In a regular series, Mobile World Live‘s Asia Editor Joseph Waring provides a regional roundup of news snippets:
Samsung West Java plant to open in Q1
Samsung has confirmed it plans to start assembling mobile phones at an existing plan in Indonesia early next year.
The South Korean firm last month announced plans to set up a factory in West Java to make as many as 900,000 mobile phones per month, reportedly mostly for the growing domestic market, where it sells about 10 million handsets a year.
Samsung said it is investing $20 million in the first of three phases at a facility that currently makes set-top boxes. The facility is located at its factory complex in Cikarang, which also produces TVs and DVD players.
The plan to start local production follows the government announcing in April it was considering taxing smartphone imports to protect domestic vendors from foreign competition. The proposal is likely to be voted on after the new administration, led by president Joko Widodo, who is seen as business friendly, takes office in October.
Indosat posts profit, but ARPU, sub base fall
Indosat returned to the black in the first half of the year, as it earned a profit of IDR226 billion ($19.3 million).
But the rebound from a IDR231 billion loss in H1 last year was mainly due to the sale of its 5 per cent (IDR1.93 trillion) stake in Bersama Tower in March. It had a IDR574 billion loss in Q2.
Revenue was down 0.8 per cent in the period to IDR11.6 trillion as its mobile customer base fell 2.7 per cent to 55 million. ARPU was also down 2.7 per cent to IDR26,200 ($2.24).
Monthly minutes of use per customer decreased 16 per cent to 79 minutes and SMS traffic was off 11 per cent.
Indosat, which has a 18 per cent market share, saw data traffic jump 210 per cent compared to a year ago. It installed 11,000 base stations in H1 and now has almost 34,000 across the country.
Docomo share buyback in credit negative
Moody’s Japan reports that NTT DoCoMo’s JPY308 billion ($29.5 billion) share buyback is credit negative but will have no immediate impact on the company’s current ratings and stable outlook.
The buyback was the first part of a planned JPY500 billion share purchase approved by the company’s board.
Moody’s said the move is credit negative since it reduces its cash on hand but does not impact the company’s rating, which benefits from a strong financial profile with low leverage, robust operating cash flow and excellent access to alternate liquidity.
MTN awards 5-year managed services contract
Huawei has won a five-year managed services contract from the MTN Group to streamline its operations and boost network quality. The deal covers the South Africa-based company’s operations in six countries. Huawei said in a statement that MTN has been a long-term partner in managed services.
Internet business props up fixed-line
Australia’s fixed-line market fell 2.3 per cent last year, but the decrease was more than offset by a 7.5 per cent from internet revenue, which IDC said was telcos’ strongest preforming segment.
That trend is expected to continue but the gap between the two will narrow. IDC forecasts the fixed-line market to fall 3 per cent annually over the next five years. The 3.9 per cent annual growth in their internet over that period will again offset the fixed-line decline.
The analyst firm noted that competition was increasing as operators aggressively pursue market share. “We have seen contracts discounted upwards of 25 per cent on renewal. Pricing needs to be rationalised and telcos need to start building differentiation around customer support,” said IDC’s Bradley Murray.