AsiaWatch: Upheaval at Telstra

News Analysis Ray Le Maistre, Editor-in-Chief 12/1/2009

Telstra Corp. Ltd. (ASX: TLS; NZK: TLS), which is currently engaged in a political arm wrestling match with the Australian government, is undergoing yet another transformation under new CEO David Thodey, with its business and management structure undergoing a revamp to match the dramatic change in the operator's network infrastructure made during the past few years. (See Telstra Names New CEO & Chairman.)

Plus there's news of investment plans, contract awards, and more potential 3G postponements from other markets in the APAC region.

Telstra's Thodey has stamped his authority on the Australian incumbent with a corporate reorganization that includes the creation of an international unit that will manage Telstra's overseas assets in China, Hong Kong, and New Zealand (where it has been testing IPTV services), and the formation of two distinct domestic product groups: "PSTN, Fixed Broadband, BigPond & Media," and "Wireless, Data, Applications & Services." (See Telstra Unveils Reorg and Telstra Gets Trendy.)

Telstra, like many other national operators, is looking to build an international as well as a domestic business. It recently announced the expansion of its MPLS capabilities around the Asia/Pacific, and has also been linked to a return to the Indian services market. (See Telstra Expands Asia/Pacific Network.)

Almost immediately after the reorganization was unveiled, Telstra announced plans to reduce its stake in one of its Chinese online operations, SouFun Holdings Ltd., through an IPO, Reuters reports. (See Telstra Cuts Chinese Firms.)

Thodey's reorganization comes as Telstra faces pressure from the Australian government to separate its retail business from its network and wholesale operations, and as the incumbent seeks a way to play a major role in the planned National Broadband Network (NBN) rollout. (See Telstra Reacts to Split Proposal, Telstra Puts AU$1B Price on Separation, Australia Unveils $31B FTTP Plan, and Quigley Named NBN Chief.)

Speaking of which, the NBN has reportedly engaged Goldman Sachs as a financial adviser as it looks for the most efficient way to build Australia's high-speed, fixed broadband network.

With its IPO now completed, Malaysia's Maxis Communications Bhd. reportedly plans to pump further capex into Aircel Ltd. , the Indian mobile operator in which it holds a 74 percent stake. (See Maxis Lists on Malaysian Exchange.)

According to an unconfirmed Financial Times report, Maxis intends to invest $6 billion in Aircel during the next few years. Aircel, India's seventh largest mobile operator with nearly 28 million customers, plans to expand its own network of mobile towers and secure some 3G spectrum (if it ever becomes available). (See India Adds 16.7M Mobile Lines in October, India Faces Further 3G Delay, and A Guide to India's Telecom Market.)

The report also suggests Maxis, which has just reported its third-quarter financial results, will challenge Telekom Malaysia Berhad and WiMax players such as Packet One Networks (Malaysia) Sdn Bhd. (P1) in the broadband services market. (See Maxis Reports Q3, Telekom Malaysia Faces WiMax Challenge, and P1 to Roll out in East Malaysia.)

Thailand's main mobile operators are expecting further delays to the 3G spectrum auction process, reports Reuters. Advanced Info Service plc (AIS) and Total Access Communication plc both believe the auction will take place during the second quarter of 2010, later than previously expected. (See AIS Unveils 3G Plans.)

India's state-owned carrier Bharat Sanchar Nigam Ltd. (BSNL) has received bids from five companies to run franchise WiMax operations around India, the Economic Times reports.

Huawei Technologies Co. Ltd. , ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763), and UTStarcom Inc. (Nasdaq: UTSI) are believed to have landed the lion's share of a major IPTV set-top box deal awarded by China Telecom Corp. Ltd. (NYSE: CHA), according to a report from Marbridge Consulting. (See China Set for IPTV Explosion.)

While China Mobile Ltd. (NYSE: CHL) prepares to trial its next-generation mobile network during the World Trade Fair in Shanghai in 2010, China Telecom is preparing to put its next-gen CDMA EV-DO (Rev B) capabilities to the test in the same city at some point soon, according to JLM Pacific Epoch. The carrier announced earlier this year that it has been working with Alcatel-Lucent (NYSE: ALU) on its Rev B. Plans. (See China Telecom Trials AlcaLu.)

Other news worth noting from the Asia/Pacific region includes:

— Ray Le Maistre, International News Editor, Light Reading