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The Economist: Telecommunications

Tech.view: Tossing the phone
Fri, 10 Oct 2008 09:22:32 -0000
Though a great alternative, Skype is open to abuseLATE last year, your correspondent decided he was paying too much for long-distance telephone calls, and vowed to switch to one of the new VOIP (“voice over internet protocol”) services, which offer calls to most places in the world for a few pennies a minute at most. At the time, his land-line carrier (Verizon) was charging him five cents a minute for local calls, 11 cents for long-distance, and around 16 cents for international calls. With lots of contacts in Britain and Japan, over half his monthly phone bill was for international calls.Many PC users got their first taste of VOIP in the 1990s when a product called VocalTec first hit the market. But because of the technical hassles involved, making calls between two PCs connected to the internet wasn’t for the faint of heart. ...
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 worst 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. ...

BBC News | Business | World Edition

Stock markets retreat after rally
Wed, 15 Oct 2008 07:33:17 -0000
After dramatic rises earlier in the week, most European and Asian stock markets give up some ground.
Bank crisis to dominate EU talks
Wed, 15 Oct 2008 08:55:52 -0000
EU leaders are to discuss multi-billion-euro rescue plans for Europe's ailing banks at a two-day summit in Brussels.
New York 'faces 165,000 job cuts'
Wed, 15 Oct 2008 08:48:49 -0000
New York City could lose 165,000 jobs as a result of the crisis in the financial sector, the city's chief financial officer warns.

NYT > World Business

Bleak Numbers Stoke Fears of Recession in Europe
Wed, 15 Oct 2008 05:12:57 -0000
With the financial sector’s problems weighing directly on the broader economy, many economists say Europe is already in recession and will be lucky to get out of it by summer.
Europe and Asia Fail to Sustain Rallies
Wed, 15 Oct 2008 10:03:58 -0000
Stocks fell in Europe after a mixed session in Asia as investors began to face the likelihood that dislocations would plague the economy even if bailouts were to succeed.
Despite Big Rally, Grim Outlook on Profits and Jobs
Wed, 15 Oct 2008 10:04:07 -0000
A day after the stock market staged one of its biggest rallies in history, investors retreated once again.

 

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