USO bid for setting rural telecom towers
VoIP - Giants battling for patents
At the same time reports have started spreading through the industry that Vonage is launching an annual pre-paid VoIP plan in a move some theorize is designed to generate some fast cash, and that the VoIP house is also about to become a mobile virtual network operator (MVNO).
Verizon filed its suit in June. In July 2006, Vonage said it had acquired three VoIP-related patents from Digital Packet Licensing that address compression techniques related to the public network, a move seen as an attempt to find technology work-arounds to the Verizon patents if they are upheld.
In the extreme, should Verizon win, then Vonage could theoretically be forced to shut down its VoIP service. Such an outcome, though, could typically take years of litigation, and few industry observers expect that to happen. The most likely outcome is thought to be a license payment from Vonage if it loses, or is losing, the case. Estimates are also that, if it knocks off Vonage, Verizon will then go out after as many other VoIP industry players as it can get its hands on.
Vonage is expected to become a mobile virtual network operator (MVNO).
Vodafone in India - The rough road ahead
Background
Vodafone, already the world's largest cellular carrier, is getting control of India's fourth-largest operator with about 24 million customers and 16.4 percent of the market. Vodafone says its target now is to garner between 20-percent and 25-percent market share by 2012. Assuming all needed regulatory approvals, the deal is expected to close in the second quarter. Hutch-Essar becomes Vodafone's third largest unit, following its German operations and its 45-percent minority stake in Verizon Wireless in the United States. However, the German and U.S. markets are mostly saturated - 80 percent in Germany and 76 percent in the United States - while the Indian market is only 15-percent penetrated, and it's the world's fastest-growing cellular market right now, with a reported 6.5 million new subscribers per month.
The immediate issues
Vodafone's acquisition of Hutchison's share of Hutch-Essar also comes with certain complications that vodafone has to deal with. The first is the Indian law that prohibits foreign entities from holding more than 74 percent of an Indian telecom company. In terms of the foreign-ownership limits, Vodafone reportedly has deals set up to cover that issue as well. Hutchison Telecom had local partners that, between them, hold a 15-percent interest in Hutch-Essar. Those partners have agreed to retain their holdings, Vodafone says, leaving Vodafone's interest at 52 percent after the deal is completed, just enough for it to have full operational control over the operator plus leaving enough leeway for it to buy the 33-percent Essar stake. Vodafone offered to buy out Essar's stake, paying the same price it paid Hutchison. According to Vodafone, if Essar accepts its buyout offer, it already has local minority partners lined up and willing to buy as much as 26 percent of the company.
Vodafone's immediate strategy will focus on -
improving the market performance at Hutch Essar: the Vodafone targets a market share (presumably by revenue) of 25% by FY2012 Rolling out the Voda brand and services Rolling out the network to the 6 circles where there is currently no service.
In the medium to long term, Vodafone will strategise to look at acquiring some of the smaller Indian GSM players to gain market share. Ultimately, the aim must be to be #1 in the market.
Vodafone Group will invest $2 billion in India in the next few years. "I think there will be consolidation in the India market in the near term," Vodafone CEO Mr. Sarin said. "India will be the biggest country for Vodafone in terms of number of subscribers," he said, adding the company will reach a subscriber base of 100 million in the country in the next few years. Sarin didn't specify when he would hit the 100 million target, but said he will achieve faster subscriber growth and a higher subscriber base as a result of roll out in newer circles, or service areas. The companies strategy will be to roll out new services so that the ARPUs increase over next few years (though this remains a very challenging task). The ARPU boost can come from introduction of new services, such as mobile banking in India. On Monday Vodafone announced it would work with Citigroup to develop M-PESA, a mobile phone money transfer application across the world. Sarin pointed out that in many emerging markets - such as India and Africa - mobile phones provide the only way to transact with a bank.
Nokia has 79% share of Indian GSM handset market?
Meanwhile in the CDMA market, Nokia again managed to retain its share, while Samsung lost market share from 17 percent to 8 percent, and Motorola too lost market share from 12 percent to 4 percent.LG had 49 percent of the CDMA market vis-à-vis 43 percent in 2005
Is the Indian broadband market falling behind the global trend
Even the residential customers in African countries like Morocco are getting more than 4 Mbps broadband. As the graph below shows already in about 10 countries the residential customers are offered speeds 2 Mbps. (Source ITU report)
High-speed residential Internet access is reaching Africa, with the launch of 2 and 4 Mbps broadband offers in 2006 by the Moroccan ISP Casanet, a 100%-owned subsidiary of Maroc Telecom, through its portal Menara.
Maroc Telecom has just released its annual results for 2006, with around 384,000 ADSL subscribers, the lion's share of Morocco's broadband market. The Moroccan regulator is seeking to partially unbundle the local loop. New entrants such as Meditel and Maroc Connect will be able to use the incumbent's copper cable to offer alternative ADSL services in competition with Maroc Telecom’s offers.
The roll-out of a 4 Mbps offer is just part of the march of higher-speed offers throughout Africa (see graph below).
This analysis is part of the this year's World Information Society Report, to be published on World Information Society Day, 17 May 2007.
Source - The ITU website
BT focuses on M & A
The takeover is BT's 17th acquisition around the world in the past 24 months.
"BT will become the biggest foreign global carrier operating in India today as the result of this deal," BT Global Services CEO Andy Green said in a prepared statement. i2i, a managed service provider, brings a customer base of 200 corporate customers into the BT fold, and it employs more than 200 people.
The price being paid by BT Telecom India, which is a BT joint venture with local Indian company Jubilant Enpro Pvt Ltd., was not disclosed. In a hint, BT said that as of I2i's last audited balance sheet date, March 31 2006, its gross assets were approximately $22.5 million. That suggests a price of not more than, perhaps, $100 million.
While the size of the deal is believed to be relatively small in dollars, "the acquisition of i2i is exciting because it places BT at the heart of the world's fastest-growing IT and business-process outsourcing market," Green said. "This will help BT build a broad-based platform for growth in India and create a single BT-branded channel to the Indian market."
He continued, "India is a cornerstone in our global expansion plans and this investment underlines our commitment to growth from India. BT continues to execute its global mission to be the leader in the delivery of converged networked services."
Indeed, BT recently said it wants $250 million in sales in India by 2008 from its various ventures in the country (TelecomWeb news break, Sept. 14, 2006). It's been coveting an Indian phone license for years (TelecomWeb news break, Nov. 23, 2005) and, in November 2006, BT Telecom India applied for licenses to provide National Long Distance (NLD) and International Long Distance (ILD) services. The BT unit was issued Letters of Intent in December 2006 by India's Department of Telecommunications (DoT), a first step toward the award of licenses. With the acquisition of i2i, it now looks like BT picks up the coveted licenses without further ado. i2i is one of the few companies in India with licenses to provide ILD, NLD, nationwide ISP and Internet telephony services, BT notes.
The acquisition of i2i comes just five days after BT disclosed a deal to buy International Network Services (INS), a Calif.-based provider of IT consulting and software solutions. INS employs almost 900 people in 12 countries worldwide. Again, BT did not disclose financial details but said that, as of the last audited balance sheet on Sept. 25, 2005, the gross assets of INS were $49.7 million. Guesses in the industry are that BT will pay nearly $200 million for the company.
That's a pittance compared with the $3.7 billion that then-Lucent Technologies (these days Alcatel-Lucent) paid for it back in 1999, merging it into Lucent Worldwide Services as the Enhanced Services and Sales division, its enterprise professional services unit. Back then, INS was doing a reported $300 million a year in business, but demand for new network projects collapsed and INS was hit even harder due to the loss of its vendor-agnostic status. Lucent finally sold INS in July 2002, reportedly at a huge loss, creating a privately owned company by venture capitalists.
Source - Telecomweb
IPTV - 3.6 million users worldwide!
That number, admittedly a drop in the buck, has set the stage for what could be explosive growth this year.
Canalys figures the 3.6 million subscribers yielded about $1.3 billion in annualized revenues (TelecomWeb calculates that equates to a reasonable $30 per month on average for an IPTV subscription). It figures about two-thirds of the subscribers in the world last year were in Europe, and that 60 percent of the European market was cornered by just five providers, "but the rush of service launches by new entrants in 2006 means that there are numerous companies with only a few thousand subscribers each."
It listed the top three as PCCW, with an 18.2 percent share; France Telecom, with 16.8 percent; and Free Telecom, at 14 percent. Telefonica and Fastweb round out the top five, but with single-digit market shares.
While Europe has set the IPTV pace so far, the research house predicts that, this year, both North America and the Far East - where only Hong Kong has significant IPTV so far - will begin catching up. "Growth will come from emerging markets such as China and India, following large investments into IPTV deployments there," Canalsys notes. "Australia is also finally moving into the commercial phase of its IPTV offerings, which will lead to fast rollouts of services in 2007."
"North America will be another major growth area, with AT&T and Verizon already pushing nationwide rollouts of IPTV services," it adds - although not making a clear distinction between IPTV and the analog service Verizon is actually offering over FiOS so far.
In a caveat to the IPTV industry, Canalsys warns that "the major threats" for many IPTV service providers will be the quality of their networks and the ability of IPTV systems to scale - an ability that remains unproved.
"IPTV networks will quickly become the most complex and bandwidth-intensive that have ever existed," says Canalys Vice President Alessandra Fitzpatrick. "Many service providers have invested millions of euros on network upgrades, but it remains unproved whether IPTV networks can scale into the millions without performance degrading and response times slowing or even collapsing altogether. Another infrastructure challenge is that service providers will quickly have to learn how to manage multiple billing systems and content across large server farms and storage area networks while maintaining the highest quality of service."
Canalys Senior Analyst Nadia Griffiths also warns IPTV providers that "2007 will see the competitive landscape become even fiercer as IPTV services from established service providers will be challenged by aggressively priced alternatives from Web TV, cable, satellite and content companies. These are all contenders for a share of the limited wallet of most consumers."
Source - Telecomweb
Top games that generate revenues on mobile
Puzzle and strategy titles dominated the best-seller list of mobile games in 1Q06, according to Telephia. Games like “Tetris," ”Tetris Deluxe” and “Bejeweled” accounted for about one-third of all dollars spent on mobile gaming in the quarter. Unit sales of games topped 8.6 million in April, a 60-percent increase since the beginning of the year, the mobile metrics company says.
Puzzle and strategy titles were almost twice as lucrative in their overall revenue share (33.8 percent) as the next biggest revenue grabbers, the similar card and casino category (18.3 percent), with sports and racing (12.9 percent) and action/adventure (12.8 percent) trailing.
Telephia’s figures seem to counter recent arguments within the mobile community that mobile gaming is stagnating. Instead, the company sees the handset gaming market as growing substantially just this year.
1Q06 Top Mobile Games (by revenue share)
| Rank | Title | Publisher | Category | Revenue Share |
| 1 | Tetris | EA Mobile | Puzzle/Strategy | 5.2% |
| 2 | Tetris Deluxe | EA Mobile | Puzzle/Strategy | 3.6% |
| 3 | Bejeweled | EA Mobile | Puzzle/Strategy | 2.6% |
| 4 | Jamdat Mahjong | EA Mobile | Puzzle/Strategy | 2.2% |
| 5 | Ms. Pac Man | Namvo | Classic/Arcade | 2% |
| 6 | Galaga | Namvo | Classic/Arcade | 1.9% |
| 7 | Downtown Texas Hold 'Em | EA Mobile | Card/Casino | 1.8% |
| 8 | Who Wants To Be A Millionaire 2005 | Cosmic Infinity | Trivia/Word | 1.5% |
| 9 | Zuma | Glu Mobile | Puzzle/Strategy | 1.4% |
| 9 | Monopoly Tycoon | Hands-On Mobile | Puzzle/Strategy | 1.4% |
| 9 | Frogger | Konami Mobile | Classic/Arcade | 1.4% |
| 9 | Jamdat Solitaire Deluxe | EA Mobile | Card/Casino | 1.4% |
| 10 | Scrabble | EA Mobile | Trivia/Word | 1.3% |
| 10 | Texas Hold 'Em by Phil Hellmuth | Oasys Mobile | Card/Casino | 1.3% |
Source: Telephia
With more than 72 percent of puzzle-and-strategy game revenue being driven by women, they are now responsible for a whopping 65 percent of mobile game purchases. This approximates the gender split for casual online games, where women also dominate, and it’s a complete flip of the demographics for console games, where as many as 80 percent of gamers are male.
Top revenue generating mobile application
It was more than a little surprised to discover from Telephia’s recent “Mobile Application Report” that Zingy’s MapQuest Mobile is not only the biggest revenue-generating app on handsets, but that it wins in a walk.
Telephia, which uses a sample of billing records and revenues as a metric of application success, found MapQuest Mobile accounts for a staggering 21.9 percent of all revenue generated from mobile applications. Say what? All due respect to Zingy and its good job on this map-and-directions widget, but this app is not that great (really), and it certainly isn’t as strong as Verizon's SuperPages 2.0 (5.3 percent of revenue) or eBay Mobile (4.3 percent)
Top 10 Downloadable Mobile Applications By Total Revenue Share (U.S.)
| Application | Publisher | Revenue Share |
| MapQuest Mobile | Zingy | 21.9% |
| The Weather Channel | Weather Channel | 5.7% |
| Verizon SuperPages 2.0 | Verizon Directories | 5.3% |
| Music Choice | Music Choice | 5.0% |
| Sirius Music | Sirius Satellite Radio | 4.8% |
| Accuweather.com Premium | AccuWeather | 4.4% |
| eBay | Bonfire Media LLC | 4.3% |
| Backup Assistant | FusionOne | 2.8% |
| America's Best Mobile Pix | FunMail | 2.6% |
| Yahoo! Photos | Yahoo! | 2.6% |
| ESPN Bottomline Pro | ESPN | 2.1% |
Source: Telephia Mobile Applications Report (1Q06)
The map/directions content category has a natural advantage in this metric because it’s responsible for nearly 40 percent of all recurring revenue from applications. This is the category people tend to keep and pay for month to month, as opposed to many entertainment-oriented apps responsible for only 12 percent of recurring revenues and almost 30 percent of first-time buyer revenues.
Top Downloadable Mobile Applications
By Repeat Purchase Revenue (U.S.)
| Category Share | Repeat Purchase Revenue Share | First-Time Purchase |
| Maps/Directions | 39.5% | 16.8% |
| Weather | 18.9% | 8.7% |
| Entertainment | 12.0% | 29.9% |
| Sports | 8.9% | 3.9% |
| Personal Organization/Tools | 7.4% | 4.3% |
Source: Telephia
MapQuest is a natural beneficiary of two strong mobile forces: “First, the fundamental need – directions and maps – just fits into mobile really well. Second, MapQuest has a well-known and reliable brand on the regular Internet, which has a spillover effect in making it the go-to place for many on the mobile Web as well.”
Indian booming telecom market: next destination for Global players
Already, four players -- including Vodafone, the world's top mobile phone company -- are jostling for a position in the multi-billion dollar race for India's Hutchison Essar, controlled by Hong Kong-based Hutchison Whampoa.
The Indian mobile market has "great potential," Britain's Vodafone said.
India added 6.8 million new mobile subscribers in November, the latest month for which figures are available.
"India's mobile subscriber base is increasing phenomenally every year -- one customer is added every second," Communications Minister Dayanidhi Maran said.
India now has more than 183 million telephone subscribers, of which over 140 million are mobile customers.
"By 2010, India will have more than 500 million mobile subscribers from the current base," Maran told a conference of top telecommunications executives in New Delhi last month.
"India's mobile subscriber base is increasing phenomenally every year -- one customer is added every second ... By 2010, India will have more than 500 mobile subscribers from the current base."
Dayanidhi Maran, Indian communications ministerThe contest for Hutchison-Essar got going in earnest last month, when Hutchison Whampoa, controlled by Hong Kong's billionaire tycoon Lee Ka-shing (李嘉誠), made it clear it wanted to sell out its 67 percent stake in the Indian mobile company, which has 22 million subscribers.
As new bidders jump into the fray, the valuations for Hutchison-Essar have zoomed to over US$20 billion.
However, this hasn't deterred the potential suitors, which include a clutch of Indian companies such as Reliance Communications, India's second-largest mobile phone company, and the Hinduja group, with interests from oil to banking.
Indian steel-to-shipping group Essar, which holds the minority 33 percent stake in the company, is another possible bidder, while other companies such as Maxis Communications of Malaysia and Egypt's Orascom have also been mentioned.
India has come a long way from just a decade ago, when teledensity -- the number of phones per 100 people -- was around three in the country of 1.1 billion people.
By November 2005, teledensity had risen to 11 and that climbed by November last year to 16, the Telecom Regulatory Authority of India said.
"There has been a steep growth in teledensity in the past 12 months," the telecom body commented.
India is now the world's fastest growing major mobile market, outpacing even China, analysts said.
A no-holds-barred price war is helping drive the cost of calls down to as low as two cents a minute, and a mobile connection can cost as little as US$4 a month.
Nevertheless, profitability of the sector is strong.
Second-quarter net profit of Bharti Tele-Ventures, India's largest mobile phone company by subscribers, rocketed 79 percent to 9.34 billion rupees (US$207 million) from the same period a year earlier.
The company's profits jumped due to nearly a doubling in its number of subscribers.
Short-term, the Indian government wants mobile subscribers to grow from 140 million now to 180 million by the close of this year.
Global phone companies and handset and telecoms equipment makers are looking intently at India because teledensity in China has already hit 29 per 100. They reckon that India will follow the same path.
Right now the mobile revolution in India is mainly confined to the cities, where not only the upper and middle classes have phones but also delivery men, rickshaw drivers and domestic servants.
Mobile phones have been "an agent of change in India," said T. V. Ramachandran, director general of the Cellular Operators' Association.
Last month, the world's second-largest mobile phone maker, Motorola, launched its "Made in India" handset, with design and software done in India, which it billed as the "common man's mobile" with a price tag of 1,700 rupees.
Maran lauded the Motorola initiative, but said companies should be looking at introducing a phone priced at less than 1,000 rupees.
"That will be the right phone for the mass market in India," Maran says.
It's all a vast change from the early 1990s, when India had only five million phone connections and making a call was a tortuous experience.
Home owners had five-year waits or longer for installation of a phone.
Public phones were either non-existent or broken. Offices never had enough switchboard lines so phone calls had to be booked and the phone network often collapsed under the load of calls.
The situation began to change when the government revamped its telephone policy in the late 1990s.
But now the real prize for telephone companies lies in in the vast rural market where nearly 70 percent of the population lives.
Telephone penetration in India was 25 per 100 people in urban areas and as low as 1.6 per 100 in rural areas, Maran said.
"The rural market is going to be the accelerator for growth in the telecommunications sector," he said.
Source: Taipei Times
TRAI order to benefit roamers
Despite strong opposition from telecom operators, mobile users will have to pay lower roaming tariffs starting February 15 with the Telecom Regulatory Authority of India ordering up to 56 per cent reduction in domestic mobile roaming charges.
TRAIhas also scrapped all forms of rental, surcharge and other additional charges being taken by the mobile operators at present for offering roaming services. The telecom regulator has also asked operators not to charge for incoming SMS while roaming.
While the move will benefit about 15 million mobile users who use roaming services, cellular operators, however, said that the TRAI move was "distressing" and suggested that operators may be forced to increase local tariffs to balance out the impact on their revenues.
Mr T.V. Ramachandran, Director-General, Cellular Operators Association of India (COAI) said the adverse financial impact on the industry was expected to be to the tune of Rs 800-900 crore annually. "The decline in roaming tariffs would most likely necessitate an increase in local call tariffs as roaming tariffs were hitherto being priced at a level which allowed the operators to offer affordable services to their consumers," said Mr Ramachandran.
Mr Manoj Kohli, President, Bharti Airtel, said that the decision was "unnecessary and unwarranted." Bharti's share price dropped by Rs 2.25 to touch Rs 686.90 on the BSE on Wednesday.
Reliance Communication and State-owned BSNL, however, said that there would be negligible impact on them since their tariffs were already at a lower level. R-Com's share price dropped by Rs 6.15 to close at Rs 434.
TRAI refuted claims of revenue loss by operators and said that reduction in tariffs would lead to substantial increase in usage for roaming service, resulting in overall revenue growth for the service providers. TRAI also said that the cost of providing services have been brought down significantly over the last five years. However, there has been no effect on national roaming tariffs.
One billion phones shipped during 2006
“Mobile phones are seen as both a practical necessity and a status symbol in many emerging markets,” explained IDC industry analyst, Ramon Llamas in a statement.
In terms of market share, Nokia and Motorola managed to consolidate their positions of global leadership, but met with declining profit margins due to the rising popularity of low-cost, entry-level cell phones.
Verizon's fourth quarter profit declines
CEO, Ivan Seidenberg, says that the telecom giant is investing the bulk of its impressive wireless profits into building a faster broadband and TV network. The new fiber optic network is intended to compete with cable companies, such as Comcast.
“You have to believe that the money that they’re spending is working,'’ commented Philadelphia Trust Co. investment manager, Richard Sichel, who invests heavily in Verizon shares. “It looks as though it is.”
The New York-based telephone operator’s net profits came in at $1.03 billion, or $0.35/share, for the final quarter of 2006, compared to $1.66 billion ($0.59/share) during the same period a year previous. Total revenue for the quarter increased by 26% to $22.6 billion, roughly in line with the expectations of analysts.
Sony Ericsson to make cheap handsets in India
Production in the fast growing Indian mobile phone market will reach 10 million mobile phones by 2009, the five-year-old joint venture between Japanese electronics maker Sony Corp and Swedish telecoms equipment firm Ericsson said in a statement.
Production of 10 million phones would represent around 13 percent of all Sony Ericsson phones sold in 2006.
"In addition to competitive pricing, these phones will offer customized features for the Indian market, such as local content and customized keypads," Sony Ericsson said in a statement.
The world's fourth biggest mobile phone maker, measured in units, has made its mark with premium phones including Cybershot digital cameras and Walkman music players.
Analysts have said it now needs to bring out more low-cost phones, catering to lower income customers in the fast growing emerging markets, to reach its target of becoming the world's number three mobile phone maker.
"Local manufacturing in India will result in improved cost efficiencies and enable us to offer attractive products at even more competitive price points," the company's president, Miles Flint, said.
Sony Ericsson had a fourth-quarter global market share of 8.7 percent, behind Nokia's 35.2 percent, Motorola's 21.9 percent and Samsung's 10.7 percent.
Measured in revenues, Sony Ericsson overtook Samsung in the fourth quarter as the number three phone maker, as a result of its more expensive phones.
Nokia - surging profits
Net profit at the Finnish handset group rose 19 per cent in the fourth quarter to €1.27 billion (£835 million) or €0.32 a share.
Sales were up 13 per cent on the same time last year to €11.7 billion.
Analysts had expected earnings of 28 cents a share on sales of €11.52 billion.
Though the average selling price of the phones fell, analysts dismissed this to send the group’s shares up 7 per cent to €16.57 in Helsinki after the announcement.
Like its peers Nokia, which is far ahead of its nearest rival, Motorola, with more than 35 per cent of the mobile market, is facing fierce pricing pressure.
Mobile operators, particularly in Western markets where mobile penetration is more than 100 per cent, are demanding ever cheaper handsets.
Tie-ups between mobile operators, giving them increased buying power, have further increased the pressure on the handset vendors.
In an attempt to offset these pressures, companies such as Nokia are increasingly turning to emerging markets.
However, though the sales potential is huge, the average selling price of phones is far lower than in more mature markets.
Last week Motorola announced plans to lay off 3,500 workers after seeing its profits savaged.
Some analysts had feared that Nokia might also have been hit by the tough conditions.
Ben Wood, of CCS Insight, the telecoms consultancy, said: "To grow margins and volumes like this in such a tough market is very impressive."
Nokia shipped 105.5 million phones in the quarter, compared with 83.7 million units a year earlier.
In an effort to grab more market share the Finnish group is working on a reinvigorated product range.
Analysts expect the group to unveil a flurry of sleeker, thinner devices at 3GSM, the industry’s annual get-together, next month.
Alcatel-Lucent not expecting to make profit in Q4
Pro-forma sales are expected to fall 16 per cent to €4.42 billion (£2.9 billion) in the quarter, from €5.25 billion a year earlier. The company expects to break even during the period, compared with operating profit of €570 million a year earlier.
Alcatel-Lucent, which also flagged restructuring charges of about €800 million, will report full earnings figures on February 9.
Alcatel SA and Lucent Technologies merged last year in an attempt to fend off competition from rivals such as China's Huawei and Sweden's Ericsson. However, the newly created company has since faced lower spending in the US and increased competition in wireless technology suppliers.
In mid-afternoon deals in Paris, shares in Alcatel were down €1.10, or 10 per cent, at €9.85.
Double trouble for Motorola
Ed Zander, the group's president and chief executive, said that the move would save the company about $400 million (£203 million) over two years. He did not immediately elaborate on where the cuts would be made.
The announcement came after Motorola reported that fourth-quarter profits fell 48 per cent despite of record sales. The slump came after the group offered customers a series of deep discounts in an effort to win market share from market leader Nokia.
In Motorola's handset business, the operating margin plunged to 4.4 per cent in the fourth quarter, from 11.6 per cent in the previous three months. The group shipped 66 million handsets in the quarter, up 47 per cent on the same period a year earlier, to give the group 23 per cent of the global market.
Mr Zander said: "As I said earlier this month, we are disappointed with our fourth quarter operating earnings performance."
The US company had issued a profits warning two weeks ago, sending its shares sharply lower. However, Mr Zander shrugged off suggestions that Motorola should concentrate on delivering profits at the expense of market share.
He said: "There’s no change in strategy. There may be some changes in tactics."
He also dismissed suggestions that Motorola's super-thin Razr phone is running out of momentum. "It’s funny, I keep reading about Razrs being tired," he told analysts. "We sold more Razrs in quarter four than in any quarter we ever had. We now have sold over 75 million Razrs worldwide."
Net profit for the past three months of 2006 was $624 million, or 25 cents per share, down from $1.2 billion, or 46 cents per share, a year earlier.
Revenue was $11.8 billion, up 17 per cent from $10 billion a year ago and in line with analysts' estimates.
The company said it expects sales between $10.4 billion and $10.6 billion in the first quarter, again in line with analysts’ forecasts.
Motorola shares gained 31 cents to $19.02 in morning trading on the New York Stock Exchange.
Erricsson plans investment of $500 million in India
The Swedish telecoms giant said that it wanted to exploit the "phenomenal" growth in the sector - where a new customer is signing up for a handset every second of the day.
Mats Granryd, managing director of Ericsson India, said: "We will be investing $100 million annually for the next five years.
"The figure could up depending on the growth in the sector. This is growing phenomenally and I do not see an end to it."
The huge growth in India has already sparked a gold rush among leading mobile phone companies.
The market has doubled in the past year to 140 million customers - triple the amount of Indian debit or credit card holders - and is growing at a rate of 2.5 million subscribers a month.
Three months ago, Vodafone spent £840 million on a 10 per cent stake in Indian company Bharti Telecom.
Virgin targetting Indian Market
Ratan Tata, its chairman, is understood to be in talks with Virgin about the group becoming an exclusive franchisee of Tata Teleservices, Tata’s telecoms arm and India’s sixth-largest mobile operator.
The venture, which could be operating as soon as April, is expected to involve creating a business owned partly by Tata Teleservices.
The Branson talks mark the latest step in a race into India by Britain’s mobile operators, as they seek to cement their position in one of the world’s fastest growing economies. Vodafone, the world’s biggest mobile group by sales, is seeking a controlling stake in Hutchison Essar, another Indian mobile operator.
India is one of its largest untapped mobile phone markets. The country has a population of 1.1 billion but a mobile phone penetration rate of just 12 per cent, or 140 million subscribers.
Usage could triple in the next four years, some analysts believe. In the UK, where some users have more than one phone, the figure is more than 100 per cent.
Tata Teleservices, which operates under the Tata Indicom brand, has 8.6 million customers, or a 7 per cent share of the market.
It is thought that it regarded a tie-up with Virgin as a way of attracting more younger users.
Virgin Mobile, a “virtual operator” that does not have its own network, already operates in the United States through a joint venture with Sprint.
It is also in Australia and in France, through a tie-up with Carphone Warehouse, the high street chain founded by Charles Dunstone.
Plans for a flotation of Virgin Mobile USA were shelved in 2005 when it raised funds through the debt market.
In the UK the group, which has merged with NTL, the cable operator, uses the network of T-Mobile, the German-owned mobile business.
Vodafone has a 10 per cent holding in Bharti Tele-Ventures, India’s biggest mobile operator.
Indian players in the mobile market:
1 Bharti Tele-Ventures: 27.1 million subscribers, which eqautes to a 21.6 per cent market share
2 Reliance: 23.5 million/18.8 per cent market share
3 Hutchison India: 20.4 million/16.3 per cent market share
4 Tata Teleservices: 8.6 million/6.9 per cent market share
Handset market - Size of the mobile matters
At just 13.7mm across, the N76 - the new handset which the phone manufacturer launched at the Consumer Electronics Show (CES) in Las Vegas yesterday - will be one of the most slender handsets on the market.
It will also, importantly, be 0.3mm thinner than the RAZR, the hugely successful model sold by its rival Motorola.
"Thin is good" was the theme of the speech by Nokia chief executive Olli-Pekka Kallasvuo at the CES yesterday as he laid out the battleground for the next generation of handsets and sought to reassure investors that the company's sales would not suffer amid a difficult period for manufacturers.
Among the slimmer offerings with which Nokia hopes to take the fight to Motorola was the N93i - a new version of the N93, launched in 2005 - which will be 3mm thinner than its predecessor, as well as doubling as a digital video camera.
The company also announced plans to release a new "ultra-thin" phone, the Barracuda, later in the year, though declined to give measurements.
Nokia still makes one in three phones sold worldwide, thanks largely to high demand for its cheaper models in emerging markets, but has suffered from a lack of slimmer models in the wake of Motorola’s hugely popular RAZR flip-phone.
The launch of the RAZR in 2003 has in large part been responsible for Motorola’s market share climbing to an estimated 22 per cent.
It has been a difficult period for the handset manufacturing market, where strong price competition has forced down margins, analysts said.
Shares in Nokia fell by more than 4 per cent in Helsinki trading on Friday after Motorola gave warning that its fourth-quarter (Q4) revenues and profits would fall below expectations.
Both companies are due to release their Q4 results later this month.
"More than 850 million people have a Nokia mobile phone in their hands. No other consumer electronics company in the world has ever had such a customer base," Mr Kallasvuo said in a statement.
The company said it had sold 40 million multimedia phones, and that the market for such devices, which was 90 million in 2006, was expected to grow to 250 million units by 2008 - figures which reassured analysts.
"This news dispels suspicions that Nokia would have to follow Motorola and warn on the fourth quarter," Karri Rinta, an analyst at Handelbanken, said.