News

Taking a brief break

Sue Marek — Wed, 30 Jul 2008 13:45:09 -0400

FierceWireless:Europe isn't immune to the inevitable slowdown in the news cycle during the month of August when much of Europe goes on holiday. To that end, we have decided to take a publishing break in August. On Sept. 1, we will return to your in-boxes with all the latest European wireless news and trends. -Sue

P.S. If you haven't already, please check out our special feature on the Top 5 trends impacting European wireless operators here.

Emerging markets too pricey, says Vodafone chairman

Paul Rasmussen — Wed, 30 Jul 2008 10:31:29 -0400

Having reported disappointing performances from its highly-penetrated European markets, Vodafone was able to salvage its reputation with strong growth from its investments in developing markets such as Turkey and India. However, the company's chairman, Sir John Bond, stated this week that breaking into these fast-growing countries--naming Russia and Brazil as potential targets, was proving to be increasingly difficult. "There is nothing for sale, and it would be a big challenge for us to agree to a price that would be beneficial to the shareholders. We find price expectations in these markets are quite high."

However, Vodafone's new CEO, Vittorio Colao, clearly wanted to follow his predecessor, Arun Sarin, by focusing on emerging markets with the hope that a deal could be struck shortly to acquire a majority holding in South Africa's Vodacom. The likelihood of this coming to fruition has moved closer over the last few days with the announcement from Vodacom that it has signed an agreement to bring on board a number of black investment groups as part of the country's move to increase black economic empowerment. Vodafone would have to have added black investors to its deal and Vodacom's move means any deal should progress more smoothly, with the new investors retaining their shareholdings.

Speaking about the financial difficulties consumers are facing, Colao said that these economic challenges will need to be understood and new initiatives launched. "I don't think these issues will slow us down, but times change and we need to do things slightly differently. If families feel constrained we are going to give more SIM-only deals, lower prices, maybe less fancy handsets and maybe the handset renewal times will be pushed a little bit further."

For more on this story:
- go to the Financial Times and Guardian

Related stories:
Orange looks to expand into emerging markets. Orange story
Spain disappoints, but emerging markets boost Vodafone. Vodafone story

Turkcell spends US$500M on Belarus acquisition

Paul Rasmussen — Wed, 30 Jul 2008 10:27:14 -0400

Having pulled out of the bidding for a Bulgarian mobile licence, Turkcell has instead splashed out US$500 million on purchasing an 80 per cent shareholding in Belarus's state-owned mobile operator BeST. However, the deal called for Turkey's leading cell phone operator to invest more than this initial commitment. The company will be required to pay an extra US$100 million when BeST makes a full-year positive net income for the first time, and sink another US$500 million into infrastructure development. This exposure is balanced by Turkcell only needing US$300 million upfront, with an additional US$100 million being paid in 2009 and 2010.

The Belarus government is keen to conclude the deal given that its neighbour Russia significantly raised gas prices earlier this year, and has already sold 70 per cent of the country's second largest mobile operator, Velcom, to Austria Telecom. The government also owns a 51 per cent stake in the largest operator MTS Belarus, in which Russian MTS holds the remaining 49 per cent.

BeST is the third largest mobile provider in Belarus behind MTS Belarus and Velcom, with around 195,000 customers at March 2008, a market share of less than three per cent.

For more on this story:
- go to Marketwatch and Telegeography

Related stories:
Turkcell feels Washington heat over Syrian purchase. Turkcell story
Turkcell flourishes, while Vodafone complains. Turkcell story

BBC mobile TV trials disappoint - where next?

Paul Rasmussen — Wed, 30 Jul 2008 10:23:41 -0400

Following very low usage during its latest mobile TV trials, the BBC has launched a public consultation on what it should do next. The service, which was available free to U.K. subscribers of Orange, Vodafone, T-Mobile and 3UK, attracted less than 600 viewers per day. Despite the lack of consumer interest, part of the BBC's new plan involves seeking permission to syndicate the broadcaster's TV channels and radio networks for delivery to mobile devices over a 3G data connection. No details have been made public as to whether this service will be provided free by the BBC with mobile operators collecting the data-download fees.

The idea of a free mobile TV service has received negative feedback from other TV and radio broadcasters which consider it to be an unfair leverage for the BBC, not helped by the BBC being funded by the U.K. tax payer.

According to reports, the BBC saw monthly content consumption of its BBC One, Three and News 24 TV channels reach a high of just 13 minutes per month during the 12 month trial which ended in April.

For more on this story:
- go to ITProPortal and 3G.co.uk

Related stories:
AT&T's new mobile TV service: a me-too offering. Mobile TV story
Austrian operator launches mobile TV services. Mobile TV story

Ex-FT head tipped for AlcaLu CEO job

Paul Rasmussen — Wed, 30 Jul 2008 10:01:25 -0400

Thierry Breton, the former French Finance Minister and ex-CEO of France Telecom (FT), is being widely tipped as the leading candidate to take the helm of Alcatel-Lucent (AlcaLu) following the sudden resignation of the company's CEO and chairman--Patricia Russo and Serge Tchuruk respectively. While the company has been in desperate need of someone that can give the merged company some clear identity and strategy, the appointment of a Breton--a close member of the Parisian political establishment and French business elite, is not likely to be received warmly by the U.S. board members of AlcaLu.

However, while the company has recently lost around 60 per cent of its share value and reported a net loss of €1.1 billion for Q2 2008--its sixth successive quarterly loss, others believe the company might (just) be turning the corner. Buried within the financial data were reports that gross and operating margins, together with SG&A expenses and R&D costs, had all improved when compared with Q2 2007. Services revenues surprised most analysts with a 9.1 per cent year-on-year increase and up 20.4 per cent sequentially at €818 million in the second quarter.

Commenting prior to leaving the company, Russo said the company's strategy of "pursuing opportunities that had a balance of top line growth and profitability" was paying off, and that there was a backlog of services business on the books. The former CEO said AlcaLu was now the No. 2 player globally in the carrier services market.

For more on this story:
- go to The Times and Light Reading

Related:
Alcatel-Lucent post huge loss; CEO, chairman step down. AlcaLu story
Alcatel-Lucent collects carrier contracts, acquires Motive. AlcaLu story

Triple-play operators must overcome content and branding hurdles

Paul Rasmussen — Wed, 30 Jul 2008 09:56:11 -0400

The triple-play market is not reaching its full potential. Content and branding issues are hampering operator strategies to increase customer numbers, according to a new report by Analysys Mason. The company estimates that the number of Western European households subscribing to a triple-play package is forecast to rise to 31.1 million by the end of 2013, representing an average annual increase of 17 per cent since 2007. The proportion of households in Western Europe that will subscribe to a triple-play service will increase from 7 per cent to 18 per cent between 2007 and 2013. Spend on triple-play services will increase to €4.8 billion by 2013. This growth in triple-play households will primarily be driven by the continuing take-up of IPTV services and the upgrade of cable networks. Article

Femtocell success reliant on handset innovations, claims new study

Paul Rasmussen — Tue, 29 Jul 2008 05:23:07 -0400

The hype surrounding the mass deployment of femtocells has been doused with cold water by a new study into the need for handset vendors to quickly transform their devices to support the technology. According to the report, published by Research & Markets (R&M), the femtocell industry is basing its optimism on the notion that subscribers will use their cell phones differently when in range of femtocells. There will be different applications and behavioural patterns when people are at home--perhaps content backups, podcasts or even advertiser-sponsored TV programming. The mobile phone may need to be linked to the TV, PC, HiFi or other items of domestic technology, claims R&M.

However, the report states that, while handsets will work with femtocells, they are not optimised to support this new 'in home' activity. The phone needs to be aware of the femtocell, ideally both in the radio and the application platform. But changing how the handset industry approaches this challenge could take 2-3 years--given that it takes this amount of time to implement new handset architecture, and around the same time before new cell phone technology reaches a broad range of devices.

R&M identified other issues that the femtocell industry should be aware of:

In dense deployments of femtocells, handsets can spend too much time and power attempting to connect at locations that are not their own "home zone."
The new 3GPP Release 8 specifications contain various modifications to enable handsets to work better with femtocells, but the first R8-compliant phones will likely be shipped at the end of 2010.
The usage of handsets on femtocells may identify unexpected side-effects, relating to faster/cheaper data connections. This may impact elements of design such as memory allocation and power management.
Various suggestions have been made for ‘femto-zone' services--but there is no standardised way for handset applications to know they are attached to a femtocell.

However, the study also pointed to some new opportunities that femtocells could have for operators, namely the generation of new revenue streams from advertisers and other third parties by enabling the provision of 'at home' services via femtocells.

R&M claimed that there could be a demand for at least 48 million femto-aware handsets to be sold to femtocell owners in 2013. However, with more optimistic forecasts, and especially if shared femtocell models become popular, there could potentially be a demand for up to 300 million femto-aware handsets per year in 2013.

For more on this story:
- go to Marketwatch

Related stories:
Femto Forum, NGMN Alliance unite for femtocells. Femtocell story
Femtocells--big market, bigger questions. Femtocell editorial

Making music, making money

Paul Rasmussen — Fri, 25 Jul 2008 11:52:34 -0400

Mobile music is set to become big business over the next four years, and Europe is leading the way. eMarketer predicts that mobile music retail revenues in the EU-5 (France, Germany, Italy, Spain and the U.K.) will reach US$1.4 billion by 2012, up from US$267 million in 2007. The biggest individual EU-5 market is the U.K. but the other countries are reporting strong growth in this sector. Interestingly eMarketer expects that the ad-supported mobile music market will bring in revenues of US$170 million in the same timeframe, up from a paltry US$4.6 million in 2007. The U.S. is the world's largest retail market for music but its mobile infrastructure lags behind Europe which accounts for the more advanced condition of the U.K. market.

For more on this story:
- go to Cellular News

Related story:
How do we revitalize mobile music? Article

Mobile mapping on the rise

Paul Rasmussen — Fri, 25 Jul 2008 11:49:05 -0400

More and more customers are using mobile maps according to a report by comScore m:metrics with 8 per cent of U.S. mobile subscribers and 3 per cent of Europeans accessing maps in the three months to May 2008. This represents a growth rate of 82 per cent in the U.S. and 49 per cent in Europe. The main driver behind the rapid growth in the U.S. seems to be the increasing availability of the iPhone which was the leading device used there to access maps. Europeans preferred the Nokia N95 and N70. Around three quarters of U.S. customers used a browser to access maps as against 57 per cent in Europe. Surprisingly, given the heavy usage of SMS in Europe, only 24 per cent of Europeans accessed maps via SMS, a figure only one point higher than the U.S.

For more on this story:
- go to 3g.co.uk and Mobile Europe

Related story:
Mapping Technology. Article

Ericsson reports plunge in Q2 profits

Paul Rasmussen — Fri, 25 Jul 2008 11:45:34 -0400

A fall of 70 per cent in its second quarter profits was reported this week by Swedish telecoms giant Ericsson. The company blamed the fall on the high cost of shedding staff and falling handset sales by its Sony Ericsson joint venture. Last week Sony Ericsson reported that its second quarter pretax profits were 8 million euros compared with 327 million euros a year earlier and announced plans to cut 2000 jobs worldwide. Ericsson reported that its net income fell to SEK1.9 billion (US$320 million) from SEK6.4 billion (US$1.07 billion) a year ago. Revenue rose 2 percent to SEK48.5 billion (US$8.1 billion) in the quarter. Gross margins were 37 per cent, down from 43 per cent in the same quarter in 2007. The decline was mainly due to a shift in business mix with a high proportion of new network buildouts. Sales in Western, Central and Eastern Europe, the Middle East, Africa and Asia Pacific were all down by varying degrees but sales in North and Latin America were up.

For more on this story:
- go to Cellular News and The Telecom

Related stories:
Ericsson profit drops 70%, but N.A. sales up. Article
Sony Ericsson issues profit warning. Article

Greek island goes wireless

Paul Rasmussen — Fri, 25 Jul 2008 11:40:35 -0400

The Greek island of Patmos, allegedly the place where St. John wrote the Book of Revelations, is going wireless. A wireless mesh network jointly developed by MIT's Media Lab and Nortel Solutions Interoperability Laboratory will provide island-wide WiFi access for locals and tourists. The new innovation is largely down to telecommunications guru Nicholas Negroponte who has a holiday home on Patmos. Negroponte has always wanted to provide Internet access to the island and in the 1990s established a local dial-up ISP called 12Net. The new wireless mesh network will use Nortel technology and the initial deployment will have eight core nodes and fifty access nodes. The network will provide WiFi access, including indoor coverage, to the major parts of the island. 12Net is implementing the mesh network with Uni Nortel--a joint venture in Greece between Nortel and IT company Unisystems--which is responsible for the commissioning, design and installation of the network.

For more on this story:
- go to Silicon News

3 reaches mobile broadband milestone

Paul Rasmussen — Fri, 25 Jul 2008 11:38:09 -0400

3G-only mobile operator 3 has signed up one million mobile broadband customers in its territories across Europe. The company says that since it launched its service in 2007 it has seen phenomenal growth from customers who are using the mobile service both to supplement and replace their fixed line broadband services. Despite the success of its mobile broadband service 3 expressed concern at the continuing high cost of data roaming in Europe. "Typical retail roaming prices are literally hundreds of times what customers expect to pay domestically. A European consumer might pay around one Euro cent per megabyte at home, yet pay a premium of 360-times that simply to cross a border," commented Christian Salbaing, Managing Director European Telecoms at Hutchison Whampoa. Salbaing urged the European Commission to take action to bring clarity and value to data roaming in the same way it had with voice roaming in 2007. 3 allows its customers to use their domestic price plans when roaming on to its sister networks in Europe, enabling them to access the Internet for a fraction of a Euro cent. As a result data roaming volumes on 3's European networks have increased by 2500 per cent over the last twelve months.

For more on this story:
- go to 3g.co.uk and Mobile Europe

Related story:
3UK aims to double its subscriber base by 2012. Article

Nokia/Qualcomm--new best friends

Paul Rasmussen — Fri, 25 Jul 2008 11:33:44 -0400

Nokia and Qualcomm have finally ended their long-winded and frequently acrimonious legal battle over patents. The two companies had legal actions pending in the U.S., U.K., France, Germany, Italy and China. The decision to end the row came after a German court had found against Qualcomm. The two companies have signed a fifteen-year agreement under which Qualcomm gives Nokia a licence to use its patents in Nokia handsets and in equipment manufactured by Nokia Siemens Networks. A number of standards are covered by the deal, including GSM, EDGE, CDMA, WCDMA, HSDPA, OFDM, WiMAX, LTE and other technologies. In addition Nokia has agreed to allow Qualcomm to include Nokia technology in its chips. The agreement includes an upfront payment to Qualcomm by Nokia as well future royalty payments. Nokia has also agreed to hand over some essential patents for WCDMA, GSM and OFDMA to Qualcomm but the terms of this arrangement are secret. Shares in both companies rose when the agreement was announced.

For more on this story:
- go to The Register and the Financial Times

Related stories:
Qualcomm, Nokia reach new patent agreement, end years of bitter disputes. Article
Nokia gains patent victory over Qualcomm in Germany. Article
ITC upholds ruling favoring Nokia in Qualcomm suit. Article

Content to rejuvenate European mobile revenue growth, claims research

Paul Rasmussen — Wed, 23 Jul 2008 13:14:25 -0400

With the mobile communication market in Europe having reached a saturated and mature phase, mobile premium content services and applications represent a potential source of significant revenues for the mobile industry, says Frost & Sullivan. The firm claims that the market (including revenues from mobile music, games, video/TV and mobile graphics) was worth €2.68 billion in 2007 and is estimated to reach €11.0 billion in 2012. Article

Nokia hints at higher than forecast growth

Paul Rasmussen — Wed, 23 Jul 2008 13:13:29 -0400

Having previously forecast that the cell phone market would grow by 10 per cent, the CFO of Nokia, Rick Simonson, has indicated that, 'with half a year visibility, we're able to say growth will be 10 per cent or more.' This upbeat assessment comes after the company posted better-than expected results for the second quarter which pushed Nokia's share price up by eight per cent--albeit that the company's share price had plunged about 40 per cent this year amid concerns the mobile industry would suffer as the credit crunch and inflation took their toll.

"Everybody's affected by the economic reality--Nokia and its customers are no different," said Simonson. "But we have an ability to play all markets. Some markets are growing strongly, some not so strongly but we aren't trapped to one market only. That's the beauty of it."

Nokia's CEO, Olli-Pekka Kallasvuo, also added to this optimistic outlook by stating that the company had received good feedback about the broad range of new products it expected to sell in its handset business. Last week, Nokia indicated that increased demand from Russia and India would help it achieve continued growth this year.

For more on this story:
- go to CIO Today

Related stories:
Nokia's Q1 net profit up 42 percent. Nokia story
Emerging markets boost Nokia. Emerging markets story