The WRAP: Telenor chairman quits; EverythingEverywhere launches 4G offensive
The past five days have seen Telenor show that a week is as long in telecoms as it is politics, EverythingEverywhere talk up the financial benefits of 4G, and research firms point to Asia Pacific as a major driver of smartphone and tablet sales during the first quarter of the year.
Norwegian incumbent Telenor’s chairman, Harald Norvik, resigned after being criticized by trade and industry minister Trond Giske for his handling of the sale of Telenor’s TV2 subsidiary in January. Norway’s government is the majority shareholder in the telco, and appears to be dissatisfied that TV2 was sold to a Danish firm rather than retaining some Norwegian roots.
Analysts were left puzzled by the move, with one telling the Wall Street Journal the crisis facing the firm in India would have been cause for Norvik to quit, rather than the sale of a single business unit.
Norvik’s resignation came just days after Telenor revealed it will take a 3.9 billion Kroner (€516 million) hit in its 1Q12 results to cover the cost of writing down its assets in its Indian joint venture Uninor, after its 22 2G operating licenses were revoked by the country’s Supreme Court in February.
EverythingEverywhere, the operator created by the merger of Orange and T-Mobile’s UK businesses, this went on the offensive over its proposals to launch 4G services on its current spectrum. The carrier claimed next-generation mobile broadband could boost the UK’s gross domestic product by £7.5 billion (€9.2 billion) per annum in the first full decade of operation, and began talking of a data crisis in the consumer press.
The firm looks to be trying to sway opinion in the final days of a consultation on its proposal by regulator Ofcom, which has already noted its enthusiasm for the plan.
Consultation was also the order of the day at the European Commission, which this week began asking the public for ideas on cutting the cost of deploying fiber networks. Particular focus is being paid to civil engineering works – an area digital agenda commissioner Neelie Kroes believes is driving up rollout costs due to a lack of coordination.
The sluggish rollout of fiber is encouraging European cellcos to look, instead, at point to multipoint microwave for data backhaul, according to Lance Hiley, vice president of marketing a Cambridge Broadband Networks. However, Hiley predicts carriers will use a mix of microwave and fiber for backhaul in the long term.
Research firm Canalys this week revealed China overtook the US as the world’s largest market for smartphones during the first quarter, accounting for 22% of global shipments compared to 16% for the US. While the launch of Apple’s iPhone spurred sales in China during the quarter, Samsung was crowned the largest vendor in the country, with a 22% market share.
Asia Pacific’s emerging markets are also proving a strong stomping ground for tablet makers, according to researchers at GfK Asia. The firm estimates sales of the devices in Cambodia, Indonesia, Malaysia, the Philippines, Thailand and Vietnam hit $962 million (€731 million) in 2011.
In other device news, a leading US analyst this week re-ignited rumors that Apple is gearing up to become a mobile service provider, while an executive at LG Electronics revealed the vendor is preparing to ditch Microsoft’s Windows Phone platform in favor of Google’s Android operating system.
In 1Q12 earnings news for the week, France Telecom saw EBITDA slip 7% year-on-year to €3.4 billion on a near 2% fall in revenue; Swiss incumbent Swisscom reported net income of 456 million Swiss francs (€379 million), down 3.8% on 1Q11; Bharti Airtel revealed a 28% slump in profit to 10.06 billion rupees (€143 million) for the quarter – the Indian cellco’s fiscal 4Q; and state owned Thai carrier TOT Corporation scaled back its 3G ambitions after failing to reach revenue targets for the network.
The GSM Association blasted Indian regulator TRAI’s plan to re-auction 2G spectrum at premium prices, claiming the move threatens future mobile broadband rollouts in the country. The regulator last week proposed re-selling 122 licenses at a base price of 36.22 billion rupees – some 13 times higher than the fee at the original auction in 2008.
And it was the week that saw a third credit ratings agency junk Nokia’s stock in the space of a fortnight, as Standard & Poor’s joined Fitch Ratings and Moody’s in questioning the vendor’s prospects.
Standard & Poor’s cut Nokia’s rating to BB+ from BBB- over concerns handset sales will continue to decline through 2012 , Reuters reports.
Timo Ihamuotila, Nokia's executive vice president and CFO, hit back by noting the firm is in the middle of a cost cutting program. Ihamuotila has previously noted the firm’s net cash position remains strong.