THE WRAP: Telefonica restructures; Sprint sues AT&T
Spanish incumbent Telefonica announced a major restructure this week that will see its domestic business folded into its broader European operations and a new digital division formed. Meanwhile, Sprint turned up the heat on AT&T’s bid to acquire Deutsche Telekom’s US business, and Thailand got its first telecoms regulator in 14 years.
Telefonica won tentative thumbs up from analysts over its restructuring plans. Informa Telecoms & Media analyst Dario Talmesio said the decision to merge its domestic business into its Europe division makes sense, but should probably have happened sooner. While he is generally positive about the move, he notes the firm still faces risks in what is its biggest structural change since taking over O2.
The operator also revealed plans to launch a new London-headquartered digital business, tasked with identifying and pursuing new growth opportunities. The business will have regional outposts in Madrid, Sao Paulo and Silicon Valley, along with “strategic hubs” in Asia Pacific.
European rival Deutsche Telekom is unlikely to be announcing any similar restructuring in the form of the sale of its US business to AT&T, after Sprint filed a second lawsuit against the deal in as many weeks. The carrier claims the sale will leave it unable to compete against AT&T and Verizon, and will catapult the US market back to a 1980s style duopoly.
Conflicting operator interests are also a key concern for Thailand’s new National Broadcasting and Telecommunications Commission (NBTC) – a super regulator some 14 years in the making. In addition to addressing the competing interests of state-owned CAT and TOT and private operators DTAC, True and AI, the regulator must also steer the country towards an auction of spectrum in the 2.1GHz frequency.
UK counterpart Ofcom, meanwhile, was focusing on high definition (HD) TV services, inviting public service broadcasters to pitch for a fifth free-to-air HD license. Demand for the service certainly seems to be high, with 1.8 million HD-ready freeview set-top boxes sold since launching in May 2010.
Avoiding regulators is the goal of Australian telcos, which this week unwrapped a voluntary code of practice covering call costs. Operators pledged to implement unit pricing to make it easier for consumers to compare call, SMS and data costs, and to establish an independent body to monitor their compliance with regulations.
In India, it was the government wielding its influence on telcos, announcing it will seek manufacturing partnerships with Japanese firms as part of a multi-billion dollar investment in wireless broadband However, potential partners will require a local presence to be considered.
LTE was the talk of the town in Singapore, where operators attending the LTE Asia conference discussed the pros of refarming 1800MHz spectrum for 4G services. Separately, equipment vendors outlined the various deployment scenarios for small cells in LTE networks.
Spectrum issues were also at play in the UK this week, with the scheduled 4G auction delayed until at least 2Q12 due to carrier’s threats of legal action over the terms of the sale. The auction appears to favor O2, EverythingEverywhere and Vodafone, which can reallocate old voice spectrum, over fourth cellco Three UK.
Three could also delay the launch of a mobile payments joint venture by its three larger rivals, after discussing the anti-competitive effects of the venture with the European Commission. Stephen Lerner, Three’s regulatory affairs director, said the trio “have engaged in a cosy collaboration and closed ranks against competition.”
And Nokia embarked on its most risky restructuring strategies to-date – replacing its trademark Nokia Tune.
The firm is staking $10,000 prize (€7,220) money in a contest to compose a replacement for the current well-known tune, which has been in use since 1994.