The WRAP: Nokia posts poor results; NSN, Ericsson score in Japan

This was the week Nokia’s credit rating was downgraded as the vendor confirmed a sales slump during the first quarter. The week also saw mobile content and payment plays from European operators, legal battles for Vodafone and Telenor, and Softbank Mobile awarding rollout contracts for its 4G network.
 
The week began and ended badly for Nokia, with the firm losing its credit rating at the beginning of the week, and confirming the downbeat 1Q12 forecast that prompted the credit agency’s action.
 
Moody’s cut Nokia’s senior debt rating to Baa3 with a negative outlook from its previous position of Baa2. The credit firm also downgraded Nokia’s short-term debt ratings, after the vendor warned a 16% year-on-year decline in handset shipments during the quarter had resulted in a 35% fall in revenue.
 
Nokia confirmed the bad news Thursday, revealing an operating loss of €1.3 billion ($1.7 billion) compared to a profit of €429 million in 1Q11, as none of its business units turned a profit in the recent quarter.
 
Chief Stephen Elop pledged to accelerate the firm’s handset restructuring efforts, however he’ll do it without executive vice president of sales, Colin Giles, who will quit the firm on June 30.
 
Nokia Siemens lifted itself from the gloom of slipping to a 1Q operating loss of €1 billion by revealing it is set to test TD-LTE technology in the 1.9-GHz frequency – a move it says will benefit China Mobile’s efforts to deploy a compatible 4G network.
 
The infrastructure firm also picked up one of Softbank Mobile’s 4G network contracts this week, with Ericsson also announced as a winning contender.
 
Softbank Mobile aims to launch commercial services in the autumn, and hired Ericsson to handle rollout in Tokyo, Osaka and Nagoya – which generate 70% of Japan’s total mobile voice and data traffic. The vendor said the deal is its largest 4G contract in Japan.
 
China Mobile, meanwhile, detailed plans to migrate all its networks to IPv6 by 2016, after trialing the standard in ten provinces during 2011. Zhou Jianming, general manager of China Mobile’s technology division, also revealed the operator has recently completed IPv6 testing for TD-LTE equipment from eight vendors.
 
Courtroom drama during the week was provided by Vodafone, Australia’s NBN Co, and Telenor
 
Vodafone got the ball rolling by filing legal notice against India’s government and threatening international arbitration over continuing efforts to charge it 113 billion rupees ($2.17 billion) in tax for its acquisition of Hutchison’s stake in what is now Vodafone India in 2007.
 
NBN Co came next, gaining the thumbs up from the ITU over its strategy of planning to build satellites before gaining orbital slots for the birds. The company sought a ruling after its chief, Mike Quigley, was quizzed on the strategy by politicians.
 
Telenor isn’t officially aware of its legal battle over Russian carrier VimpelCom. The operator states Russia’s Federal Antimonopoly Service (FAS) is seeking to invalidate its purchase of VimpelCom shares from Weather Investments in February because the deal violates Russia’s Strategic Investment Law, but notes it has received no official word from FAS.
 
Cable & Wireless Worldwide again extended the deadline for bidders interested in buying the firm, after India’s Tata Communications pulled out of the running on deadline day – April 19.
 
Tata’s decision leaves Vodafone as the only potential buyer prompting C&WW to give the firm until April 23 to make an offer.
 
Telekom Austria began testing NFC-based mobile payments, equipping 5,000 subscribers with the means to pay up to €25 ($33) for goods in selected branches of McDonald’s and local supermarket chain Merkur. However, the carrier was vague on details of a commercial launch for the service.
 
For Spanish incumbent Telefonica, mobile gaming was the order of the week. Its Telefonica Digital division revealed it is teaming with EA Mobile, the wireless arm of games publisher Electronic Arts, to offer mobile games on multiple devices and platforms. The service will launch in the UK, and pitches the firm into a market tipped to be worth €9 billion ($11.82 billion) by 2015.
 
And Apple reminded us all that the world of apps can be a legal minefield, with reports angry parents in the US are preparing to sue the firm over in-app payments.
 

The parents slam the firm for enabling children to purchase items without their authorization, and claim Apple actually encourages such buys. A federal judge this week gave the parents permission to lodge a class action lawsuit over the matter, resisting calls by Apple to throw the case out.

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