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Telecommunications
Ringing endorsement
 In Asia the one thing you can’t leave home without is your cellphone. It’s the accessory of choice, an extension of our personalities, with differentiators such as toys hanging from the ends, flashy colours and silly ring tones.
Phones are ubiquitous and India and China, which are also the world’s fastest-growing mobile markets. These countries added around eight million mobile phone subscribers in October 2007 alone, taking their user base to approximately 217 million and 531 million, respectively.
“Growth features such as rising consumption, elasticity of demand and economies of scale will continue to be the main themes for the growth markets, including China, India and Indonesia, which are still under-appreciated by investors, in our view,” UBS said in a report released in December 2007.
As a result, the Swiss firm picked India’s Bharti Airtel, China Mobile and Telkom Indonesia as telecom investment picks in Asia for 2008, given that their home markets enjoy strong growth rates.
Indeed, China Mobile and Bharti Airtel are market leaders in their countries, where wireless user penetration rates are still relatively low – 20% in India and less than 40% in China – making the markets attractive destinations for global players like Vodafone. In February 2007 Vodafone bought a 67% controlling interest in Hutchison Essar from KS Li’s company, Hutchison Telecommunications International.
In both countries, telecommunication companies are pressing into rural markets, where lower incomes and weak communications infrastructure have traditionally hampered growth.
Far-flung places that traditionally haven’t been covered is one area of growth, but another segment is moving up the technological ladder. Asia is key to CDMA use – CDMA2000 is the most widely deployed 3G technology. Asia Pacific claims 49% of the world’s CDMA subscribership. From Q3 2006 to Q3 2007, APAC witnessed a 32% increase of its CDMA footprint, bringing the region to 49% of CDMA subscribers worldwide. While CDMA expanded across the whole of Asia, most of the growth occurred in several key markets, notably: Hong Kong, Indonesia, Macau, South Korea, and Vietnam.
After a successful bid for a 3G licence in Macau, China Unicom will roll-out its first 3G CDMA2000 high-speed broadband data network there. Similarly, PCCW-HKT Telephone won a 15-year CDMA2000 license from the Office of the Telecommunications Authority, Hong Kong’s telecoms regulator, to operate CDMA2000 in the 800 MHz band. PCCW is the largest and most comprehensive provider of communications services in Hong Kong, and the operator will use its all-IP CDMA2000 network to converge their fixed-line, broadband Internet, pay-TV, media content and large-scale IT business services.
In South Korea, LG Telecom is well into the final stages of its nationwide upgrade. The process began in mid-2007 in greater Seoul and is nearly complete in 84 cities, covering 93% of South Korea’s population.
Smart Telecom also recently launched a state-of-the-art CDMA2000 network in Indonesia using the 1900 MHz band. By the end of 2007, the operator plans to upgrade to Rev A, and will be the first Indonesian service provider to offer advanced mobile broadband services.
In Vietnam, SK Telecom has witnessed tremendous success with its investment in S-Fone, Vietnam’s first CDMA service. The operator now claims more than three million subscribers in the region. The service covers all 64 provinces, with EV-DO service in five of its major cities. SK Telecom aims to help S-Fone increase its Vietnamese market share to more than 20% in the coming years – aided in large part by CDMA’s vast economies of scale.
What this means for the FA100 is that there’s growth both on the low-tech end of the market and the high-tech side, which is sure to benefit the companies on our list.
| Ranking by revenue |
| Country |
Company |
(million $) |
| CH |
China Mobile (HK) |
39,652.70 |
| CH |
China Telecom |
23,506.70 |
| SK |
KT Corp |
12,960.98 |
| CH |
China Unicom |
12,659.20 |
| SK |
SK Telecom |
11,726.70 |
| CH |
China Netcom Corporation |
11,669.40 |
| SP |
Singapore Telecom |
9,080.75 |
| TW |
Chunghwa Telecom |
5,747.88 |
| IJ |
Telekom Indonesia |
5,639.43 |
| IN |
Bharti Airtel |
4,694.45 |
| PM |
Philippine Long Distance Telephone |
3,092.75 |
| TH |
Advanced Info Service |
2,913.23 |
| TW |
Taiwan Mobile |
1,477.58 |
| |
|
|
| Ranking by revenue growth |
| Country |
Company |
|
| IN |
Bharti Airtel |
59.4% |
| IJ |
Telekom Indonesia |
22.7% |
| CH |
China Mobile (HK) |
21.5% |
| CH |
China Unicom |
8.3% |
| PM |
Philippine Long Distance Telephone |
6.0% |
| SK |
SK Telecom |
4.8% |
| CH |
China Telecom |
3.4% |
| CH |
China Netcom Corporation |
1.2% |
| TW |
Taiwan Mobile |
1.0% |
| TW |
Chunghwa Telecom |
0.9% |
| SP |
Singapore Telecom |
0.1% |
| SK |
KT Corp |
-0.9% |
| TH |
Advanced Info Service |
-1.2% |
| |
|
|
| Ranking by net profit |
| Country |
Company |
(million $) |
| CH |
China Mobile (HK) |
8,864.18 |
| CH |
China Telecom |
3,643.89 |
| SP |
Singapore Telecom |
2,609.24 |
| CH |
China Netcom |
1,739.92 |
| SK |
SK Telecom |
1,592.70 |
| SK |
KT Corp |
1,358.02 |
| TW |
Chunghwa Telecom |
1,298.90 |
| IJ |
Telekom Indonesia |
1,210.04 |
| IN |
Bharti Airtel |
1,079.13 |
| PM |
Philippine Long Distance Telephone Co |
812.66 |
| TH |
Advanced Info Service |
517.98 |
| CH |
China Unicom |
501.03 |
| TW |
Taiwan Mobile |
498.91 |
| |
|
|
| Country |
Company |
ROE |
| Country |
Company |
|
| IN |
Bharti Airtel |
43.10% |
| IJ |
Telekom Indonesia |
42.86% |
| PM |
Philippine Long Distance Telephone |
41.48% |
| CH |
China Mobile (HK) |
22.31% |
| TH |
Advanced Info Service |
20.84% |
| CH |
China Netcom Corporation |
18.92% |
| TW |
Taiwan Mobile |
18.29% |
| SP |
Singapore Telecom |
18.02% |
| SK |
SK Telecom |
16.47% |
| SK |
KT Corp |
14.90% |
| CH |
China Telecom |
14.14% |
| TW |
Chunghwa Telecom |
11.13% |
| CH |
China Unicom |
4.79% |
| |
| Country |
Top telecoms company |
Total Points: |
| Country |
Top telecoms company |
|
| CH |
China Mobile (HK) |
35 |
| IN |
Bharti Airtel |
23 |
| IJ |
Telkom Indonesia |
23 |
| CH |
China Telecom |
22 |
| CH |
China Netcom Corporation |
20 |
| SK |
SK Telecom |
19 |
| PM |
Philippine Long Distance Telephone |
15 |
| SP |
Singapore Telecom |
15 |
| CH |
China Unicom |
14 |
| SK |
KT Corp |
14 |
| TW |
Chunghwa Telecom |
8 |
| TH |
Advanced Info Service |
6 |
| TW |
Taiwan Mobile |
6 |
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