THE WRAP: UK, EU make tech investments; Moody's downbeat on EU telcos
Finance dominated proceedings this week, with the European Commission revealing a rescue package for its satellite programs, the UK government committing an extra £100 million (€116 million) to high-speed broadband, and Malaysian carrier’s earnings on the slide.
The EC revealed it will pump an additional €7 billion into its Galileo and European Geostationary Navigation Overlay Service (EGNOS) satellite programs over the next eight years. The Commission claims its investment offers the financial stability the projects need to deliver economic benefits to the region, provided deployment and operation of the birds is handled by domestic agencies.
Official documents leaked late last year revealed a funding shortfall of €1.7 billion for the Galileo scheme, and stated the set-up would cost €1 billion per year to operate over the 20 years of planned EC running. The Commission estimates Galileo will generate €90 billion per year over that timeframe.
European funding commitments didn’t stop at its satellite program. The European Institute of Innovation and Technology (EIT) announced plans to spend €2.8 billion on six new knowledge innovation centers between 2014 and 2020.
The centers aim to foster collaboration between research centers, education facilities and businesses in the areas of climate change, sustainable energy and ICT. The new facilities add to 16 sites already up and running.
Tech funding was also on the agenda in the UK, where the government announced an extra £100 million in funding for high-speed broadband rollouts in an autumn budget update.
The pot of cash is assigned to turn ten UK cities into high-speed hubs for fixed and mobile broadband, and will be available to small and medium businesses, enterprise parks, local government and even telcos.
Despite the various funding announcements, Europe’s telecoms industry was given a negative rating by credit agency Moody’s this week. The firm predicts operators revenues will fall by 1% to 2% on average through 2012, due to tough trading conditions and rising competition.
Moody’s claims operators must increase capex budgets by €60 billion over the next three years to meet growing demand for data services, but remains downbeat on carrier’s ability to actually cash in on that increase.
Earnings by Malaysian carriers Maxis and Axiata suggest the problems outlined by Moody’s aren’t restricted solely to Europe.
Maxis’ third quarter net profit fell 10.4% year-on-year to 537 million ringgit (€126 million), while revenue fell 24 million ringgit to 2.24 billion ringgit – though that figure was up 4% sequentially.
Axiata’s 3Q net profit was down 8.8% year-on-year to 679.1 million ringgit despite operating revenue growing from 3.97 billion ringgit in 3Q10 to 4.19 billion this year. Both operators report lower voice income for the period, though Axiata noted that was offset by increased data revenues.
In contrast, Singapore and Hong Kong-headquartered Pacnet could be well positioned to capitalize on mobile data, opening a content delivery network (CDN) spanning Japan, Singapore, Hong Kong and Australia.
The operator plans to expand the network into six more Asia Pacific markets, while a partnership with EdgeCast opens the door to international expansion.
China Telecom also secured international opportunities, extending a partnership with AT&T to access the US firm’s domestic MPLS-based IP networks that also sees AT&T expand its Chinese IP-VPN service. The pair are targeting domestic multinationals operating in the other’s market, and are also eyeing a bilateral Wi-Fi roaming agreement.
In other news, Belgium’s 4G auction raised €77.7 million from four successful bidders; HTC denied it faces a ban on shipments in Germany, despite patent licensing firm IPCom demanding it stop selling one 3G smartphone in the market; Samsung won a rare victory over Apple in a similar patent battle in Australia, but then lost out again; and Nokia Siemens offloaded its Wimax division to US firm NewNet Communication.
And finally, a UK company revealed a wee-controlled games console for gent’s toilets.
A console mounted above the bowl offers games controlled by the ‘users’ stream, detecting where the fella is aiming through an infrared sensor. Devices are up and running in a London pub, offering a skiing challenge and pub quiz along with adverts.