The Economist: Telecommunications

Alcatel-Lucent: Bring down the barriers
Thu, 04 Sep 2008 12:30:35 -0000
Ben Verwaayen’s talents will be sorely tested in his new roleAFTER Alcatel SA merged with Lucent Technologies Inc two years ago, almost the last thing the new company could afford to worry about was balancing the interests of its French and American parts. But although less than half of the combined group’s turnover comes from its home countries, Alcatel-Lucent failed to transcend its national origins. Two small, weak telecoms-equipment firms became one big, weak one, beset by low-cost competition from new Chinese rivals and struggling in a business that internet technology was changing beyond recognition. Worse, demand has been weakening across the industry. Appointing people on the basis of nationality rather than ability is never a good idea; in conditions like these, it spelled disaster.Cost savings either failed to materialise or were swallowed by falling prices; despite hacking 16,500 jobs from a workforce of 88,000, Alcatel-Lucent made losses for six consecutive quarters and its share price fell by more than half. At the end of July it said that Serge Tchuruk, its French chairman, and Patricia Russo, its American chief executive, would depart. This week their replacements were named: a French chairman, who lives in America, and a Dutch chief executive, who will be based in Paris. Both Philippe Camus and Ben Verwaayen have the personality and experience that could iron out the beleaguered telecoms group’s problems. ...
Alcatel-Lucent: Goodbye and adieu
Thu, 31 Jul 2008 12:10:21 -0000
The architects of a big telecoms-equipment merger decide to hang upWHEN Alcatel, a French maker of telecoms equipment, announced its plan in 2006 to merge with Lucent, an American rival, reactions were mixed. There was general agreement that bigger was better and that the combined firm would benefit from greater geographical reach. But there was also scepticism that its French and American managers would be able to get along. With good reason, it seems: on July 29th Alcatel-Lucent announced its sixth consecutive quarterly loss and the resignations of Serge Tchuruk, its French chairman, and Patricia Russo, its American chief executive. Their firm’s troubles stem in large part from its internal clash of cultures.This clash was an unhelpful distraction, given that the entire telecoms-equipment industry is suffering. The bonanza of 2000-05, when European operators upgraded their mobile-phone networks to new “third-generation” (3G) technology, is winding down. Sales growth is slowing, and even Ericsson, the industry leader, has seen its share price fall by 50% in the past year. Margins have also been squeezed by the rise of Huawei and ZTE, two Chinese firms. Their prices are sometimes 40-50% lower than those of Western vendors. ...
Tech.view: Home warriors
Fri, 25 Jul 2008 07:24:51 -0000
Telecommuters need more than e-mail and a broadband connectionTHE best thing about being a foreign correspondent is not having to commute to the office every day, attend dreary meetings, dress soberly, and generally get distracted from the nitty-gritty of doing the job. The worse thing is being out of touch with colleagues at head office, with little say over how your stories are treated. But if you can handle the patchy feedback and total lack of control, the freedom pays dividends in productivity and sheer job satisfaction.Being one of the most portable jobs on the planet, journalism provides a daily reminder that work is something you do, not some place you go to. For the past quarter of a century, your correspondent has smirked about the time and energy he’s saved through not having to travel to work. ...
Telecoms in Mexico: Slim’s pickings
Thu, 10 Jul 2008 13:30:55 -0000
More competition should help to drive down exorbitant phone chargesIT HAS become quaint, in the era of Skype and unlimited calling plans, to worry too much about the cost of phone calls. But it is a textbook case of the old saying: “Them as has, gets”. The well-connected executive can use any number of voice-over-internet services to make free calls; but the rural poor, if they have phones at all, must pay high rates. Perhaps nowhere is this more true than in Mexico, where Carlos Slim, by some estimates the world’s richest man, dominates the telecoms industry. He controls Telmex, which has 81% of the fixed-line market, and Telcel, which has 72% of the mobile market. In the first quarter of 2008 Telmex had a profit margin before interest, taxes, depreciation and amortisation of 48.7%; for Telcel the figure was 52.1%.This is well above the global average for telecoms firms of 35%, says Martin Lara, an analyst at Vector Casa de Bolsa, a research firm. Base tariffs have fallen in Mexico in recent years, but they do not include things like international calls or calls to mobile phones. Competition has not helped much, because smaller firms have been reluctant to undercut Mr Slim’s companies by very much—and high prices boost their profits, too. “No one wants to destroy these profits overnight,” says Mr Lara. ...
Telemedicine: Telemedicine comes home
Thu, 05 Jun 2008 14:04:15 -0000
Medicine: Telemedicine permits remote consultations by video link and even remote surgery, but its future may lie closer to home FEW places on earth are as isolated as Tristan da Cunha. This small huddle of volcanic islands, with a population of just 269, sits in the middle of the South Atlantic, 1,750 miles from South Africa and 2,088 miles from South America, making it the most remote settlement in the world. So it is a bad place to fall ill with an unusual disease, or suffer a serious injury. Because the islands do not have an airstrip, there is no way to evacuate a patient for emergency medical treatment, says Carel Van der Merwe, the settlement’s only doctor. “The only physical contact with the outside world is a six to seven day ocean voyage,” he says. “So whatever needs to be done, needs to be done here.”Nevertheless, the islanders have access to some of the most advanced medical facilities in the world, thanks to Project Tristan, an elaborate experiment in telemedicine. This field, which combines telecommunications and medicine, is changing as technology improves. To start with, it sought to help doctors and medical staff exchange information, for example by sending X-rays in electronic form to a specialist. That sort of thing is becoming increasingly common. “What we are starting to see now is a patient-doctor model,” says Richard Bakalar, chief medical officer at IBM, a computer giant that is one of the companies in Project Tristan. ...
Telecoms in China: Rewired
Thu, 29 May 2008 13:41:52 -0000
The long-awaited reorganisation of China's vast telecoms industry beginsBY ANY measure—revenues, employees, customers—it is the largest industrial reorganisation ever. And, reflecting how business is done in China, it was announced in the most modest way, with a posting on a government website on May 24th. The country's telecoms industry, with nearly 600m mobile subscribers, 360m fixed-line customers and $244 billion in revenue, will be reconfigured. Six companies will be collapsed into three, each spanning mobile, fixed and broadband services.China Mobile, the world's largest mobile operator by subscribers, will merge with China TieTong, the smallest fixed-line operator. China Telecom, the country's biggest fixed-line operator, will acquire one of the mobile networks run by China Unicom, which will merge its remaining mobile operations with China Netcom, another fixed-line operator. A sixth operator, China Satcom, will be taken over by China Telecom. ...

BBC News | Business | World Edition

US jobless rate near 5-year high
Fri, 05 Sep 2008 13:36:52 -0000
The US economy sheds 84,000 jobs last month, more than expected, raising the jobless rate to a near five-year high.
Global stock markets still jumpy
Fri, 05 Sep 2008 14:53:27 -0000
Fears about a global economic slowdown continue to weigh on stock markets, with Japan's main share index falling nearly 3%.
Pakistan 'needs help' on economy
Fri, 05 Sep 2008 11:46:22 -0000
Pakistan needs a "substantial" injection of external funds if it is to stabilise its economy, an IMF official says.

NYT > World Business

Main Bank of China Is in Need of Capital
Fri, 05 Sep 2008 04:44:51 -0000
China’s central bank is in a bind, after snapping up roughly $1 trillion worth of Treasury bonds and mortgage-backed debt issued by Fannie Mae and Freddie Mac over the last seven years.
U.S. Stocks Off; Europe and Asia Down Sharply
Fri, 05 Sep 2008 14:11:14 -0000
Wall Street declined further in early trading after a worse-than-expected unemployment report. Earlier, markets in Europe and Asia slid, following the Dow’s steep fall the previous day.
Two Banks in Europe Stand Pat on Rates
Fri, 05 Sep 2008 04:02:27 -0000
Both the European Central Bank and the Bank of England kept their key interest rates unchanged Thursday amid concerns of high inflation and a slowing economy.

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