Mobile operators stand to gain by investing in mobile advertising, but only if they ensure it is implemented correctly, according to a new report, The Mobile Advertising and Marketing Revolution, published this week by Analysys, the global advisers on telecoms, IT and media (http://research.analysys.com).
“Mobile advertising could provide an additional revenue stream for operators – but it must be implemented carefully. Flooding mobile phones with advertising would destroy consumer confidence and, with it, the potential value of the mobile advertising market,” says the report’s author, Martin Scott, Analyst at Analysys.
“If they focus on delivering mobile advertisements that are unobtrusive and relevant to the target audience, operators and advertisers may be able to create a mutually beneficial cycle of revenue and rewards,” Scott explains. “Virgin Mobile USA, for example, seems to have achieved this with its Sugar Mama advertising campaign.”
The motivation for operators to develop mobile advertising has been limited, as voice services have historically yielded the quickest return on network investment. However, in mature markets, core voice revenues are no longer delivering the growth that they once did. Analysys Research forecasts that, in Western Europe, mobile voice revenue will grow at a CAGR of only 2.3% between 2006 and 2012. Mobile operators need new sources of revenue to provide future growth – and mobile advertising could be one such source.
Operators, handset manufacturers and content providers need to grasp both the dynamics of the advertising space and the full potential of the mobile advertising market. According to Scott, “Obstacles to mobile advertising are now beginning to fall, making it more feasible for operators, handset manufacturers and advertising agencies to exploit the revenue potential of mobile advertising.”
The Mobile Advertising and Marketing Revolution identifies the value chains at play and explains how operators can maximise the share of revenue they take from the mobile advertising market. The report presents scenarios for the future of mobile advertising, indicates which forms of mobile advertising will be most effective and shows how mobile advertising can benefit operators, advertisers and consumers alike.
The report is available to purchase online at http://research.analysys.com/store, priced at GBP1500 (approximately EUR2150) plus VAT.
Editors Note: A press summary is available for this report. Contact Gina Ghensi on +44 (0)1223 460600 or press@analysys.com
About Analysys (www.analysys.com)
Analysys provides strategy and management consultancy, information services and start-up support throughout the telecommunications, IT and media sector. Its grasp of market dynamics, coupled with creativity, rigour and renowned objectivity, enables Analysys to consistently exceed the high levels of quality and innovation that its clients expect. The company has over 160 staff worldwide, and, as part of the Analysys Mason Group, has offices in Cambridge, Dublin, Edinburgh, London, Madrid, Manchester, Milan, Paris, Singapore and Washington DC.
Media contact:
Gina Ghensi
Analysys
Tel: +44 (0)1223 460600
Email: press@analysys.com
Web: http://www.analysys.com/media
RSS feed: http://www.analysys.com/rss/analysys-rss.xml
Sunday, September 30, 2007
Tuesday, September 25, 2007
Telco Daily 25-Sept-2007
BRUSSELS SPLIT OVER TELECOMS
The EU commissioner Viviane Reding has proposed that telecom operators with a dominant market position could be forced to separate its networks and services divisions. Now, other EU commissioners warn the proposed review could create more bureaucracy and harm investment, especially in ultra-fast broadband networks. Some national regulators in the union already have the power to impose functional separation, but Reding wants to ensure all telecoms authorities can apply the measure in a consistent way. (Financial Times)
BLYK TAPS EUROPEAN MOBILES
Blyk, the first UK mobile operator to offer customers free phone calls in return for accepting advertising on their handsets, plans to expand into continental Europe. Large groups such as Google and Vodafone are also weighing plans to turn such advertising into a significant revenue source. Blyk was co-founded by Pekka Ala-Pietila, former president of Nokia, and is targeting 16- to 24-year-olds, who have become difficult to reach with advertising because their reading and viewing habits are so fragmented. (Financial Times)
MYSPACE LAUNCHES FREE MOBILE SERVICE
The Web site MySpace is launching a free, advertising-supported cellphone version Monday as part of a wider bid by parent News Corp. to attract advertising for mobile Web sites. News Corp.'s Internet properties, also plans to roll out versions of FoxSports.com, the gaming site IGN, AskMen and its local TV affiliates in the coming months that will work on cell phones that can access the Internet. The new MySpace version will work on all U.S. carriers and will allow users to send and receive messages and friend requests, comment on pictures, post bulletins, update blogs, and find and search for friends. "Accessing the Internet from your mobile phone will soon be as common as text messaging and voice calling," said John Smelzer, senior vice president of mobile at Fox Interactive. (Wall Street Journal)
The EU commissioner Viviane Reding has proposed that telecom operators with a dominant market position could be forced to separate its networks and services divisions. Now, other EU commissioners warn the proposed review could create more bureaucracy and harm investment, especially in ultra-fast broadband networks. Some national regulators in the union already have the power to impose functional separation, but Reding wants to ensure all telecoms authorities can apply the measure in a consistent way. (Financial Times)
BLYK TAPS EUROPEAN MOBILES
Blyk, the first UK mobile operator to offer customers free phone calls in return for accepting advertising on their handsets, plans to expand into continental Europe. Large groups such as Google and Vodafone are also weighing plans to turn such advertising into a significant revenue source. Blyk was co-founded by Pekka Ala-Pietila, former president of Nokia, and is targeting 16- to 24-year-olds, who have become difficult to reach with advertising because their reading and viewing habits are so fragmented. (Financial Times)
MYSPACE LAUNCHES FREE MOBILE SERVICE
The Web site MySpace is launching a free, advertising-supported cellphone version Monday as part of a wider bid by parent News Corp. to attract advertising for mobile Web sites. News Corp.'s Internet properties, also plans to roll out versions of FoxSports.com, the gaming site IGN, AskMen and its local TV affiliates in the coming months that will work on cell phones that can access the Internet. The new MySpace version will work on all U.S. carriers and will allow users to send and receive messages and friend requests, comment on pictures, post bulletins, update blogs, and find and search for friends. "Accessing the Internet from your mobile phone will soon be as common as text messaging and voice calling," said John Smelzer, senior vice president of mobile at Fox Interactive. (Wall Street Journal)
Sunday, September 23, 2007
NetScout to acquire Network General for $205 million
NetScout Systems plans to spend about $205 million in cash, stock and debt to acquire competing and complementary network service assurance vendor Network General.
The newly merged company will approximately double NetScout’s current revenue rate in 2009 and further NetScout’s “vision of providing superior network-based performance management based on a KPI (key performance indicator) Flow/Packet paradigm,” the two companies said in a news release.
The acquisition is also expected to accelerate NetScout’s push into the wireless service provider segment by expanding its real-time monitoring and reporting performance monitoring and troubleshooting offering.
The deal is expected to be completed by early November and is one more sign that the entire telecommunications space is again converging. In this case, the double-sized company hopes to compete more effectively against bigger vendors in the wireless space, pitting real-time monitoring and reporting against established deep packet inspection techniques.
Source: http://www.telecommagazine.com/newsglobe/article.asp?HH_ID=AR_3488
The newly merged company will approximately double NetScout’s current revenue rate in 2009 and further NetScout’s “vision of providing superior network-based performance management based on a KPI (key performance indicator) Flow/Packet paradigm,” the two companies said in a news release.
The acquisition is also expected to accelerate NetScout’s push into the wireless service provider segment by expanding its real-time monitoring and reporting performance monitoring and troubleshooting offering.
The deal is expected to be completed by early November and is one more sign that the entire telecommunications space is again converging. In this case, the double-sized company hopes to compete more effectively against bigger vendors in the wireless space, pitting real-time monitoring and reporting against established deep packet inspection techniques.
Source: http://www.telecommagazine.com/newsglobe/article.asp?HH_ID=AR_3488
Thursday, September 20, 2007
Telco Daily 20-Sept-2007
KDDI and Intel to bid for WiMax licence in Japan
KDDI and Intel are leading a joint venture to bid for a WiMax licence in Japan. The joint venture, that is called Wireless Broadband Planning, will bid for the 2.5 gigahertz frequency band and, if successful, will launch a mobile wireless broadband business. The new company said it intended to become a global leader in WiMax and would offer services globally through roaming agreements. NTT DoCoMo has partnered ACCA Networks to seek a WiMax licence. The Japanese government is expected to hand out two licences by the end of the year. (Financial Times)
Wireless Spectrum Is on Hold
US carriers, which spent billions of dollars in last year's government auction of airwaves, have been unable to use a major portion of this spectrum because of the surveillance activities of several federal agencies. For T-Mobile, the issue is impeding its US expansion. The company was the largest bidder, having spent nearly USD4.2 billion to acquire the spectrum. The government agencies were given USD1.1 billion raised in the auction to relocate to other radio spectrum, but most of them have yet to move. T-Mobile has also offered to pay up to USD50 million to buy new equipment or modify existing equipment for the agencies to use temporarily. However, a Commerce Department spokesperson said the government likely wouldn't view this proposal favorably. (The Wall Street Journal)
NOKIA AGREES TO BUY CELLPHONE-AD FIRM
Nokia has agreed to acquire a Boston company that displays ads on cell phones. The 120-person Enpocket works directly with cell phone operators such as Sprint Nextel, Vodafone and Bharti Airtel. It has powered mobile ads for brands such as Hyundai and Pepsi. (The Wall Street Journal)
BRUSSELS IN FRESH THREAT TO MOBILE GROUPS
Viviane Reding, the EU media commissioner, is threatening to draw up new rules that could harmonise how much mobile operators can charge for connecting calls to their networks. She is concerned the charges vary widely across the 27 EU member states, and wants national regulators to adopt a common approach. The rates are known as wholesale charges because they are paid by operators rather than consumers. In the UK, the charges represent about 15 percent of mobile operators' revenues. (Financial Times)
T-MOBILE IN IPHONE DEAL
Deutsche Telekom´s T-Mobile subsidiary has secured the rights to sell Apple´s iPhone exclusively in Austria, the Netherlands, Hungary and Croatia, in addition to Germany. (Financial Times)
KDDI and Intel are leading a joint venture to bid for a WiMax licence in Japan. The joint venture, that is called Wireless Broadband Planning, will bid for the 2.5 gigahertz frequency band and, if successful, will launch a mobile wireless broadband business. The new company said it intended to become a global leader in WiMax and would offer services globally through roaming agreements. NTT DoCoMo has partnered ACCA Networks to seek a WiMax licence. The Japanese government is expected to hand out two licences by the end of the year. (Financial Times)
Wireless Spectrum Is on Hold
US carriers, which spent billions of dollars in last year's government auction of airwaves, have been unable to use a major portion of this spectrum because of the surveillance activities of several federal agencies. For T-Mobile, the issue is impeding its US expansion. The company was the largest bidder, having spent nearly USD4.2 billion to acquire the spectrum. The government agencies were given USD1.1 billion raised in the auction to relocate to other radio spectrum, but most of them have yet to move. T-Mobile has also offered to pay up to USD50 million to buy new equipment or modify existing equipment for the agencies to use temporarily. However, a Commerce Department spokesperson said the government likely wouldn't view this proposal favorably. (The Wall Street Journal)
NOKIA AGREES TO BUY CELLPHONE-AD FIRM
Nokia has agreed to acquire a Boston company that displays ads on cell phones. The 120-person Enpocket works directly with cell phone operators such as Sprint Nextel, Vodafone and Bharti Airtel. It has powered mobile ads for brands such as Hyundai and Pepsi. (The Wall Street Journal)
BRUSSELS IN FRESH THREAT TO MOBILE GROUPS
Viviane Reding, the EU media commissioner, is threatening to draw up new rules that could harmonise how much mobile operators can charge for connecting calls to their networks. She is concerned the charges vary widely across the 27 EU member states, and wants national regulators to adopt a common approach. The rates are known as wholesale charges because they are paid by operators rather than consumers. In the UK, the charges represent about 15 percent of mobile operators' revenues. (Financial Times)
T-MOBILE IN IPHONE DEAL
Deutsche Telekom´s T-Mobile subsidiary has secured the rights to sell Apple´s iPhone exclusively in Austria, the Netherlands, Hungary and Croatia, in addition to Germany. (Financial Times)
Tuesday, September 18, 2007
Infrastructure awards wrap-up: Ericsson, Alvarion, Nokia Siemens and more
The following list details this week's infrastructure awards for the cellular, WiFi, and WiMAX industries. The contracts are broken down by transmission technology, country and vendor. The value of the contract is included when available.
Cellular
Sweden: L.M. Ericsson said it upgraded 3 Scandinavia’s HSPA network to support downlink speeds of up to 7.2 Mbps and uplink speeds of 1.4 Mbps.
Uruguay: Movistar chose L.M. Ericsson to be its sole supplier and network integrator for a W-CDMA/HSPA core and radio network.
WiMAX
Cayman Islands: Digicel Group has chosen Alvarion Ltd. to provide its 802.16e 4Motion Mobile WiMAX solution as part of the carrier’s first WiMAX launch.
India: Sequans Communications said Telsima is using its chips in its StarMAX product line that supports both 802.16-2004 fixed and 802.16e-2005 mobile WiMAX networks. The solution is being deployed now in India.
Miscellaneous
Israel: Nokia Siemens Networks said it has been chosen by Cellcom Israel to develop its Next Generation Network.
Spain: GigaBeam Corp. said it received its first purchase order for a WiFiber link from F2-Tel Ingenieria de Telecomunicacion. The links are being used by a Spanish university, said the company.
Cellular
Sweden: L.M. Ericsson said it upgraded 3 Scandinavia’s HSPA network to support downlink speeds of up to 7.2 Mbps and uplink speeds of 1.4 Mbps.
Uruguay: Movistar chose L.M. Ericsson to be its sole supplier and network integrator for a W-CDMA/HSPA core and radio network.
WiMAX
Cayman Islands: Digicel Group has chosen Alvarion Ltd. to provide its 802.16e 4Motion Mobile WiMAX solution as part of the carrier’s first WiMAX launch.
India: Sequans Communications said Telsima is using its chips in its StarMAX product line that supports both 802.16-2004 fixed and 802.16e-2005 mobile WiMAX networks. The solution is being deployed now in India.
Miscellaneous
Israel: Nokia Siemens Networks said it has been chosen by Cellcom Israel to develop its Next Generation Network.
Spain: GigaBeam Corp. said it received its first purchase order for a WiFiber link from F2-Tel Ingenieria de Telecomunicacion. The links are being used by a Spanish university, said the company.
Friday, September 14, 2007
Telco Daily 14-Sept-2007
Alcatel-Lucent plunges after third warning
Alcatel-Lucent has slashed its forecast for full-year revenue growth to nearly zero as a result of a slowdown in capital spending among its wireless customers in North America. The group had counted on higher volume sales to compensate for the price cuts it has undertaken in order to compete with Ericsson. Alcatel-Lucent, which is struggling to implement a cost savings plan that will result in more than 12,000 job cuts, said it planned to press ahead with its plans and was confident of hitting its target for synergy related savings of EUR600million this year. This was Alcatel-Lucent’s third outlook warning this year.
Vivendi in Oger Telecom stake talks
Vivendi, the French media group, is in talks that could lead to it investing in Oger Telecom, the Dubai-based company that owns telecoms businesses in emerging markets. Jean-Bernard Lévy, Vivendi’s chief executive, said: “We have repeatedly said we were looking for investments in fast-growing economies in the telecoms area.” Vivendi has a controlling stake in SFR, France’s second largest mobile operator, and Maroc Telecom, Morocco’s leading carrier.
T-Mobile considers network sharing plan with 3
FT writes that T-Mobile, the UK's fourth-biggest mobile operator, is considering pooling its network infrastructure with 3, its loss making rival, in a move that could provide both companies with significant cost savings. Some analysts said the network sharing plan, if concluded, could pave the way to T-Mobile to buy 3. T-Mobile and 3 declined to comment.
Alcatel-Lucent has slashed its forecast for full-year revenue growth to nearly zero as a result of a slowdown in capital spending among its wireless customers in North America. The group had counted on higher volume sales to compensate for the price cuts it has undertaken in order to compete with Ericsson. Alcatel-Lucent, which is struggling to implement a cost savings plan that will result in more than 12,000 job cuts, said it planned to press ahead with its plans and was confident of hitting its target for synergy related savings of EUR600million this year. This was Alcatel-Lucent’s third outlook warning this year.
Vivendi in Oger Telecom stake talks
Vivendi, the French media group, is in talks that could lead to it investing in Oger Telecom, the Dubai-based company that owns telecoms businesses in emerging markets. Jean-Bernard Lévy, Vivendi’s chief executive, said: “We have repeatedly said we were looking for investments in fast-growing economies in the telecoms area.” Vivendi has a controlling stake in SFR, France’s second largest mobile operator, and Maroc Telecom, Morocco’s leading carrier.
T-Mobile considers network sharing plan with 3
FT writes that T-Mobile, the UK's fourth-biggest mobile operator, is considering pooling its network infrastructure with 3, its loss making rival, in a move that could provide both companies with significant cost savings. Some analysts said the network sharing plan, if concluded, could pave the way to T-Mobile to buy 3. T-Mobile and 3 declined to comment.
Wednesday, September 12, 2007
Envivio to Showcase WiMax TV at IBC Event
Envivio, a technology provider of IP video convergence encoding solutions from mobile to HD, and broadcast infrastructure provider National Grid Wireless are teaming up to deliver streamed TV, alongside VoIP and data, across a WiMAX network.
The network, which uses a full head-end with an Envivio Mobile TV encoder, will be available throughout the RAI Congress Centre during IBC2007 from September 7 - 11. Deploying the open systems-based solution enables mobile WiMAX operators to reach the three screens of video - TVs, PCs and mobile phones - and supports a variety of revenue generating business models by providing subscribers with anytime, anywhere connection capabilities.
From 3G to xDSL to WiMax, the Envivio mobile to HD encoders make video a reality over any type of network and to any multimedia device. Supporting a wide range of network protocols, resolutions, codecs, bit rates and devices, Envivio convergence solutions, like the one featured with National Grid Wireless at IBC2007, deliver video quality at the lowest bit rate.
Peter Mathers, CTO, National Grid Wireless, said, "Our experience and expertise in the design and deployment of shared networks within the broadcast sector provides us with a great foundation to meet the needs of the converged services of the future. This demonstration provides a great opportunity for us to showcase some of the leading media on the move technologies. Envivio, along with our other demonstration partners, have been critical to making this a success."
Julien Signes, President and CEO of Envivio Inc., said, "WiMAX is one of the leading access network contenders for future wireless services. Working with National Grid Wireless has given us an excellent venue to showcase the compatibility of our highly interoperable encoders with this access network. The encoders clearly work over any network regardless of the end device and can truly support a convergence-minded service provider."
The network, which uses a full head-end with an Envivio Mobile TV encoder, will be available throughout the RAI Congress Centre during IBC2007 from September 7 - 11. Deploying the open systems-based solution enables mobile WiMAX operators to reach the three screens of video - TVs, PCs and mobile phones - and supports a variety of revenue generating business models by providing subscribers with anytime, anywhere connection capabilities.
From 3G to xDSL to WiMax, the Envivio mobile to HD encoders make video a reality over any type of network and to any multimedia device. Supporting a wide range of network protocols, resolutions, codecs, bit rates and devices, Envivio convergence solutions, like the one featured with National Grid Wireless at IBC2007, deliver video quality at the lowest bit rate.
Peter Mathers, CTO, National Grid Wireless, said, "Our experience and expertise in the design and deployment of shared networks within the broadcast sector provides us with a great foundation to meet the needs of the converged services of the future. This demonstration provides a great opportunity for us to showcase some of the leading media on the move technologies. Envivio, along with our other demonstration partners, have been critical to making this a success."
Julien Signes, President and CEO of Envivio Inc., said, "WiMAX is one of the leading access network contenders for future wireless services. Working with National Grid Wireless has given us an excellent venue to showcase the compatibility of our highly interoperable encoders with this access network. The encoders clearly work over any network regardless of the end device and can truly support a convergence-minded service provider."
Media morph: WiMax
What it is: Wi-Max is a term you've likely been hearing a lot lately. Short for ``worldwide interoperability for microwave access,'' it is your home or Starbucks Wi-Fi system set free. It's a far-reaching cable- and DSL-broadband alternative that can be used not only on personal computers, but also on most electronic devices like mobile phones or even digital cameras. Sprint Nextel Corp. has teamed up with Clearwire to develop a nationwide network, in effect betting its future on Wi-Max. Tests should be running in Chicago and Washington in early 2008.
The societal effect: Wi-Max promises to bring mobile broadband to the masses, not just executives or professionals willing and able to pay high monthly fees for connectivity cards, or subscriptions to T-Mobile or other Wi-Fi services. It's the Wal-Mart of the wireless space, said Philip Marshall, VP-technology at Yankee Group.
The marketing implication: Anytime Wi-Max is connected, the system could flash a ``brought to you by'' message or other ad impressions sponsored by marketers. It should speed up the promise of location-based advertising, likely to be a boon to retailers, package-goods marketers and others as it revolutionizes point-of-purchase marketing. Reality check: Wireless analysts wonder just what the business model will be. Will advertising, in fact, be enough to support the system as it did for TV and radio? Or will consumers have to pay for a subscription? It will also require a major change in wireless architecture. Who's poised to win in a Wi-Max world? Many analysts agree it will be Google. ``Wi-Max will offer the potential for advertisers to simply plug into a platform like Google ... to target mobile advertisements based on location,'' said Nihal Mehta, co-founder of Omnicom's mobile marketing shop Ipsh
The societal effect: Wi-Max promises to bring mobile broadband to the masses, not just executives or professionals willing and able to pay high monthly fees for connectivity cards, or subscriptions to T-Mobile or other Wi-Fi services. It's the Wal-Mart of the wireless space, said Philip Marshall, VP-technology at Yankee Group.
The marketing implication: Anytime Wi-Max is connected, the system could flash a ``brought to you by'' message or other ad impressions sponsored by marketers. It should speed up the promise of location-based advertising, likely to be a boon to retailers, package-goods marketers and others as it revolutionizes point-of-purchase marketing. Reality check: Wireless analysts wonder just what the business model will be. Will advertising, in fact, be enough to support the system as it did for TV and radio? Or will consumers have to pay for a subscription? It will also require a major change in wireless architecture. Who's poised to win in a Wi-Max world? Many analysts agree it will be Google. ``Wi-Max will offer the potential for advertisers to simply plug into a platform like Google ... to target mobile advertisements based on location,'' said Nihal Mehta, co-founder of Omnicom's mobile marketing shop Ipsh
Wednesday, August 22, 2007
Telco Daily 22-Aug-2007
SK TELECOM TO TAKE UNICOM STAKE
According to FT South Korea's SK Telecom said it would convert USD1billion worth of bonds in China Unicom into a 6.6 percent stake to solidify its position in China. SK Telecom expects the deal will help it expand co-operation with China Unicom in 3G services once licences are issued.
Speculation of a restructuring in China's telecom sector - which could see the number of large operators cut from four to three - includes talk of a proposal for Unicom to be divided in two, with one of its national wireless networks going to China Telecom and the other to China Netcom. (Financial Times)
APPLE SECURES EUROPE IPHONE REVENUE DEALS
Apple has signed contracts with three European mobile operators which want exclusively to sell the new iPhone. The contract was signed by T-Mobile of Germany, Orange of France and O2 in the UK, writes FT Deutschland. In the US, AT&T has negotiated a two-year contract with Apple. Mobile operators are said to be hoping for a significant boost in their image from the exclusive deal with Apple, writes FT. (Financial Times)
SPRINT NEXTEL BETS ON WIMAX
Besides selling wireless service to subscribers, Sprint Nextel is seeking to embed access to its WiMax network in novel products, such as digital cameras and billboards. Sprint CEO Gary Forsee said demand for WiMax services won't grow without a large number of products that use the network. As a result, the company has teamed with Intel, Motorola, Samsung Electronics and Nokia to release 50 million WiMax devices over the next three years. Mr. West said Sprint was in discussions with other makers of consumer-electronic products. (The Wall Street Journal)
PARTNERSHIP KEEPS BEATING ALL THE ODDS
Alliances within the telecommunications sector do not have a very good track record. But Microsoft and Nortel are betting their strategic partnership, called the Innovative Communications Alliance, will beat the odds. Both of them sense a business opportunity as companies combine voice and data networks into a single IP-based system. The alliance was created one year ago and the two partners now claim the partnership, which combines Nortel's network equipment expertise and Microsoft's software, is on track.
To help convince their customers, Nortel and Microsoft have set up more than 100 demonstration facilities across the globe. (Financial Times)
HUTCHISON TELECOMMUNICATIONS: EARNINGS SOAR ON UNIT SALE
Hutchison Telecommunications International said its first-half revenue increased 12 percent to HKD9.64billion. A gain from the sale of its stake in India's Hutchison Essar to Vodafone boosted earnings. The company said revenue from mobile-data increased and that the number of subscribers increased 15 percent to 6.8million. (The Wall Street Journal)
According to FT South Korea's SK Telecom said it would convert USD1billion worth of bonds in China Unicom into a 6.6 percent stake to solidify its position in China. SK Telecom expects the deal will help it expand co-operation with China Unicom in 3G services once licences are issued.
Speculation of a restructuring in China's telecom sector - which could see the number of large operators cut from four to three - includes talk of a proposal for Unicom to be divided in two, with one of its national wireless networks going to China Telecom and the other to China Netcom. (Financial Times)
APPLE SECURES EUROPE IPHONE REVENUE DEALS
Apple has signed contracts with three European mobile operators which want exclusively to sell the new iPhone. The contract was signed by T-Mobile of Germany, Orange of France and O2 in the UK, writes FT Deutschland. In the US, AT&T has negotiated a two-year contract with Apple. Mobile operators are said to be hoping for a significant boost in their image from the exclusive deal with Apple, writes FT. (Financial Times)
SPRINT NEXTEL BETS ON WIMAX
Besides selling wireless service to subscribers, Sprint Nextel is seeking to embed access to its WiMax network in novel products, such as digital cameras and billboards. Sprint CEO Gary Forsee said demand for WiMax services won't grow without a large number of products that use the network. As a result, the company has teamed with Intel, Motorola, Samsung Electronics and Nokia to release 50 million WiMax devices over the next three years. Mr. West said Sprint was in discussions with other makers of consumer-electronic products. (The Wall Street Journal)
PARTNERSHIP KEEPS BEATING ALL THE ODDS
Alliances within the telecommunications sector do not have a very good track record. But Microsoft and Nortel are betting their strategic partnership, called the Innovative Communications Alliance, will beat the odds. Both of them sense a business opportunity as companies combine voice and data networks into a single IP-based system. The alliance was created one year ago and the two partners now claim the partnership, which combines Nortel's network equipment expertise and Microsoft's software, is on track.
To help convince their customers, Nortel and Microsoft have set up more than 100 demonstration facilities across the globe. (Financial Times)
HUTCHISON TELECOMMUNICATIONS: EARNINGS SOAR ON UNIT SALE
Hutchison Telecommunications International said its first-half revenue increased 12 percent to HKD9.64billion. A gain from the sale of its stake in India's Hutchison Essar to Vodafone boosted earnings. The company said revenue from mobile-data increased and that the number of subscribers increased 15 percent to 6.8million. (The Wall Street Journal)
Friday, August 3, 2007
Alcatel-Lucent Reports Second Consecutive Quarterly Loss
Telecom equipment giant, Alcatel-Lucent, reported a notable decline in second-quarter profit margins yesterday, amid a second consecutive quarterly loss during the three-month period ending on June 30.
The transatlantic company, formed last year by the merger of France’s Alcatel and America’s Lucent, reported a net loss of €586 million ($800.4 million) for Q2, compared to a combined profit of €128 million in the second quarter of 2006. The loss included a €250 million merger-related amortization payment.
Gross profit margins also slid significantly to 33.4%, from 38% in the year-ago period.
“2007 is clearly a transition year for the company as we continue to execute on our integration plans in a rapidly changing industry,” commented CEO, Patricia Russo, in a statement. “We believe the gross margin level this quarter is not indicative of the business going forward.”
Market analysts were concerned about the company’s poor performance, however, even questioning its ability to compete. As results continue on a downward spiral, the “merger integration” excuse seems to be wearing thin.
“Things look very bad,” said Nomura analyst, Richard Windsor. “Ericsson margins in the mobile infrastructure business are excellent. Alcatel-Lucent margins are so weak it shows there is no way they can compete with Ericsson.”
Source: http://www.teleclick.ca
The transatlantic company, formed last year by the merger of France’s Alcatel and America’s Lucent, reported a net loss of €586 million ($800.4 million) for Q2, compared to a combined profit of €128 million in the second quarter of 2006. The loss included a €250 million merger-related amortization payment.
Gross profit margins also slid significantly to 33.4%, from 38% in the year-ago period.
“2007 is clearly a transition year for the company as we continue to execute on our integration plans in a rapidly changing industry,” commented CEO, Patricia Russo, in a statement. “We believe the gross margin level this quarter is not indicative of the business going forward.”
Market analysts were concerned about the company’s poor performance, however, even questioning its ability to compete. As results continue on a downward spiral, the “merger integration” excuse seems to be wearing thin.
“Things look very bad,” said Nomura analyst, Richard Windsor. “Ericsson margins in the mobile infrastructure business are excellent. Alcatel-Lucent margins are so weak it shows there is no way they can compete with Ericsson.”
Source: http://www.teleclick.ca
Wednesday, August 1, 2007
Helius Completes Acquisition of the PointeCast Corporation
Helius to Combine IP Video Solutions with Rapid-Authoring and Learning Management Technologies LINDON,
Utah--(BUSINESS WIRE)--Helius Inc., the worldwide leader in IPTV solutions for business, completed the previously announced acquisition of the PointeCast corporation, a leading provider of rapid-communication and online training solutions.
The acquisition expands the Helius application offering to include rapid-authoring software and learning management tools. Helius will continue to provide solutions for the digital signage, business television and training and learning markets.
“The PointeCast rapid-authoring technology is a key component to the expansion of our existing product offerings,” said Mike Tippets, President and CEO, Helius, Inc. “We will announce new products based on the integration of these technologies and deliver new applications in the third quarter.”
With the close of the acquisition, PointeCast becomes a wholly owned subsidiary of Helius and will continue to develop applications under the PointeCast brand. The financial terms of the transaction were not disclosed.
About Helius Inc.
Helius provides IPTV solutions for business. Our patented expertise helps organizations implement applications like digital signage, distance learning, and corporate communications. For more information, visit www.helius.com or call Jeffrey Curtis at 801-764-9020.
Utah--(BUSINESS WIRE)--Helius Inc., the worldwide leader in IPTV solutions for business, completed the previously announced acquisition of the PointeCast corporation, a leading provider of rapid-communication and online training solutions.
The acquisition expands the Helius application offering to include rapid-authoring software and learning management tools. Helius will continue to provide solutions for the digital signage, business television and training and learning markets.
“The PointeCast rapid-authoring technology is a key component to the expansion of our existing product offerings,” said Mike Tippets, President and CEO, Helius, Inc. “We will announce new products based on the integration of these technologies and deliver new applications in the third quarter.”
With the close of the acquisition, PointeCast becomes a wholly owned subsidiary of Helius and will continue to develop applications under the PointeCast brand. The financial terms of the transaction were not disclosed.
About Helius Inc.
Helius provides IPTV solutions for business. Our patented expertise helps organizations implement applications like digital signage, distance learning, and corporate communications. For more information, visit www.helius.com or call Jeffrey Curtis at 801-764-9020.
Wednesday, July 25, 2007
TomTom snaps up Tele Atlas
Europe's leading in-car navigation systems provider TomTom NVhas agreed to acquire digital map producer Tele Atlas NV for an enterprise value of EUR1.8 billion ($2.5 billion), the companies said Monday, July 23.
The Amsterdam-based buyer plans to offer Tele Atlas investors EUR21.25 per share, valuing the target's share capital at about EUR2 billion. Tele Atlas has about EUR200 million cash on its balance sheet.
The offer represents a 28% premium to Tele Atlas' closing price on Friday and has the backing of both boards.
The Dutch target supplies TomTom, also of the Netherlands, with digital road maps of U.S. and European countries to be used in tandem with in-car navigation systems it produces.
The companies said the merger will allow them to offer more accurate navigation information, improved coverage and new features, including daily map updates and intelligent routing to TomTom's 10 million navigation devices. Following the merger, Tele Atlas will continue to operate as a separate unit, developing and licensing digital map products for TomTom and other customers.
Tele Atlas shares were up EUR5.72, or over 35%, at EUR22.27 per share by late afternoon in Amsterdam, suggesting that investors are expecting a competing bid. The company is also listed in Frankfurt.
Shares in TomTom were up EUR4.08, or almost 10%, at EUR45.06.
Marcel Achterberg a Netherlands-based analyst at ING Group NV, thought TomTom was Tele Atlas' most suitable partner, though he didn't discount the possibility that a rival bidder would emerge.
"The deal makes sense for TomTom; it could [extract more] synergies than anyone else, and the deal would give it vertical integration and re-engergize growth as TomTom's [growth] is slowing," Achterberg said.
"There could still be competing bids for the company, ones from the software or teleco space or a company like Google[Inc.] or Yahoo! [Inc.]," Achterberg added. "But if Google had wanted to buy it, it probably already would have."
Amsterdam-based TomTom said it has already received irrevocable undertakings from International Asset Management BV and from Tele Atlas' board to tender shares representing about 17.4% of the target's share capital.
TomTom expects to publish an offer memorandum in October, and to complete the transaction by the end of 2007. The company is entitled to a EUR20 million breakup fee should the Tele Atlas board recommend a competing offer.
TomTom also released better-than-anticipated second-quarter earnings Monday. The company reported net profit of EUR68 million, up 81% from the same period a year ago, on revenue of EUR380 million, up 37% from last year.
Tele Atlas, which is based in the Dutch town of Den Bosch, had a net loss of EUR19 million in 2006, Ebitda of EUR42.8 million and revenue of EUR264.3 million.
The TomTom offer is 28 times Tele Atlas' projected 2007 Ebitda, the companies said.
Lehman Brothers Inc.is serving as financial adviser to Tele Atlas along with Atlas Advisors. Scott Simpson of Skadden, Arps, Slate, Meagher & Flom LLPand Houthoff Buruma NV are acting as legal counsel.
Goldman Sachs International, which is providing debt financing for the deal, is TomTom's financial adviser. Stibbe NV, Herbert Smith LLPand Willkie Farr & Gallagher LLP are providing legal counsel.
URL: http://www.TheDeal.com
The Amsterdam-based buyer plans to offer Tele Atlas investors EUR21.25 per share, valuing the target's share capital at about EUR2 billion. Tele Atlas has about EUR200 million cash on its balance sheet.
The offer represents a 28% premium to Tele Atlas' closing price on Friday and has the backing of both boards.
The Dutch target supplies TomTom, also of the Netherlands, with digital road maps of U.S. and European countries to be used in tandem with in-car navigation systems it produces.
The companies said the merger will allow them to offer more accurate navigation information, improved coverage and new features, including daily map updates and intelligent routing to TomTom's 10 million navigation devices. Following the merger, Tele Atlas will continue to operate as a separate unit, developing and licensing digital map products for TomTom and other customers.
Tele Atlas shares were up EUR5.72, or over 35%, at EUR22.27 per share by late afternoon in Amsterdam, suggesting that investors are expecting a competing bid. The company is also listed in Frankfurt.
Shares in TomTom were up EUR4.08, or almost 10%, at EUR45.06.
Marcel Achterberg a Netherlands-based analyst at ING Group NV, thought TomTom was Tele Atlas' most suitable partner, though he didn't discount the possibility that a rival bidder would emerge.
"The deal makes sense for TomTom; it could [extract more] synergies than anyone else, and the deal would give it vertical integration and re-engergize growth as TomTom's [growth] is slowing," Achterberg said.
"There could still be competing bids for the company, ones from the software or teleco space or a company like Google[Inc.] or Yahoo! [Inc.]," Achterberg added. "But if Google had wanted to buy it, it probably already would have."
Amsterdam-based TomTom said it has already received irrevocable undertakings from International Asset Management BV and from Tele Atlas' board to tender shares representing about 17.4% of the target's share capital.
TomTom expects to publish an offer memorandum in October, and to complete the transaction by the end of 2007. The company is entitled to a EUR20 million breakup fee should the Tele Atlas board recommend a competing offer.
TomTom also released better-than-anticipated second-quarter earnings Monday. The company reported net profit of EUR68 million, up 81% from the same period a year ago, on revenue of EUR380 million, up 37% from last year.
Tele Atlas, which is based in the Dutch town of Den Bosch, had a net loss of EUR19 million in 2006, Ebitda of EUR42.8 million and revenue of EUR264.3 million.
The TomTom offer is 28 times Tele Atlas' projected 2007 Ebitda, the companies said.
Lehman Brothers Inc.is serving as financial adviser to Tele Atlas along with Atlas Advisors. Scott Simpson of Skadden, Arps, Slate, Meagher & Flom LLPand Houthoff Buruma NV are acting as legal counsel.
Goldman Sachs International, which is providing debt financing for the deal, is TomTom's financial adviser. Stibbe NV, Herbert Smith LLPand Willkie Farr & Gallagher LLP are providing legal counsel.
URL: http://www.TheDeal.com
Tuesday, July 17, 2007
Telco Daily 17-July-2007
TELEFÓNICA INSISTS MAJOR DEALS ARE OUT
Telefónica spent more tan EUR 100 billion during the past decade to build up operations in 22 countries. Now, Telefónica's Chief Financial Officer, Santiago Fernández, said the company has sworn off big deals and will push for internal growth. WSJ added that this is an important turn for investors that are still skittish about Telefónica's EUR 55.1 billion debt pile. (The Wall Street Journal)
TISCALI EXPANDS PRECENCE IN THE U.K
Tiscali agreed to buy Pipex Communications PLC's broadband and voice businesses for EUR 310.43 million in a deal that expands Tiscali's presence in the United Kingdom. Tiscali already makes most of its revenue in the United Kingdom and has reshaped itself in the past 18 months with asset sales and a renewed focus on its Italian and U.K. operations. (Financial Times)
PROVIDENCE REVIVES ITS VIRGIN MEDIA INTEREST
FT wrote that Virgin Media is understood to have been approached by Providence, the private equity group, about reviving its interest in taking over the cable group. First-round offers are expected next month, with the second round in August. (Financial Times)
Telefónica spent more tan EUR 100 billion during the past decade to build up operations in 22 countries. Now, Telefónica's Chief Financial Officer, Santiago Fernández, said the company has sworn off big deals and will push for internal growth. WSJ added that this is an important turn for investors that are still skittish about Telefónica's EUR 55.1 billion debt pile. (The Wall Street Journal)
TISCALI EXPANDS PRECENCE IN THE U.K
Tiscali agreed to buy Pipex Communications PLC's broadband and voice businesses for EUR 310.43 million in a deal that expands Tiscali's presence in the United Kingdom. Tiscali already makes most of its revenue in the United Kingdom and has reshaped itself in the past 18 months with asset sales and a renewed focus on its Italian and U.K. operations. (Financial Times)
PROVIDENCE REVIVES ITS VIRGIN MEDIA INTEREST
FT wrote that Virgin Media is understood to have been approached by Providence, the private equity group, about reviving its interest in taking over the cable group. First-round offers are expected next month, with the second round in August. (Financial Times)
Monday, July 16, 2007
Orange dips its toe into the UK MVNO
Hot on the heels of the Vodafone/Asda announcement last week, advertising-funded MVNO Blyk has announced that Orange will be its host network provider. Blyk, which describes itself as a ‘pan-European free mobile operator for young people, funded by advertising’, aims to launch in the UK in end-2007.
This is the first MVNO deal for Orange in the UK, and it seems that other UK operators are now intent on giving T-Mobile a run for its money on wholesale MVNO deals. Vodafone already has an MVNO partner, Dot Mobile, which focuses on a similar target market, while T-Mobile has Virgin Mobile. However, Blyk’s unique business model is a major differentiator.
I think that advertising-funded mobile services is an interesting concept, and potentially very attractive to consumers and advertisers alike. However, i do see a few potential issues that may have an impact on Blyk’s success. I have to question how much it can really afford to give away for free. I do not yet know the precise details of its business model or its proposition to consumers, except that it relies on push SMS and MMS advertising, but we would be surprised if advertising revenues alone are enough to cover its network bill from Orange. In addition, it will need to offer excellent customer services and support, which will involve significant capex in the first year of operation. The fact that its business model is so unique means that it will need a strong team in place to deal with inevitable customer queries.
In order to succeed, Blyk will need to attract a fairly large number of consumers within its initial months of operation. The fact that it is offering something for(nearly) nothing means that it may well do so. However, it will also need to work hard at retaining these users past the first couple of months, once the initial novelty factor wears off.
The fact that it will be a SIM-only proposition means that there is also the possibility that consumers could try and exploit the service. They may simply swap in their Blyk SIM card to use their free minutes and texts and view advertisements when they feel like it, and then swap in another low-cost provider’s SIM for regular use.
The Blyk business model relies on advertisers signing up to target 16–24 year olds with advertisements. The initial announcement of six companies including Buena Vista, Coca-Cola and mobile gaming company I-Play is an encouraging start. However, in order for it to be a success we would expect to see more big-name advertisers signed up prior to its planned launch in end-2007.
This is the first MVNO deal for Orange in the UK, and it seems that other UK operators are now intent on giving T-Mobile a run for its money on wholesale MVNO deals. Vodafone already has an MVNO partner, Dot Mobile, which focuses on a similar target market, while T-Mobile has Virgin Mobile. However, Blyk’s unique business model is a major differentiator.
I think that advertising-funded mobile services is an interesting concept, and potentially very attractive to consumers and advertisers alike. However, i do see a few potential issues that may have an impact on Blyk’s success. I have to question how much it can really afford to give away for free. I do not yet know the precise details of its business model or its proposition to consumers, except that it relies on push SMS and MMS advertising, but we would be surprised if advertising revenues alone are enough to cover its network bill from Orange. In addition, it will need to offer excellent customer services and support, which will involve significant capex in the first year of operation. The fact that its business model is so unique means that it will need a strong team in place to deal with inevitable customer queries.
In order to succeed, Blyk will need to attract a fairly large number of consumers within its initial months of operation. The fact that it is offering something for(nearly) nothing means that it may well do so. However, it will also need to work hard at retaining these users past the first couple of months, once the initial novelty factor wears off.
The fact that it will be a SIM-only proposition means that there is also the possibility that consumers could try and exploit the service. They may simply swap in their Blyk SIM card to use their free minutes and texts and view advertisements when they feel like it, and then swap in another low-cost provider’s SIM for regular use.
The Blyk business model relies on advertisers signing up to target 16–24 year olds with advertisements. The initial announcement of six companies including Buena Vista, Coca-Cola and mobile gaming company I-Play is an encouraging start. However, in order for it to be a success we would expect to see more big-name advertisers signed up prior to its planned launch in end-2007.
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