Almost 50 per cent of Ericsson’s publicly announced infrastructure contracts during H108 were related to WCDMA, according to research conducted by Comm.

Ericsson announced 35 infrastructure contracts in the six months to end-June 2008, 17 of which were related to the delivery of WCDMA equipment. Of those, 14 contracts, or 82 per cent, also extended to the delivery of HSPA infrastructure, indicating the traction the WCDMA upgrade technology is enjoying in markets around the world.

In comparison, Motorola publicly announced 30 infrastructure and enterprise solutions contracts during H108, only one of which was related to WCDMA infrastructure. Motorola has been the largest proponent of WiMAX technology, and during the six months to end-June recorded four WiMAX contracts, including a deal to supply 198,000 WiMAX customer premises equipment devices to Wateen in Pakistan, announced at the end of January 2008.

Motorola also witnessed strong deal flow in the area of TETRA, the terrestrial digital radio technology, with six contracts being announced with clients including airports, city municipalities and healthcare organisations. A full list of contract awards for Ericsson and Motorola in H108 will be included in the February issue of Comm.

Given the global economic slowdown, industry analysts and commentators have suggested that equipment vendors are set to be negatively impacted in 2009, though operators in emerging markets such as the Middle East and Africa are set to be less affected than those in more developed regions, resulting in a smaller fall-off of CAPEX investment.

Speaking on the back of the announcement of Q308 results last year, Ericsson CEO Carl-Henric Svanberg said the business in the Q309 had not been impacted by the financial turmoil, and said he believed customers were generally financially strong.

“We have a positive longer-term view for our industry, however, as we look into 2009, we continue to plan for a flattish market, and we have measures in place also for tougher conditions,” Svanberg said.

Ericsson is set to report Q408 and full year results January 29, while Motorola is set to follow suit on February 2.

Bahrain’s Batelco has become the latest operator to break into the Indian market, having inked a deal to purchase 49 per cent of Indian start-up mobile operator S Tel for US$225 million. The agreement is subject to conditions that are expected to be finalised by the end of Q109.

Batelco’s priority is to assist S Tel in rolling out its network infrastructure across six Indian states and to launch commercial services

S Tel has licences to operate in six Indian states – Bihar, Orissa, Jammu and Kashmir, Himachal Pradesh, North East and Assam – which have a combined population of 230 million and mobile penetration of less than 20 per cent.

Batelco chief executive Peter Kaliaropoulos stated that the acquisition of the S Tel shares in partnership with Dubai-based Millennium Private Equity (MPE) will provide significant growth opportunities in the fastest growing mobile market in the world, where mobile penetration is currently growing at nine to 10 million subscribers per month.

“We explored a number of investment opportunities in India and S Tel was judged to be the most suitable investment for Batelco’s entry into the Indian telecommunications market. Our priority now is to assist S Tel to rapidly rollout network infrastructure and offer mobile services to customers,” stated Kaliaropoulos.

"The successful completion of this deal supports our growth and expansion strategy in wireless and broadband markets and boosts Batelco’s long term plans to diversify our geographical footprint and dramatically increase our scale.”

Batelco chairman Sheikh Hamad bin Abdulla Al-Khalifa added that Batelco plans to continue its regional expansion drive through targeted acquisitions of other operators and licences while maintaining its market leadership in Bahrain. The Batelco Group has subsidiaries and joint ventures in Bahrain, Saudi Arabia, Jordan, Kuwait and Egypt.

"Our Bahrain operation is and will always be the heart of Batelco Group. However, we also have to tap into growing markets larger than Bahrain either directly or with partners in order to retain our strength and prominence at home and in the Middle East and Africa region," commented Sheikh Hamad.

Other operators that have recently entered the Indian market include Etisalat, which purchased 45 per cent of Swan Telecom for US$900 million, Norway’s Telenor which paid US$1.07 billion for 60 per cent of Unitech Wireless, and Japan’s NTT DoCoMo, which acquired a 26 per cent stake of Tata Teleservices for US$2.7 billion.

Handset manufacturer Sony Ericsson posted a fourth quarter net loss of €187 million (US$248 million), deepening from a €25 million loss in Q308, and from a profit of €373 million a year earlier.

Komiyama foresees a continued deterioration in the mobile handset market place in 2009, particularly in the first half

Handset shipments in Q408 were also down to 24.2 million, a drop of 5.8 per cent quarter-on-quarter and 21.4 per cent less than in the same quarter of 2007 when 30.8 million devices were shipped.

“In economic terms, 2008 has been a tumultuous year with world markets experiencing a serious downturn. The mobile phone market has been greatly affected by this and as expected, the fourth quarter continued to be very challenging for Sony Ericsson,” stated Dick Komiyama, president of Sony Ericsson.

“Our business alignment is progressing as planned, with the full effect of annual savings of around €300 million expected by the second half of 2009. We foresee a continued deterioration in the market place in 2009, particularly in the first half,” Komiyama added.

Revenue was up 3.77 per cent from the previous quarter to €2.914 billion, but down 22.7 per cent from fourth quarter 2007. This was attributed to contracting consumer demand and decreased availability of credit.

The average selling price per unit was €121 during Q4, with the company’s market share for the quarter estimated at eight per cent, down slightly from 8.1 per cent the previous quarter.

Qatar Telecom (Qtel) has confirmed it will commence two concurrent tender offers on January 20 in Indonesia and the United States for up to 24.19 per cent of the shares of its Indonesian subsidiary PT Indosat. This will bring Qtel’s holdings in Indosat up to a maximum of 65 per cent.

Qtel chairman Al Thani believes completion of the Indosat deal will put the operator in a strong position to push ahead with development plans for Indosat and build it into a leading regional telecoms company

Qtel will offer to purchase up to 1,314,466,755 Series B shares, which are listed on both the Indonesian and New York stock exchanges. The shares are priced at IDR7,388 (US$0.67) each, with the offer due to close on February 18.

“We look forward to a smooth completion of this process, which will put us in a strong position to push ahead with development plans for Indosat and build it into a leading regional telecoms company. This will not only enhance shareholder value, but ultimately benefit Indonesian consumers,” stated Sheikh Abdullah Bin Mohammed Bin Saud Al Thani, chairman of Qtel.

Comm. previously reported the tender offer was shortly pending, following the decision taken by Indonesia’s government in December to allow Qtel to acquire 65 per cent of Indosat without having to spin-off the Indonesian operator’s fixed-line business. A previous condition stated that the Qatari operator would have to transfer Indosat’s fixed business into a separate company, as the maximum foreign ownership allowed for a fixed-line operator is 49 per cent, as opposed to 65 per cent for a mobile operator.

The mandatory tender offers were triggered by Qtel’s earlier acquisition of a 40.81 per cent stake in the Indonesian telco on June 22 last year.

Motorola has announced that it will further reduce its workforce in 2009 by approximately 4,000 positions. This reduction will include approximately 3,000 positions associated with the Mobile Devices business and approximately 1,000 positions associated with corporate functions and other business units. The workforce reductions, which were announced yesterday, are expected to begin immediately and are incremental to the 3,000 workforce reductions previously announced during Q408.

Motorola’s co-CEO Sanjay Jha says the company is making good progress in developing smartphones for 2009, despite quarterly handsets shipments dropping from 40.9 million units in Q407 to 19 million units in Q408

Motorola estimates that these combined workforce reductions are expected to result in additional annual cost savings of approximately US$700 million in 2009. The savings from the latest actions, together with the US$800 million of savings from other actions announced during Q408 are expected to result in aggregate cost savings of US$1.5 billion in 2009.

“Together with these actions and the announcements made in the fourth quarter, the Mobile Devices business expects to recognise annual cost savings of approximately US$1.2 billion in 2009,” said Sanjay Jha, co-chief executive officer of Motorola. “Additionally, we are making good progress in developing important new smartphones for 2009 and are pleased with the positive response from our customers to these new devices,” he added.

With respect to preliminary Q408 results, Motorola announced that during the period, Mobile Devices shipped approximately 19 million units. Motorola stated that sales were adversely impacted by continued weakness in end-consumer demand and customer inventory reductions. By comparison, in Q407 Motorola shipped 40.9 million devices.

Motorola announced it ended the year with a total cash position of approximately US$7.4 billion, with total sales for the fourth quarter expected to be in the range of US$7.0 billion to US$7.2 billion.