond-

Figure 4


ents put those on their lists, with cost reduction typically ranking second on the overall list. One revealing stat: no ones much

interested in B2B partnerships as a strategic focus in 2012. Only 15 respondents put it on their list, and none of them ranked it at the top. TA

Cut costs by offloading themTelcos looking to save costs will turn to network sharing and outsourcingost optimization is one of Ovums big themes for 2012. Its an old theme, with a new twist operators need to reinvestigate network sharing and network outsourcing. So far, emerging markets have taken the lead on both fronts. In particular, pan-Asian investor Axiata is spearheading network share deals in the markets it operates. Its lynchpin deal is in Malaysia, where Celcom and Digi are now sharing towers, but these operators aim to share active infrastructure as well. Axiata estimates it will save upward of $700 million over ten years that sort of network saving simply cannot be ignored. Network sharing has been slow to emerge in developed Asian markets however. The exception is Hong Kong operators18 Dec 2011/Jan 2012 Telecom Asia

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Hutchison and PCCWs joint-venture deal to share a single LTE network. Not all operators will see value in sharing their greatest asset the network, even on a passive level. But margins remain under pressure, so why not share towers in rural areas? Why not share backhaul in some areas? Meanwhile, network outsourcing is less complex and faster to implement than network sharing. New research from Ovum has found that telcos can make an average opex saving of around 20% through network sharing. Traditional network outsourcing models are changing. One example of this is where spectrum and network ownership are pooled by operators. A network vendor then supplies managed network capacity to several

service providers. The premise here is that such business models allow operators to concentrate on services rather than the operation of networks. In short, many large network vendors want to expand their role beyond todays business model of purely managing only networks. Rather, new network outsourcing models involve vendors transforming both networks and IT systems. We expect to see more of these completely outsourced business models emerge particularly in emerging markets. Under such business models the virtual telco becomes a reality. TA Nicole McCormick, senior analyst with Ovum in Australia [email protected]

Reach 78,000+ Global Telecoms professionalsONLINE WEBINARS VIDEO EVENTS RESEARCH PRINT CUSTOM PUBLISHINGQuestex Medias Telecoms Group helps business marketers reach decision-makers in the telco industry through a portfolio of ROI media. From online portals to print publications and supplements, to research and events, the groups products help you connect with executives and influencers in your market segment. www.telecomasia.net

and over 45,000 in emerging Asia markets

VIetNAm rOuNDtABletHe NetwOrKeD SOCIetY

Bridging the gapPublic and private sectors need to be aligned in developing ICT-enabled services, with clear government frameworks to boost cost efficiency

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Joseph Waringietnam is moving rapidly toward a networked society. Mobile penetration has jumped from just 20% in 2005 to more than 100% last year. The country has more than 91 million mobile subs compared to a population of 87 million. 3G subs account for only 11% of total mobile subs. But with about 80% of the population covered by 3G networks and smartphones accounting for just 10% of handset sales, there is plenty of room for growth, especially as prices of high-end devices drop. ICT is now playing a increasingly important role in enabling collaboration between different industries, the government as well as citizens. The result is better, more accessible and more affordable services. Telecom Asia, in partnership with Ericsson, organized a roundtable discussion in Hanoi last month with service providers and government officials to gain insight into how a more connected Vietnam will impact public- and private-sector services. The panel also tried to identify the key opportunity areas as well as the main challenges in the up-take of such things as m-health, e-education and e-government. The event, moderated by Telecom Asia group editor Joseph Waring, was attended by Nguyen Thanh Tuyen, deputy director general for the Department of Information Technology, Nguyen Phong Nha, deputy director general for the Authority of Telecommunications, Mai Liem Truc, former vice minister and telecom advisor, Vietnamobile CTO Desmond Cheung, Vinaphone director of VAS center Ngo Dien Hy, Value Partners partner Zoran Vasiljev and Jan Wassenius, Ericssons president of Vietnam, Laos and Cambodia. Wassenius pointed out that the cost of sensors has dropped to the point where theres now a more viable business case for using them in M2M applications. Were all coming to the inflection point where this will happen its not a matter of whether or not it will happen. And then we have to look at how it will affect society, he said. Vietnamobiles Cheung noted that the key driver for M2M applications is cost reduction. A company will do more machine-to-machine if they can save costs. He said the countrys electricity authority has more than 10,000 people to

Vinaphones Ngo Dien Hy

Vietnamobiles Desmond Cheung


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handle just collections and that doesnt include those reading the meters. He noted that this area is ripe for saving resources, which could be better deployed in some other part of the economy. Hy said Vinaphone, in cooperation with a few transportation firms, has launched a number of traffic monitoring and vehicle monitoring applications. Vinaphone customers can buy packaged SIM cards for transportation apps such as monitoring correct routing. Chueng said one of the main taxi companies in the country accepts payment almost nationwide by a taxi card, and Hy said another lets passengers pay by ATM card. While everyone agrees that the private sector will be driven mostly by cost savings and improvements in efficiency, the government will look for an impact on society, like long-term growth and improvements in education. The question is how to initiate the growth of e-government services within public departments and agencies. Value Partners Vasiljev said there is a gap that needs to be bridged between the private and public sectors. This is part of a nation-building opportunity and exercise, so the government cant wait as the private sector moves so far ahead and then they play catch up, or for the private sector to always think that the government will be a hindrance and the slow part of society. He said both parties need to accept that the speed somehow needs to align and works toward the common goal. There are some good steps being taken, such as the proactive services and

Mai Liem Truc, former vice minister and telecom advisor

Nguyen Thanh Tuyen, the Department of Information Technology

Nguyen Phong Nha, Authority of Telecommunicationswww.telecomasia.net

applications weve discussed. These are the result of people understanding and accepting that its the convenience that is required and what has driven the services. Now its a matter of having more encouragement and trust in investing in companies, Vasiljev said. Wassenius noted that since the private sector in Vietnam is still quite small and its a very public-driven environment, moving from traditional services to ICTenabled ones requires a change of culture. The mindset is really not in place to use ICT, for example in education. ICTbased education can be done totally different than how its done today, so you have to have a culture change and educate teachers so they will embrace the new technology rather than see it as a threat since its something new. And that has to be promoted by the public sector. Nha from the Authority of Telecommunications said that once you have a good infrastructure, youll have good data speeds and wide coverage, and only then can the government and the private sector develop services for education, health care and e-commerce. After that you can talk about who will implement the services the private sector or a government participant. Nha said the infrastructure has to come first, so the discussion is a bit premature. He said the country has more than 12 facility based operators (FBOs) and seven mobile operators, which cover some 95% of the country with 2G. With the move from voice to data taking off in Vietnam, he said the Ministry of Information and

Communications (MIC) issued 3G licenses in 2009 for the first time via a beauty contest. We studied the experiences in many European countries, and we think up until now the beauty contest way has been very successful. The operators that have licenses should commit to the MIC to implementing 3G networks and quality of service. After three years, 80-90% of the population has 3G coverage. Tuyen from the Department of Information Technology, who has written an academic paper on the four stages of a networked economy, said the government needs to create a framework where people can join, connect and share with others. At first the government must provide the infrastructure, but thats not the only thing it can do. It can encourage all government agencies to provide public services via IT. We not only encourage but request all national and provincial agencies to set up websites. It can also select public agencies, or schools, to showcase and demonstrate how ICT can impact society, he said. In its push toward a networked economy, the government is focusing on education in primary and secondary schools. Tuyen noted that almost every school in Vietnam is connected by fiber. To improve IT literacy among teachers and students, the Department of Information and Communications (DIC) back in 2009 put together a group of IT experts to create e-schools and e-portals on opensource software. At model schools in the poor province of Quang Nam students can checkTelecom Asia Dec 2011/Jan 2012 21

VIetNAm rOuNDtABletHe NetwOrKeD SOCIetY

Value Partners Zoran Vasiljev

Ericssons Jan Wassenius

their schedules and test scores online and download and submit their homework. Vasiljev asked if there was any level of private sector involvement. Tuyen said the DIC worked with some private companies to develop the applications. Former vice minister Truc called for a rethink in how the government will reach its development targets, the so-called three pillars of improved infrastructure, improved human resource development and education, and the restructuring of is policy and regulatory framework announced by the Party Congress earlier in the year. He said the question is how ICT can help. While he said the Prime Ministers plan to transfer Vietnam to an advanced country in ICT by 2020 is good and supports it, he has doubts about how its being implemented. If we can readjust our thinking, we can see the opportunities and challenges for Vietnam in expanding the connected society, which means the three pillars can be solved by ICT, whether its e-government, e-commerce, intelligent transport or tele-health care, Truc explained. I want Vietnam to be an advance country by 2030 or 2040 by ICT not in ICT. He noted that in Vietnam where securing investment is very difficult, its vital to make full use of any investment in the economy, society and the environment, which is were ICT can support the government immediately. Looking at how the public sector can better support private companies, Vietnamobiles Cheung gave the example of Hong Kong and Singapore where the government and some operators have joined together to open incubation labs to help developers create and market applica22 Dec 2011/Jan 2012 Telecom Asia

tions. But he said the fundamental thing is the culture and whether people will use them or even be aware of them. That is not something operators can do. The government has to work together with operators. Like in western countries, he said small businesses can really help the economy grow. Hy said Vinaphone has plans to introduce mobile schools and some schools are moving in this direction spontaneously. To have the same framework for mobile schools as e-schools requires the support of the government, he said. We are looking for content providers to work on value-added mobile learning applications, but they are not willing to support because its not cost effective for them, he said. They have to work with schools all over Vietnam and multiple operators as well as try to create demand, which they are unwilling to do because they cant balance the costs with the potential revenue. They support web learning, but not m-learning because the demand is not clear. What is missing, Ericssons Wassenius said, is a common framework that will create cost efficiency and reach a bigger audience. How do you create that framework? Everyone agreed that more support from the government in the form of clearer policies is required for a national framework. But Hy said learning from and sharing examples of useful applications, like a mobile solution to manage communications between parents and a school, allows companies to build on existing examples. Vasiljev from Value Partners asked if the lack of a policy framework is hindering

outside investment in both the private and public sectors. Tuyen said besides a master plan for investment, we need a concrete action plan to implement the plan, otherwise its just strategy on paper. This is true for the health-care sector on how to implement e-health. Truc argued that the government already has a formal master plan and framework but what is lacking is a clear commitment. Tuyen agreed, saying there is not a clear financial commitment. Vasiljev said that the private sector wants to move fast and is looking for business models that will create profits, while on the other side the top has vision, but the IT department doesnt have the execution capability or willingness. Tuyen said the slow uptake of mobile services in the health-care sector, for example, is not a technical issue but a problem with top management. Its an internal problem. The leadership may be eager to apply IT, but IT and HR [departments] dont have the capability to implement the plan. While Tuyen pointed out the Prime Minister has other priorities like the financial crisis or natural disasters, Truc reenforced his point about the importance of using ICT to solve problems. We can use tele-health and e-education. There are many good examples worldwide of ICT being the main enabler for social development. Truc noted that in most developed countries with mature health-care institutions the move to e-heath and e-education has been slower than in many developing countries. They dont need to change so fast because they have to recover their costs. But in the case of India and Vietnam we can choose a different solution. He heard recently the tele-health care systems can reduce hospital visits by as much as 50-60%. This would be very good for Vietnam today because every hospital is over crowded. Wassenius agrees, saying Vietnam has the possibility to leapfrog technologies, learning from other regions and skipping a few steps. But that requires visionary leadership. TAwww.telecomasia.net

Matt Walker, Ovum l

fOrum

Power firms start to smarten up the grid

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elecom vendors are always on the hunt for new markets. Electric utilities are an important vertical, but their telecom needs have historically been basic. The prospect of big new investments in smart grid projects raises the prospect of this changing. However, dont expect an overnight gold rush. While there is no doubt that making electric grids smarter will require big investments, the move is under way in Asia. For instance, one attractive smart-grid application is automating a utilitys distribution plan, which helps with fault detection and isolation. Realtime demand management (i.e. flexible pricing) through smart meters is also taking off in some markets. The bandwidth involved is small, though, which limits the telecom vendor opportunity. But building smart grids will require utilities to rely heavily on vendors for services and systems integration: defining the target network and how to build, operate and maintain it. For some utilities a smart grid is simply not a priority. Implementing one is a costly, complex process requiring consensus from internal constituents, plus regulators and consumers. Given this, some utilities focus attention elsewhere. One example is Malaysias Sarawak Energy. Most utilities are slow growth, especially now that energy conservation is important. But because of new industrial parks, Sarawak Energy expects a roughly fivefold increase in its peak load between 2011 and 2020. Its customer base is also changing drastically: from about 30% industrial in 2010, its load may reach 80-90% industrial by 2020. After this transition, its customer base will prioritize power quality and reliability issues, and a smart grid will come in handy. China State Power Grid (CSPG) has a number of objectives for its smart-grid investments: Improvegridsecurityandstability Improve asset utilization and management Improve energy efficiency and customer service

Optimizeenergyresourceallocationover a wide area Many of CSPGs regional utilities are rolling out trials and live smart-grid projects. This occurs even as they also increase capacity and go green, in part to support local manufacturers new products (like solar panels). Already, smart meters are being deployed in the millions; upgrades to distribution and feeder plant intelligence are much slower. Meeting demand, going green and supporting local industry seem to be greater goals. One wildcard in China is CSPGs quiet plans to roll out a national FTTx network, running fiber along the same cables as its power lines. CSPG has no communications license but it has financial heft and political clout, plus rights-of-way. It is one of Asias few large utilities planning to enter the telecom business as part of the transition to smart grid. This is an interesting opportunity for vendors, though local suppliers have the inside track. SP Ausnet in Australia appears to be one of the more aggressive, forward-thinking utilities in Asia Pacific when it comes to the smart grid. It started investing in in 2007, then expanded it in 2010. The utilitys prime achievement so far is automating its distribution/feeder plant, and significantly improving fault detection and isolation, as well as configuration management. For the last hundred feet access to the smart meter, SP Ausnet is using Wimax, which it believes is more flexible and has more potential applications than using PLC/ BPL or mesh radio. SP Ausnet has found that, even with CCTV video streams, smart-grid bandwidth needs are limited. But SP Ausnet says the services and systems integration are a big headache. This creates an opportunity for telecom vendors, which are fine-tuning their professional services offerings. Just dont forget that ABB, Mitsubishi, Siemens, GE and lots of other vendors more familiar to utilities are also shopping solutions around. TA

Matt Walker is a principal analyst at Ovum

Limited bandwidth

One wildcard in China is CSPGs quiet plans to roll out a national FTTx network

www.telecomasia.net


Awards VideoHighlights

December 1, 2011 l Singapore

Celebrating Asias top vendors13 equipment and software suppliers win 21 awardsuawei Technologies and Cisco Systems were the big winners in this years Telecom Asia Readers Choice Awards each taking home three trophies at a ceremony in Singapore on December 1. Huawei was named the Best Telecom Vendor of the Year (the best-of-the-best award), Wireless Network Vendor of the Year and Broadband Network Vendor of the Year. Cisco was recognized as the Core Network Vendor of the Year, Metro Network Vendor of the Year and Carrier Ethernet Vendor of the Year. Alcatel-Lucent, Amdocs, Ericsson and Nokia Siemens Networks each won two awards. Amdocs was voted the OSS Vendor of the Year for the first time and was named BSS Vendor of the Year for the third straight year. Alcatel-Lucent won the LTE Innovation of the Year award for its lightRadio product line and was also named FTTx Vendor of the Year. Ericsson took the Wireless Broadband Network Vendor of the Year and Best Infrastructure Management Vendor awards. Nokia Siemens Networks was selected as the Most Innovative Vendor of the Year for its Liquid Net wireless solution and Green Vendor of the Year.24 Dec 2011/Jan 2012 Telecom Asia

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Thirteen equipment and software suppliers received 21 awards, which were presented a ceremony in Singapore by representatives from nine service providers and Analysys Mason partner Amrish Kacker, who gave the opening presentation. Executives from AT&T, BT Global Services, Level 3 Communications, NTT Communications, Orange Business Services, StarHub, Tata Communications, Telstra International and Verizon Business were on hand to celebrate with the winners. CSG Internationals Content Marketplace was recognized as the BSS Innovation of the Year for its easy-to-use service that gives operators the tools to compete head-to-head with the OTT players and the app stores while HP won the Cloud Innovation of the Year

for its CloudSystem, which one of the nominating analysts said gives telcos a simple and agile path to serve the lucrative SMB market. Telecom Asia organizes the awards each year to recognize the technology innovations and accomplishments of the top telecom vendors operating in Asia Pacific. Nominations were open to analysts, consultants and telco executives in September. More than 60 telecom insiders submitted some 520 nominations. Telecom Asias editorial team narrowed down the list of nominations in each of the categories after consulting with a team of analysts. A total of 45 companies were nominated in 21 categories. In addition to 15 Readers Choice Awards, six Special Editor Recognition Awards were presented. TA

Nomination Criteria:* Overall quality of innovation and contribution to technology advancement (40%) * Market acceptance market share growth, market share and new customer acquisition (20%) * Revenue growth and contribution to overall industry leadership (20%) * Vision and industry leadership (20%) * Based on performance in 12 months prior to August 1, 2011 nominated products/services should have been available by June 30, 2011

www.telecomasia.net

Congratulations to all winnersWireless Network Vendor of the Year

Huawei Technologies

FTTx Vendor of the Year

Alcatel-Lucent Cisco Systems Ciena

Special Editor Recognition Award Most Innovative Vendor of the Year

Wireless Broadband Network Vendor of the Year

Metro Network Vendor of the Year

Ericsson

Nokia Siemens Networks Alcatel-Lucent ZTE

Broadband Network Vendor of the Year

Optical Network Vendor of the Year

LTE Innovation of the Year

Huawei TechnologiesCore Network Vendor of the Year

Carrier Ethernet Vendor of the Year

Cisco Systems Ericsson

Cisco Systems

Broadband Innovation of the Year

Best Infrastructure Management Vendor

Mobile Security Vendor of the Year

Juniper NetworksOSS Vendor of the Year

Cloud Innovation of the Year

Hewlett Packard

Green Vendor of the Year

Nokia Siemens NetworksVideo Platform Vendor of the Year

Amdocs Amdocs SAP

BSS Innovation of the Year

CSG InternationalBest Telecom Vendor of the Year

BSS Vendor of the Year

Microsoft

Huawei Technologies

BI Vendor of the Year

www.telecomasia.net


Pushing the industrys boundaries

Jeff Liu, Huaweis president for the southern Pacific region, outlines the drivers behind its continued strong growth. Huawei has made significant achievements against the backdrop of a weak economic recovery. We have built comprehensive advantages in core areas such as wired and wireless broadband access, data communications and optical transmission through years of continuous development. We have become the preferred partner for operators in the age of all-IP convergence. We also help operators build cloud computing platforms to effectively improve their return on investment. What are the main industry trends you have capitalized on to drive growth? We are seeing the integration of information technologies with telecommunications, as well as the collaboration between broadband and digitalization. In line with the growing digitalization of society, the telecom industry is primed to embark on new developments while striving to achieve four major migrations voice to data, pipe to content, human-tohuman to machine-to-machine communication, and communications technology to ICT. By leveraging these transformations, the telecom industry will converge broadband and digitalization for even greater de-

velopment opportunities. The integration of ICT has created enormous business opportunities. At Huawei, we see beyond the telecom industry by moving into new business segments, thus expanding the boundaries of the industry. While addressing the current needs of customers, we are also forward looking and cooperating with partners so that we may contribute to the future development of the industry. By leveraging our experience and expertise in the telecom network sector, Huawei is developing cloud computing technologies to establish end-to-end ICT solutions. What do you see as your biggest challenges? The internationalization of our overall management and operations, as we expand globally, is a major challenge. Unlike an American or European organization that is accustomed to commonly adopted management practices in the more developed west, a Chinese company needs time and resources to study and prepare for the adoption of such best business practices. Another major challenge in the next five to 10 years will be our continuous efforts to improve and streamline our management processes, the globalization

Jeff Liu, Huawei

of our company and increasing our level of responsiveness to customers demands. Looking ahead, we will continue to improve customer satisfaction by aligning ourselves with their strategic needs. We believe that we can achieve sustainable growth only through continuously creating value for our customers. What are operators main pain points? Many are seeing flat revenues as well as dramatically increasing data services that are placing significant pressure on network capacity without the associated revenue growth. In the modern world of mobile broadband and fixed broadband, operators are trying to develop new business models that allow them to focus on the development of new services, while


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Best telecom Vendor of the Year, wireless Network Vendor of the Year, Broadband Network Vendor of the Year: Huawei Technologies

at the same time keeping control of their opex and capex. How are you helping operators be more profitable? Against the backdrop of burgeoning demand for mobile broadband network bandwidth, telecom operators face the challenges of enhancing the capacity of MBB and enriching end-user experiences, while also realizing profitability for their MBB businesses. Huawei is committed to helping them build sustainable and profitable MBB/LTE commercial networks. We have unveiled a range of innovative solutions for LTE operators. Also in line with this, we launched our SingleRAN-based LTE solution. Our SingleRAN solution comprehensively assists operators achieve maximum utilization of assets by integrating various technical modes into a single package. Our Singlesolutions have over the past two years helped numerous operators addressed the challenges of expanding network capacity, enriching user experience and reducing the per-bit cost, ultimately ensuring higher profitability and business successes for operators. Moving forward, we are committed to providing products and solutions for the cloud, pipe and devices businesses and helping operators to achieve business success with our ABC strategy growing ARPU, increasing bandwidth and reduc-

Key Achievements: Winseightoutofnineglobalultrabroadbandprojects,includingBT(UK),Nucleus Connect (Singapore), TM (Malaysia) and Qtel (Qatar) Unveilscloudcomputingsolutionstospeeduptheshifttocloudtechnologyfor various industries and promotes the building of an open cloud computing industrial chain SignsavoluntaryenergyconservationagreementwiththeChinaMinistryofIndustry and Information Technology (MIIT) to jointly promote the strategic objectives of energy conservation and emission reduction in Chinas telecom industry

ing cost. Huaweis strong R&D capabilities allow us to pass on financial benefits to customers facing pressures on their capex. What is Huaweis outlook for 2012? We see our business momentum continuing in the coming year. Based on the long-term resources and platform that weve cumulated, Huawei continues to expand its business scope and customer base with the provision of competitive and integrated ICT solutions for telecom operators, enterprises and consumers, eventually driving the sustainable development of the company and the industry as a whole. Huawei is strategically increasing investments in the enterprise business, and offering services in industries such as egovernment, finance, energy, education, and retail as well as helping customers to improve their operating efficiency. As for devices, Huawei aims to devel-

op mobile internet applications that are simple, ubiquitous, scenario-based and smart, and at the same time featuring a converged experience. Huawei also aims to adopt three key strategies including open business clouds, easy-to-use management clouds, and ubiquitous devices to realize its goal of going beyond devices to provide rich experience to consumers. Huawei has unveiled its cloud computing solutions. The company is developing cloud platforms to facilitate resource sharing, efficiency improvements, energy savings and environmental protection. We are promoting cloud-based services and applications to facilitate various business applications to evolve toward cloud computing. Across Asia Pacific, we see potential in emerging markets such as India and Indonesia, where we expect continued growth.TA

www.telecomasia.net


From mere connectivity to business successAlex Zinin, Ciscos CTO for its AsiaPacific service provider business, outlines the secret to Ciscos continued growth. Continuous growth in a highly competitive and innovative high-tech market is a not a trivial issue, especially for a company that already has a substantial market share. On the one hand, you need to be diligent to continue to serve your customers well and help them leverage the investments theyve already done with you. On the other, you need to continue to deliver innovative products and solutions and to be the industry technology and business leader. What are the main industry trends you have capitalized on to drive growth? Over the last five years we entered three new service provider market segments: video, mobility and cloud. Were seeing strong growth across all three, and the associated growth within our NGN architecture triggered by the traffic generated by the associated services. Mobility is obviously the dominant theme in Asia. Increasing smartphone penetration is an additional growth multiplier. These two factors together have created new dynamics in this region that lead to hyper growth of traffic and valid concerns about monetization. With our mobile and video solutions, we are right in the middle of this process, helping service providers build scalable networks that create new services that bring customers on their network and generate28 Dec 2011/Jan 2012 Telecom Asia

new revenue streams. We are seeing similar dynamics in the cloud segment as well. Whats interesting is that cloud adoption dynamics in this region are different from other parts of the world. While the infrastructure buildouts are happening as we speak, we are helping operators build cloud services on top, and what we see is that as cloud buildouts are coinciding with rising IT and broadband penetration in the developing and emerging countries, customers are going to the cloud faster, driven by the fact they do not have to migrate from the legacy IT. We are helping our service providers create these new services, which provides us an excellent growth platform. Finally, it is interesting to see how these new trends start to interconnect, with creation of a consumer media cloud accessible through fixed and mobile access. Ciscos portfolio fits nicely in this emerging space. What do you see as your biggest challenges? We could say our challenges are actually our biggest opportunities: growth, complexity and techno-economics. The economic and business environment has had several major shocks in the past few years and this has transformed our customers outlook and approach to consumption of technology.

Alex Zinin, Cisco

On the positive side, technology is driving more collaboration and productivity across departments, corporations and industries. Networks that used to be used for connectivity are now critical for business success. Our experience in driving the ICT industry means we have to continue to be relevant not just at the IT level but at the board level as well. What are operators main pain points? What we are hearing from our customers centers around four major areas: monetization, optimization, innovation and operational excellence. Addressing scalability, ensuring interoperability and convergence of infrastructure is being driven by the explosionwww.telecomasia.net

Core Network Vendor of the Year, metro Network Vendor of the Year, Carrier ethernet Vendor of the Year: Cisco Systems

of mobile data traffic and the myriad of new over-the-top applications. Our customers look to us to assist them in scaling their networks, reducing operating costs and simplifying their fulfillment processes as well as monetizing their services. Our IP NGN, mobility, video and cloud solutions are specifically targeted at taking out the pain of growth for our customers while also allowing them to access new revenue streams and balance the investment required to evolve to a nextgeneration operator. How are you helping telcos be more profitable? There are many ways we work with telcos and service providers across the region. Lets discuss two of these that affect the expense line and the revenue line. Before listing them, some context is useful. Two of the most important trends have been the growth in video traffic, as shown in Ciscos yearly Visual Networking Index, as well as the explosion of smartphone and mobile internet usage across the region. This has put a big strain on the network capacity and has required increased capex and opex to be allocated, though generally without the reciprocal return in terms of revenue increase. Our first category of assistance is to address the infrastructure EBITDA squeeze. Cisco and our partners are working with the network planning and operations departments to optimize and architect the core and access networks and allow better traffic management, virtualization and control of the deployedwww.telecomasia.net

Key Achievements: RegainsleadershipmomentumincoreroutermarketinQ2 Improvesmarketshareinoverallcarrierinfrastructuremarketineach of the last three quarters Synergy LeadstheglobalCarrierEthernetswitchmarketwitha45%share of revenue Infonetics

resources. Cost-efficiency projects are critical in this constrained financial environment and help address a continuing challenge of handling bandwidth growth from the demand side. A second way is that our strong presence in the enterprise and commercial markets mean that our customers are telcos customers. We work closely in partnership with partners and the telcos to drive managed services and early cloud deployments. These assist the sales, product management and marketing teams drive their service revenue with the right product for the right customer at the right time backed by Ciscos partner ecosystem and Ciscos sales force. What is Ciscos outlook for 2012? We are confident in the regions capability for growth in the coming years. Across Asia Pacific large network builds are still taking place and Cisco is well positioned to take advantage of these. For 2012 our biggest challenge will continue to be the state of the global economy, an issue shared by all equipment vendors and our customers. However, we believe that with our diversified customer

base, wide range of products and strong balance sheet were better positioned than any other networking vendor to continue transforming our customers business and creating true partnerships throughout any market volatility. Can you give a glimpse into your pipeline for 2012? We can clearly see an interesting set of services being delivered to our customers as they expand their service offerings both in geographic coverage, bandwidth and in intrinsic business value for their customers. Specifically, from the Carrier Ethernet perspective, we will continue our approach of not just providing single-platform point products but delivering higher-performance end-to-end architectures that are standards-based. By end-to-end we mean not just the traditional core IP NGN and Carrier Ethernet system components but also the data center and mobile packet core for full service availability. Customers dont have the time or resources to test all equipment and service combinations, especially when seeking to add new or enhanced services on an existing network. TATelecom Asia Dec 2011/Jan 2012 29

wireless Broadband Network Vendor of the Year, Best Infrastructure management Vendor: Ericsson

Thriving on managed servicesStephanie Huf, Ericssons head of marketing and communications for Southeast Asia and Oceania, discusses the main trends that are driving growth. First is mobility. People and businesses want to be able to accomplish all of their tasks no matter where they are. Second is broadband. Faster and better quality broadband enables new business processes, new value networks and new ways for machines to communicate with one another. Third is the cloud, where the entry point is lower thanks to lower costs and where cheaper but powerful devices can run applications that are more accessible. What do you see as your biggest challenges? We see that our customers need to cope with increasing data traffic, increasingly demanding customer requirements and managing complex business models on a dayto-day basis. This means smart network planning and capabilities to manage the surge in smartphone traffic are essential, as well as innovative managed services models to help operators focus on their core business. What are operators main pain points? One is relieving data traffic jams. According to recent figures, mobile traffic is doubling every year. Thus, the industry must put network transformation and the development of new business models at the top of their agenda. Sometimes its a matter of upgrading existing infrastructure while other times entirely new systems are put in place. Another is building customer relationships. Consumers often couldnt care less about which operator is actually delivering connectivity to their device. For operators there is a battle to gain consumers attention and keep it. What we offer through our managed services are solutions that allow operators to place more focus and attention on consumer-oriented activities and marketing while we take over the responsibility of managing their networks. Then there is maximizing profitability. With current flat-fee business models and explosive levels of data traffic, operators are faced with the challenge of finding pricing structures that allow them to be profitable while also attracting new customers and media partners. How are you helping operators be more profitable? We have identified five key areas. Operators need to continue to invest in bandwidth and more efficient infrastructure. It is crucial for them to manage the transition to all-IP network environments. Operators also need to get back to their principal business of providing consumers

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