Worldwide sales of mobile phones increased by 11.8 per cent in the second quarter of 2008 compared to the same quarter last year, bringing quarterly sales to 305 million units, according to a report by research and advisory firm Gartner.

A lack of 3G and hot applications like GPS has kept Motorola’s sales lagging in the latest quarter, while Nokia continues to extend its market share dominance.

Nokia and Samsung further strengthened their positions as the number one and two-ranked handset manufacturers with 39.5 per cent and 15.2 per cent market share respectively.

However, only 2.5 percentage points or 7.4 million handsets, separated third-placed manufacturer Motorola, from fifth-placed Sony Ericsson. LG retained its fourth spot ahead of Sony Ericsson, which it overtook for the first time in Q108.

Gartner’s research director for mobile devices, Carolina Milanesi, noted that the economic environment continued to negatively impact mobile phone sales in both mature and emerging markets.

“Despite this, we remain positive that mobile phone sales in 2008 will reach 1.28 billion,” Milanesi commented.

The report attributed Nokia’s widening lead and high sales in the low-cost segment to an effective distribution strategy, economies of scale and brand power. Gartner expects Nokia’s diverse portfolio will continue to drive its market share in the latter half of 2008, and suggests its highly anticipated touch-screen device will be a mid-high-tier device rather than a high-tier, and this will help boost revenues.

However, for struggling Motorola, Gartner remains sceptical that revamping products such as the Ming “in response to the touch-screen frenzy” will resurrect its slumping sales. Gartner comments that Motorola’s portfolio remains uncompetitive because of its lack of 3G and hot applications such as GPS and high quality Internet browsing.

Worldwide mobile terminal sales to end-users in Q208 (thousands of units)

Note* This table includes iDEN shipments, but excludes ODM to OEM shipments.
Source: Gartner (August 2008)

At the beginning of this month Egypt’s leading mobile operator Mobinil launched 3G services, covering large cities, tourist, industrial and corporate centres in Cairo, Alexandria, Sharm El Sheikh, Hurghada, Dahab, Taba, Safaga, Marsa Alam, Luxor and Aswan.

Mobinil has been hard at work revamping its network in preparartion for the launch 3G earlier this month

Since agreeing to purchase the 3G licence, Mobinil has since increased the number of installed base stations to more than 6,500, out of which 700 3G base stations and more than 2,100 EDGE-enabled base stations are in place.

Nokia Siemens Networks, along with Huawei has developed Mobinil’s 3G network, while Alcatel-Lucent and Motorola cooperated with Mobinil to establish the 2G portion of the network. This is in addition to the cooperation with Cisco Systems and Ericsson to develop and enhance the network infrastructure.

In April this year Mobinil did say it would delay the introduction of 3G services and payment of an EGP750 million (US$138 million) instalment on the licence fee by about two and a half months. At the time, the operator said the delay was necessitated because the regulatory authorities were late in handing over the frequency band needed for Mobinil to conduct the necessary tests before commercial service began.

Mobinil had been meant to receive the frequency band on January 17 but the National Telecommunications Regulatory Authority (NTRA) did not say it was available until March 27, according to Mobinil.
Mobinil is the last of Egypt’s three mobile operators to launch 3G services, having initially refused to pay the licence fee asked by the NTRA.

“The licence condition set the value of a 3G licence (for the incumbents Mobinil and Vodafone Egypt) at 20 per cent of the price of the 2G/3G licence awarded to the third operator,” explained Alex Shalaby, CEO of Mobinil at the beginning of last year. “We thought this was high and elected not to bid for 3G at this time.” Etisalat bid US$2.9 billion to win Egypt’s third mobile licence, valuing the amount required to be paid by the incumbents for 3G licences at US$580 million each.

Research In Motion (RIM), the Canadian manufacturer of BlackBerry smartphones, plans to open an office in Dubai before the end of the year, a senior RIM representative told Comm.

Toronto-based Research In Motion plans to increase its presence in the GCC.

In an exclusive interview with Comm., RIM’s director of sales for Middle East, Khaled Kefel, said that it is only a matter of time before a satellite office is established to serve as a hub for the GCC.

“Now that the service is in the Middle East and there is a good adoption of it, we will certainly have a local presence here,” Kefel stated.

Currently the closest regional RIM office is in Turkey, however most activities for the Middle East are administered from the Toronto headquarters.

The BlackBerry is presently offered in the region through carrier partners such as Etisalat and Qtel, and through distributors such as Axiom Telecom.

There were more than 16 million BlackBerry subscriber accounts worldwide as of June 2008.

Alcatel-Lucent’s board yesterday approved the appointment of Ben Verwaayen as the company’s chief executive officer. Verwaayen, 56 is a Dutch national who was formerly CEO of BT between February 2002 and June 1, 2008. He is credited with turning the former UK utility into a leading edge communications company, which enjoyed a dramatic and dynamic new image.

Ben Verwaayen had previously been approached to head Alcatel-Lucent, but was reported to have previously turned the offer down

Verwaayen was also formerly vice-chairman of the management board of Lucent Technologies in the US, which he joined in September 1997. Prior to that, he worked with KPN in the Netherlands for nine years as president and managing director of its telecoms subsidiary, PTT telecom. Before that, Ben worked for ITT, a predecessor of Alcatel.

Verwaayen had been identified as an early choice to succeed outgoing Alcatel-Lucent CEO Patricia Russo, but was reported to have turned down the initial approaches some weeks ago. Further conversations and Alcatel-Lucent’s inability to identify any other suitable candidates must have resulted in further talks being entered into, which resulted in the French/US manufacturer eventually securing its man.

The Alcatel-Lucent board also announced the appointment of Philippe Camus as the company’s non-executive chairman as of October 1, 2008. Philippe Camus, 60 is a French national and a US resident. He was the co-CEO at European Aeronautic Defence and Space Company (EADS) and managed a large, global business in the high-tech industry. He is co-managing partner of Lagardère, an international media group, and a partner of Evercore Partners, a New York based investment and advisory firm.

“Philippe Camus and Ben Verwaayen are respected and experienced business leaders. Their understanding of this industry with its challenges and opportunities make them the perfect choice to lead and guide Alcatel-Lucent as it moves into this next stage in its development,” said the board in a written statement.

“Alcatel-Lucent has a lot to offer: technological excellence, leading market positions worldwide, in developed as well as emerging countries and a strong customer focus,” Verwaayen commented. “The company operates in a quickly changing market and therefore is evolving. I’m truly delighted to become the CEO of Alcatel-Lucent, leading a company with vast assets and great talents, while recognising the difficulties and challenges ahead.”

Verwaayen’s office will be in the company’s headquarters in Paris.

Pan-regional operators Qatar Telecom (Qtel) and Zain have confirmed their interest in Iran’s third national mobile licence, along with MegaFon and Vimpelcom of Russia.

Tender documents for the licence, which allows operators to provide 3G services, will go on sale on September 6, with the tender expected to attract US$3 billion in investment.

Currently 50 per cent of Iran’s 70 million residents own a mobile phone, but this could dramatically increase with the introduction of a third mobile operator and more competitive offers

“As a communications market with significant potential for growth and development, the Islamic Republic of Iran represents an investment opportunity,” Qtel said in a statement on the Doha bourse website.

“Qtel has not entered into any partnership in relation to this project. At the present time, it is studying the opportunity and will announce its intentions upon completion of its review.”

Earlier advice from Iran’s Ministry of ICT noted that foreign operators will only be able to receive a 49 per cent stake in the operation.

The country’s mobile penetration currently stands at approximately 50 per cent of the 70 million population, with state-owned Telecommunications Company Iran (TCI) and MTN Irancell the current providers.

Since launch in October 2006, second provider MTN Irancell has gained a 32 per cent market share to total 11.6 million subscribers at the end of June. This growth has been achieved in part through an aggressive ‘buy one, get one free’ campaign, competitive SIM pricing and promotional tariff plans, the operator explains.

According to a report by Business Monitor International, Iran sits at the lowest position on its Business Environment Rankings for the Middle East. Although the republic receives a relatively high score for its telecoms market, it suffers from having the lowest score in the region for regulatory independence.