THE WRAP: NSN sacks 17k, IDA gets power boost
It was the week that saw NSN make plans to sack 17,000 staff, as Singapore’s regulator gained the power to split up companies and the US began formally investigating Chinese equipment vendors.
Nokia Siemens chief Rajeev Suri revealed plans this week to restructure the company over the next two years after failing to drag itself out of the red in 2011.
NSN will switch its focus to mobile broadband networks and managed services, sell businesses deemed to be non-core, or manage them for value and shave €1 billion from the firm’s operating costs. That also means slashing 17,000 jobs along the way.
It was also the week that Infocomm Development Authority of Singapore (IDA Singapore) was granted new regulatory powers after the Singapore parliament amended the nation's Telecommunications Act, including giving the telecom minister the right to order the structural separation of an operator.
Under the new law, the government will also allow takeover of a telecom service by a third-party in the event of insolvency by the owner, and the IDA will have tougher powers in imposing fines. The IDA pledges to wield its new powers only as a last resort.
The week also spelled more headaches for Chinese telecoms equipment vendors hoping to crack the US market, after a US government committee launched a full investigation into the potential security threat of such companies.
The House permanent select committee on intelligence (HPSCI) said it will review the extent to which the vendors provide the Chinese government with the opportunity to more effectively conduct online espionage. China’s commerce minister called on the US government not to “politicize trade issues”.
Chinese vendors weren’t the only ones under investigation this week – FCC chairman Julias Genachowski calling a hearing to evaluate AT&T's $39 billion (€29.4 billion) bid to acquire T-Mobile USA.
Genachowski expressed concerns that the deal would be against the interest of consumers and significantly diminish competition, the Wall Street Journal reported. The move comes after the US Department of Justice sued to block the deal in September.
There was even more investigation action in India this week, as the Central Bureau of Investigation raided the offices of Bharti Airtel and Vodafone in a probe into new allegations of spectrum allocation conspiracies.
Coincidentally, Bharti Airtel and Vodafone Essar, as well as Idea Cellular, called on the government this week to refund their 3G license payments if domestic 3G roaming pacts are declared illegal.
There was some good news this week for Chinese and Indian device makers. Gartner claims that Chinese vendor G’five and Indian manufacturers Karbonn Mobile and Micromax, occupy the top five in India’s device sales chart behind market leader Nokia and second place Samsung. Local players are weakening the efforts of major global brands in the market by focusing on low-end devices.
Meanwhile, China – which now has 950 million mobile users – is now the world's biggest smartphone market by volume, having taken the crown from the US in the third quarter, according to analysts, although the US still leads the world in terms of quarterly smartphone sales revenue.
And finally, it was the week that Web porn giants sued ICANN and domain name registrar ICM Registry over the creation of the .xxx TLD.
Manwin Licensing and Digital Playground are accusing the bodies of acting anti-competitively and ICM of abusing its position. They claim the TLD forces owners of trademarks and domain names to purchase expensive "defensive registration" from ICM to prevent cyber-squatting. The lawsuit isn’t entirely unexpected – a number of big-name adult brands have criticized the .xxx TLD and ICM’s status as sole registrar. Hustler president Michael Klein said earlier this year that his company would not be “shaken down” by ICM to protect its IP and would sue ICM if it sells any of Hustler’s trademarks to a third party.