Influence of the Overseas Chinese in Telco - Philippines

For many that doesn't know, there's great influence in Southeast Asia from the overseas chinese. Generally overseas chinese refers to those immigrants from China who settle in their respective adoptive countries. This happened a few decades ago when they try to escape poverty and war when China was in turmoil. Many has gone to Singapore, Indonesia, Philippines, Malaysia, etc. Thus their wealth grew over the years and it led to them dominating many of the economies in Southeast Asia. 

That influence extended to the Telecommunication industry. Just take PLDT for example. PLDT is majority owned by First Pacific. Who is First Pacific? This belongs to Anthony Salim. Anthony Salim is the son and heir of the indonesian tycoon Liem Sioe Liong (aka Sudono Salim) business empire. Liem Sioe Liong was a close friend of Suharto and at his peak owns BCA bank, Indocement and Indofood and many others. After the asian financial crisis, they had little choice but to sell BCA.

Globe Telecom on the other hand is also owned by the Chinese. It is majority owned by the Ayala family. You may be more familiar with the Ayala Greenbelt shopping malls. 

Same story for Bayan Telecom. It is majority owned by the Lopez family. Another powerful chinese family in the philippines. It has since been sold to Globe and rumors is circulating that there'll be massive retrenchments happening as soon as mar. The Lopez family also owns the media company ABS-CBN that owns Sky cable. Well, talk about power and influence, here's all the top few telecommunications companies in Philippines for you and all owned by the local chinese. 

Verizon Layoffs in Asia

Grapevine has it that Verizon has quietly let go quite a significant number of staffs in Asia including those in the network team.  There was already some changes last year that claimed its first casualty, the once mighty and much feared Ms Yali Liu.  Good for her she has now found a job as VP for ChinaCache.

Testra Buys Pacnet

It is something that the industry has known for years. Pacnet has been desperately seeking buyers as the private equity wants to bail out. They didn't get the $1 billion (asking price from Bill Barney then was $2 billion) they were looking for but got only $697 million (comes with $400 million debt). Finally the private equity can get out. Telstra is now full of cash. Not only did they get $2.8 billion from the sale of CSL New World Mobility to PCCW, they also has $11 billion from selling their fixed network to the NBN co in Australia. Best part of this sale is that NBN gets a old copper and hydrid network. The joke is going around that  the government had repurchased the "old, out of date copper network" that former Prime Minister John Howard sold last century. Winner is surely Telstra and the loser unfortunately are the Australians tax payers.

Now back to the Pacnet sale. How well will this acquisition go is unsure but one thing for sure is the layoff exercise that will come in the months ahead. Pacnet and Telstra has some of the most number of people working in the internationally especially in Asia. Telstra is heavily overstaffed and unfortunately for Pacnet, it has always been the victor that writes the history.

Dating in the same industry?

It's always a little tricky to date someone in the same industry especially when the relationship sours. Then it becomes kinda awkward. It happened again recently in telco industry which left the lady devastated and contemplating suicide. She was dumped mercilessly, rumor has it that it was done via sms. Months ago they were talking about marriage and setting down in UK. Lady is a hong kong chinese and the guy is a British caucasian. Some chinese girls has a thing for Caucasian. Well girls, just opened up your eyes as some of them are just going for a fling while promising you the world to get 'what' they want. The late paramount leader of China Deng Xiao Peng sums it up best when he says, 'regardless of white cat or black cat, a cat that catches mouse is a good cat'. So it doesn't matter whether the guy is white, yellow or black. Just have to learn to look beyond the color.

GTT fires ex-Tinet's NOC

The NOC that help bring Tinet's netwk from tier 2/3 to tier 1 has been shut down. Here's some very sad comments from its ex-employees. I think they must have taken the importance of the NOC with IP skill set too lightly. Will it be a decision that will bring impact to its customers with such drastic action? Customer experience seem to be the lowest priority in GTT management's mind. It is going down the path of cogent to be market leader in price with quality a low focus. GTT seems to be trigger happy when it comes to firing people especially ex-tinet staffs.

Global Cloud Xchange - PacNet alumni?

Reliance Globalcom has being reborn as Global Cloud Xchange. It could finally be becoming a more competitive and international outfit after many years in the wilderness. What's interesting is the senior management are all ex-pacnet's guys. People like Bill Barney who rise like a phoenix to become once again the CEO of GCX, Wifred Kwan as CTO and Ivy Chan and CMO.

Network Readiness Index

Here's the list of the top 10 countries that use infocomm technology to improve economic productivity and social development. Not surprisingly the Scandinavian countries are among the top again except Denmark (#13). What's surprising is that an Asian country is top 2 and that's Singapore. 

State of the Internet

Akamai has released its latest state of the internet report. Surprisingly Indonesia has the 2nd lowest speed in Asia.

What's worst is the response from the Minister of Communication and Information Tifatul Sembiring. Through his Twitter account, he responded with a question," Fellow twitters, what would you use the internet for if its speed is faster? ... :) *IWantToKnowSoMuch* ". 

This must be the ultimate insult and embarrassment to many indonesians who are very tech savvy (no 4 in the world with Facebook subscribers). Talking about ignorance or competence ....

Here's the rest of the report...

Tribute to Happy Zhang Hua Lian of China Telecom

  

Our thoughts and prayers are with Happy Zhang, her family and to

 all on Malaysia Airlines MH370.

New World Number 1 in IP backbone

It's official. We have now a new world number 1 in IP backbone. It is TeliaSonera, the Swedish Giant. They are really growing fast considering where they were a few years ago. Word is that they hired the best kick-ass salesperson in the market and literally just move up the ranking. Well done, It wasn't too long ago that Level 3 was known as the internet. Now TeliaSonera has proven it is possible to kick Level 3 out of the top spot. Hope they stay there long enough.

Layoffs for GTT/Inteliquent

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.

Myanmar Picks Telenor and Ooredoo

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).

Diverse West Bound route with BBG cable?

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.

Another new owner for Inteliquent

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?

Broadband offers in Singapore

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.

Tough times for Tata and Pacnet

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.

And who's number 1 in Myanmar?

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.

Who's the top upstream for North Korea?

I was just curious who is the likely ally in the IP world for a hermit state like North Korea which most of the west are much against. Out of which the Americans are the most vocal. 

To my surprise.....

It is the Americans!!! Well, the Chinese are expected being their closet ally and supporter.

Looks like the Americans are doing business with the devil (or the Axis of Evil).

Clash of the ranking titans

There are a few ranking ranking sites out there for IP. Which is more credible and which is not especially for those who needs to evaluate upstreams. Each claim to have their own algorithm (some are secret) to rank each upstream so it may not be easy to dispute if they are right or wrong. Perhaps we shall go by the industry knowledge about their connectivity especially in Asia.

Let's start with Netconfig.

One AS that stood out is AT&T. They have already left the wholesale market and are not longer active in that space. I am not sure if they even have any more customers connected in Asia at all. Yet they are still ranked number 2. In US, I am sure as they are still the incumbent there. However, for those connecting to AT&T in Asia, I believe you will find alot of routes missing and have to go all the way to US and back. And what is Rostelecom doing up there? They are not even a Tier 1 and probably only have presence in Europe?

For SingTel (an Asian carrier), you should get quite good connectivity in Asia but then it is also not  a Tier 1 and have little POPs in US and Europe.

Let's define Tier 1. There are a few different interpretations out there but the universally accepted ones is one that doesn't buy transit from anyone. 

Next is Fixed and Orbit. 

This also doesn't seem right. AT&T is still there and Hurricane electric (HE) who is also not a Tier 1. They are also not that successful in Asia. Sprint is also not longer active in this space. And what's  Swisscom doing up there?

Next will be Caida.

Ok, this looks more like it. Those top few are really very active in the market place and winning quite a fair bit of customers so they deserved to be up there.  However, for level 3 (AS3356), the connectivity is only in US and Europe as they do not have any POPs in Asia. They have under AS3549 (ex-Global Crossing) which they acquired quite recently but it is still a separate AS number.

Sparkle (AS6762) may be abit high up there as most European ISPs will not consider them a strong contender in those markets. One reason could be because they are cable owner in SMW3/SMW4 and will be stronger in the South Asia market due to this factor.

Lastly, the Renesys. Sorry, you can't see this as it is a paid access (it's not cheap).

This is rather similar to Caida site. It does carefully track the customers acquisitions or even losses by each of the upstream. The reason is the number of prefix is one of the measurement. Whenever an upstream announces new prefix, that means their routing table has increased in size. This matters as it shows the amount of routes you have. Take for example Level 3 (ranked #1), it has about 288k IPv4 prefixes (according to Caida) whereas SingTel (ranked #28) has 29k.  

No dispute for Level 3 in US. They are the undisputed number 1. However, under their Europe and Asia backbone ranking, Level 3 is also number 1. There is some problem here though as in Europe, TeliaNet (TeliaSonera) AS1299 should be number 1 as they have the most number of ISP connected (~90%). In Asia, Level 3 (AS3356) do not even have a POP in Asia and they are still separate from AS3549 (ex-Global Crossing). You will be in trouble if you connect to them for Asia routes. All routes from Asia will still have to go back to US and back. The other issue is of course the cost. It is quite expensive to buy an access to Renesys as it is not free. It is probably the most accurate of them all but the only paid service around. Well, good services and product comes at a price. That's how this world works generally.

Google and Facebook are Top sites in Asia

Google and facebook topped most sites in Asia according to Alexa. These includes Singapore, Malaysia, Hong Kong, Thailand, Indonesia Philippines, India and Taiwan. Well, almost everywhere in the world except China and Russian. In China, they have their own Baidu, QQ, etc. Google is only ranked number 5. 

In Russian, the facebook equivalent is Vkontakte (no 2) and their Google equivalent is Yandex (no 1). 

Google peers with most major carrier in each country and they have been very successful with that. Going to Youtube used to be a painful experience in terms of speed but that has been improved tremendously due to the extensive local peering. That's something that Facebook should be learning too. To top most countries in the world is no easy feat. One must admit that these guys really knows what they are doing.