The WRAP: China, EU focus on web; APAC lifts Telenor

The WRAP: China, EU focus on web; APAC lifts Telenor

Michael Carroll  |   May 06, 2011
telecomasia.net

The European Commission and China addressed challenges of the internet industry this week, with the EC unveiling a €600 million ($871.2 million) plan to develop the web of the future and China launching a new agency to regulate the sector.

Digital Agenda commissioner Neelie Kroes said the EC was playing it smart by agreeing a five year web development deal that will see public funding for half of the total investment. The remainder will come from industry, under a public-private partnership.
 
A total of €180 million will be spent on phase one of the project, which runs to end 2012 and aims to establish the ground rules for future web development. Ultimately, the program aims to develop secure and reliable digital markets that can fuel regional economies.
 
China’s decision to launch a new agency to shore up regulation of the web, however, was a less clear cut affair.
 
Details from state run news agency Xinhua reveal the new regulator will be tasked with controlling online content and enforcing the country’s tough censorship rules. The agency will also hold sway over operator’s web access provisions, and distribute domains and IP addresses.
 
But the New York Times pointed out the new agency’s position relative to the 14 other bodies claiming involvement in web regulation isn’t clear.
 
Whatever its powers, the new agency will have its hands full with a surge in smartphone users following triple digit growth in shipments during 1Q11. Research firm Canalys notes China, India and South Korea helped power Asia-Pacific to the top slot in terms of global shipments by region, though the US remained the largest single country.
 
The Boston Consulting Group also gave food for thought to the new agency, revealing the internet contributed HK$96 billion ($12.35 billion) to Hong Kong’s economy in 2009 – almost 6% of GDP. 
 
Asia Pacific countries also featured heavily in a successful first quarter for Norway-based Telenor, with over half of its mobile net additions in the period coming from India alone. The carrier’s businesses in the region registered a typical 13% rise in revenues, helping it to maintain group ebitda at 7.3 billion kroner ($1.33 billion) – up from 7.1 billion in 1Q10.
 
The picture isn’t so rosy for Indian carrier Reliance, with analysts predicting its first quarter net profit could be down by 65% to 77% year-on-year due to higher operating costs and lower ARPU. Profit for Idea Cellular is also tipped to be down 15%.
 
Political unrest in Egypt, Ivory Coast and Tunisia hampered France Telecom in the opening quarter, driving EBITDA down 5.1% to €3.7 billion. However strong mobile revenues in France, Spain and Poland kept group sales steady at €11.2 billion.
 
South Korean carrier SK Telecom committed to its largest annual capex budget since its launch, with plans to invest 2.3 trillion won ($2.13 billion) into its network in 2011. The operator added 15% to its original budget to help account for a 57% rise in data traffic.
 
Growth in the operator’s smartphone users is driving the data surge, contributing to a 2.7% rise in revenues and 35% profit hike to 152.5 billion won in 1Q11.
 
State-run Thai carrier TOT committed 58 billion baht ($1.9 billion) to upgrading its 3G and fiber networks. 
 
Telekom Austria increased its offer for 51% of Telekom Srbija to €1.1 billion after Serbia’s finance ministry discovered fresh assets it claims boost the telco’s worth. The government hopes to sell for €1.4 billion, but Telekom Austria originally bid €800 to €950 million.
 
And Australian consumer groups predicted tougher regulation on telcos after complaints rose to a record high in the first quarter – growing 31.5% on 4Q10.
Michael Carroll

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