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