Iraq Government Looking to Auction 3G Licenses:

Iraq's government is seeking to sell its 3G licenses to the incumbent mobile networks for at least US$307 million each.

The country's three national mobile networks are currently limited to GSM services, and while customer growth was initially considerable in a country that lacked reliable telecommunications, the lack of 3G services has been a drag in the past couple of years.

Last week the Council of Ministers agreed in principle to auction 3G licences, Ahmed Alomary, a former commissioner at the Communications and Media Commission (CMC), told Reuters.

The reserve price has been set at US$307 million, although that is currently just indicative and could change. The mobile networks, who paid US$1.25 billion each for their licenses in 2007 have long argued that they shouldn't have to pay extra for 3G approvals.

The auction will also be open to new entrants to the market after plans to automatically award the licenses to the three incumbent operators was rejected.

Moody's: China Mobile's Sale of IPhones is Credit Positive:

Moody's Investors Service says that China Mobile's right to sell iPhones on the Mainland is credit positive for the Chinese mobile telecommunications carrier.

Moody's expects that such sales will help China Mobile improve its market positions in the growing areas of 3G and 4G services, while slowing the pace of decline in its average revenue per user (ARPU).

China Mobile's market share for 3G services has been smaller than its overall mobile market share of over 60%, although it maintains the largest share.

As of November 2013, its 3G market share was 45%, while its two major competitors -- China Unicom and China Telecom -- had the shares of 30% and 25%, respectively.

This situation is largely because of the intense competition in 3G services, as well as China Mobile's use of TD-SCDMA. This is a home-grown technology and was initially incompatible with major manufacturers' handsets, including Apple's iPhone.

Algeria awards final 3G licences:

Algerian telecoms watchdog the Autorite de Regulation de la Poste et des Telecoms (ARPT) issued the final licences for the provision of 3G services in the country to all three applicants—Mobilis, Ooredoo Algeria (Nedjma) and Djezzy – on 3 December 2013. News agency Agence Ecofin reports that Mohamed Toufik Bessa, head of ARPT, has also revealed that, in order to save time, the regulator agreed to allow ‘operators to submit their 3G offers for consideration’, with these offers subsequently validated on the same day. Further, the ARPTassigned frequencies and blocks of numbers, suitable for 3G+ technology, to all licensees. 3G services are now expected to be launched commercially on 17 December 2013.

However, some of the operators have reportedly expressed concerns about the obligation for subscribers to change their mobile numbers in order to use the new mobile broadband service. Ooredoo Algeria’s director Joseph Ged stated that it will be difficult for customers to change their SIM cards whenever they want to access the 3G service. In addition to being expensive, he said that it constitutes a double subscription to the same operator. The Algerian Consumer Association has expressed the same opinion, while operators Mobilis and Djezzy have reportedly refrained from commenting on the matter.
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Thailand's True's Debt Ratings Downgraded on Weak Mobile Network Financials:

Moody's Investors Service has downgraded to B3 from B2 the corporate family rating of True Corp, and the corporate family and senior unsecured bond ratings of its consolidated subsidiary, True Move.

Moody's has also placed all ratings under review for further downgrade.

"­The rating action reflects the prolonged character of True Corp's negative free cash flows (FCF), due to weak earnings from the mobile business and a high level of capital expenditures (capex). As a result, we expect its financial and liquidity profiles to remain under pressure in the coming 12-18 months," says Yoshio Takahashi, a Moody's Assistant Vice President.

True Corp's negative FCF rose to THB21 billion for the 12-month period ended September 2013 from about THB6 billion in 2011 and below Moody's expectation. Moody's estimates that its negative FCF will likely remain at a similar level in 2014, given large capital requirements for 3G and the potential for additional spectrum fee payments following the 1.8 GHz spectrum auction in 2014.

At the same time, True Corp's reported consolidated EBITDA margin is likely to stay weak. Its reported consolidated EBITDA margin in Q3 2013 further declined to 17.6% in Q3 2013 from 19.8% in Q1 2013 and 18.8% in Q2 2013.

While a reduction in revenue-sharing costs for expanding 3G revenue may help slightly improve its margins, Moody's expects its reported consolidated EBITDA margin will stay at around or below 20%, due to rapid declines in earnings from 2G services, as well as intensified competition in 3G services.

Algerian Telecom Market Set to Become More Competitive As 3G is Introduced:

Algeria is set to become more competitive as 3G is introduced in 2013 and expected regulatory changes allow number portability and local loop unbundling, according to a new report from Pyramid Research.

"Tight regulations imposed by the government have deterred foreign buyers," says Pyramid Research Analyst, Ousmane Yatera.

Nedjma, the only Ooredoo affiliate without 3G services, expressed high expectations from UMTS technology, and it made a substantial effort to modernize its network in order to comply with the license requirements. Equally, the other operators have been investing a lot of money to improve their infrastructure for 3G. This move will give operators more flexibility to offer data-based services such as mobile video.

"If the mobile operators succeed in building high-quality 3G networks, they could also attract ADSL customers who complain about the quality of service," he adds.