2007 Asia - Telco Company Profiles

This publication contains overviews of the companies that have been attracting most attention in the region. The reports contain historical financial and operating data on each of the companies covered. The companies covered are as follows:

Bharat Sanchar Nigam Limited (BSNL)

India’s state-owned BSNL holds around 85% of the country’s copper wire local loop networks. It is the largest telecom operator in India, providing basic fixed-line services nationwide, except for the cities of Mumbai and Delhi. BSNL lost its exclusive rights to local access and national telephony in 2001. To compensate for reduced revenues, it built a national GSM network and entered the mobile sector, becoming one of the country’s biggest GSM operators. BSNL also entered the international telephony market in February 2003. In April 2004, the government moved to unbundle BSNL’s copper network to encourage the growth of broadband ADSL access. The company has been attracting considerable attention through its launch in 2006 of a ‘mega tender’ for 45.5 million mobile lines and the supply of 3G equipment. For the company overview, see chapter 1, page 1.

China Mobile Limited

China Mobile has the world’s largest mobile subscriber base (over 300 million) and the largest geographically contiguous mobile network. Listed on the New York and Hong Kong stock exchanges since 1997, China Mobile has been facing competition from cheaper city-based PHS mobile services offered by the country’s two big fixed-line operators. In preparation for 3G services in China, the company submitted its application for a WCDMA licence in July 2005. In an important strategic move, China Mobile finalised its purchase of China Resources Peoples Telephone Company in Hong Kong in 2006, renaming the subsidiary China Mobile Peoples Telephone Company. For the company overview, see chapter 2, page 12.

China Netcom Group

China Netcom is the second largest fixed-line operator in China. The group owns 30% of the country’s fixed-line infrastructure and serves 35% of its fixed-line customers. As part of its infrastructure it has a 360Gb/s IP backbone network and acquired the Asia Netcom submarine cable network. Its services include PSTN and VoIP telephony, the ‘Little Smart’ PHS service, broadband Internet access, leased lines and VPNs. With an IPO in November 2004, it was the last of the major telcos in China to go public. In 2006, the company sold 100% of Asia Netcom for US$168 million. For the company overview, see chapter 3, page 25.

China Telecom Corporation Ltd

China Telecom is the principal provider of local, domestic and international voice and data services, dial-up and broadband Internet access in 20 of the 31 regions in China. The company commenced operations in September 2002, then went public on the HKSE and NYSE in November of that year, after the government split the original state-owned China Telecom into the China Netcom and the current China Telecom. Revenue growth engines have included the company’s PHS mobile service and its broadband Internet service. In mid-2005, China Telecom signed a landmark cooperative agreement with ZTE to provide the world’s largest fixed-line Next-Generation Network in China covering 30 provinces. In 2006, the government selected China Telecom (together with China Netcom and China Mobile) to build pre-commercial 3G networks based on the locally developed TD-SCDMA platform. For the company overview, see chapter 4, page 39.

Hutchison Whampoa Ltd

Hutchison Whampoa, a huge Hong Kong based conglomerate, has become heavily involved in telecommunications and is now a serious global player. As well as its Hong Kong business, it has a presence in a growing number of countries throughout Asia, Europe, Australasia, the Middle East, Africa and South America. Specialising in mobile communications, the company has invested billions in 3G licences and infrastructure and has been at the forefront of the global 3G roll-out. Branded ‘3’, it launched the world’s first UMTS 3G to market in 2003, in UK, Italy and Australia. With a slower take-up than expected, the company could be forced to sell more assets to finance its international 3G rollout, or substantially modify its 3G strategy. For the company overview, see chapter 5, page 53.

Japan - Major Operators - Overview & Statistics

Japan has been active in regulating its telecommunication industry to reduce the monopoly of NTT, and to introduce more effective competition. This has been effective in increasing the number and size of competitors, reducing prices and introducing innovative telecoms applications. This report gives a brief overview of the operating environment within Japan, and describes the major players – NTT, KDDI and SoftBank – as well providing historical financial and operating data on the companies. (Note: The history of these companies up to the present is described in a separate report.) For the country overview, see chapter 6, page 69.

PCCW Ltd

PCCW has been Hong Kong’s dominant fixed-line telco provider since it acquired the incumbent, Cable & Wireless HKT, in 2000. The company is Hong Kong’s largest ISP offering broadband ADSL access and multimedia content including pay TV channels. In January 2005, China Netcom reached an agreement with PCCW on the purchase of a 20% stake in PCCW for US$1 billion. The relationship between China Netcom and PCCW continued to evolve with the forming of a joint broadband venture in mainland China in 2006. The year 2006 also saw PCCW as the continuing subject of investor interest, as Macquarie Bank of Australia and US investment company Texas Pacific Group (TPG) publicly competed to buy PCCW’s phone and media assets for about US$7 billion. Both companies abandoned their takeover attempts after strong resistance from China Netcom. Major PCCW shareholder Richard Li increased his stake in PCCW after the collapse of the sale. For the company overview, see chapter 7, page 79.

Singapore Telecom (SingTel)

Listed on the Singapore and Australian Stock Exchanges, SingTel is majority-owned by the Singapore Government. SingTel is the leading provider of fixed-line, mobile and Internet services in Singapore. With a small, saturated and competitive home market, SingTel has significant offshore interests, which now contribute a majority of its revenue. Its main subsidiary is Optus in Australia. Others include Telkomsel in Indonesia, Globe Telecom in the Philippines, Bharti Telecom in India and AIS in Thailand. The company has significant investments in international submarine cable networks, satellite systems and data centres. In 2006, SingTel’s Optus acquired 100% of Virgin Mobile in Australia. For the company overview, see chapter 8, page 93.

StarHub Pte Ltd

StarHub provides voice and data services over fixed, mobile and Internet platforms. After a period of strong growth, the company has passed MobileOne to take second position behind SingTel in the mobile market and is now closing in on the incumbent. StarHub has deployed an IP-based network to serve corporate customers and has been building a nationwide network to serve the residential market. In April 2001, the operator was awarded a 3G mobile licence and launched a 3G service in 2005. Singapore Cable Vision merged with StarHub in July 2002, renaming itself StarHub Cable Vision, providing cable TV and broadband services. The operator’s broadband base represented over 50% of the residential broadband market in Singapore by end-2006. Households subscribing to StarHub’s triple play services grew by 72% during 2006. or the company overview, see chapter 9, page 106.

Telekom Malaysia (TM)

Listed on the Kuala Lumpur Stock Exchange, state-controlled TM is the country’s telecommunications incumbent. Despite market deregulation in 1994, the company continues to dominate the fixed-line voice, data and Internet sectors. In April 2003, it acquired number two GSM mobile operator Celcom. In January 2004, it launched a 3G service using the WCDMA standard. Its ISP, TM Net, is one of the largest in Southeast Asia, with ADSL exchanges installed throughout the country. Its international arm, TM International, has telecom investments, mainly mobile, in India, Bangladesh, Sri Lanka, Thailand and Cambodia, with evolving plans to expand into other parts of Asia. Reinforcing its focus on Asia, TM sold its remaining businesses in Africa in 2006. For the company overview, see chapter 10, page 118.

Vietnam Posts & Telecommunications Corporation (VNPT)

VNPT is Vietnam’s incumbent state-owned telecom carrier, having held a virtual monopoly on all services including fixed-line, mobile, data, Internet and satellite. The government has licensed other state run operators, which provide some competition, mainly with domestic and international VoIP telephony and ISP services over VNPT’s network. VNPT operates the country’s two main GSM mobile networks and a PHS mobile city network. VNPT’s growth areas are in mobile and ADSL Internet services. The government had announced plans to restructure VNPT, opening up for greater private investment in the sector at an early date. In 2006, VNPT announced that it was aiming to install 29 fixed telephone lines for every 100 people by 2010. For the company overview, see chapter 11, page 133.

Data in this report is the latest available at the time of preparation and may not be for the current year.