Telefonicawatch June/July 2010 — supplier activity summary
July 2, 2010
See the Telefonicawatch 2010.06 Report for more details.
| Unit | Supplier | Activity | Page |
| Movistar Ecuador | Intel | Education | 24 |
| Movistar Ecuador | Liga Deportiva Universitaria de Qui | Commercial alliance | 24 |
| Movistar Ecuador | Samsung | Handset | 24 |
| Movistar España | Apple | Handset | 14 |
| Movistar España | Compaq (HP) | Android devices | 15 |
| Movistar España | Dell | Android devices | 15 |
| Movistar España | Digital+ | Content | 14 |
| Movistar España | Gemalto | NFC | 17 |
| Movistar España | Huawei | Android devices | 15 |
| Movistar España | Rubberduck | Mobile TV | 19 |
| Movistar España | Samsung | Handsets | 14 |
| Movistar España | Samsung | Android devices | 15 |
| Movistar España | Samsung | NFC | 17 |
| Movistar España | Tata Communications | Interconnect, Telepresence | 18 |
| Movistar España | Telsis | Customer care automation | 19 |
| Movistar España | Visa | NFC | 17 |
| Movistar Panama | Sony Ericsson | Handset | 26 |
| Telefónica Brazil | TVA | TV | 22 |
| Telefónica Europe | Carat, Initiative, Mindshare, ZenithOptimedia | Media account shortlist | 28 |
| Telefónica Group | Giesecke & Devrient | NFC-enabled SIMs | 11 |
| Telefónica Group | Intel | MeeGo devices | 13 |
| Telefónica Group | Nokia | MeeGo devices | 13 |
| Telefónica Group | Samsung | NFC-enabled handsets | 11 |
| Telefónica International Wholesale Services | Convergys | BSS | 12 |
| Telefónica Latinoamérica | Alcatel-Lucent | LTE | 26 |
| Telefónica Mexico | Government of Mexico | Fibre network | 25 |
| Telefónica O2 Czech Republic | Nokia | NFC-enabled handsets | 11 |
| Telefónica O2 Czech Republic | NXP/MIFARE | NFC | 29 |
| Telefónica O2 Czech Republic | Samsung | Handsets | 29 |
| Telefónica O2 Czech Republic | Samsung | Notebooks | 31 |
| Telefónica O2 Germany | Huawei | HSPA-router | 30 |
| Telefónica O2 Germany | TOC | Advertising-funded mobile services | 30 |
| Telefónica O2 Ireland | Vesta | Prepay | 33 |
| Telefónica O2 UK | Apple | Handset | 36 |
| Telefónica O2 UK | Dell | Terminal | 33 |
| Telefónica O2 UK | Huawei | Handset | 35 |
| Telefónica O2 UK | NSN | Network | 36 |
| Telefónica O2 UK | Palm | Handsets | 35 |
| China Unicom | Apple | Terminal | 42 |
| China Unicom | Huawei | Interworking gateway | 42 |
| China Unicom | Research In Motion | BlackBerry | 41 |
| China Unicom | Samsung | Handset | 44 |
| China Unicom | Tencent | E-commerce | 42 |
| Portugal Telecom | Envivio | IPTV | 44 |
| Portugal Telecom | Microsoft | IPTV | 44 |
Telefonicawatch June/July 2010 — people movements
July 2, 2010
Summary of arrivals, transfers, and departures (see the Telefonicawatch 2010.06 Report for more details).
| Company | Executive | Details | Page |
| Manx Telecom | 300 employees | Disposal | 10 |
| Movistar Argentina | Gustavo Truffini | Appointment | 21 |
| Telefónica Europe | 100 employees | New centre | 32 |
| Telefónica Global Technology | 2,000 employees | Centralisation | 12 |
| Telefónica O2 UK | Ed Smith | Appointment | 38 |
| Telefónica O2 UK | Kate Jarvis | Promotion | 38 |
| Velti | Chris Boddice | Appointment | 7 |
Telefonicawatch issue 2010.06 Executive Brief
July 2, 2010
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Executive Brief from Telefonicawatch, issue 2010.06. Click through for: an Extract from this month’s report; the Issue Snapshot; or to contact us for more information about the full 50-page issue, this industry standard monthly report service, and ongoing subscription access.
- The bid to take control of Vivo was vetoed by the Portuguese government, leaving Telefónica accused both of desperately offering too much and being holed strategically. A legal appeal looks likely and to have a good chance of success. The Spanish incumbent had been accused of heavy handed tactics, but it had been assumed it would ultimately succeed in its bid. Portugal Telecom could return to the Brazilian market following any sale, although it may meet local government resistance. [pp.4-9.]
- Telefónica Global Technology is to be established as a new IT division to unify management and operation of worldwide information systems. Operations previously managed by individual country units will now be centrally-controlled from Spain. The new unit is another sign of Telefónica shifting resources in order to better target the multinationals, as well as trim costs. A contract for a new business support system solution from Convergys was also entered into, which should see real time billing and services for MNC customers. Further consolidation of functions within Telefónica Europe saw announcement of a central human resources centre in Dublin. [pp.12,32.]
- Potential deployments of near-field communication technology at Telefónica drew attention, with executives suggesting markets in Europe are particularly seeing signs of readiness for the services. There remains doubt about the availability of suitable handsets, however. Trials are underway in the Czech Republic and Spain. [pp.11,17,29.]
- Movistar España is aiming to expand its portfolio of “mini-tablet” devices, ahead of the Christmas 2010 market. Proposals for devices have been invited from vendors including Compaq, Dell, Huawei, and Samsung. The company is expected to offer the devices for less than EUR450, as part of the strategy to deliver affordable smart devices in order to drive mobile data use. The launch of the Huawei developed Movistar IVY handset also fits this strategy. [p.15.]
- O2 UK abandoned its strategy of offering unlimited mobile data downloads, in favour of capped services. The operator insisted most customers would not be affected, but commentators questioned the decision to make customers more conscious of potential costs rather than targeting the minority of heavy users. An upgrade of the London O2 network to cope with demand for data, by Nokia Siemens Networks, could be viewed as a reminder that heavy users may not be the biggest challenge faced by operators, but rather their density in metropolitan areas. Elsewhere, O2 Czech Republic is expanding its HSPA+ network and introducing new mobile internet tariffs, with the aim of prompting users to increase consumption of data, while flat rate mobile data tariffs were launched in Germany. [pp.28,30,34-35,36.]
- Telefónica claimed record levels of broadband growth in Brazil, and an upturn in its fixed line voice business. The improvements follow a lengthy period of service problems, which are greatly improved since the beginning of 2010. Deployment of door to door sales representatives is said to have contributed to the uplift. [pp.21,22.]
- GROUP: Telefónica sold Manx Telecom for EUR190m, to private equity firms HgCapital and CPS Partners. [p.10.]
- Telefónica was linked to a bid for a stake in Serbian state telco Telekom Srbija, although the reports have the look of overplayed speculation. Taking an increased stake in China Unicom in 2010 looks more likely. [pp.4,10.]
- Telefónica is working with Nokia and Intel on the development of MeeGo, a new Linux based smart device operating system that could support the delivery of converged services. [p.13.]
- MOVISTAR ESPAÑA’s mobile business performed poorly in latest market statistics from the CMT, while broadband subscriptions were dominated by alternative providers in a market with slowing growth. Decline in fixed line numbers continued, but residential lines saw a slight increase month by month. [p.16.]
- Telefónica España agreed a timetable for the overhaul of systems managing wholesale access to its network. [p.18.]
- Telefónica and Tata Communications signed an interconnect agreement that will see the pair collaborate on telepresence services. [p.18.]
- Telsis highlighted provision of natural language text query solutions to Telefónica in Spain. [p.19.]
- Movistar España is set to launch the iPhone 4 in coming weeks, and is reportedly to introduce a high definition mobile TV service for the device. In Latin America, new mobile TV services were also launched in Ecuador, with a device from Samsung that also enables content to be recorded. [pp.14,19.]
- Further promotional offers on bundles were announced by Movistar España following its unified rebranding, with mobile broadband deals made available to fixed line customers. Discounts for expanding small businesses were also extended. Regulator CMT maintained line rental prices at current levels for the third year running. [pp.16,20.]
- LATINOAMÉRICA: The Movitalk push to talk service debuted in Argentina, following earlier launches in Colombia and Ecuador. [p.21.]
- Vivo is expanding its 3G network, with plans to reach 85% of the population by 2012. LTE trials were reportedly successfully undertaken by Telefónica del Peru and Alcatel-Lucent using the 700MHz spectrum band, which is believed to be well suited to the provision of next generation mobile services across the continent. [pp.22,26.]
- Movistar Chile is offering free online storage through a new cloud computing service, which is being linked with its Homestation home multimedia platform. [p.23.]
- Telefónica Mexico was a member of the consortium winning rights to use fibre across the country to expand network coverage, enabling more effective competition with the incumbent. Telefónica also appears most to win bidding for a significant stake in state-owned operator ETB, in Colombia, although the decision making process is taking longer than anticipated. In Peru, Telefónica is examining prospects for building out its network through agreements with national infrastructure owners, such as electricity and rail network owners. [pp.23,25,26.]
- TELEFÓNICA EUROPE: O2 Germany debuted an ad-funded mobile service offering minutes, text and data downloads for customers willing to receive advertising. The operator also launched a Huawei HSPA enabled router capable of linking five devices using Wi-Fi connectivity. [p.30.]
- A point-to-point wireless leased line broadband offering for O2 business customers in Ireland was unveiled, pitched as an alternative to existing fixed-line services. [p.31.]
- O2 Ireland was served legal papers that could see it compelled to provide information on customers alleged to be illegally sharing copyrighted material online. O2 UK is also to be required to share information on file sharing customers. [pp.32,40.]
- O2 UK received a licence to trial LTE on 800MHz spectrum, with testing to begin in the north west of England in the third quarter of 2010. However, the company is still battling the government over the future of its existing 900MHZ spectrum licence. Limited stocks saw O2 UK restrict availability of the iPhone 4 on launch to existing iPhone customers. [pp.36,37,39.]
- ASSOCIATES AND INVESTMENTS: China Unicom is building momentum with its 3G rollout, and expanding m commerce capabilities. Portugal Telecom is launching a new PC based TV service intended to complement existing Meo services. Telecom Italia continues to battle to decide on the future of its stake in Argentinean operator Telecom Argentina. [pp.41,42,44,45.]
Telefónica positive on NFC
July 2, 2010
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Extracts from Telefonicawatch, issue 2010.06. Click through for: the Executive Brief from this month’s report; the Issue Snapshot; or to contact us for more information about the full 50-page issue, this industry standard monthly report service, and ongoing subscription access.
Telefónica positive on NFC
Telefónica Group confirmed that the Czech Republic, Spain, and the UK are likely to be first markets in which it will launch commercial near-field communications (NFC) payment services.
Michiel van Eldik, Group Director for New Business and Innovation at Telefónica said that these three countries have already conducted various technology trials and consumer pilots (Telefónicawatch, passim), and will potentially see handset-based payment service launches in late-2010 or early-2011.
” In these countries, we are seeing more and more evidence of market readiness, and we at Telefónica are most advanced in our developments. ”
– van Eldik.
The company cited its limited rollout of NFC-enabled Nokia 6212 handsets in Czech city of Pilsen (see separate report), to allow customers to pay for public transport, purchase tickets to local events, and make payments in local stores, as a demonstration of the readiness of its NFC systems for commercial launch.
Pablo Montesano, Director for New Businesses at Telefónica, speaking at the GSM Association‘s Mobile Money Summit in Rio de Janeiro, said that Telefónica estimates that mobile financial services could ultimately generate $1.5bn (EUR1.2bn) for the company.
” The last 18 months have been important to our understanding. We consider financial services one of the biggest opportunities within the Group. ”
– Montesano.
However, the company did cite the availability of reliable NFC handsets as a potential problem, after encountering performance issues with the Samsung S5230 NFC handset it used for a trial conducted at the Mobile World Congress in February 2010. The company said that it has worked with Samsung and Giesecke & Devrient, the NFC SIM supplier, to resolve the problems.
[Further reference: Telefónica O2 plans commercial NFC services -- FierceWireless, 28 May 2010.]
Telefónica España and La Caixa commence NFC pilot
Telefónica España and La Caixa, a Spanish financial institution, launched a six-month pilot Near-Field Communications (NFC) scheme in Sitges, Catalonia, in collaboration with Visa, Samsung and the Sitges City Hall.
The trial, dubbed “Mobile Shopping, Sitges 2010″, will involve 1,500 users and around 500 retailers, and allow customers to make purchases by tapping special NFC enabled handsets to the point-of-sale terminals using a version of Telefónica’s Movistar Wallet service.
Telefónica provide the NFC platform to manage the cards’ lifecycle, including issuance, activation, use and withdrawal, remotely and in real time, using over the air (OTA) technology.
For its part, La Caixa will issue the Visa cards to be placed in the trial participants’ mobile phone SIM card, and administer the retailers’ point of sale devices. Samsung will supply the NFC-enabled handsets. Gemalto will provide the NFC service platform and SIM cards.
The trial was announced at the Mobile World Congress in Barcelona at the beginning of 2010 (Telefónicawatch, 2010.02), and comes as Telefónica increases testing of NFC technology, with wider launches predicted, despite concerns over the quality of existing handsets (see separate report). In the UK, where early trials took place, the local O2 unit is focusing on partnering to provide financial services, and has indicated it is unlikely to commercialise NFC until the capabilities of the available devices have caught up with the technology.
[Further reference: "la Caixa", Telefónica and Visa start in Sitges the first mobile shopping experience in Spain -- La Caixa, 28 May 2010.]
O2 launches NFC service in Pilsen
Telefónica O2 Czech Republic announced the commercial launch of a near-field communications (NFC) payment service in collaboration with the City of Pilsen and local transit company Plzenske Mestske Dopravni Podniky, allowing customers to pay for fares on public transport, book tickets for events, and make small purchases in participating shops.
The service uses MIFARE technology, developed by NXP Semiconductors to integrate a contactless Plzenska karta card that is already in use by over 230,000 inhabitants of the city, into a customised Nokia 6212 handset.
The Plzenska karta card has been in use since 2004, and has an established payment network. As well as its primary function as a prepaid card for use on the city’s public transport system, it also allows customers to use the card as an electronic purse to pay for goods and services of contractual partners, and purchase tickets for cultural events. It also doubles as a library card in the Pilsen City Library, as well as being used by a number of local companies as an “employee card” for monitoring employee attendance and enabling use of printers, and in some secondary schools to purchase cafeteria meals.
It was noted that integrating the card into a mobile phone will allow users to view balance and transactions details, on the handset display, via a Java application, rather than needing to visit special terminals.
The mobile service was originally presented at the GSMA Mobile World Congress in 2009, and has subsequently been through a number of trials (Telefónicawatch, 2009.02).
” During a trial run that started in April 2009, the NFC services were used by 50 users in total, who have given it a very positive evaluation. In particular, they highlighted the fact that they keep their handset handy all the time in fact, and therefore, there is no need to look for a card to make the payment. Another advantage, according to their opinion, is the possibility to display transaction history and balance directly on the handset display. If they were to choose between a standard ‘Plzenska karta’ card and an application of the same name in their handset, most of the trial users would prefer [the] mobile handset. ”
– Jiri Malik, Sales Director for Public Administration and Government, Telefónica O2.
The NFC handsets are available from 22 May 2010, priced from CZK 495 (EUR19) as part of a new contract or extension, or at CZK 4,495 on a stand-alone basis.
[Further reference: ‘Plzenska karta' card in a mobile now thanks to the unique NFC technology -- Telefónica O2 Czech Republic, 24 May 2010.]
Unicom launches NFC m-commerce service
The Beijing branch of China Unicom launched a NFC (Near Field Communication)-powered mobile commerce service in partnership with Beijing Municipal Administration and Communications Card Company (BMAC).
BMAC operates the Yikatong card, which is a contactless “stored value” card that can be used to make payments on the city’s buses, subway system, in taxis and in retail stores. It will be made available to mobile phone users either via SIM cards with built-in NFC antennas, or using two handset models which have the technology embedded.
Users will also be able to check balances and payment transaction histories from their handsets, and credit balances can be topped-up via the existing BMAC kiosks or over the-air.
[Further reference: China Unicom adopts SIMpass for mobile payments -- China Payments News, 9 June 2010.]
Telefonicawatch, issue 2010.06 snapshot
July 2, 2010
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Snapshot of Telefonicawatch, issue 2010.06. Click through for: the Executive Brief from this month’s report; an Extract from the issue; or to contact us for more information about the full 50-page issue, this industry standard monthly report service, and ongoing subscription access.
Table of Contents
1 Executive Brief
4 Group
4 Acquisitions and disposals
4 Portugal wields golden share to veto Vivo bid
4 Acquisitions and disposals
4 Telefónica linked to Telekom Srbija bid
5 Shareholder meeting to vote of Vivo offer
5 Bid provides divestiture options
5 Associates and investments
6 Financing options
6 Signs both sides considering all means necessary
6 Dividend plans could sweeten deal
6 M&A
7 Telefónica fails to “sell” PT stake in attempt to avoid conflict of interest…
7 Analysts ponder when, rather than if…
7 People
8 …but potential regulatory barriers remain
8 Financial
9 If the bid fails…
9 Options for PT
10 Telefónica sells Manx Telecom for £158.8m
10 Associates and investments
10 Telefónica set to increase Unicom holding — reports
10 Society
10 Telefónica undertakes 1GOAL push
11 Mobile payments
11 Telefónica positive on NFC
12 Operations
12 Telefónica unifies global IT management
12 Consolidating internally, to better target multinationals
12 Telefónica chooses Convergys for Smart BSS solution
13 Products and services
13 Telefónica ties with Nokia and Intel to explore MeeGo
14 Regulatory
14 Operators push for “Google Tax”
14 Operators seek to squeeze Google/YouTube
14 Devices
14 Mobile TV
15 Telefónica España
15 Devices
15 Telefónica sends out call to expand tablet portfolio
15 Movistar launches Huawei Android device
15 Network
16 Market statistics
16 Movistar lags rivals in subscriber additions
16 Broadband market share still slipping
16 Fixed-line position shored up by residential lines
16 Pricing and tariffs
17 Mobile payment
17 Telefónica and La Caixa commence NFC pilot
17 Society
18 Network
18 Telcos agree Telefónica network access plan
18 Telefónica and Tata sign inter-carrier agreement
18 Universal service
19 Partners and suppliers
19 Movistar’s Telsis automation solution trumpeted
19 Rubberduck providing Movistar iPhone TV service?
20 Pricing and tariffs
20 Re-branded Movistar promotes bundles
20 Movistar renews growing business offers
20 Line rental charges frozen again by CMT
21 Telefónica Latinoamérica
21 Argentina
21 Movitalk launches in Argentina
21 Brazil
21 Telefónica claims record Speedy growth
21 Argentina
22 76% drop in complaints in 2010 so far
22 Telefónica boosts Wi‑Fi rollout
22 Brazil: Vivo
22 Vivo details 3G network expansion
22 Brazil
22 Brazil: Vivo
23 Chile
23 Movistar Chile launches cloud computing service
23 Colombia
23 Further delays in ETB sales process
23 Chile
24 Ecuador
24 Mobile TV handset launched in Ecuador
24 Movistar partners Intel on education
24 Movistar enters strategic alliance with football league
24 Ecuador
25 Mexico
25 Telefónica in winning Mexican fibre bid
25 Panama
25 Telefónica to support health ministry
25 Peru
26 Movistar launches entertainment-oriented phones
26 Peru
26 LTE trial completed with Alcatel Lucent
26 Telefónica del Peru considering fibre infrastructure plans
26 Peru
27 Peru to introduce prepaid registration
27 Peru
27 Fitch affirms TdP rating
27 Venezuela
28 Telefónica Europe
28 Czech Republic
28 TOCR adds HSPA in 13 key cities
28 O2 launches flat rate internet tariffs
28 Advertising
28 Czech Republic
29 O2 launches NFC service in Pilsen
29 O2 adds three Samsungs to handset portfolio
29 Czech Republic
30 Germany
30 O2 launches Huawei E5 router
30 O2 debuts ad-funded mobile service
30 O2 Germany launches smartphone option for surf flatrate
30 Czech Republic
31 Ireland
31 O2 launches business wireless leased line service
32 Telefónica to launch EUR25m HR centre in Dublin
32 IRMA to sue O2 and 3 over illegal file sharing
32 Germany
32 O2 planning Alice brand phase-out
33 United Kingdom
33 O2 Simplicity brand expands to pre-pay
33 Streak confirmed on O2
33 Ireland
34 O2 ends unlimited data tariffs
34 O2 UK smartphone tariffs
34 Some debate over wisdom of decision
34 Slovakia
35 Industry moves as operators bow to inevitable
35 UK
36 O2 cleared for LTE testing at 800MHz
36 NSN upgrades O2 UK London network
36 UK
37 O2 restricts iPhone 4 to existing customers
37 Contract buy-out value questioned
37 O2 clarifies restrictions for Home Access customers
37 UK
38 O2 appoints Ed Smith to head, “realign” legal team
38 Operators lose roaming appeal
38 UK
39 O2 to appeal to CAT in spectrum dispute
39 UK
39 Ofcom rules in Stour Marine MTR dispute with O2
40 O2 set to be impacted by copyright code of practice
40 UK
40 O2 launches new home broadband ad campaign
40 O2 pay dispute continues
41 Associates and investments
41 China Unicom
41 Unicom confirms stronger 3G subscriber performance
41 China Mobile 3G base nears ten million
41 China Unicom
42 Unicom to launch mobile app store
42 Unicom launches NFC m-commerce service
42 Unicom extends ties with Tencent
42 China Unicom
43 Portugal Telecom
43 PT faces opposition to mooted Oi bid
43 China Unicom
44 PT to debut PC-based TV service
44 Telecom Italia
44 TI plans solo next generation access push
44 China Unicom
45 TI moves forward in latest round of Argentine legal battle
45 Telecom Italia
46 Index
Telefonicawatch, issue 2009.08 snapshot
October 9, 2009
Issue: 2009.08
Covering: September 2009
Published: October 2009
Next issue: October/November 2009
Delivering valuable insight into the labyrinth that is Spain’s global telco giant. A unique monthly report for the industry.
EXECUTIVE BRIEF
- MAIN STORIES: Telefónica announced global trials of LTE technology featuring six vendors and pilots in six countries. Alcatel-Lucent, Ericsson, Huawei, NEC, Nokia Siemens Network, and ZTE will initially feature in the programme, which is part of Telefónica’s LTE partner selection process, and is intended to examine the potential of 4G technology, particularly for mobile broadband-based services. [p.6.]
- Telefónica Group is to open new operational units in 15 European countries outside its current footprint, as part of efforts to establish itself as an integrated services provider to multinational corporations. [pp.7-8.]
- Telefónica España announced the launch of mstore, a mobile application store featuring more than 1,000 apps offered at prices up to EUR19.99. The company intends to roll out the store across its mobile territories as it grows mobile broadband use. SME customers are also to be offered software-as-a-service business applications through a new online store operated by Telefónica and NEC Iberia, as part of efforts to position the telecoms operator as a managed services provider. [pp.11,14.]
- José-María Pallete, head of Telefónica in Latin America, again trumpeted the importance of the region, and indicated that recent years’ growth has been built on stable foundations, while emphasising the continent’s young population, which is enthusiastically adopting new technology and leading innovation. [p.18.]
- O2 did its best to be seen to shrug off news that rivals Orange and Vodafone will join it in selling Apple’s iPhone in the UK, with Chief Executive Ronan Dunne almost blasé about the separate prospect of his company’s market leadership being overhauled by the proposed Orange and T-Mobile tie-up. To prove ‘life goes on’, Telefónica Europe detailed launch plans for Palm’s innovative Pre handset in mid-October, with tariffs generally similar to the iPhone; and faith was reiterated in the market-leading value of the O2 brand. [pp.29-31,40.]
- GROUP: Telefónica made a bid worth up to EUR2.5bn for Brazilian telecoms operator GVT, trumping an earlier offer from French media and communications conglomerate Vivendi. This new battle appears to have put an end to a planned collaboration with Vivendi to buy Spanish pay-TV player Digital+. [pp.3,20.]
- After the recent announcement of its bilateral shareholding agreement with the Chinese operator, Telefónica became the sole overseas stakeholder in China Unicom, after South Korea’s SK Telecom agreed to sell back its interest in the operator. Telefónica does not appear to be as welcome a presence among the owners of Telecom Italia, however, with government ministers expressing concern about the incumbent remaining in Italian control, and other shareholders questioning the value of TI’s close links with its Spanish peer. [pp.3,4.]
- ESPAÑA: Telefónica is launching tailored VDSL2 broadband products, supposedly as a consequence of its decision to scale back short-term fibre rollout. The company also marked the tenth anniversary of the launch of broadband in Spain, although: the operator appears to be struggling to maintain market share; is expected to see tougher competitive threats from unbundlers; and market penetration remains relatively low. In contrast, market statistics suggest the domestic mobile business is still competing strongly. [pp.9-10.]
- Telefónica España Chief Executive Guillermo Ansaldo emphasised his company’s commitment to the domestic market, highlighting investment, which is proportionally rising in challenging conditions. He also suggested Telefónica would be prepared to consider spectrum re-farming as it strives to obtain a new allocation for mobile broadband growth, which is increasingly becoming the Holy Grail for the Telefónica OpCo. Huawei announced it had deployed a metro services solution for Telefónica España. [pp.12-13.]
- Telefónica España introduced a new “Clientes” division, which is to become the focus for domestic strategy, marketing, and quality of service for business customers. New executive positions were also created for the management of regional operations in Andalucía, Asturias, and Galicia. [p.13.]
- As the Spanish telco continues to address increased competition and restricted spending in recession-hit Spain, new tariffs and bundled offers were introduced for fixed line and mobile services, with additional flat-rate plans and service add-ons. [p.16.]
- LATINOAMÉRICA: Telefónica is to offer the Nokia Messaging solution across Latin America, following an agreement with the vendor; the service is already available on the Movistar network in Ecuador. MoreMagic Solutions, a mobile transactions provider, agreed a contract to enable Movistar mobile accounts in Latin America to be topped-up at retail locations across the USA. [p.17.]
- Ernesto Gardelliano was named Chief Executive for Movistar Argentina after his predecessor Federico Rava was appointed to a role in the new Clientes division in Spain. [p.19.]
- Political factors are increasingly impacting on Telefónica’s ability to deliver triple-play services in Argentina, particularly plans for pay-TV. Apparent government antagonism towards a rival may be some consolation, however. Speculation continues as to whether more nationalisation of telecoms business in Venezuela is part of the Chavez government’s plans. In Brazil, a new state-owned fibre broadband network is under consideration. [pp.19-20,22,28.]
- Telefónica in Brazil is to offer customers digital communications solutions from LG-Nortel, following an agreement with local distributor Olifone. [p.20.]
- Soon after seeing restrictions lifted on the sale of broadband services in Brazil, it was reported that further action is being taken against Telefónica by consumer-protection authorities relating to failures of both wireline telephony and broadband services. [p.21.]
- Vivo has now paid 90% of the money due for its Brazilian 3G licence. A Huawei backed study predicted mobile broadband would see annual growth of more than 70% for the coming five years in Brazil, albeit from a starting point below the global norm. [p.23.]
- Movistar Chile called for more spectrum to be made available to established operators, as the regulator looks to attract new entrants. A new holding company will consolidate all Telefónica business units in Chile, replicating the restructuring example of Telefónica del Peru. [p.26.]
- Telefónica in Mexico was awarded additional spectrum, as local authorities distributed under-used spectrum previously reclaimed from rival Iusacell. Movistar Mexico launched a voice to text service, as the regional roll out of the SpinVox-based solution continues. [p.26.]
- The cost of calling mobiles from landline was capped in Colombia, while in Brazil fixed-line rate increases were cleared by Anatel. [pp.21,24.]
- Telefónica del Perú said it is on track to reach the halfway point of a partially state-funded roll out of wireline voice and broadband services to remote areas of the country. The project is to provide connectivity to an additional four million people. The 3.5G rollout in Venezuela continued, with more regions added to Movistar’s coverage. [pp.27,28.]
- EUROPE: Douglas Gregory was appointed to an EU lobbying role for Telefónica Europe. O2 UK, and its main domestic rivals, looked to have failed in an appeal to the European courts protesting EU-mandated price cuts. Regulators in the Czech Republic and Slovakia were pressed to introduce greater cuts to termination rates in their markets, and end asymmetry in Slovakia that currently favours the local O2 business. [pp.29,31,32,39.]
- Critical Path highlighted its role in provisioning over-the-air mobile back-up services to TOCR. [p.32.]
- O2 Germany completed the country’s “largest ever” live network upgrade, as Huawei replaced more than 5,000 base stations. The German unit also called for action to be taken in upcoming auctions, to make spectrum allocation more equal between operators. [pp.33-34.]
- Rubberduck Media Lab highlighted its role in providing mobile TV services to O2 Ireland, amidst signs that the deal could be expanded to other Telefónica operating companies. O2 Ireland is expanding its retail presence through a chain of 35 franchised stores. [p.35.]
- Manx Telecom is deploying Alcatel Lucent technology to enable the provision of triple-play fixed-line services, using what the vendor describes as “fibre to the most economic point” . [p.37.]
- O2 UK enhanced its offerings to the SME sector with the launch of new converged solutions, featuring wireline, mobile, and consultancy services. [p.41.]
- A new mobile brand, Giffgaff, is set to be launched by O2, which aims to create a user community that resolves its own support issues and contributes to management and growth of the service — thus supposedly achieving low operational costs. [p.42.]
- O2 UK is offering music-recognition services in partnership with Shazam. [p.43.]
- ASSOCIATES AND INVESTMENTS: China Unicom commercially launched its 3G network, and is also set to officially unveil the iPhone locally. Portugal Telecom is borrowing EUR200m as it invests in fibre rollout. Telecom Italia is seeing plenty of interest in its Telecom Argentina stake, and could raise more than EUR2bn from proposed asset sales. [pp.46-53.]
EXTRACT
OPERATIONS
Telefónica opens 15 new country offices
Telefónica Group announced the opening of new operational units in 15 European countries outside its current footprint, and launched a new suite of solutions for corporate customers, including the Telefónica Multinational Solutions web portal. The company said both developments were expected to enhance the integrated telecommunications services it offers Deutsche Post DHL (Telefónicawatch, 2009.01) and other multinational customers (MNCs) across the region.
Telefónica International Wholesale Services is overseeing the deployment of the new network infrastructure and offices, which are located in Austria, Belgium, Bulgaria, Denmark, Estonia, France, Greece, Hungary, Italy, Netherlands, Poland, Portugal, Romania, Sweden, and Switzerland. The rollout includes the provision of wide area network connectivity, centralised internet access, local area network (LAN) such as wireless LAN, fixed voice, mobile voice and data, and managed security, the company said.
” Telefónica’s global capabilities allow us to quickly and efficiently deliver both fixed and mobile solutions to multinational corporations anywhere in the world. The new offices and network infrastructure being deployed in Europe, supported by a new online experience and enhanced products and services, reinforces our commitment to this strategically important market segment. Telefónica is making good progress, and is executing in line with the strategy to expand presence and services to corporate customers already announced in December 2008. ”
– Matthew Key, Chairman and Chief Executive, Telefónica Europe.
The Telefónica Multinational Solutions web portal is claimed to have been designed to improve the online experience for customers. According to the company, the portal focuses on customer “pain points”, using case studies and “clear benefit-led language” to help improve communication with customers.
Telefónica also said it has made significant progress with the delivery of an enhanced Service Management Centre to support fixed and mobile services for MNCs, and that the Central Services Platform now offers: asset management; a customer portal; central management of systems and infrastructure; central reporting; device management; online ordering; SLA management; telecom expense management; and trouble ticketing.
” Providing a personalised customer service is an important aspect of Telefónica’s value proposition to MNC customers. The new service management functionality available in Europe is a competitive key differentiator that we can offer to our customers. ”
– Key.
Customers yet to emerge, however…
The Deutsche Post MNC deal announced in January 2009 was expected to mark Telefónica’s entrance into a new market already well-populated with major players such as AT&T, BT Global Services, Orange, and Verizon. While Telefónica did indicate at the time that it expected new deals to principally start coming down the pipeline in 2010, it had said that more news on deals was expected to emerge during 2009. However, since the Deutsche Post deal, no contracts of remotely comparable worth have been flagged.
The Telefónica move into the sector took analysts by surprise, and, even though the Group said it had the main skills and resources in place due to the acquisition of O2 in 2006, and that it had completed much of the work to support the contract, the lack of news of further deals suggests major businesses are yet to be convinced, despite probable favourable terms. Yet considering the standing start Telefónica is attempting to grow from, paired with its global reach and pragmatic management approach, Telefónicawatch is refusing to be cynical, and expects to hear more concrete news as part of the Investors Conference in October 2009.
[Further reference: Telefónica opens offices in 15 European countries and launches new web portal to support multinational corporations -- Telefónica, 14 September 2009; Telefónica expands in Europe -- BMI Emerging Europe Telecommunications Insights, 17 September 2009.]
Georgia suggests possible Telefónica entry
Giorgi Akhalaia, Chairman of Communications and IT Technologies at the Department of Economic Development in Georgia, suggested that Telefónica is considering entry into the Georgian fixed and mobile telecoms markets.
Currently, the fixed-line market in Georgia is dominated by United Telecom, but with 4.6 million inhabitants and 550,000 active fixed lines, fixed penetration stands at only around 12%. The GSM market has three players, Geocell, Magti, and Mobitel, and mobile penetration stands at around 80%. In the internet market, Caucasus Networks stands as the dominant player, but penetration is still in the single digits, implying significant scope for organic growth.
Although no further details were released, the story was apparently confirmed by Zurab Pololokashvili, Georgian Minister of Economy, who said that negotiations with Telefónica were in line with the Georgian government’s Action Programme for the period 2004-2009, which places telecommunications sector development among the government’s top priorities.
Telefónica itself has not yet given any indication of an interest in entering the Georgian market and Telefónicawatch suspects that, beyond a level of political posturing that often sees Telefónica linked to investments in countries hoping to expand their telecoms markets, talks are most likely around the building of a presence in line with the Group’s plans for delivering global services to multinational corporations (see separate report).
[Further reference: Telefónica in talks to launch services in Georgia -- Digital Media Europe, 11 September 2009; Georgian Communications Ministry claims Telefónica interest in national telecoms market -- Global Insight, 14 September 2009.]
TABLE OF CONTENTS
3 Telefónica Group
3 M&A
3 Telefónica and Vivendi end Digital+ bidding partnership
3 Associates and investments
3 Li ends PCCW control bid
3 Telefónica moves for GVT after Vivendi bid
3 Telefónica becomes Unicom’s sole foreign investor
4 Fossati ponders TI stake, doubts Telefónica benefits
4 Future of Telco SpA consortium still uncertain
4 Italian government still unsure about Telefónica TI stake
4 Telefónica ordered to sell Telecom Argentina stake
5 Community
5 Telefónica tops Dow Jones Sustainability Index
5 Employment
5 Telefónica ponders global employee share programme
6 Devices
6 Palm on Telefónica relationship
6 Networks
6 Telefónica Group commissions global LTE trials
7 Financial reports
7 Broker questions Telefónica valuation
7 Operations
7 Telefónica opens 15 new country offices
8 Customers yet to emerge, however…
8 Georgia suggests possible Telefónica entry
9 Telefónica España
9 Broadcasting services
9 Telefónica acquires production unit
9 Broadband
9 Telefónica marks ten years of broadband with VDSL
9 CMT cuts unbundled DSL prices
10 Community
10 Market statistics
10 CMT figures show Telefónica defending market share
10 Movistar outperforms established peers
10 Broadband continues gradual growth
10 Fixed-line declines and porting grows
11 Research points to Movistar market share decline
11 Mobile services
11 Movistar España opens mstore
12 Network
12 Rival Ono to launch MVNO on Movistar network
12 Huawei awarded Spanish Metro Ethernet contract
12 Telefónica willing to participate in spectrum re-farming
13 Partners
13 Telefónica trumpets Microsoft collaboration
13 Ansaldo emphasises Telefónica investment in Spain
13 Operations
13 New customer-focused division launched by Telefónica
14 Products and services
14 Aplicateca app store launched for SMEs
15 Telefónica offers free access to telepresence suites
15 Regulatory
15 Linares criticises EU regulation
16 Tariffs and pricing
16 Movistar updates tariffs…
16 …Telefónica triple-play offer also upgraded
17 Telefónica Latinoamérica
17 Regional deals
17 Telefónica to launch Nokia Messaging across LatAm
17 MoreMagic trumpets Latin America top-up deal
18 Regional strategy
18 Álvarez-Pallete on LatAm mobile broadband opportunities
19 Argentina
19 New Movistar Argentina head named
19 Political factors continue to impact Argentina telecoms
20 Brazil
20 Telesp signs 20,000 Speedy customers in five days
20 Vivendi bids for Telefónica rival
20 New audio-visual bill could affect Telefónica TV plans
20 Telefónica agrees joint venture with LG-Nortel in Brazil
21 Further action taken against Telesp over service levels
21 Anatel clears fixed-line rate rise
22 Brazil considers new state-owned fibre network
23 Brazil: Vivo
23 Vivo makes 3G licence payment
23 Mobile broadband to grow by 70%-a-year in Brazil
24 Chile
24 Telsur investor plan ups competitive threat to Telefónica
24 New holding company for Telefónica Chile
24 Movistar calls for new spectrum release
24 Colombia
24 Movistar Colombia sees new rate caps imposed
25 Ecuador
25 Nokia Messaging launched in Ecuador
25 Movistar Ecuador continues to lag behind Porta
26 Mexico
26 SpinVox solution launched in Mexico
26 Movistar benefits from reclaimed Iusacell spectrum
27 Peru
27 Peru spectrum auction reconsidered
27 Telefónica makes progress on rural telecoms rollout
27 Movistar predicts 85%-penetration in Peru
28 Venezuela
28 Rumours of Venezuelan mobile nationalisation plans
28 New BlackBerry Curve launched in Venezuela
28 Movistar continues 3.5G rollout
29 Telefónica Europe
29 Appointments
29 Gregory appointed to EU lobbying role
29 Devices
29 O2 sanguine on end of iPhone exclusivity
30 Exclusivity may be gone, but iPhone ‘halo’ may not have completely slipped
31 O2 unveils Palm Pre promotions
31 Regulatory
31 Telefónica Europe fails in roaming regulation block bid
32 Czech Republic
32 TOCR selects Phone Back-Up from Critical Path
32 EC pressures Czech regulator on MTRs
33 Germany
33 O2 calls on government to end spectrum inequality
34 Huawei trumpets German live network upgrade
34 Ireland
34 O2 eyes Smart acquisition
35 O2 Ireland unveils franchised store plan
35 O2 ties with Rubberduck for TV deal
36 O2 demonstrates self-sustaining mast
37 Isle of Man
37 Manx Telecom to deploy Alcatel-Lucent cabinets
38 Manx Telecom wins e-Gaming Disaster Recovery licence
39 Slovakia
39 Telefónica trumpets success of O2 Fér
39 EC calls on TUSR to speed MTR reductions
40 United Kingdom
40 Dunne bullish on O2 prospects post-Orange-T-Mobile deal
41 O2 launches “Joined up” service for SMEs
42 IEMR predicts strong EBITDA for O2 UK
42 O2 offers “unlimited” mobile internet bundle
42 O2 UK to launch new online SIM-only brand
43 IEMR predicts strong EBITDA for O2 UK cont’d
43 Mobile data use peaks when pubs close
43 O2 UK links with Shazam for music-discovery solution
43 O2 Media opens forum for industry feedback
44 O2 on data management and business intelligence
44 O2 places second in e-commerce review
45 O2 launches iPhone account management app
45 Mobile Commerce trumpets O2 Money role
46 Associates and investments
46 China Unicom
46 China Unicom 3G network sees commercial launch
47 iPhone launch date announced; exclusivity denied
47 Unicom to invest ahead of World Expo
48 Unicom awards ZTE order as 3G handset deals done
48 Handset subsidies rumoured to be under consideration
48 Unicom deploys Huawei unified network management
48 Revenue-split arrangements pondered for Wo Store
49 Unicom plans 2G micropayments
49 Unicom continues to see GSM growth, fixed decline
49 New charging systems planned for Unicom
49 Unicom plans high-definition video-on-demand
50 Portugal Telecom
50 PT launches fibre services, borrows EUR200m
50 PT fined for abuse of dominant position
50 PT fixed-line market share down as overall access grows
51 Telecom Italia
51 TI sales could bring in EUR2bn+
51 TI denies Media unit offers
52 TI sees plenty of interest in its Argentinian assets
52 TI appeals Telecom Argentina ruling
53 Nokia Messaging launched by Telecom Italia
53 TIM Brasil deploys Alca-Lu packet transport solution
55 Index
Telefonicawatch, issue 2009.07 snapshot
September 7, 2009
MAIN STORIES: Telefónica agreed to sell its stake in Meditel, its Moroccan joint venture with Portugal Telecom. The pair are to receive EUR400m each for their share in the company, which is being acquired by local investors. There were further rumours that a Telefónica acquisition of Telecom Italia’s German broadband business HanseNet was getting closer — rumours that could now gain credence as the Meditel sale generates funds. Telefónica was again linked with an acquisition of T-Mobile UK, a potentially pricier proposition. [p.3.]
Statistics from the Spanish regulator the CMT suggested the decline in Telefónica’s fixed-line base is accelerating, with a record numbers ported to altnets, and a decline in the total number of lines in the country. In the Spanish mobile sector, MVNOs also continue to rise, winning over half of net adds in Q2, as Movistar’s market share shrinks. Telefónica is also failing to defend its domestic broadband market share. [p.7.]
In Brazil, regulator Anatel lifted restrictions on Telefónica selling broadband products, after it was satisfied network improvement programmes were in place. The suspension spurred Telefónica to embark on a substantial PR campaign to highlight improvements, announcing just ahead of the resumption of broadband sales that the Telefónica network had been extended to another 91 cities as part of a Sao Paulo region-wide rollout. [pp.14-17.]
Oracle was awarded a contract to provide inventory management solutions to Telefónica O2 Czech Republic. Ericsson landed a contract to supply an IMS core system and VoIP application server to Telefónica Germany. [pp.28,31.]
Telefonicawatch, issue 2009.6 snapshot
September 7, 2009
H1 FY09 RESULTS: Telefónica published its results for the first half of 2009, which were generally received as being pleasingly “solid” . Reported revenue for the half year of EUR27.6bn was down 2% year-on-year, but, when considered on an organic basis, the company saw revenue growth of 1.4% for the period. Telefónica Latinoamérica was again the key driver behind the revenue performance, while Telefónica Europe also played its part, despite being hampered by the continued weakness of sterling. OIBDA and net income were slightly ahead of the levels predicted by analysts, with results of EUR10.9bn and EUR3.62bn, respectively. OIBDA was up 0.7%, excluding capital gains impact, and up 3% if currency movements were disregarded. [pp.3-5.]
Telefonicawatch, issue 2009.05 snapshot
August 3, 2009
There were reports that Telefónica is to centralise much of its global purchasing through Germany. The centre, in Munich could control as much as EUR17bn in annual spending on information systems, market products, and network infrastructure. [p.6.]
Telefonicawatch, issue 2009.04 snapshot
July 1, 2009
MAIN STORIES: Telefónica announced its results for the first quarter of 2009, with the benefits of a diverse geographic business evident in the current global climate. Business in Spain reflected the extent of the recession in the country, but impressively robust results from O2 in Europe, and strong yet controlled growth in Latin America, offered cause for optimism. [pp.3-23.]
Jaime Smith, O2 Germany Chief Executive, is taking on a new Group role, responsible for strategy in relation to industrial alliances. However, with Smith’s reputation built on impressive operational performance, Telefónicawatch wonders whether the move is an early portent of acquisition activity. Smith will be replaced in Germany by Rene Schuster, a former senior marketer for rival Vodafone. [pp.24-25.]
Telefónica selected agencies Interbrand DBB and Y&R Lambie to manage the overhaul of the Group’s global branding, with Movistar and O2 set to become converged consumer brands for all mobile and fixed-line services, and the Telefónica brand to be reserved for corporate communications. [pp.25-26.]
The Apple iPhone 3GS was unveiled, and subsequently exclusively launched by O2 in the UK and Movistar in Spain, with an Irish launch imminent. Nevertheless, there was speculation that O2 UK may lose exclusivity on iPhone sales before the end of 2009. Movistar España launched the Nokia N97 smartphone in Spain, but O2 UK passed on the opportunity to sell the device, and warned it would continue to be choosy with regard to available high-end devices. [pp.30,47-49,60.]
Movistar Messenger , an instant messaging service hosted and managed by Colibria, is to launch in Peru, ahead of a rollout across Movistar operations in Latin America. SpinVox’s voice-to-text solution will also be deployed across Telefónica Latinoamérica mobile units, having been operational in Peru since 2008. The system is expected to generate new revenue streams, and will be customised to take into account local language variations. [pp.38-39.]
