China restructures telecoms industry

The international ICT world was dominated last week by China's restructuring of its various telecommunications players.

At home, the MTN saga continues but now with Reliance Communications, India's second largest mobile player, and not Bharti Airtel.

* Excellent maiden full-year numbers from Huge Group, although revenue below but profit above last September's revised profit forecast.
* Excellent interim figures from Alliance Mining, with revenue up almost 100% and profit up four times; and Stella Vista, with revenue and profit both up over 100%.
* Very good year-end numbers from African Cellular Towers, with revenue up 66% and profit up nearly 50%.
* Good year-end figures from SAB&T Ubuntu, with revenue up 62% and profit up 12%; and Vodacom, with revenue up 17%, operating profit up 15% and subscriber numbers up 12.7% to 34 million.
* Mediocre year-end figures from ISA, with revenue slightly up but profit down.
* Mixed year-end figures from Eureka, with revenue up 34% but profit down almost 85%.
* Very poor year-end (maiden) numbers from TCS, with revenue marginally down but profit significantly down.
* Very poor 12-month (maiden) figures from Ideco (year-end changed to August), with revenue significantly down and profit barely in the black.
* Atio acquired Symetrix, a Microsoft gold partner. The company will be re-named Atio IT-Services division and headed by MD Craig Munitz.
* The opening, by privately-owned, Netherlands-based Comsys, of its first African office, based in Woodmead, Johannesburg. Comsys is an international provider of interactive converged telecommunications solutions, with operations in Germany, Netherlands, Poland, Switzerland and the UK.
* Synergy Computing will change its name to Synergy Business Intelligence.
* The SABS has filed an appeal against the ISO decision to accept Microsoft's Office OpenXML as an international standard. South Africa has been joined by Brazil and India, which have also appealed this decision.

* Good year-end figures from Safaricom, recently the subject of a very successful IPO, with revenue up 19% and profit up 16%.
* The name change of Namibia's Telecom Ericsson to Orion Telecom Namibia, following the purchase of the former by Orion Telecom.
* The appointments of John Ode (Nigeria) as chairman of the Bureau of African Ministers of Communication and IT.

This is in line with Vodafone's strategic intention to increase its presence in key developing wireless markets such as those in Africa, the Middle East and India.

Paul Booth, MD, Global Research Partners

* The £40 million acquisition by Reliance Globalcom, a subsidiary of Reliance Communications (RCom), of UK-based Vanco, a virtual network provider. This is RCom's second acquisition this year following its purchase of UK-based eWave World, a WiMax operator, in April.
* The acquisition by Rohm, a Japanese semiconductor manufacturer, of Oki Electric's microchip operations, to create Japan's seventh largest semiconductor maker in terms of sales.
* The acquisition by VMware of b-hive Networks, an application performance management software company. Following VMware's spin-off from EMC and its subsequent IPO, I expect several niche acquisitions to be made over the coming few months.
* China will restructure its telecommunications industry in order to create competitors to China Mobile, which dominates the Chinese market and is the world's biggest mobile carrier by subscriber base with annual revenue in excess of $50 billion. The restructuring will result in three groups based around China Mobile, China Telecom and China Netcom. Fixed-line carrier China Telecom will acquire China Unicom's CDMA mobile network and also purchase China Satcom, which offers satellite-based communications services. China Unicom will retain its GSM network and merge with fixed-line operator China Netcom. China Mobile will merge with China Tietong Telecommunication, the fixed-line unit of China Railway Communication, which operates a national fixed-line network. The Chinese government said the restructuring will increase competition and clear the way for 3G licences to be released. Telefonica owns a 7.2% stake in China Netcom and Vodafone holds a 3.21% stake in China Mobile. The digestion of the above suggests any potential involvement in African activities will be on the backburner for the next few weeks.
* The awarding of Qatar's second wireless licence to Vodafone and its local partner, Qatar Foundation. This is in line with Vodafone's strategic intention to increase its presence in key developing wireless markets such as those in Africa, the Middle East and India.
* Good year-end numbers from Vodafone, with revenue breaking the $70 billion barrier and back in the black.
* Satisfactory quarterly results from Dell and Novell (back in the black).

* Quarterly losses from QAD.
* The appointments of Peter Bauer as CEO of Infineon Technologies AG and Vittorio Colao as CEO of Vodafone Group.
* The resignation of Wolfgang Ziebart as CEO of Infineon Technologies AG.

* The retirement of Arun Sarin as CEO of Vodafone Group, as of July.

* The outcome of the discussions that Neotel is engaged in, which could include local companies such as Business Connexion, Dimension Data and GijimaAst.
* Capgemini's possible purchase of part of IT services company, Getronics, currently owned by Royal KPN NV.
* The possible purchase of UK-based Thus, a UK-based telecommunications company, by Cable & Wireless.

* According to Gartner, worldwide sales of mobile phones reached 294.3 million units in Q108, a 13.6% increase over Q107.
* According to Gartner, worldwide external controller-based disk storage revenue grew 8.7% last year to $15.1 billion.

* JSE All share index: Down 2.1%
* Nasdaq: Up 3.2%
* Top SA share movements: African Cellular Towers (-30.6%), Beget Holdings (-20%), Cape Empowerment Trust (-15.2%), Dialogue Group (-17.6%), Ideco (-13.7%), Ifca Technologies (-35%), ISA (+25%), Labat Africa (+25%), Stella Vista (+12.5%) and TCS (+47.8%)

The latest edition of BusinessWeek features its 2008 Hot Growth Companies rankings. From a technology perspective, the top 50 includes Vasco Data Security at 14, a company that sells Internet authentication technology for banks; Interactive Intelligence at 33, a company that ties phone, fax and e-mail systems together with software; and Sigma Designs at 39, a company that provides system-on-chip semiconductors for digital media products such as HDTVs.