China issues 5G licences in timely boost for Huawei

The battle over 5G network suppliers is part of a broader push by the Trump
administration to check China’s rise as a global technology powerhouse.PHOTO: REUTERS 

5G商用 中国准备好了! 20190605 | CCTV中文国际

News Wrap: Huawei to develop 5G networks in Russia

SHANGHAI/HONG KONG (REUTERS, BLOOMBERG) – China granted 5G licences to the country’s three major telecom operators and China Broadcasting Network Corp on Thursday (June 6), giving the go-ahead for full commercial deployment of the next-generation cellular network technology.

The approvals will trigger investment in the telecommunications sector which will benefit top vendors such as Huawei Technologies, just as the Chinese network equipment provider struggles to overcome a US blacklisting that has hurt its global business.

China approved four operating licences for 5G networks, setting the stage for the super-fast telecommunications system amid simmering tensions with the US over technology and trade.

The country’s three state-owned wireless carriers and China Broadcasting Network Corp were granted licences for full commercial deployment, according to state broadcaster CCTV.

The operators, China Mobile Ltd, China Telecom Corp and China Unicom Hong Kong Ltd, have been testing the technology in several cities including Beijing and Shenzhen.

Full deployment of 5G networks in a country with almost 1.6 billion wireless phone subscriptions is expected to boost local companies designing gear for applications in autonomous driving, robotics, remote surveillance and virtual reality. The faster-than-expected approvals also come as Shenzhen-based Huawei Technologies Co, the world’s largest manufacturer of networking equipment, has vowed to maintain its lead in the face of a US campaign pressuring allies not to use the company’s products.

Shares of some 5G-related companies fell in Hong Kong and Shanghai trading after the licence announcement, trimming gains made earlier in the week on expectations the companies would benefit from the push for the new networks.

China Tower Corp, the three major carriers’ infrastructure provider, fell 3% as of 10.50am in Hong Kong, paring its advance in the past four days to 9.1%. ZTE Corp, which makes handsets and telecom gear, dropped 4.3%, trimming its four-day rally to 7.1%.

Betting on the fate of the nation’s next generation of telecom networks has been one of the year’s hottest trades in China and Hong Kong. An index of telecom-related shares is up 20% this year, led by a 54% rally in ZTE’s Shenzhen-traded stock.

Beijing-based Xiaomi Corp in March said it would introduce China’s first 5G phone in May or June. Huawei and ZTE, have also said they intend to offer handsets compatible with the technology this year.

Introducing 5G will directly add 6.3 trillion yuan (US$912bil) to economic output and 8 million jobs by 2030, the China Academy of Information and Communications Technology estimates. — Bloomberg

Read more: 

If they must pick sides, tech firms will choose China

US President Donald Trump’s latest confrontation with
China’s telecoms giant Huawei may plunge the world into a long-term
technology “cold war,” forcing global companies to pick sides between
the US and China.

US may escalate trade war in six ways

All parties suffer during the trade war, a game of
“killing 1,000 enemies while losing 800 of our own.” Many institutions
have forecast the impact of increased tariffs on China’s economic growth
to be around 1 percentage point. While there is no need to panic, we
should also prepare for worst-case scenarios.

Trump’s Huawei Threat Is Nuclear Option to Halt China’s Rise


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Huawei Surprise goldfish in a bowl

Uncertain future: In this courtroom sketch, Meng sits beside a translator during a bail hearing in Vancouver. She
faces extradition to the US on charges of trying to evade US sanctions on Iran. – AP 
The arrest of Huawei ‘heiress’ has thrown a rare spotlight on the family of the reclusive smartphone giant founder, Ren Zhengfei.

WHEN Huawei CFO Sabrina Meng Wanzhou appeared on Wednesday in a Vancouver courtroom, clad in an unbranded green tracksuit, the moment was witnessed by a single reporter from the local Vancouver Sun newspaper who happened to notice her name on the hearings list that morning.

By the end of the day, Meng’s arrest in Canada at the request of Washington was the biggest story in the world.

And when her bail hearing resumed on Friday, Meng entered court to see about 100 reporters, craning to look at her through two layers of bulletproof glass.

Meng who faces extradition to the United States, was charged for helping Huawei allegedly cover up violations of US sanctions on Iran.

Like many top Chinese executives, Meng is a mysterious figure even in her home country, but the 46-year-old chief financial officer of Huawei Technologies had been widely tipped to one day take the helm of the tech giant her father founded.

That was until her shock arrest, a move that has entangled her in the protracted diplomatic tensions between Washington and Beijing.

Crucially, Meng is the daughter of Huawei founder Ren Zhengfei – one of China’s leading businessmen, an ex-People’s Liberation Army officer and an elected member of the 12th National Congress of the Communist Party of China.

In other words, Meng is part of China’s elite.

Her father Ren moves in the highest government circles in China and founded Huawei in 1988, after he retired from the Chinese armed forces. Born into a rural family in a remote mountainous town in the southwestern province of Guizhou, Ren rose to the equivalent rank of a deputy regimental chief in the PLA and served until 1983, according to his official Huawei biography.

Officials in some governments, particularly the United States, have voiced concern that his company is close to the Chinese military and government. Huawei has repeatedly insisted Beijing has no influence over it.

Ren is one of the most watched entrepreneurs in China and was on Time magazine’s list of 100 most influential people in the world in 2005 and again in 2013.

But like his elder daughter, Ren has largely kept a low profile.

Ren has married three times. His first wife was Meng Jun, daughter of a former senior official in Sichuan province, Meng Dongbuo; she bore Ren two children: Sabrina Meng Wanzhou and a son, Meng Ping.

Meng’s current wife is Yao Ling, who gave him a younger daughter, Annabel Yao, 20. In a rare move, the three posed last month for a family photoshoot for French lifestyle magazine Paris Match. Annabel, a Harvard computer science student, became a sensation at last month’s Le Bal des Debutantes (or Crillon Ball) in Paris.

Ren’s third wife is Su Wei who, according to Chinese media reports, is a millennial who was formerly his secretary.

Interestingly, all his children opted not to take on their father’s surname – Meng adopted her mother’s surname after her parents divorced. According to Chinese news websites, Meng’s brother Ping, who also works for Huawei, followed her in taking their mother’s surname to “avoid unnecessary attention” – though the son was also known as Ren Ping in the past.

(This practice is not uncommon among the families of China’s elite. The co-founder of Chinese auction house China Guardian, Wang Yannan, opted not to take her father’s surname – she is the daughter of late Chinese premier Zhao Ziyang.)

Born in 1972, Meng joined the company in 1993, obtained a master’s degree from Huazhong University of Science and Technology in 1998, and rose up the ranks over the years, mostly holding financial roles.

In her first media appearance before the Chinese press in 2013, Meng said she had first joined the company as a secretary“whose job was just to take calls”.

In the interview with China’s 21st Century Business Herald, Meng said she began her first job at China Construction Bank after graduating with her first degree in 1992.

Arrested Meng: Like her father, the Huawei CFO had led a quiet life, out of the spotlight. – Reuters

Arrested Meng: Like her father, the Huawei CFO had led a quiet life, out of the spotlight. – Reuters

“I joined Huawei one year later because a branch closed its operations due to the business integration [of CCB],” said Meng, describing her early jobs in Huawei as “very trivial”.

Meng has served in various roles at the company since, until her latest role as the Hong Kong-based CFO of Huawei.

In 2003, Meng established Huawei’s globally unified finance organisation, with standardised structures, financial processes, financial systems, and IT platforms.

Since 2005, Meng has led the founding of five shared service centers around the world, and she was also the driver behind completion of a global payment center in Shenzhen, China. These centres have boosted Huawei’s accounting efficiency and monitoring quality, providing accounting services to sustain the company’s rapid overseas expansion.

Meng has also been in charge of the integrated financial services (IFS) transformation program, an eight-year partnership between Huawei and IBM since 2007. This has helped Huawei develop its data systems and rules for resource allocation, and improve operating efficiency and internal controls.

In recent years, Meng has focused on advancing detailed financial management at Huawei, working to align these efforts with the company’s long-term development plans.

Meng’s importance at Huawei became apparent in 2011, when she was first named as a board member. Company insiders describe her as capable and hardworking. Earlier this year, Huawei promoted Meng, to vice-chairwoman as part of a broader reshuffle. Meng is one of four executives who hold the vice-chair role, while retaining her CFO position. Despite assertions by Ren that none of his family members would succeed him in the top job, it is widely speculated that she was being groomed to take over the reins of the company eventually.

Married with a son and a daughter, Meng’s revelation that her husband did not work in the industry, dispelled the speculation she was married to a senior Huawei executive.

Meng did not conduct public interviews before 2013 and has seldom mentioned her personal life until recently, when she used her son to illustrate the importance of persistence.

“My son did not want to go swimming one day and he almost knelt on the ground and begged my husband so that he would not have to go. But he was rejected,” Meng said in a speech at Chongqing international school in 2016. “Now my son is proud to represent his school in swimming competitions.”

Meng recently made a speech at a Singapore academic conference in 2018, in which she talked of Huawei’s future role in technology development.

“Without universities, the world would be left in darkness. Without industry, science would be left in the ivory tower,” said Meng. “The fourth industrial revolution is on the horizon and artificial intelligence is one of its core enabling technologies. Huawei is lucky to be part of it.”

While her brother, Meng Ping, as well as her father’s younger brother and his current wife all work at Huawei and related companies, none has held such senior management roles.

“The other family members are in the back office, Sabrina is CFO and sits on the board,” a Huawei source said. “So she is viewed as the boss’s most likely successor.”

But her fate now is uncertain.

She faces up to 30 years’ jail for the alleged crime. Her lawyer in Canada, David Martin, had told the court that Meng posed no flight risk and should be granted bail. To flee would shame her in front of her father and all of China, said Martin.

“Her father would not recognise her. Her colleagues would hold her in contempt. She would be a pariah,” he said.

Meng leaned forward in her seat and dabbed at her eyes with a tissue.

When the hearing adjourned, she was led away with her head bowed, a goldfish in a bowl that is the biggest story in the world. – South China Morning Post

Younger Huawei daughter: ‘I’m just a normal girl’

Arresting Yao: ‘My daily life is actually pretty boring compared to this.’

JUST last month, the reclusive Huawei founder Ren Zhengfei made headlines by appearing in French lifestyle magazine Paris Match with his younger daughter and current wife.The daughter, Annabel Yao, 20, posed with a smile in front of a grand piano with her mother, identified by the magazine as Yao Ling, and Ren, who wore a blue shirt with his hand resting on her shoulder.

Suddenly, the whole family are making headlines again – even if for quite different reasons.

Few outsiders had previously heard of the younger daughter, a Harvard computer science student and ballerina. But Yao recently made a high-profile appearance at the exclusive Le Bal Debutante ball in Paris.

While Le Bal des Debutantes in Paris each year is a nod to the tradition of young society ladies entering the elite social scene of Europe, these days it courts modern debutantes, aged 16 to 21, who are chosen for their looks, brains and famous parents – prominent in business, entertainment and politics.

They parade in glamorous couture gowns, waltz with their cavaliers – young men who accompany the “debs” for the evening – and take part in photo shoots and interviews.

The schedule at the event, organised by Ophélie Renouard, is full of young women such as Baroness Ludmilla von Oppenheim, from Germany; Julia McCaw, daughter of AT&T founder Craig McCaw; and Yao – one of three debutantes chosen for the opening waltz this year.

“I definitely treated this as a debut to the world,” said Yao after the ball. “From now on, I’ll no longer be this girl living in her own world, I’ll be stepping into the adult world where I have to watch my own actions and have my actions be watched by others.”

Today’s Le Bal, is a diverse affair, a microcosm of the shifting tides of the global elite. Of the 19 debutantes of 2018, there were young ladies from India and America, Europeans from Portugal, France, Belgium and Germany, as well as Hong Kong’s Angel Lee, Kayla Uytengsu from the Philippines and China’s Yao.

Yao – who has lived in Britain, Hong Kong and Shanghai – was one of several Chinese debutantes in recent years. Hollywood offspring, such as the daughters of actors Forest Whitaker, Bruce Willis and Sylvester Stallone, have also become Le Bal regulars.

“All the girls were down-to-earth, easygoing, helpful and outgoing. No one was pretentious,” said Yao.

“All of them attended top universities or high schools like Stanford, Brown and Columbia, so it’s a group of girls who are privileged, but also work really hard.”


Diverse affair: Today’s ‘Le Bal’ is a microcosm of the shifting tides of the global elite like Yao (far right, front row).


As they swapped their jeans for tiaras and couture gowns and trade teenage antics for waltzing, the girls got to play fairytale princesses for three days and make their grand debut in high society.

They all arrived in Paris two days before the ball to meet, socialise with other girls and their cavaliers (Yao’s cavalier was the young Count Gaspard de Limburg-Stirum), rehearse and take part in portrait sessions.

Girls are given questionnaires about the fashion styles they like, and then choose from a selection. Yao donned a champagne gold J Mendel gown.

“An American designer with a very French style I wanted something modern,” she said. “I’m not super girlie inside, so I prefer something more chic and not so princessy It’s very elegant, and I’m not a fan of very [strongly] pigmented hues. I also loved the tulle texture of the dress, as it reminds me of a ballerina.”

“I definitely feel very honoured to be included, as there are only 19 girls in the world this year,” Yao added. “It means I have to work harder, try to accomplish great things in my life and be a role model for other girls.”

She said: “As people who have more privilege than others, it’s more important for us to help those with less opportunity. I want to get involved in philanthropy and charity I still consider myself a normal girl; it’s important for me to work hard and better myself every day.

“My daily life is actually pretty boring compared to this. I usually live like a normal student.”

Computer science is a heavy subject with a high workload, so she studies a lot. Her spare time is often taken up at the Harvard Ballet company (she’s been dancing since childhood). “I try to dance as much as possible,” she said.

A quick glance at the Ivy League student’s social media shows her jetting around the world wearing Dior, Louis Vuitton and Saint Laurent, but she’s quick to show her serious side. This summer, she did an internship at Microsoft “on a team focusing on machine learning and image recognition”.

However, she noted: “As much as I enjoy coding, I enjoy personal interactions a lot I have a passion for fashion, PR and entertainment.”

In the future, she sees herself working on the business side of technology. “I’ll try to integrate the tech knowledge I have,” she said. “I don’t think I’ll be a software engineer but maybe I’ll be more on the management side. I enjoy building connections.” – South China Morning Post

Growing stronger, opening wider key to resolving Huawei crisis

Huawei is now facing its most severe test since it became the world-renowned innovative tech company.

With executive’s arrest, US wants to stifle Huawei

The Chinese government should seriously go behind the US tendency to abuse legal procedures to suppress China’s high-tech enterprises. It should increase interaction with the US and exert pressure when necessary. China has been exercising restraint, but the US cannot act recklessly. US President Donald Trump should rein in the hostile activities of some Americans who may imperil Sino-US relations.


Related posts:

Huawei CFO arrest violates human rights as US takes aim at Huawei, the real trade war with China

In custody: A profile of Meng is displayed on a computer at a Huawei store in Beijing. The Chinese government, speaking
through its embassy in Canada, strenuously objected to the arrest, and  demanded Meng’s immediate release.  

Huawei CFO arrest violates human rights as US takes aim at Huawei, the real trade war with China

In custody: A profile of Meng is displayed on a  computer at a Huawei store in Beijing. The Chinese government, speaking through its embassy in Canada, strenuously objected to the arrest, and  demanded Meng’s immediate release. — AP

China urges release of Huawei executive

– In violation of universal human rights

Chinese officials are urging the US and Canada to clarify why Meng Wanzhou, a senior executive of Huawei Technologies, has been detained and to immediately release her, slamming the arrest as a violation of her rights.

Experts said on Thursday that Meng’s detention is a move by the US to heat up the ongoing trade war between China and the US.

Meng, who is Huawei’s chief financial officer and the daughter of Huawei’s founder Ren Zhengfei, was detained as she was transferring flights in Canada, according to information provided by Huawei, one of China’s tech giants.

Meng’s detention was made following a request by the US, which is seeking her extradition on as yet unspecified charges made by prosecutors in the Eastern District of New York, a Huawei spokesperson told the Global Times on Thursday.

Meng was arrested in Vancouver on Saturday, the New York Times reported on Thursday, citing a spokesperson from Canada’s Justice Department.

“China has demanded that the US and Canada immediately clarify the reasons for Meng’s detention and to release her,” Geng Shuang, spokesperson of China’s Ministry of Foreign Affairs, told a daily press briefing on Thursday.

He noted that Chinese consular officials in Canada have already provided assistance to Meng.

Meng’s detention, made without any clearly stated charges, is an obvious violation of her human rights, said Geng.

The Chinese Embassy in Canada also said on Thursday morning that it firmly opposes and has made strong protests over the action which has seriously curtailed the rights of a Chinese citizen.

“The Chinese side has lodged stern representations with the US and Canadian side, and urged them to immediately correct the wrongdoing and restore the personal freedom of Meng Wanzhou,” the Chinese Embassy in Canada said in a statement published on its website.

A Canadian source with knowledge of the arrest was quoted in the Canadian newspaper Globe and Mail on Thursday as saying that US law enforcement authorities allege that Huawei violated US sanctions against Iran but provided no further details.

Although Meng’s detention stems from terms of the US-Canada extradition treaty, the US should not be taking such legal action without providing concrete evidence, especially when it has been trying to restore relations with China, Hao Junbo, a Beijing-based lawyer, told the Global Times on Thursday.

Chinese officials and experts criticized the US for its long-arm jurisdiction, which not only hurts individuals but also enterprises.

Rising obstacles

Huawei has been targeted by the US for many years, from patent infringement lawsuits to political pressure, Xiang Ligang, chief executive of the telecom industry news site, told the Global Times on Thursday.

“As the Chinese company grew stronger, it faced more obstacles in foreign markets as it is considered as a threat to local players,” he said.

Cisco Systems filed the first lawsuit against Huawei in 2003. Motorola filed a lawsuit accusing Huawei of theft of trade secrets in 2010, according to media reports. The company also faced investigation by the US Congress on security issues.

Since at least 2016, US authorities have been probing Huawei’s alleged shipping of US-origin products to Iran and other countries in violation of US export and sanctions laws, Reuters reported in April.

The US also asked its major allies to say ‘no’ to Huawei equipment, as it was worried about alleged potential Chinese meddling in 5G networks, the Wall Street Journal reported on November 23.

While the company faces rising difficulties in the US market, it has been actively exploring other markets such as the EU and Africa.

It became the world’s largest telecom equipment provider in 2017, surpassing Ericsson and ZTE, industry website reported in March, citing IHS data.

Huawei has a 28 percent market share in the global telecom infrastructure industry, followed by Ericsson and Nokia, which have 27 percent and 23 percent respectively, said the report.

Escalating trade war

The US will not stop countering China’s rise in the technology sector and will never drop its hostility toward China’s “Made in China 2025” strategy, Wang Yanhui, head of the Shanghai-based Mobile China Alliance, told the Global Times on Thursday.

“Huawei has become another card for the US to play against China in the ongoing trade war,” he said.

China and the US announced a trade truce following a meeting between the two countries’ top leaders in Buenos Aires on Saturday.

But experts warned that China should be prepared for a long-lasting and heated trade war with the US, as it will continue to attempt to counter China’s rising power.

“The latest Huawei incident shows that we should get ready for long-term confrontation between China and the US, as the US will not ease its stance on China and the arrest of a senior executive of a major Chinese tech company is a vivid example,” Mei Xinyu, a research fellow with the Beijing-based Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Thursday.

Huawei said there is very little information about specific allegations and that the company is not aware of any misconduct by Meng.

“The company complies with all laws and regulations in the countries in which it operates, including export control and sanctions laws applied in the UN, the US and the EU,” Huawei said. – Global Times by Chen Qingqing

Canada’s treatment of Meng Wanzhou in violation of human rights

We hope that Canadian authorities handle the case seriously and properly. We also hope that Ms Meng will be treated humanely and will be bailed out. We would like to see Meng’s case being handled properly, so that she can regain her freedom as soon as possible. Chinese society has always respected Canada, and it is sincerely hoped that the way how Canadian authorities handle this matter will live up to Chinese people’s expectation and impressions regarding the country.

 With executive’s arrest, US wants to stifle Huawei

The Chinese government should seriously go behind the US tendency to abuse legal procedures to suppress China’s high-tech enterprises. It should increase interaction with the US and exert pressure when necessary. China has been exercising restraint, but the US cannot act recklessly. US President Donald Trump should rein in the hostile activities of some Americans who may imperil Sino-US relations.

US takes aim at Huawei

 Arrest of telecom giant’s CFO escalates US-China tech battle

THE Trump administration’s efforts to extradite the chief financial officer of China’s Huawei Technologies Co over criminal charges mark the start of an even more aggressive phase in the technology rivalry between the United States and China and will increase pressure on Washington’s allies to shun the telecommunications company.

Armed with a US extradition request, Canadian authorities arrested Meng Wanzhou on Dec 1, the same day as President Trump was holding a summit with Chinese counterpart President Xi Jinping. But White House officials said Trump had no advance knowledge of the arrest, indicating the action was on a separate track from trade talks currently under way between Washington and Beijing.

Meng’s detention underscores a sense of urgency, at the Justice Department and other US agencies, to address what they see as a growing threat to national security posed by China’s ambitions to gain an edge in the tech sector. For years, Washington has alleged the Chinese government could compel Huawei, which supplies much of the world with critical cellular network equipment, to spy or to disrupt communications.

Huawei has long said it is an employee-owned company and isn’t beholden to any government, and has never used its equipment to spy on or sabotage other countries. The Chinese government, speaking through its embassy in Canada, strenuously objected to the arrest, and demanded Meng’s immediate release.

US prosecutors made the extradition request based on a sealed indictment for alleged violations of Iran sanctions that had been prepared for some time, people familiar with the matter said. A federally appointed US overseer, formerly charged with evaluating HSBC Holdings PLC’s anti-money-laundering and sanctions controls, relayed information about suspicious Huawei transactions to federal prosecutors in the Eastern District of New York, some of the people said.

Meng, the daughter of Huawei’s founder, Ren Zhengfei, is now in custody in Vancouver, and a bail hearing has been scheduled for Friday, according to a spokesman for Canada’s justice department.

Some worried a lack of coordination on the various strands of the Trump administration’s China initiatives could be counterproductive, especially if Trump decides to use the detention of Meng as leverage to extract concessions in the trade talks. The two sides agreed on a 90-day window from the Dec 1 summit to settle a trade dispute that has seen the two sides exchange tit-for-tat tariffs on each other’s goods.

“I’m very concerned that that’s just going to ratchet this trade war and make negotiations much more difficult,” said Gary Locke, former US ambassador to China. “This is I think a really hot-button, almost a grenade with respect to the 90-day negotiations.”

China has a long history of reading darker motives into US actions. “The risk is conspiracy theories in Beijing,” said China scholar Michael Pillsbury at Hudson Institute, who consults regularly with the Trump trade team. He compares the events to when China rejected US explanations that the United States had made a mistake when it bombed the Chinese Embassy in Belgrade in 1999 during the Kosovo war.

The arrest indicated the Justice Department had significant evidence against Meng, and that additional charges were likely, said Brian Fleming, a trade and national security lawyer at Miller & Chevalier. “This is just the tip of the iceberg,” he said.

The arrest could also add ammunition to an extraordinary US government campaign to persuade wireless and Internet providers in allied countries to stop using telecommunications equipment from Huawei, said national security experts. US officials say they are intensifying efforts to curb Huawei because wireless carriers world-wide are about to upgrade to 5G, a new wireless technology that will connect many more items—factory parts, self-driving cars and everyday objects like wearable health monitors – to the Internet. US officials say they don’t want to give Beijing the potential to interfere with an ever-growing universe of connected devices.


By Kate O’keeffe and Bob Davis


Huawei reveals the real trade war with China

Tech rivalry: The high-tech trade war shows that for all the hoopla over manufacturing jobs, steel autos and
tariffs, the real competition is in the tech sector. — Reuters

IF you only scan the headlines, you could be forgiven for thinking that the US-China trade war is mainly about tariffs.

After all, the president and trade-warrior-in-chief has called himself “Tariff Man”. And the tentative trade deal between US President Donald Trump and Chinese President Xi Jinping was mainly about tariffs, especially on items like automobiles.

But the startling arrest in Canada of a Chinese telecom company executive should wake people up to the fact that there’s a second US-China trade war going on – a much more stealthy conflict, fought with weapons much subtler and more devastating than tariffs. And the prize in that other struggle is domination of the information-technology industry.

The arrested executive, Wanzhou Meng, is the chief financial officer of telecom-equipment manufacturer Huawei Technologies Co (and its founder’s daughter). The official reason for her arrest is that Huawei is suspected of selling technology to Iran, in violation of US sanctions.

It’s the second big Chinese tech company to be accused of breaching those sanctions – the first was ZTE Corp in 2017. The United States punished ZTE by forbidding it from buying American components – most importantly, telecom chips made by US-based Qualcomm Inc.

Those purchasing restrictions were eventually lifted after ZTE agreed to pay a fine, and it seems certain that Huawei will also eventually escape severe punishment. But these episodes highlight Chinese companies’ dependence on critical US technology.

The United States. still makes – or at least, designs – the best computer chips in the world. China assembles lots of electronics, but without those crucial inputs of US technology, products made by companies such as Huawei would be of much lower quality.

Export restrictions, and threats of restrictions, are thus probably not just about sanctions – they’re about making life harder for the main competitors of US tech companies.

Huawei just passed Apple Inc to become the world’s second-largest smartphone maker by market share (Samsung Electronics Co is first). This marks a change for China, whose companies have long been stuck doing low-value assembly while companies in rich countries do the high-value design, marketing and component manufacturing.

US moves against Huawei and ZTE may be intended to force China to remain a cheap supplier instead of a threatening competitor.

The subtle, far-sighted nature of this approach suggests that the impetus for the high-tech trade war goes far beyond what Trump, with his focus on tariffs and old-line manufacturing industries, would think of. It seems likely that US tech companies, as well as the military intelligence communities, are influencing policy here as well.

In fact, more systematic efforts to block Chinese access to US components are in the works. The Export Control Reform Act, passed this summer, increased regulatory oversight of US exports of “emerging” and “foundational” technologies deemed to have national-security importance. Although national security is certainly a concern, it’s generally hard to separate high-tech industrial and corporate dominance from military dominance, so this too should be seen as part of the trade war.

A second weapon in the high-tech trade war is investment restrictions. The Trump administration has greatly expanded its power to block Chinese investments in US technology companies, through the Committee on Foreign Investment in the United States.

The goal of investment restrictions is to prevent Chinese companies from copying or stealing American ideas and technologies. Chinese companies can buy American companies and transfer their intellectual property overseas, or have their employees train their Chinese replacements.

Even minority stakes can allow a Chinese investor access to industrial secrets that would otherwise be off-limits. By blocking these investors, the Trump administration hopes to preserve US technological dominance, at least for a little while longer.

Notably, the European Union is also moving to restrict Chinese investments. The fact that Europe, which has opposed Trump’s tariffs, is copying American investment restrictions, should be a signal that the less-publicised high-tech trade war is actually the important one.

The high-tech trade war shows that for all the hoopla over manufacturing jobs, steel, autos and tariffs, the real competition is in the tech sector.

Losing the lead in the global technology race means lower profits and a disappearing military advantage. But it also means losing the powerful knowledge-industry clustering effects that have been an engine of US economic growth in the post-manufacturing age. Bluntly put, the United States can afford to lose its lead in furniture manufacturing; it can’t afford to lose its dominance in the tech sector.

The question is whether the high-tech trade war will succeed in keeping China in second place. China has long wanted to catch up in semiconductor manufacturing, but export controls will make that goal a necessity rather than an aspiration. And investment restrictions may spur China to upgrade its own homegrown research and development capacity.

In other words, in the age when China and the United States were economically co-dependent, China might have been content to accept lower profit margins and keep copying American technology instead of developing its own. But with the coming of the high-tech trade war, that co-dependency is coming to an end. Perhaps that was always inevitable, as China pressed forward on the technological frontier. In any case, the Trump administration’s recent moves against Chinese tech – and some similar moves by the EU – should be seen as the first shots in a long war.

— Bloomberg by Noah Smit


Huawei to sell servers with own chips in cloud computing push

Huawei to sell servers with own chips in cloud computing push


Poor 3G services under MCMC scrutiny, a move in right direction

3G services under MCMC scrutiny – Telcos using 900/1,800 Mhz instead of 2,100 Mhz

PETALING JAYA: The Malaysian Communication and Multimedia Commission (MCMC) has issued a stern warning to cellular companies that are providing 3G services on lower-than-agreed bandwidth, causing a deterioration in the quality of 3G services.3G_4G

Most of the 3G players are using the 900 megahertz (MHz) and 1,800MHz frequency bands to roll out 3G services instead of the primary 2,100MHz band meant for 3G.

The regulator has given the players till the end of the year to come up with a plan to rectify the situation or face hefty fines, given the rise in the number of complaints regarding the capacity and speed of 3G services.

“We did an audit over three months ago and this has come to light. They have been putting up 3G coverage but not capacity and speed, and hence, the 3G services are slow. We issued the warning two weeks ago and have given them till the end of December to come back to us or action will be taken against them,” MCMC chairman Datuk Mohamed Sharil Mohamed Tarmizi told StarBiz yesterday.

He, however, added that “some of them have taken steps, but a lot more needs to be done”.

The rationale for telco operators to roll out their 3G on the lower bands is simply because it is more cost-effective to do so, according to telco experts.

Simply put, the higher the band, the higher the data capacity that can be carried on that network. However, the higher bands have smaller areas of coverage, and hence, the investment has to be higher.

“Some players have economised on investing in 2,100MHz to push coverage instead of higher capacity and speed. They are trying to compromise on quality. They may be stretching their dollar by not putting in enough base stations despite having made a lot of money all these years,” said an telco expert.

Another added that “consumers need more bandwidth for tablets than phones and this means the players may have compromised on the quality of service. Perhaps, some of the players had underestimated the tablet demand and had under-provisioned”.

The four recipients of the 3G spectrum are Celcom Axiata Bhd, DiGi.Com Bhd, Maxis Bhd and U Mobile.

The four players did not respond to queries from StarBiz as at press time.

“The concern is two-fold – first, there is concern about the quality of service of existing customers on the 900MHz/1,800MHz spectrum.

“Second, and more important, is the fact that rolling out 3G on any spectrum other than 2,100MHz could mean under-utilisation of the 3G primary band given to the players by the Government to provide maximum benefit of higher data capacity and speed to consumers,” said the expert.

“The onus is now on the regulator to find out if the Internet data rates charged for 3G services commensurate with the actual delivery of speed and capacity. If not, then consumers should not be burdened.”

Late last year, MCMC also dished out parts of the 2,600MHz spectrum band to eight players, including the main incumbent telco operators, to roll out 4G/ long-term evolution or LTE services.

Some of the players have asked to be allowed to upgrade on the 1,800MHz, on top of the 2,600MHz. Again, this would be a move to provide less capacity, but the regulator does not want a repeat of the 3G debacle.

Sharil said: “We have mandated that for every two base stations on 1,800MHz, operators will have to roll out one base station on 2,600MHz, as they have to provide adequate capacity and not coverage alone.

“The lower-bandwidth base stations are to accommodate for some handsets usage.”

MCMC has been making serious efforts at raising the quality of services for consumers in Malaysia.

Last year, it conducted a survey and found that the rate of dropped calls was bad among certain operators, and highlighted its findings.

– Contributed by  B K Sidhu The Star Nov 28 2013

MCMC moving in right direction – Operator must live up to their 3G claims!

KUDOS to the Malaysian Communications and Multimedia Commission or MCMC for checking on what the operators have been doing on 3G deployment.

The commission seems to be moving in the right direction in checking on the quality of services, which is a concern, and said to be lagging behind Hong Kong, Seoul and even China.

Over two months ago, the regulator did an audit check and came up with some interesting news. It found out that most of the 3G operators have not been using the 2,100 megahertz (MHz) spectrum fully to roll out 3G services. Instead, some have been using the lower bands, 900MHz and 1,800MHz, to roll out the services. It’s more economical to do so. They have been providing 3G coverage but not real 3G speed and capacity.

3G is meant to give you higher speeds just like 4G can give you super-fast data speed.

3G has been in the country for nearly a decade. The first two blocks of 2,100MHz spectrum were awarded to Celcom Axiata Bhd (then part of Telekom Malaysia Bhd) and Maxis Bhd in 2002.

Four years later, in 2006, Time dotCom Bhd (TDC) and MiTV Corporation Sdn Bhd got two more blocks of the same spectrum. MiTV’s spectrum is used by sister company U Mobile, while TDC, as soon as it secured the spectrum, sold it to DiGi.Com Bhd for a handsome profit.

To be fair, 3G has never taken off despite the hype. In Europe, operators paid hefty sums for the spectrum, while here, it was for a small fee.

But a decade later, finding out that the operators are still on a bandwidth that is lower than 3G and claiming to be offering 3G services makes us wonder if we have been overcharged.

This, perhaps, explains why there have been complaints about the 3G service; the speed and capacity have not been there, and it has been patchy and unreliable for most users.

There is no denying that the operators have been investing. It is not easy for them, as they have to deal with all kinds of challenges and authorities to get the service to the customer. However, when they claim it to be 3G service, it should be 3G service.

Two weeks ago, the operators were issued a stern warning to make the change or face hefty fines. One operator is rushing to do so, while the others are still waiting. They have till the year-end to face the regulator.

It is also unfortunate that it has taken the regulator so long to find out, as now the march is towards 4G and consumers will never find out how much extra they would have paid for the 3G service if it is not 3G speed and capacity they are getting.

But then, had the regulator not found out, consumers would not have found out, too. This tells us a lot about the state and quality of services, the promises and marketing pledges made, the pricing, the spectrum usage and all the money paid by consumers for what they had thought were 3G services.

However, as consumers, what do we benchmark our 3G services against? The onus is on the regulator to both set the benchmark and make sure it is adhered to. When we pay 10 sen for a product, we do not expect a five-sen product.

This is unfortunate, especially since our operators make among the highest earnings before interest, tax, depreciation and amortisation margins in the world. When they make so much, they should not compromise on service in the pursuit of profits.

Consumers should get a fair deal for what they are paying for. If indeed there has been any inconsistency, then the parties involved should be gracious enough to admit it and compensate the consumer.

Contributed by B K Sidhu The Star Nov 29 2013
Business Editor (News) B K Sidhu feels the local regulator should follow what the European regulators do; force operators to drop broadband charges.

Costly mobile Net surfing overseas!

Data charges can go up to thousands of ringgit if phone usage not monitored

Mobil Net Surfing costly overseas 
Be careful when surfing the Internet on your handphone while overseas — you may end up being asked to pay the price of a car.

PETALING JAYA: A mobile user was in the Middle East for 12 days and was slapped with a RM122,703 bill for data roaming. Another went on a four-day trip to Singapore and was charged RM23,000 for checking her e-mail during the trip.

Be careful with that smartphone. Surfing the Internet on your mobile phone while overseas can be very costly. If you are not careful, you could end up with data roaming charges exceeding the price of a car.

Even the big names are not spared. One “victim” of excessive roaming charges was Communi­cation and Multimedia Minister Datuk Seri Ahmad Shabery Cheek, who received a bill shocker after a short trip to Indonesia.

“I only used data roaming for a few minutes towards the end of my stay but I was billed RM4,500 for it,” he told The Star.

According to the Communica­tions and Multimedia Consumer Forum of Malaysia (CFM), complaints against telcos increased in the last two years, with mobile data charges and data roaming being the main grouses.

How to save on your data

CFM said it received 1,191 cases on billing and charging last year. In the first half of this year, it received 1,018 complaints.

CFM director Ahmad Izham Khairuddin added: “The complaints used to be mostly about poor coverage, but they’ve changed since 2011.”

CFM was set up by the Malaysian Communications and Multimedia Commission in 2001.

In the case involving the complainant with the RM122,703 bill, CFM mediated and the consumer was given an 88% discount, with a 10% rebate and partial payment arrangements.

The complainant, however, has yet to accept the settlement.

In another case, Sara Kamal (not her real name), 45, complained that she was sent a bill for RM23,000 after using data roaming for four days while on a business trip to Singapore in 2011.

“I was shocked when I got the bill as I had only checked my e-mail during lunch and dinner while I was there. The telco said it was because my data roaming was on. Even though the bill was settled by my company, I felt really bad,” said the manager.

The National Consumer Com­plaints Centre (NCCC), too, has received many similar complaints.

“Since January, we’ve received about 300 complaints on telcos. Two main issues are consumers disagreeing with the amount charged and being charged for items they did not subscribe to,” said NCCC deputy director K. Ravin.

Ahmad Shabery cautioned telcos to be more responsible in their billing.

“It’s illogical that a phone bill should cost so much. Companies should be more responsible when charging.

“Perhaps they should emulate credit cards and put a cap on how much one can spend on roa­ming to avoid cases where people get charged tens of thousands of ringgit on their phone bills,” he said.


Expert: High price of data roaming ‘very possible’ 
Data charges mobile internet
PETALING JAYA: It is “very possible” for you to be charged tens of thousands of ringgit for data roaming, said an IT consultant who specialises in customer relationship management and billing systems for telcos.

“If you check your phone bill, you will see how much data actually cost (refer to actual bill cut-out).

“In this case, for example, you have actually incurred RM15,467.70 for 1,546,770KB (1.546GB), which amounts to 10 sen/KB (kilobyte), but this is waived because of your data plan. If you’re roaming, it will definitely be much more,” said the consultant, who declined to be named.

For example, Celcom charges RM12/MB in Singapore, RM18/MB in Australia and RM20/MB in Britain on a pay-per-use basis for data roaming (with their roaming partners).

Maxis charges RM30/MB worldwide and Digi RM38/MB. However, all telcos have data roaming plans which are more cost effective. Pricing information was obtained via the telcos’ customer carelines and websites.

“All these prices are fixed by the individual telcos based on their pri­cing strategy and arrangement with their roaming partners.

“They vary from country to country, so your roaming charge in Singapore may be different from that in the Philippines, or Britain, for example,” said the consultant.

For comparison, a single A4 Word document page takes up about 15KB, while a one-minute YouTube video clip takes up between 2MB and 3MB.

“Data roaming is expensive because you’re paying a premium for a value-added service to data roam in another country.

“It’s like having nasi lemak and teh tarik in England,” he said.

Chances are, you’ll have to pay a lot more there than back home.”


We have stringent billing process, say telcos 

PETALING JAYA: Telecommuni­cations companies say they adhere to a stringent billing process to ensure that customers receive accurate and timely bills.

Celcom Axiata Bhd in a statement said it believed that one reason for a spike in customers’ mobile spending was that many users were not “completely familiar with the features of their smartphones and the third-party apps they support”.

“Various apps, especially those for social media, GPS and messaging, rely on data connections and geo-location services that can constantly run in the background and drive up data charges for those on limited quotas.

“We encourage our customers to take some time to familiarise themselves with any new mobile device by reading the manual carefully and learning how to turn off unnecessary services,” the statement said.

When asked how it was possible for a mobile user to rack up a bill of tens of thousands of ringgit when data roaming, Maxis Bhd sales and service head Tan Lay Han said: “Maxis is committed to providing our travelling customers roaming experience via affordable data passes in over 60 destinations.

“However, not all countries fall under this arrangement. Hence, customers will be charged based on pay-per-use rates in countries that we do not have preferred data roa­ming agreements with. Therefore, customers roaming in these destinations are more likely to incur high data bills.”

A Digi spokesman said that when searching for a phone plan, consumers should make comparisons first, as “information is readily available online” for them.

“Consumers first need to understand their usage patterns, ie, how much they usually spend for voice calls and SMS versus surfing or using mobile apps, to find a plan that suits their needs,” he said via e-mail.

Should there be discrepancies in their bills, the telcos urge customers to contact them immediately for clarification.

By LISA GOH The Star/Asia News Network

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How stolen handphones would be useless?   

Telcos and Maxis need to reinvent

Maxis has not been paying much attention to its young local talent, resulting in some of these talents making its competitors look good instead.

IT has been an interesting week for the telecommunications sector locally.

Axiata Group Bhd got pre-qualified to bid for a mobile licence in Myanmar, Packet One Networks (M) Sdn Bhd head honcho Michael Lai quit the company and Maxis Bhd saw some staff departures.

Why Lai left is a mystery. Hopefully, he will show up at another telco because he knows the marketing game well.

At Maxis, several personnel have left, with more expected to head for the exit door. Most senior, and some middle-level executives, may also bid their adieus. Those whose contracts are up for renewal may leave because Maxis is on a massive clean-up mode.

Some call it a clean-up, while others say it is a reorganisation. Essentially, it is re-shaping itself to respond better to market demands in view of the challenging times ahead. The consumer is discerning and its competitors have cleaned up their acts.

It might be the biggest company by revenue and subscriber base, but it has competitors who are nimble and agile.

Surprisingly, Maxis has not been paying much attention to its young local talent, resulting in some of these talents making its competitors look good instead. Indeed, Celcom Axiata is looking attractive, and DiGi.Com Bhd, savvy.

What Maxis is facing is a battle both within and without the company.

It has no chief executive officer (CEO), a bloated workforce of 3,500, 24 units/divisions, a seemingly lack of young talent at the top, operational and cost inefficiencies, and it could do better in some market segments by lowering prices and bringing to market more innovation.

“It is hard to find a unit with large numbers of people below 30,” said a person familiar with the company.
The clean-up is the first step in addressing the problem, but is it skin-deep or merely surface-scratching?

Still, all is not lost.It has a great brand, brand loyalty, a wide network – although some hard decisions could have been made – a huge subscriber base, much to the envy of its rivals, and a multitude of products and services.

It also enjoys pole position in the market place.

The key now is to sharpen its focus, reinvent itself, harness its local talent and move forward fully energised. This may take anything from six to nine months, but worth every second in its bid to transform itself.

Next week, the new organisation structure will be out, although the search for a CEO is still on. Succession planning should be considered because at some point of time, the CEO will have to be homegrown. That gives hope to the team.

The future is about a real convergence of mobile and fixed networks, resulting in greater convenience for customers, with portals that can be accessed with all devices, independent of the technology used, says a report.

Making that right call on technology is, therefore, critical, as networks of the future will need a high degree of reliability whilst cleaning up, and at the same time, keeping costs under control, which is vital.

Friday Reflections by B.K. Sidhu

*Business editor (news) B K Sidhu says improve the call quality and there will be happier and loyal customers.

YTL launches converged 4G network,Extending Internet coverage; cheapest & survive?

YTL launches converged 4G network

Eva Yeong


KUALA LUMPUR (Nov 19, 2010): YTL Communications Sdn Bhd today launched the world’s first fully converged 4G mobile Internet service with voice offering the industry’s lowest rates at nine sen a minute, per SMS or per 3MB of data through its pay-as-you-go plan.

The Yes service incorporates fully converged data and voice services, speeds of up to five times faster than 3G, new devices and a unified communication tool. The Yes service was officially launched by Deputy Prime Minister Tan Sri Muhyiddin Yassin (pix above).

YTL Communications executive chairman Tan Sri Dr Francis Yeoh said: “Every Yes account comes with high-speed Internet access and a mobile phone number, making the convergence of data and voice seamless. Our subscribers will have not only high-speed mobile data access but will also enjoy voice, online chat and SMS services that can be accessed from anywhere in the world, through the Internet.”

The Yes plan, which offers nine sen per minute/SMS/3MB is up to three times lower than current prepaid mobile Internet and voice packages, and combines voice, mobile Internet and mobile broadband into an integrated plan so that consumers do not have to pay multiple bills.

YTL Communications chief executive officer Wing K Lee said there is no throttling of data services and there is no wastage as customers are charged only for what they use.

He said there is no contract or lock-in period and there is no expiry for the credits.

Yes also offers up to 30% rebate to power users who consume a high amount of data that reduces the rates to as low as two sen per MB or RM20 per GB.

Yes is also a SIM-less service that comes with a user ID and telephone number that works across all devices, turning any device connected to the Internet into a phone.

During the launch today, YTL Communications and Samsung introduced the first all-4G mobile phone, the Yes Buzz. Other Yes 4G devices include Yes Huddle (4G mobile router), Yes Go (4G USB dongle) and Yes Zoom (4G WiFi router).

At the launch, the Yes 4G covers 65% of the population in Peninsular Malaysia and the company aims to increase the coverage to at least 80% by end- 2011.

Yeoh said that it currently has the licence for only Peninsular Malaysia but will extend the service to Sabah and Sarawak at the right time.

He said Malaysians travelling abroad can also keep in touch with friends and family at home through Yes at local rates without worrying about roaming charges.

He added that it would be giving 300MB of data or 100 minutes of voice calls a month free to every student registered under its Education Partner programme. “I am also pleased to announce that we will be extending the Education Partner programme to all government-sponsored scholars abroad.”

Speaking at the launch, Muhyiddin said the service would help the government improve the household broadband penetration which is currently at 54.5%.

“I am confident that we can reach even more households and help establish high quality and affordable broadband network that will reach 95% of the population by 2020,” he said.

He added that it is critical for the nation to balance market-friendly environment to drive private investments with maintaining its inclusive policy aims, particularly on affordability of access and quality of service in rural area.

YTL Comms extending coverage


Its Yes service will cover 80% of population by end-2011 from 65% now.

KUALA LUMPUR: YTL Communications Sdn Bhd (YTL Comms) will roll out its 4G mobile Internet-with-voice service, Yes, to cover 80% of the population by end-2011.

YTL Comms, a unit of YTL Power International Bhd, currently has a coverage of 65%. To date, it has invested some RM2.5bil in the Yes 4G infrastructure.

We will extend to Sabah and Sarawak at the right time, executive director Datuk Yeoh Seok Hong told a briefing prior to the service launch by Deputy Prime Minister Tan Sri Muhyiddin Yassin yesterday.

Seok Hong said that with 1,500 base stations, the event marked the largest network ever launched in the country.

We still have 1,000 base stations to be deployed. By then, 80% of the population will be covered, he said.

Chief executive officer Wing K. Lee said Yes was the most affordable 4G mobile Internet-with-voice service in Malaysia.

He said its pay-as-you-go rate of nine sen for 3MB (megabit) data, one-minute call or one short-messaging service was the cheapest in town.

Lee said Yes also offered up to 30% rebate to power users who consume high amounts of data.

The saving starts at 2.5GB (gigabit). The more you use, the less you pay, he said, adding that for usage of 4GB and above, subscribers would get a 30% rebate for every GB used.

Yes subscribers will receive a rebate of RM9 for data usage of 2.5GB while usage of 3GB will get RM23 rebate.

The rebates will reduce Yes’ rates to as low as two sen per MB or RM20 per GB while giving users the power to self-manage by setting temporary data caps.

YTL Comms and Samsung have also introduced the world’s first all-4G mobile phone, Yes Buzz, which will be available next month.

The 4G network will be SIM-less with the 018 prefix.

YTL Comms chairman Tan Sri Francis Yeoh declined to give a specific target of pre-registered subscribers but said the numbers were healthy.

He said the response to the pre-registration had exceeded the group’s expectations by three times.

Yeoh said the group was keen to cooperate with telecommunications service providers in China and other Asian countries to offer 4G services.

Prior to the launch, Yes 4G faced interconnectivity issues with other networks as it was unable to interconnect with the operators. However, the group managed to sign interconnectivity agreements with them yesterday.

We’re now finally interconnected with everybody. We have received full cooperation (from other telcos), Seok Hong said, adding that other operators had welcomed them onboard.

At the launch, Muhyiddin spent five minutes on a video call with Malaysian students in London.

Also present were YTL Corp executive chairman Tan Sri Yeoh Tiong Lay; Information, Communications and Culture Minister Datuk Seri Utama Dr Rais Yatim; Tun Lim Kheng Yaik; and Datuk Seri Chua Soi Lek.

YTL : [Stock Watch] [News]

Can YTL keep promise to be cheapest mobile phone service and survive?

AS expected, the mobile Internet service from YTL Communications Sdn Bhd, Yes, was launched last Friday with much fanfare. Some consumers are excited and rightly so.

YTL is promising the cheapest communication rates in the country with a simple integrated plan that combines voice, SMS and mobile data. There is also talk that YTL could offer Internet protocol TV soon.

YTL’s Yes launch, however, is reminiscent of a couple of other launches of telecommunications-related services in the past by newcomers attempting to break into the scene.

Those following the telco or broadband scene will remember that in the last 10 years or so, there have been many players who have come into the wireless broadband scene.

Alas, despite their ambitious and sometimes colourful ad campaigns, many have not been able to sustain their businesses.

Here are some examples:

  • EB Capital Bhd launched its wireless broadband service in 2001, got listed in 2005 and went into major financial difficulties by 2008, when it was de-listed.At one point, had more than 1,500 corporate and retail customers for its wireless broadband service and had even done trials on WiMAX.
  • AtlasOne Sdn Bhd, started by a bunch of former Celcom employees around 2000. It was hailed as the new broadband player in town when it announced that it had garnered a significant amount of funding.At one point, it was said to have raised RM370mil partly from the Islamic Development Bank in Jeddah and partly from Bank Pembangunan Malaysia Bhd. But AtlasOne fizzled out and little has been reported about whether its funders had got their money back.
  • Time dotCom Bhd (TdC) in 2004 launched its wireless broadband service called Webbit in certain areas of Petaling Jaya. It is believed that TdC had not even managed to move beyond its pilot phase for various reasons, the bulk of them being technical in nature.
  • MiTV Corp Sdn Bhd, launched in 2005 as the country’s second pay-TV operator, had expected to sign up 100,000 subscribers for the first year.It failed to gain a foothold in the pay-TV market and suspended its new subscription activities in late 2006, only to morph its business model into a cellphone service provider in the country.It changed its name to U Mobile Sdn Bhd, and operates the 018 prefix service and is now running trials on a wireless broadband service. Singapore’s STT Communications Ltd and Multi-Purpose Holdings Bhd have bought stakes in U Mobile.
  • Green Packet Bhd, the most significant licensed WiMAX player in Malaysia (considering its widest coverage), has so far reported losses over the last few years due to its high capital expenditure in rolling out its network.It promises profitability, at least from an Ebitda (earnings before interest, tax, depreciation and amortisation) calculation, by next year.
  • No doubt, many players are driven to the industry by the attractive Ebitda margins achieved by the entrenched players, such DiGi.Com, Celcom and Maxis. But those starting afresh face major challenges and this is why many have failed.
  • First, you are up against some serious competition the incumbents are not about to give up a customer easily and these players have to some extent, sunken costs that put them in a better position to fight on price.
  • Then there are the huge costs involved in rolling services, on multiple fronts actually. Firstly, there is the network itself, which includes not only the equipment costs but also having pay real estate owners a rental for using their area to put up base stations and other equipment.Then you have to continuously ensure your service is up and running and of a certain quality.
  • It can cost a lot of money to deploy a sufficient number of technically competent staff.Then there are the other fixed costs such as paying for billing systems, the call centres to handle customer queries and complaints and in some instances, having to pay what is called a device subsidy.This is where players absorb some of the cost of devices sold that use their network so as to entice customers.One of the world’s leading WiMAX players, US-based Clearwire, is still reporting losses.

    Still, perhaps a time will come when WiMAX players will achieve healthy Ebitda margins. And perhaps then they will enjoy the kind of investor interest that DiGi.Com and Maxis have today, due to their massive cash flows. Time will tell.

  • Deputy news editor Risen Jayaseelan says that despite the lack of visibility of profits of WiMAX players, the entry of new service providers can only mean good news to consumers, who should enjoy better rates for their telecommuncation needs.
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