Wednesday, March 11, 2009

Ericsson Updates its Employee Stock Compensation Plans

Ericsson's Board of Directors will propose a new Long-Term Variable Remuneration Program for consideration at the company's annual general meeting on April 22, 2009. The program comprises in total 27 million B-shares and is divided into three plans: (1) a Stock Purchase Plan embracing all employees, designed to award employees one Ericsson share for each share invested in under the plan, (2) a plan for up to ten percent of the employees selected as key contributors to receive a second matching share, and (3) a plan embracing the CEO and other senior managers, up to 0.5 percent of employees who at a maximum can earn a further four, six or eight matching shares in addition to the ordinary matching share under the Stock Purchase Plan, provided that certain financial goals are met.

Matching under the program presupposes that the employee invests part of the salary (up to 7.5 percent, the CEO: 9 percent, of the gross fixed salary) in Ericsson shares, retain the shares and remains in employment at the time of the matching, three years after the investment.

The proposal gives the shareholders the opportunity to vote for each of the respective plan, including its financing. Further details are posted on the company's website.

Skype Targets $1 Billion in 2011 Revenue

Skype is expected to more than double its revenue to over $1.0 billion in 2011.

Skype is expected to more than double its revenue to over $1.0 billion in 2011. With more than 400 million registered users currently, Skype's metrics continue to accelerate as the company further establishes leadership in free and paid internet-based voice and video communications, with growth opportunities in core consumer, mobile, businesses and platform. Skype's leadership position has strengthened over the past year, driven by a new management team and the launch of many innovative products.

ILS Selected to Launch ViaSat-1 Satellite in First Half 2011

International Launch Services (ILS) has been awarded a contract for the launch of the ViaSat-1 satellite on an ILS Proton. The satellite is under construction by Space Systems Loral and is scheduled to launch in the first half of 2011 from the Baikonur Cosmodrome in Kazakhstan. ViaSat-1 is a high capacity Ka-band spot beam satellite, which is expected to be the highest capacity of all current and planned North American satellites with 10 times the throughput of any other Ka-band satellite. ViaSat-1 will provide broadband Internet services to customers and businesses across North America.

Dell'Oro: Carrier IP Telephony Market Loses 20% of Value in Q4 2008

The carrier IP telephony market contracted 20 percent in the fourth quarter of 2008 compared to the same quarter in 2007, due in large part to significantly lower sales in developing regions, according to a recent report published by Dell'Oro Group.

Despite continued financial struggles and corporate restructurings, Nortel regained the market's top vendor position based on revenue in the fourth quarter with 13 percent market share. The report indicates that Huawei, which has a strong presence in developing regions, lost market share in the fourth quarter; however, its market share was up for the full-year 2008.

"Developing regions have been a key growth driver for the carrier IP telephony market, as new construction and rising incomes have driven investments in fixed-line telephony services," said Greg Collins, Vice President at Dell'Oro Group. "While we saw a market decline coming from developing regions in the fourth quarter of 2008, it is unclear exactly to what extent the decline in consumer demand in the U.S. will affect the future economies of developing regions, which have relied largely on exports to the U.S. for their growth," he added.

Epitiro Launches LTE Test Suite

Epitiro introduced a packet-domain test solution for UMTS long term evolution (LTE) device manufacturers and mobile network operators (MNO). The suite is comprised of LTELab and ISP-I TM LTE.

Epitiro said its LTELab is designed to empower LTE cell designers and MNO product assessment engineers with the ability to test an LTE cell under real network stress. Over 200 simultaneous LTE-based broadband sessions can be established as can an unlimited number of other mobile voice and data sessions (2G, 3G, 3.5G, HSDPA). LTELab's ability to generate and monitor the performance of these types of traffic in a lab environment is a distinct advantage over test gear that only simulates network conditions.

For early LTE movers entering field trials, Epitiro has added a new portfolio of LTE analysis features to ISP-I, its flagship broadband monitoring platform. Enhancements include the ability to accurately measure broadband speeds in excess of 300Mb/sec as well as modifications to reporting and database formatting.

'We Need Broadband' Campaign Launched for Rural America

Colorado-based RidgeviewTel has launched a website that enables residents and businesses in communities under-served by broadband Internet access to register their location and desire for federal assistance under the Obama broadband stimulus plan.

Only a name and address is required to map a potential subscriber's location. Ridgeview said the more locations mapped in a community, the more attractive it becomes for the $7.2 billion in grant dollars for broadband in the 2009 American Recovery and Reinvestment Act. It is expected that large telecommunications companies will vie for those dollars, and communities that have already been mapped for service will be more attractive to them also.

Bell Canada Appeals Regulatory Decision

Bell Canada is asking the nation's federal government to confirm that investment in next-generation communications networks should be encouraged as a matter of policy by overturning a decision and companion order by the Canadian Radio-television and Telecommunications Commission (CRTC).

Specifically, Bell Canada argues that a regulatory order issued in December (Telecom Decision 2008-117 and companion order Telecom Order 2009-111) threatens to slow and even eliminate such network investments in many communities by forcing telecommunications companies to provide competitors with regulated access to their newly constructed next-generation networks, such as the high-speed Fibre to the node (FTTN) being rolled out by Bell and other carriers.

"As in any other competitive industry in Canada, we should be able to choose who distributes our services and how, be it wholesale, retail, direct or any other creative form of distribution channel," said George Cope, President and CEO of BCE and Bell. "The alternative of regulated access will have significant implications for our network and other investments going forward. Despite current economic conditions, BCE has committed to investing more than $2.5 billion in the Canadian economy in 2009 alone."

"By regulating who can sell our next-generation network services and how, the CRTC decision alters the financial case for the $700 million we are investing in accelerating the deployment of our next-generation fibre over the next three years and puts further investment at risk," added Kevin Crull, President, Bell Residential Services. "If this decision stands, we will have to revise the pace, extent and location of our network roll-out, re-evaluating all our deployment plans in locales outside of Montreal and Toronto, where fibre rollouts are complete."

Google Readies Release of Voice Application

Google is preparing to launch a voice application that helps consolidate multiple phone lines and voice mailboxes into a single-box service.

Google Voice, which is based on the GrandCentral service that Google acquired in July 2007, provides the user with a single phone number that will ring your home, work, and mobile phones, a central voicemail inbox that you could access on the web, and the ability to screen calls by listening in live as callers leave a voicemail. Google Voice is initially available only to users of the preceding GrandCentral service, but the company plans to release the application to the general public in the coming weeks.

Among its other features, Google Voice provides transcripts of incoming voicemail and enables the ability to search all of the SMS text messages you send and receive. You can also use the service to make low-priced international calls and easily access Goog-411 directory assistance.

Ericsson: Slowdown Not as Dramatic as 2001-2003

Despite similarities to the 2001--2003 market downturn, Ericsson does not anticipate a major slowdown for the mobile telecoms industry. The company cites several reasons: operator have significantly strengthened their balance sheets, growth expectations are more realistic and network utilization is materially higher. Ericsson also expects slowing GDP to cause less than proportionate declines in mobile and broadband revenue for several reasons: 1) there are better substitutes for traditional fixed telephone services (e.g. mobile, VoIP ) than previously; 2) term contracts and bundling make it
more difficult (or at least slower) for subscribers to reduce spending; and 3) mobile communications and the Internet are much more pervasive and engrained in today's society. Despite this, Ericsson noted that some operators in Western Europe have shown a progressive deterioration in their business during the year, which has negatively affected suppliers,
especially mobile phone manufacturers including Sony Ericsson. There is also a trend by major operators to preserve capital during the downturn. But here again, Ericsson expects a less dramatic reduction in spending on network equipment than in 2001-- 2003.

Ericsson's 2008 Annual Report comments on other significant trends for the industry, including the following.

Weakening Global Economy Affecting Mobile Handset Sales -- many operators are pushing SIM card-only plans to reduce subsidies and preserve cash. This is slowing the demand for replacement phones especially in the mid-to-high end price range as consumers postpone upgrading their mobile phones. The drop in replacement rates is most noticeable in Western Europe.

Positive Correlation between Broadband Penetration and GDP levels -- studies of the relationship between broadband penetration and economic development indicate that broadband plays a fundamental role in accelerating the economic and social development of a country. As already demonstrated by the mobile telephone, the ubiquitous availability of affordable communication services has a positive effect on a country's economy.

Fixed and mobile broadband Main Market Driver -- Ericsson expects the number of fixed and mobile broadband subscriptions to increase by a factor of 7 between 2008 and 2014 to almost 3.5 billion. Broadband Internet access revenues for fixed operators (including cable operators) are expected to grow from 20 percent to 35 percent of total revenues in the next five years. Similarly, data's share of mobile operators' revenue, which is currently some 20 percent, is expected to account for a progressively more significant portion of global mobile revenues over the next five years.

Broadband Access Creates Bottlenecks in other Parts of the Network -- the increased capacity of the access nodes brings pressure on the backhaul part of the transport network. The additional backhaul capacity must be provided more dynamically and more efficiently than possible with traditional backhaul solutions.

The Future of TV -- some 850 million households have television services of which only 20 million are currently served by IPTV. This number is expected to grow to above 100 million by end of 2014. Ericsson does not expect operators to
become marginalized as bit pipe providers.

Mobility is changing the Internet -- multimedia-capable mobile Internet devices and affordable mobile broadband access are harbingers of change. This will have the greatest impact on emerging markets where household penetration of PC s is slightly more than 10 percent compared with 60 percent in mature markets.

Operator Consolidation and Network Sharing -- Operator consolidation continues across all regions. In the Americas, consolidation has substantially reduced the number of operators. In Europe, mergers continue as well as other types of combinations, such as network sharing and outsourcing of network operations. In other regions, operator consolidation has led to the emergence of rapidly growing pan-regional operators, particularly in the CEMA markets (Central and Eastern Europe, Middle East and Africa). Ongoing operator consolidation, especially in Western Europe, where the technology shift for more efficient networks, as well as changing regulations, such as price caps for roaming and lower call termination fees, is affecting operator willingness and need to increase network investments in the near term. This trend is most pronounced for highly penetrated GSM networks.

Network sharing offers potentially significant CAPEX and OPEX savings to operators. However, Ericsson believes the overall impact of network sharing should ultimately be neutral for mobile equipment vendors.

Ericsson full 2008 Annual Report is available on its website.

M.I.T. Researchers Develop Fast Lithium Ion Battery

Researchers at the Mssachusetts Institute of Technology (MIT) have developed a lithium ion battery with a unique surface structure that enables it to be fully-charged or discharged in 10 to 20 seconds compared to several minutes for a conventional battery. Furthermore, batteries with new surface structure do not degrade as much when repeatedly charged and recharged. This could lead to smaller, lighter and quickly-rechargable batteries for applications ranging from handheld electronics to electric cars.

The work, led by Gerbrand Ceder, the Richard P. Simmons Professor of Materials Science and Engineering, is reported in the March 12 issue of Nature.