Telco Week Flash

Nokia sees Q2 profit drop 61pc

Nokia the finnish mobile phone giant has posted a 61 percent drop in net income for the second quarter on the back of restructuring costs and a slowing market. Net profit for the quarter came to EUR1.1 billion, compared with EUR2.8 billion last year. Analysts had been expecting profit of EUR1.3 billion. It must be said that profit for the second quarter in 2007 was boosted by a gain from the formation of Nokia Siemens Networks (NSN), the Finnish giant's joint venture with Siemens, while this quarter's bottom line was affected by continuing restructuring costs at NSN and a EUR259 million charge from the closure of a manufacturing plant at Bochum, Germany.

Earnings per share for the quarter were EUR0.20, a 60 percent drop on the year-ago figure. Sales for the three-month period to end of June amounted to EUR13.2 billion, just a 4 percent increase on the year-ago figure of EUR12.6 billion. However, the figure was still ahead of analysts' estimates of EUR12.7 billion. NSN contributed EUR4.1 billion to the Nokia coffers, up 18 percent on the year-ago revenue figure of EUR3.4 billion. Nokia said it shipped 122 million mobile phones during the quarter, up 21 percent on the year-ago shipment figure of 100.8 million. According to Nokia it now holds 40 percent of the mobile phone market, up from the 38 percent market share it held in 2007.

In the second quarter Nokia saw a good momentum in the early stages of its services and software business, and believe that the next wave of growth will be driven by devices linked with services. On the infrastructure side, Nokia Siemens Networks delivered a second quarter with good net sales growth and improved profitability. The firm said the market share increase was driven primarily by strong share gains in Latin America, Asia-Pacific and a slight increase in North America. This growth offset a slacking off in the Middle East & Africa, Greater China and Europe.

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Consumer-electronics create wireless standard

The consumer-electronics heavyweights Sony and Samsung and other are uniting to support a technology that could send high-definition video signals wireless from a single set-top box to screens around the home. The recent announcement is an important development in the race to create a definitive way to replace tangles of video cables, but doesn't end it both Sony and Samsung also are supporting a competing technology.

In the new consortium, Sony and Samsung Electronics, along with Motorola, Sharp and Hitachi, will develop an industry standard around technology from Amimon of Israel called WHDI, for Wireless Home Digital Interface. The message of WHDI is very simple if you have a TV in the home, that TV will be able to access any source in the home, whether it's a set-top box in the living room, or the PlayStation in the bedroom, or a DVD player in another bedroom. Amimon is already selling chips that fulfil part of that promise, but the creation of a broad industry group makes it more likely that consumers will be able to buy WHDI-enabled devices from different manufacturers and have them all work together. Amimon expects TVs with chips to reach stores next year, costing about $100 more than equivalent, non-wireless TVs.

Wireless streaming of high-definition video is a relatively tricky engineering problem that many companies are trying to tackle. It can be done with the fastest versions of Wi-Fi, a technology already in many homes, but that requires "compression," or reduction of the data rate, with picture quality degrading as a result. There's also a delay in transmission as chips on both ends of the link work to compress, and then decompress the image.

That's prompted much research into radio technologies that are faster, requiring less compression. A leading contender is WirelessHD, centered on technology from SiBEAM Inc. of Sunnyvale, Calif. It uses an open portion of the radio band, at 60Ghz, for ultrafast transmission of uncompressed video, but it could be years away from commercialization. Its range is limited, meaning that it would be used for in-room links rather than whole-house networking, like WHDI. Sony is part of the WirelessHD group as well, and is supporting WHDI to have "wider options," the company said in an official statement.

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IPTV worldwide user base doubles for second year

IPTV subscribers have more than doubled for the second year running, hitting 15.4 million at the end of March. According a report released by the Broadband Forum and Point Topic, Asia lead the growth with a 132% increase, with subs expanding to 2.6 million while Europe followed with a 117% growth rate and the largest IPTV user base - 8.42 million. Worldwide broadband subscribers have reached over 370 million, with DSL remaining the most dominant access technology with 65% of the world’s subscribers.

However, fiber subscriptions have risen by 33% since the beginning of 2007, with over 10 million people connected to a fiber network. This increase in fiber subscriptions may be attributed to the increased popularity of bandwidth hungry services such as IPTV. The leading technology delivering IPTV today is ADSL2plus, with 12,049,817 subscribers.

IPTV operators around the world have shown that systems are scalable and can handle rapid growth in subscriber numbers, however, developing and agreeing standards will help these operators deliver IPTV more simply and effectively over a variety of access technologies and help to drive higher up take in other markets.

Regional IPTV subscriber growth worldwide, first quarter 2007 and 2008

Region Q1 2007 Q1 2008

Europe 3,875,266

Asia-Pacific 1,129,355 2,619,035

North America 850,601 2,258,601

South and East Asia 1,353,000 2,086,000

Latin America 2,300 11,183

Middle East and Africa 10,000 10,000

TOTAL 7,220,522 15,410,189

Source: Data provided for the Broadband Forum by Point Topic

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Written: by LuisB