Not long after the acquisition by GTT of Inteliquent, a major layoffs was carried out. They layoff up to 30-40% of the ex-Inteliquent staffs sometime last month including some of the founding members based in Italy. Many of the critical support staffs are gone which left customers in the lurch and confused.
Looks like no industry is safe and surely not Telecommunications. A pity and farewell to the once rising star called Tinet. This blog posting is a tribute to that little company that challenges the giants of the Telecommunications world.
The win by Telenor is expected as they are really strong contender and operates several mobile operations around the world, including a few in Asia. They also owns DTAC (Thailand), Digi (Malaysia), Grameenphone (Bangladesh), Uninor (India). Most of which are doing very well except Uninor.
The dark house is surely Ooredoo which is formerly Qatar Telecom. This is a surprise as one would think that it has to be the japanese. Their PM came recently and waived off all the debts plus pledging new loans. If I am KDDI, it must surely hurt. Well, this is not the first time the Japanese was trying to leave some legacy in this country. Remember the Burma Railway (aka death railway)? That's the most famous or infamous contributions here. I think the debt the Japanese owes to Asia is far more that whatever they can write off.
However, one wonders how does Ooredoo won it then. Could it be related to any of the Oil or Gas potential Myanmar has? Qatar definitely has the oil and gas expertise and Myanmar the untapped supply....That's got to be even more profitable than Telecommunications. We shall see soon....
Anyway, congratulations to the 2 winners to one of the very last frontier of Telecommunications (the other one may be North Korea).
The new Bay of Bengal Gateway Cable has just been announced. This looks promising to be another diverse path to SMW4 cable system that most of the carriers are riding on. However, with the recent SMW4 cable outage that lasted for several weeks, diversity for the west bound is again in the spotlight.
Let's take a look at the various cable maps.
The BBG cable will connect from Singapore and all the way to Oman and the UAE. Then it should connect to europe via IMW or EIG.
IMEWE cable.
EIG cable.
For most part, it would appear to be diverse from SMW4. However, IMEWE and EIG also goes through the Suez Canal and on the same path as SMW4.
The reason why most cables goes through the Suez Canal is not because it is the shortest path but also because it is the easiest as it is on international waters. Imagine if you want to cut across these region via terrestrial. You would have to negotiate with countries like Iran, Saudi, Syria, etc. I think you get the picture. Operation and fault management would be a nightmare.
To be truly diverse, I think taking the terrestrial route seems to be the better option. For TEA, it goes from Hong Kong-China-Russia and on to other parts of Europe. Then why is this route not so popular? Well, mainly because of the cost. It can be as much as 2-3 times more than SMWE4. Until the price of this route comes down, looks like the submarine route will still be the preferred option for most carriers.
There's another new owner for Inteliquent which has seen several change of owners over the past few years. From Tiscali to Tinet (BS equity) to Inteliquent (neutral Tandem) and now GTT. The sale appears to be only the data portion. Neutral Tandem seems to realize the Data part is not making money and has drag themselves on a downward slope even since they decide to buy Tinet. So let's see who makes money so far from such sale.
BS equity buys Tiscali International Network for US$60 Million (47M Euro) in 2009.
Neutral Tandem then buys over for US$95 Million in 2010. Profit of $35 Million. Not bad for approximately just 2 years of ownership. Private equity main purpose is just to make money and they have done just that.
GTT now buys the data portion for US$54.5 Million in 2013. Is that a US$40.5 Million lost in less than 3 years for Neutral Tandem? That shows just how desperate they are in trying to get rid of the data portion to even making a loss. So what happens to the voice portion (the ex-Neutral Tandem)? Re-emerge as another new company?
I will start a series of comparison in broadband prices in each countries that i visited. Of which, i will try to compare the wholesale price that these operators are buying.
For simplicity, 100M fiber broadband speeds will be used:
Monthly published rates
SingTel - $69.90
StarHub - $68.27
M1 - $39
My republic - $38.88
The fiber broadband gives you more value per dollar or per Meg of IP packet as compared to the normal broadband. For example, SingTel is selling $31.90 for 10Mbps speed. This is about $3.19 Per Mbps ($31.90/10). For fiber broadband, it is $0.699 Per Mbps. That's more power per buck. The IP transit price in Singapore right now is below $10 Per Mbps depending on the bandwidths. Thus to make money, the operators have to oversubscribe quite substantially. You need to have mass or economy of scale so the smaller boys will have a tough time.
Obviously, SingTel and StarHub owns the lion share of the market with My republic the least. I think My republic only has about 10,000 subs as of Mar 13. This is considered not bad considering they just started 1 year ago. They just celebrated their 1 year old birthday recently. It will be interesting to see how's the market elsewhere. Will be back soon.
Soon after Pacnet's recent layoffs, Tata also follow suit. Pacnet has layoff approximately 30% of the staff worldwide. Most of the expensive expatriates are the first to be let go. Stories of how unceremoniously they have been let go is rather uncomfortable to Asian standards. After all, the staff have served faithfully for years. Most of them doesn't even know their fate until the actual day as they were escorted to their desk to pack and then out of the office.
As for Tata, they have lay off about 300 staffs worldwide. This includes some of the senior management. The ex-CEO, Bryon Clatterbuck, left all of a sudden sometime in Mar/Apr 2012. He has since joined SEACOM as the Chief Commercial Officer sometime end of 2012. Somehow these senior guys are always able to find another opportunity elsewhere due to their networks. So be sure that this will be the last you hear of Bill Barney.
Since we are at North Korea, let's look into another closed country which is Myanmar. Who's the number 1 in customer backbone in Myanmar? Surprisingly it is TeliaSonera, the Swedish Telecommunications giant.
