Asian Mobile Phone Industry Meeting's Gloss Hides Loss of Faith
--From AOL.-- Cooters
Hong Kong, Dec. 9 (Bloomberg) -- Beneath the gloss of the metallic miniskirt-clad women and megaphone-wielding men touting the latest mobile phones at ITU Asia Telecom 2000 this week was an industry losing its faith.
``The vision is always easy, but the execution is always difficult,'' said Ian Stone, chief executive of Hong Kong's SmarTone Telecommunications Holdings Ltd. He was addressing a panel discussion with executives from among the more than 500 companies at the event in Hong Kong.
The waning confidence among telecommunications service providers in part reflects their plunging share prices. In Japan for example, NTT Corp. and DDI Corp. are among the 10 worst performers on the Nikkei 225 stock average this year, losing about half their value.
Difficulty in raising funds from the stock market could explain why Asian service operators' interest in high-speed wireless services is waning, given the prospect of spending billions of dollars on licensing and networks for services whose demand is yet unproven. Some companies such as Singapore's MobileOne Asia said they shared the market's skepticism.
Licenses for so-called third generation networks, which should enable cell phone users to view movies or conduct videoconferences on their handsets, have already been granted in Japan and Korea. Operators in Singapore and Hong Kong will bid early next year.
License Fees
Asian operators hope auctions in the region will be ``rational,'' unlike those in the U.K., where five 3G licenses sold for 22.5 billion pounds ($32.5 billion), or in Germany, where six permits fetched 50.5 billion euros ($44.9 billion).
In Singapore, where bids for the four 3G licenses will start at S$150 million ($86 million), analysts expect prices to soar to as much as $500 million each. Operators' expectations are lower.
``I don't think there's interest beyond (the opening bid price),'' said Neil Montefiore, chief executive of MobileOne, Singapore's No. 2 cell phone service provider.
Not everyone is flush with cash. Currencies in Indonesia, the Philippines and Australia are among the world's 10 worst- performers this year, making equipment purchases more expensive. Philippine Long Distance Telephone Co. and Telekom Malaysia Bhd. have at least $2 billion in long-term debt.
``The question becomes how much are the 3G frequencies worth?'' said Craig Ehrlich, the managing director of Sunday Communications Ltd., Hong Kong's No. 5 cell phone service operator. ``In Europe, it's ridiculous, and now it's coming to Asia.''
Others, such as operators in China, where only 5 percent of its 1.2 billion population use mobile phones, see no immediate need for high-speed networks.
``Voice telephony will make up the biggest segment in our products, where prices (are in) the middle and lower niches,'' said Shi Jixing, chairman of Eastern Communications Co. in China, which makes cell phones for Motorola Inc. ``We have to be realistic about where the revenues are.''
Internet Bubble
Casting further doubt on the potential of mobile Internet, top executives of online content providers in Asia skipped the conference. The chief executives of Chinadotcom and Sina.com, which run two of the Chinese-speaking world's most frequently viewed Web sites, canceled their presentations.
Richard Li, whose Internet startup Pacific Century CyberWorks Ltd. defeated Singapore Telecommunications Ltd. and News Corp. in a bid for Hong Kong's biggest phone company earlier this year, failed to appear at a conference event where he was considered a host.
All the same, equipment makers such as Lucent Technologies Ltd. and Nokia Oyj said operators are telling them mobile Internet prospects are good.
``It's a need for speed,'' said David Spear, a vice president in Asia for Lucent Technologies Inc., the world's No. 1 phone equipment maker. ``Asian operators are hungry for speed.''
Equipment Sales
Rival Alcatel SA, Europe's No. 2 equipment maker, told operators to aim for an intermediate technology, which matches the speed of Internet surfing on personal computers today. Access speed on handsets today is as slow as it was for PCs six to eight years ago.
``Cell phone users have no choice now, and people are bored,'' said Dominique De Boisseson, head of Alcatel's China operations. ``You need a base of people to be frustrated enough to want 3G.''
Singapore Telecom, 80 percent owned by the government, took an uncharacteristically lighter note in a party for equipment suppliers and other guests at the Peninsula Hotel, a landmark for Hong Kong's elite.
As SingTel Chief Executive Lee Hsien Yang chatted up guests like SmarTone's Stone, scantily clad belly dancers wove through the ballroom. SmarTone could become SingTel's Hong Kong partner as the Singapore company scouts for 3G opportunities in regional markets such as Taiwan and Australia.
For others, the showmanship did little to change the outlook for 3G. They're already looking for what's next in mobile technology, promising even faster download speeds and functions as yet only dreamed of.
``We may want to think about developing 4G,'' said Hajime Nomura, deputy general manager of international relations division at DDI Corp., Japan's No. 2 cell phone company. ``When we develop 4G, the technology for 3G isn't important.''
Dec/08/2000 22:57 ET |
