Tag Archives: investment
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News generated at the LIRNEasia@5 conference
We didn’t quite think we’d be generating news at the conference, but apparently some of what was said was truly newsworthy.
Capital investment in Sri Lanka’s telecom infrastructure has plummeted amid a price war and high taxation which will crimp expansion in the future and broadband roll out in the island, top telecom operators said.
“Before the price war each operator was spending about 150 to 200 million (US dollars) a year in capital expenditure,” Dumindra Ratnayake, head of Tigo Sri Lanka said at a forum organized in Colombo by LirneAsia, a regional policy research body.
“This year all operators put together may have invested about 150 million.”
Expropriation makes a comeback in Russia, with a twist
Glimmerings of a return to the bad old days, when governments “nationalized” telecom companies. The end result was pillage by the government flunkies and bad/no service to the public. The Russians are back in this game, but this time through the courts and with a different beneficiary, the local partner oligarch.
Already jittery investors were alarmed on Thursday when a Norwegian cellphone company announced that a Siberian court had seized its multibillion-dollar investment in a Russian joint venture and would turn it over to a company thought to be allied with a Russian oligarch.
The decision signaled an escalation in a long-running dispute between the Norwegian company, Telenor, and the Alfa Group, an alliance of Russian businessmen that was also at the center of a separate fight with the British oil giant BP last summer. That dispute also shook faith in the Russian market.
Russia’s stock market fell on the news of the asset seizure.
Another telecenter story. Or will the ending be different because it’s Google’s?
The world is awash in telecenter pilots. I thought all the lessons that could be learned, have been learned. Apparently not. Google is bankrolling another pilot in Kenya, including a USD 700/month broadband bill. So, for sustainability we’d need around 700 users spending a tad more than USD 2 per visit? And that would be a little more than what they make in a month? Never mind.
Google paid for the final design of the stations and is covering the monthly fees for satellite bandwidth. The company has also invested in O3b, a start-up that hopes to deploy a constellation of satellites over Africa by the end of next year.
“Building infrastructure is not necessarily Google’s objective, but if you look at all the areas that Google has gone into, in many cases it has been to fill a gap,” said Joseph Mucheru, who heads Google’s East Africa office. “The market should see the opportunity.”
Just how much opportunity there is remains unclear. Google is uncertain whether such satellite stations can pay for themselves in rural areas, given the cost of equipment and bandwidth. Communities may well benefit from the connection, but they do not all have the means to afford it.
Bandwidth ..read more
What should we fear, the exaflood or the data drought?
In all networks, there is a perpetual debate about the growth of whatever flows across it (data, voice telephony, traffic. electricity) and what levels of investment are most appropriate for carrying the future load without deterioration of quality. This debate is going on now, about the Internet and the load likely to be placed on it by proliferating video, the so called exaflood. But then, profits are essential for investment. The quote below is about a data drought that could drive down profits and cause all kinds of bad things to happen.
Panic over, then? Not quite. Perversely, the real threat may come from a reduction in internet-traffic growth, says Dr Odlyzko. Too little internet traffic, he contends, could prove to be more dangerous to the industry than too much. A traffic-growth rate of 50%, combined with steady declines in equipment costs, means revenues are stagnant, “which is hardly a cheering prospect for the industry”. If traffic growth continues to fall—it is already below 10% in Hong Kong, where high-speed access is abundant—there will be slowing demand for faster connections from operators and new equipment from vendors. But if compelling new applications drive the growth rate back up to ..read more
Sri Lanka telecom FDI: Is this the high point?
Meeting the traget of a billion dollars of FDI in 2008 seems to rest on foreign investment continuing at a high rate in telecom. After all, in the first half of the year, telecom brought in USD 291 million, out of a total of USD 425. However, the increasing hostility to the sector driven by the JHU plus the decline in people’s buying power pulled down profits last quarter. The largest mobile operator, Dialog, stated that its capital expenditures for the coming year will be cut by about 25 percent at an investment briefing recently.
One cannot draw conclusions from one quarter, but do not be surprised if the first half of 2008 turns out to be the high point of investment in the sector.
Telecom operators continue to dominate FDI inflows
Contrary to jingoistic claims that foreign owned telcos draining out local resources, the telecom sector continues to bring in new investment from outside. In Pakistan, at one point, 50% of the FDI was telecom. If the breakdown is provided, it may well be that the telecom sector accounts for 50% of FDI in Sri Lanka too.
“The BoI recognized Dialog Telekom as the company with the highest level of realized investment in 2007 totalling 328 million dollars in 2007.” Dialog Telekom, which has over four million subscribers, secured the top slot in investment rankings for the third year in succession having being recognized as Sri Lanka’s largest investor in 2005 and 2006 with investments of 90 million dollars and 150 million dollars.Sri Lanka Dialog Telekom top investor for third year running – LANKA BUSINESS ONLINE
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