About Telefonicatch

Issue: 2010.06
Covering: June/July 2010
Published: June 2010
Next issue: July 2010

Ongoing tracking and insight into Telefónica Group; delivering valuable insight into the labyrinth that is Spain’s global telco giant.
A unique monthly report for the industry.

• Telefonicawatch is the only independent monitor of everything and anything to do with Telefonica Group, worldwide. Nothing else comes close. Thorough, impartial, accessible, and time-saving.
• Covering not just a leading European and Latin American integrated telecoms group and one of the world's top-five players and its many operating companies, but also its wider interests, including the Atento contact centre business, Vivo in Brazil, Telecom Italia, Portugal Telecom, and China Unicom.
• Our ‘watch' titles are repeatedly described by clients and end-users as the single most valuable source of third-party sales intelligence, and are considered invaluable by many high-achieving commercial teams and account directors.
• A unique source of valuable opportunities, knowledge, planning, strategy, and much more, the reports represent both tactical tool and strategic reference, providing input and even a springboard for corporate planning, reporting, and meetings.
• A ‘must-have' for sales teams focused on high-value sales, maintaining strategic relationships, and managing extended sales cycles. Just one nugget, insight, or validation can pay for the service many times over.
• Pricing is typically USD $4.2k / EUR 2.8k / UKP £2.5k per year for a workgroup or small/midsize account, and can be tailored to meet your specific needs and situation. Copies of individual reports are also available, priced from UKP 500 (USD $825 / EUR 560). Multiple purchasing options available, including payment cards.
• Delivered electronically 10-12-plus times a year, with back issues also available, providing unparallelled reference and insight into major events, strategic initiatives, financials and KPIs.
• Contact us for further information, including samples and evaluation trial requests. info@marketmettle.com / +44-20-7183-0111.

About Telefonicatch

Issue: 2010.06
Covering: June/July 2010
Published: June 2010
Next issue: July 2010

Ongoing tracking and insight into Telefónica Group; delivering valuable insight into the labyrinth that is Spain’s global telco giant.
A unique monthly report for the industry.

• Telefonicawatch is the only independent monitor of everything and anything to do with Telefonica Group, worldwide. Nothing else comes close. Thorough, impartial, accessible, and time-saving.
• Covering not just a leading European and Latin American integrated telecoms group and one of the world's top-five players and its many operating companies, but also its wider interests, including the Atento contact centre business, Vivo in Brazil, Telecom Italia, Portugal Telecom, and China Unicom.
• Our ‘watch' titles are repeatedly described by clients and end-users as the single most valuable source of third-party sales intelligence, and are considered invaluable by many high-achieving commercial teams and account directors.
• A unique source of valuable opportunities, knowledge, planning, strategy, and much more, the reports represent both tactical tool and strategic reference, providing input and even a springboard for corporate planning, reporting, and meetings.
• A ‘must-have' for sales teams focused on high-value sales, maintaining strategic relationships, and managing extended sales cycles. Just one nugget, insight, or validation can pay for the service many times over.
• Pricing is typically USD $4.2k / EUR 2.8k / UKP £2.5k per year for a workgroup or small/midsize account, and can be tailored to meet your specific needs and situation. Copies of individual reports are also available, priced from UKP 500 (USD $825 / EUR 560). Multiple purchasing options available, including payment cards.
• Delivered electronically 10-12-plus times a year, with back issues also available, providing unparallelled reference and insight into major events, strategic initiatives, financials and KPIs.
• Contact us for further information, including samples and evaluation trial requests. info@marketmettle.com / +44-20-7183-0111.

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.

1. 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.]
2. 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.]
3. 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.]
4. 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.]
5. 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.]
6. 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.]
7. GROUP: Telefónica sold Manx Telecom for EUR190m, to private equity firms HgCapital and CPS Partners. [p.10.]
8. 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.]
9. 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.]
10. 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.]
11. Telefónica España agreed a timetable for the overhaul of systems managing wholesale access to its network. [p.18.]
12. Telefónica and Tata Communications signed an interconnect agreement that will see the pair collaborate on telepresence services. [p.18.]
13. Telsis highlighted provision of natural language text query solutions to Telefónica in Spain. [p.19.]
14. 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.]
15. 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.]
16. LATINOAMÉRICA: The Movitalk push to talk service debuted in Argentina, following earlier launches in Colombia and Ecuador. [p.21.]
17. 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.]
18. 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.]
19. 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.]
20. 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.]
21. 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.]
22. 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.]
23. 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.]
24. 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.]

About Telefonicawatch

Issue: 2010.06
Covering: June 2010
Published: June 2010
Next issue: July 2010

Ongoing tracking and insight into Telefónica Group; delivering valuable insight into the labyrinth that is Spain’s global telco giant.
A unique monthly report for the industry.

• Telefonicawatch is the only independent monitor of everything and anything to do with Telefonica Group, worldwide. Nothing else comes close. Thorough, impartial, accessible, and time-saving.
• Covering not just a leading European and Latin American integrated telecoms group and one of the world's top-five players and its many operating companies, but also its wider interests, including the Atento contact centre business, Vivo in Brazil, Telecom Italia, Portugal Telecom, and China Unicom.
• Our ‘watch' titles are repeatedly described by clients and end-users as the single most valuable source of third-party sales intelligence, and are considered invaluable by many high-achieving commercial teams and account directors.
• A unique source of valuable opportunities, knowledge, planning, strategy, and much more, the reports represent both tactical tool and strategic reference, providing input and even a springboard for corporate planning, reporting, and meetings.
• A ‘must-have' for sales teams focused on high-value sales, maintaining strategic relationships, and managing extended sales cycles. Just one nugget, insight, or validation can pay for the service many times over.
• Pricing is typically USD $4.2k / EUR 2.8k / UKP £2.5k per year for a workgroup or small/midsize account, and can be tailored to meet your specific needs and situation. Copies of individual reports are also available, priced from UKP 500 (USD $825 / EUR 560). Multiple purchasing options available, including payment cards.
• Delivered electronically 10-12-plus times a year, with back issues also available, providing unparallelled reference and insight into major events, strategic initiatives, financials and KPIs.
• Contact us for further information, including samples and evaluation trial requests. info@marketmettle.com / +44-20-7183-0111.

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.]

About Telefonicawatch

Issue: 2010.06
Covering: June 2010
Published: June 2010
Next issue: July 2010

Ongoing tracking and insight into Telefónica Group; delivering valuable insight into the labyrinth that is Spain’s global telco giant.
A unique monthly report for the industry.

• Telefonicawatch is the only independent monitor of everything and anything to do with Telefonica Group, worldwide. Nothing else comes close. Thorough, impartial, accessible, and time-saving.
• Covering not just a leading European and Latin American integrated telecoms group and one of the world's top-five players and its many operating companies, but also its wider interests, including the Atento contact centre business, Vivo in Brazil, Telecom Italia, Portugal Telecom, and China Unicom.
• Our ‘watch' titles are repeatedly described by clients and end-users as the single most valuable source of third-party sales intelligence, and are considered invaluable by many high-achieving commercial teams and account directors.
• A unique source of valuable opportunities, knowledge, planning, strategy, and much more, the reports represent both tactical tool and strategic reference, providing input and even a springboard for corporate planning, reporting, and meetings.
• A ‘must-have' for sales teams focused on high-value sales, maintaining strategic relationships, and managing extended sales cycles. Just one nugget, insight, or validation can pay for the service many times over.
• Pricing is typically USD $4.2k / EUR 2.8k / UKP £2.5k per year for a workgroup or small/midsize account, and can be tailored to meet your specific needs and situation. Copies of individual reports are also available, priced from UKP 500 (USD $825 / EUR 560). Multiple purchasing options available, including payment cards.
• Delivered electronically 10-12-plus times a year, with back issues also available, providing unparallelled reference and insight into major events, strategic initiatives, financials and KPIs.
• Contact us for further information, including samples and evaluation trial requests. info@marketmettle.com / +44-20-7183-0111.

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
• Index
• About Vodafonewatch

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

Index

SYMBOLS
1GOAL, 10, 28, 35
A
Advertising Standards Authority, 38
Aegis Group plc
- Carat, 28
Alcatel-Lucent, 21, 26
América Móvil, 8, 9
- Claro, 9
- Telmex Internacional
(Carso Global Telecom SAB)
- – Teléfonos de México (Telmex), 23, 25
- – Empresa Brasileira de Telecomunicações S.A. (EMBRATEL), 9
American Society for Quality, 21
Anatel, 8
Apple, 14, 19, 35, 37, 42
- iPad, 15, 42
- iPhone, 14, 19, 35, 37, 42
Arup, 31
AT&T, 25, 35
Augustus, 29
Autorita’ Garante della Concorrenza e del Mercato (AGCM, Italy), 45
Avenir, 38
B
Banco Bilbao Vizcaya Argentaria, 7
Bank of America Corp., 5
Beijing Municipal Administration and Communications Card Co. (BMAC), 42
Bernstein, 4
Brasil Telecom, 43
BSkyB, 40
BT Group, 34, 40
- Openzone, 34
- PlusNet, 36
Buongiorno, 7
C
China International Futures Co. (CIFCO), 44
China Mobile, 41, 42
China Telecom, 41, 42
Chunghwa Telecom, 42
Cloud, The, 34
CMT (Spain), 16, 18, 20
CMVM, 7
CNDC (Argentina), 45
Comisión Fed. de Electricidad (Mexico), 25
Communications Workers Union, 40
Consip SpA, 45
Consumers’ Association
- Which?, 36
Convergys Corp., 12
CPS Partners LLC, 10
Credit Suisse Group CS, 6
D
Datamonitor, 13, 15
Dell, 15, 33
Deutsche Telekom, 4
- T-Mobile, 37, 38, 39
- – UK, 38, 39
Digital Economy Act 2010 (UK), 40
E
Eircom, 32
- Meteor, 32
Ekos, 24
EMI, 32
Empresa de Telecomunicaciones
de Bogota (ETB), 23
Enel SpA, 45
Envivio, 44
Ericsson, 31
ETB, 23
European Union, 14, 34, 38, 39
- European Court of Justice, 38
- European Parliament, 38
F
Family Online Safety Institute, 17
Fédération Internationale de Football Association (FIFA), 10, 14, 27, 28, 35
- World Cup, 10, 14, 27, 35, 38
Findim
- Marco Fossati, 8
First Direct, 37
Fitch, Inc., 9, 27
- Fitch Ratings, 9, 27
France Télécom, 4
- Orange, 14, 16, 18, 37, 38, 39, 40
- – Spain, 16
- – UK, 37, 38, 39, 40
Frost and Sullivan, 7
G
Gemalto, 17
Giesecke & Devrient, 11
Google, 14, 15, 26, 33
- Android, 14, 15, 26, 33, 42
- YouTube, 14, 34
Grupo Santander
- Santander, 15
GSM Association (GSMA), 11, 29
- Mobile World Congress,
11, 14, 17, 29
Guangdong Development Bank, 43
H
Hewlett-Packard, 31
- Compaq, 15
HgCapital, 10
High Court, 32
Huawei, 15, 30, 35, 36, 42
Hutchison Whampoa, 28
- H3G
- – 3 Ireland, 32
- – UK, 39
I
Informa plc, 8, 9
Intel, 13, 24
Interpublic Group
- Initiative, 28
- R/GA, 28
Irish Recorded Music Association (IRMA), 32
L
La Caixa, 17
Liga Deportiva Universitaria de Quito, 24
M
Mediapro
- Gol TV, 19
Mediobanca, 7
Megacable, 25
Merrill Lynch, 5
Microsoft, 44
- Windows Mobile, 42
Millennium Investment Banking, 4
Millicom International Cellular, 23
MTV, 19
N
National Health Service (UK), 40
News Corp.
- BSkyB, 40
NII Holdings, Inc., 25
- Nextel Mexico, 25
Nokia, 11, 13, 21, 29
Nokia Siemens Networks, 36
NXP, 29
O
Ofcom (UK), 36, 39, 40
Office of Fair Trading
- Competition Appeal Tribunal
(CAT), 39
Omnicom Group, Inc.
- Agency Republic, 28
Orascom, 4
- Wind Telecom. SpA, 44, 45
Osiptel, 25, 27
P
Palm, 35
Plzeské mstské dopravní podniky, 29
Populus Ltd, 40
Portugal Telecom, 4, 5, 6, 7, 8, 9, 43, 44
Bava, Zeinal, 5
Post Office, 40
Prisa
- Digital+, 14
Procon (Brazil), 22
Profero, 28
Publicis Groupe
- ZenithOptimedia, 28
Q
Qatar Telecom, 7
QUALCOMM, 33
R
RBC Capital Markets, 4
Regions
- Africa
- – South Africa, 14, 27
- APAC
- – China, 10, 41, 42, 43, 44
- – Hong Kong, 10
- – Japan, 24
- – Taiwan, 42
- EMEA
- – Czech Republic, 11, 28, 29, 30, 31, 32
- – Europe, 4, 6, 8, 9, 10, 12, 14, 15, 16, 18, 28, 32, 33, 34, 35, 38, 39, 45
- – France, 4
- – Germany, 30, 32
- – Ireland, 12, 31, 32, 33
- – Isle of Man, 10
- – Italy, 8, 15, 44, 45
- – Portugal, 4, 5, 7, 8, 9, 43, 44
- – Slovakia, 32, 34
- – Spain, 4, 6, 7, 9, 10, 11, 12, 14, 15, 16, 17, 18, 19, 20, 25
- – UK, 6, 11, 15, 17, 19, 28, 32, 33, 35, 36, 37, 38, 39, 40
- – Vatican City State, 10
- Latin America,
4, 6, 8, 9, 10, 24, 26, 45
- – Argentina, 21, 23, 45
- – Bolivia, 27
- – Brazil, 4, 5, 6, 7, 8, 9, 21, 22, 24, 43, 45
- – Chile, 23
- – Colombia, 19, 21, 23
- – Ecuador, 21, 24
- – Mexico, 25, 27
- – Panama, 25, 26
- – Peru, 24, 25, 26, 27
- – Venezuela, 27
Research in Motion, 21, 41
- BlackBerry, 16, 41
Rubberduck Media Lab, 19
S
Samsung, 11, 14, 15, 17, 24, 29, 31, 44
Satmetrix, 37
Securities and Exchange Commission, 44
Societe Generale, 7
Sofora, 45
Sony, 37
- Sony Music, 32
Sony Ericsson, 26, 31
Stour Marine, 39
Swisscom
- Fastweb, 44, 45
Symbian, 26, 42
T
Taikang Life Insurance, 43
TalkTalk plc, 40
Tata Communications, 18
Technologies
- 2G, 35, 39, 41
- – GSM, 11, 21, 39, 44
- 3G, 10, 22, 28, 29, 39, 41, 42
- – HSPA+, 15
- – HSDPA, 28
- – UMTS, 28, 39
- – WCDMA, 41, 44
- 4G
- – LTE, 26, 36
- – WiMAX, 41
- Broadband, 15, 16, 20, 21, 22, 23, 25, 28, 29, 32, 36, 37, 39, 40, 41, 42, 44
- – ADSL, 16, 20, 29, 30
- – DSL, 32
- Business/Operations Support Systems (BSS/OSS), 12
- Carrier pre-selection, 10
- Cloud computing, 23
- e-readers, 15
- Femtocell, 38
- GPS, 15, 16
- ICT, 17, 31
- IP, 32, 42, 44
- IPTV, 44
- ISDN, 30
- Java, 29
- Linux, 13
- MIFARE, 29
- NFC, 11, 17, 29, 42
- P2P, 34, 37
- Private circuits, 31
- Push-to-talk (PTT), 21
- SIM, 11, 17, 27, 30, 33, 35, 42, 44
- SMS, 10, 19, 23, 27, 30, 33, 34
- Telepresence, 18
- TV, 19, 32, 44
- – Mobile TV, 14, 19, 24, 44
- – ISDB (digital mobile television), 24
- – SBTVD, 24
- WLAN/Wi-Fi, 22, 29, 30, 33, 34, 41
Telco SpA, 8
Telecom Argentina, 45
Telecom Italia, 5, 8, 9, 44, 45
- Telecom Italia Mobile, 8, 45
- TIM Brasil, 8, 9
Telecom Plus plc
- Utility Warehouse, 36
Telefónica Group
- Associates and investments
- – China Unicom,
10, 41, 42, 43, 44
- – Portugal Telecom,
4, 5, 7, 8, 9, 43, 44
- – Telecom Italia,
5, 8, 44, 45
- Atento, 6
- España, 14, 15, 16, 18, 19, 20
- Europe (O2),
6, 7, 10, 11, 17, 19, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40
- – Alice, 32
- – Czech Republic,
7, 28, 29, 30, 31
- – Germany, 30, 32
- – HanseNet Telekommunikation, 32
- – Ireland, 19, 31, 32, 33
- – Manx Telecom
(Isle of Man), 10
- – O2 Media, 7
- – Slovakia, 34
- – UK, 28, 33, 34, 35, 36, 37, 38, 39, 40
- Executives
- – Alder, Steve, 33
- – Alierta, César, 6, 10, 14
- – Dev, Vivek, 13
- – Dunne, Ronan, 34
- – Ezcurra, Luis, 15
- – Fernández Valbuena, Santiago, 5
- – Jarvis, Kate, 38
- – Joyce, Robert, 36
- – Key, Matthew, 10
- – Linares, Simon, 32
- – Malik, Jiri, 29
- – Matjovský, Petr, 28
- – Montesano, Pablo, 11
- – Mortimer, Nicola, 31
- – Patton, Eoghan, 33
- – Purdy, Nigel, 36
- – Smith, Ed, 38
- – Soro, Mario, 19
- – Torquati, Maria Fernanda, 12
- – Truffini, Gustavo, 21
- – van Eldik, Michiel, 11
- – Villalobos, Alfredo, 12
- Ex-executives
- – Boddice, Chris, 7
- – Qadri, Sohail, 7
- Fundación Telefónica, 24
- – Pro Niño, 25
- Latinoamérica, 21, 23, 26
- – Argentina, 21, 45
- – Brazil, 7, 9, 21, 22
- – Chile, 23
- – Colombia, 23
- – Mexico, 25
- – Panama, 25, 26
- – Peru, 25, 26, 27
- – Telefónica International Wholesale Services, 12
- – Venezuela, 27
- Products and services
- – Broadband Home Access, 37
- – Digital TV, 24
- – DUO, 20
- – Handy Internet, 30
- – HomeStation, 23
- – Keteke, 15
- – Kombitarif, 30
- – Mobile payments, 11
- – Mobilní Internet, 28
- – Movistar IVY
(Huawei U8100), 15
- – Movitalk, 21
- – My Three, 34
- – NetzClub, 30
- – Niggles and Narks, 40
- – O2 Internet, 28, 29
- – O2 NEON, 29
- – O2 o, 10, 29, 34, 37
- – O2 Prepaid, 30
- – O2 Release Edge Plus, 33
- – O2 Simplicity, 33
- – O2 TV, 28, 29, 30
- – Pay & Go, 33, 35
- – Pay-TV, 14
- – Roaming Datalimit, 34
- – Ruta Movistar, 15, 16
- – Simplicity, 33
- – Speedy, 21, 22
- – TRIO, 20
- Telco SpA, 8
- Telefónica Global Technology, 12
- Telefónica Multinational Sols., 12
Telekom Srbija, 4
Telemar
- Oi, 9, 43
Televisa, 25
TeliaSonera
- Yoigo (Xfera), 16
Telsis, 19
Tencent Holdings, 42
- QQ, 42
- Tenpay, 42
Tesco
- Tesco Mobile, 36
Tiscali SpA, 44
TVA, 22
U
UBS, 41
UPC, 32
V
VCCP, 28
Velti plc, 7
Ventura, 6
Vesta Corporation, 33
Virgin Media, 37, 40
- Virgin Mobile UK, 36
Visa, Inc., 17
Vivendi SA
- Universal Music Group (UMG), 32
Vivo Participações, 4, 5, 6, 7, 8, 9, 22, 43, 45
- Brasilcel N.V. (Telefónica-PT holding company), 5, 6, 9
- Telemig Celular (Brazil), 22
Vodafone Group,
4, 14, 16, 18, 31, 32, 35, 37, 38, 39, 44, 45
- Czech Republic, 31
- Ireland, 32
- Spain, 16
- UK, 35, 37, 38, 39
W
Warner Music Group (WMG), 32
Werthein family, 45
WPP plc
- Mindshare, 28
Y
YOC AG, 30
Z
ZTE, 21

About Telefonicawatch

Issue: 2010.06
Covering: June 2010
Published: June 2010
Next issue: July 2010

Ongoing tracking and insight into Telefónica Group; delivering valuable insight into the labyrinth that is Spain’s global telco giant.
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Delivering valuable insight into the labyrinth that is Spain’s global telco giant. A unique monthly report for the industry.

• Executive Brief
• Extract
• Table of Contents
• About Telefonicawatch
• Index

EXECUTIVE BRIEF

1. 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.]
2. 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.]
3. 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.]
4. 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.]
5. 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.]
6. 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.]
7. 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.]
8. 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.]
9. 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.]
10. 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.]
11. 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.]
12. 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.]
13. 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.]
14. 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.]
15. Telefónica in Brazil is to offer customers digital communications solutions from LG-Nortel, following an agreement with local distributor Olifone. [p.20.]
16. 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.]
17. 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.]
18. 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.]
19. 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.]
20. 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.]
21. 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.]
22. 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.]
23. Critical Path highlighted its role in provisioning over-the-air mobile back-up services to TOCR. [p.32.]
24. 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.]
25. 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.]
26. 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.]
27. O2 UK enhanced its offerings to the SME sector with the launch of new converged solutions, featuring wireline, mobile, and consultancy services. [p.41.]
28. 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.]
29. O2 UK is offering music-recognition services in partnership with Shazam. [p.43.]
30. 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

ABOUT TELEFONICAWATCH

• Telefónicawatch delivers all the information on Telefónica Group worldwide in one place, and keeps it up-to-date in a uniquely thorough and digestible fashion.
• This ongoing report service encapsulates Telefónica’s three core divisions — España, Latinoamérica and Europe — along with its central functions, strategy, financial and operational performance, and numerous other units and interests (including China Unicom, Portugal Telecom, Telecom Italia, Vivo, Atento, TIWS, Terra, etc.).
• If Telefónica really matters to you — whether as a vendor, competitor, investor, regulator or any other major stakeholder — it pays to keep properly informed and there is simply no easier or better way to become and remain fully briefed.
• Our ‘watch’ titles are repeatedly described by clients and end-users as the single most valuable source of third-party intelligence. Considered invaluable by many high-achieving commercial teams and account directors.
• A unique source of valuable opportunities, knowledge, planning, strategy, and much more. Both tactical tool and strategic reference. An invaluable reference, input and even springboard for corporate planning, reporting, and meetings.
• A ‘must-have’ for sales teams focused on high-value sales, maintaining strategic relationships, and managing extended sales cycles. Just one nugget, insight, or validation can pay for the service many times over.
• Pricing typically USD $4k / EUR EUR3k / UKP £2.5k per year for a workgroup or small/midsize account, tailored to meet your needs and situation. Delivered electronically 10-12 times a year. Also available are back issues, which provide unparalleled reference and insight into major events, strategic initiatives, financials and KPIs.
• Copies of individual reports are available, priced from UKP 200 plus any applicable sales taxes (or around USD $300 / EUR EUR230, governed by prevalent foreign exchange rates). Contact sales@marketmettle.com to place an order or find out more. Multiple purchasing options available, including payment cards.
• Contact us for further information, including samples and evaluation trial requests. info@marketmettle.com / +44-20-7083-0055.
• Below is a free taster from issue 2009.08 (September 2009), including an Executive Brief, Extract, Table of Contents and Index, giving a valuable snapshot of the full report.

INDEX

A
Academy Music Group (AMG)
- O2 Academy, 43
Acer, 34
Albion London, 42
Alcatel-Lucent, 6, 37, 53
Alegro, 25
América Móvil, 20, 24, 25, 52
- Comcel, 24
- Porta, 25
- Slim, Carlos, 24, 52
- Telcel, 26
Americatel, 27
Anatel, 20, 21, 22, 23, 51
Andrade Gutierrez, 52
Antena 3, 9
Apple, 29, 30, 31, 40, 46, 47
- iPhone, 29, 30, 31, 45, 46, 47
Asus, 34
AT&T, 8
Avenir, 40
B
Banco Bilbao Vizcaya Argentaria, 10, 27
Bebo, 41
Bernstein, 7, 30
BNP Paribas, 51
Brasil Telecom, 22
British Broadcasting Corporation, 35
BT Group, 8, 30, 31, 34, 41
- Openzone, 30, 31
- PlusNet, 40
Bubok, 10
Bundesnetzagentur für Elektrizität, Gas, Telekommunikation, Post und Eisenbahnen (Federal Network Agency for Electricity, Gas, Telecommunications, Postal Service and Railways, BNA/BNetzA/RegTP, Germany), 33
C
Cade (Brazil), 51
Carrefour, 48
Caucasus Networks, 8
Chavez, Hugo (Venezuela), 28
China Mobile, 46, 47, 49
China Telecom, 46, 47, 48, 49
Chunghwa Telecom, 48
Cicomra, 20
Cisco Systems, Inc., 15
Cloud, The, 30, 31
CMT (Spain), 9, 10
CNDC (Argentina), 52
Columbia Ventures
- Magnet, 34
Critical Path, 32
CRT (Colombia), 24
CSOB Group, 33
Czech Telecommunication Office (CTU), 32
D
Dell, 32
Deutsche Bank, 7
Deutsche Post
- DHL, 7, 8, 33
Deutsche Telekom, 40
- T-Mobile, 31, 32, 33, 39, 40, 43
- UK, 40
DHL, 7, 33
Digitel, 28
Digiweb, 34
Dopod, 46
Dow Jones Sustainability Index, 5
E
Ectrobrás, 22
Eircom, 34
Empresas Quiñenco, 24
Entel, 24
Ericsson, 6, 28, 35
ESB, 36
European Union, 9, 15, 29, 31, 39
- European Commission, 15, 32, 39, 52
- European Court of Justice, 31
- European Investment Bank, 50
F
Federal Network Agency, 33
Findi, 4
Fitel (Peru), 27
France Télécom, 12
- Orange, 8, 10, 12, 29, 30, 31, 39, 40, 41, 43
- Orange Spain, 12
Fundación del Espanol Urgente, 10
G
Geocell, 8
Gilat Satellite Networks Ltd, 47
Google, 46
- Android, 46
Grupo Clarín, 19, 20, 52
- FiberTel, 19
Grupo Santander
- Santander, 15, 18
GVT (Brazil), 3, 20
H
Hewlett-Packard, 14
HighBridge Constellation, 51
High Tech Computer Corp. (HTC), 46
Hits Telecom, 27
Huawei, 6, 12, 23, 34, 48
I
IBM, 29
IE Market Research, 11, 42
Intelig, 51
Intelsat, 9
ITV, 42
Iusacell, 26
J
JPMorgan Chase, 24
K
KKCG, 33
L
LAN, 7
Lega Pro, 53
Lew TelNet GmbH, 36
LG, 20
LG-Nortel, 20
M
Magti, 8
MasterCard, 41
McStay Luby, 34
Mediaset
- Berlusconi, Silvio, 4
Microsoft, 13, 14, 34
Millicom, 24
Mobile Commerce, 45
Mobile Interactive Group, 45
MobilKom, 32
Mobitel, 8
MoCo Communications Ltd, 41
MoreMagic Solutions, 17
Motorola, 28
MVNOs, 10, 12
N
NEC, 6, 14
NET, 22
NII Holdings, Inc., 24, 26
Nokia, 6, 17, 25, 28, 35, 53
- Nokia Messaging, 17, 25, 53
Nokia Siemens Networks, 6
Nortel Networks, 20
O
Ochre House, 41
Olifone, 20
Ono, 12
Orascom
- Wind Telecomunicazioni SpA, 53
P
Palm, 6, 28, 30, 31
PCCW, 3
Pegasus Capital, 52
Petrobas, 22
Portugal Telecom, 50
Prisa, 3
- Digital+, 3
Procon (Brazil), 21
ProInversión (Peru), 27
R
Raidió Teilifís Éireann (RTÉ), 35
R Cable, 52
Regions
- APAC
- China, 3, 46, 47, 48, 49
- Hong Kong, 3
- Japan, 15
- EMEA
- Austria, 7
- Belgium, 7
- Bulgaria, 7
- Czech Republic, 32, 33
- Denmark, 7
- Estonia, 7
- France, 7, 12
- Georgia, 8
- Germany, 31, 33, 34, 35, 36
- Greece, 7
- Hungary, 7
- Ireland, 31, 34, 35, 36, 37
- Isle of Man, 37, 38
- Italy, 4, 7, 19, 51, 52, 53
- Luxembourg, 4
- Netherlands, 7
- Poland, 7
- Portugal, 7, 50
- Romania, 7
- Slovakia, 39
- Spain, 3, 7, 9, 10, 11, 12, 13, 32, 53
- Sweden, 7
- Switzerland, 7
- UK, 5, 29, 30, 31, 32, 37, 40, 41, 42, 43, 44, 45
- Latin America, 17, 18, 26
- Argentina, 4, 13, 19, 20, 51, 52
- Brazil, 3, 7, 18, 19, 20, 21, 22, 23, 51, 52, 53
- Chile, 24
- Colombia, 24
- Ecuador, 17, 25
- Mexico, 18, 26
- Peru, 24, 27
- Venezuela, 28
- North America
- USA, 15, 17
Research In Motion, 28
- BlackBerry, 28
Royal Ahold N.V. (Koninklijke Ahold N.V.), 33
Royal KPN
- E-Plus, 33
Rubberduck Media Lab, 35
S
Samsung, 28, 35
Sapo, 50
SCT (Mexico), 26
Shazam, 43
Siemens, 6
SIMO 09, 13
SK Telecom, 3
Smart Telecom, 34
Sofora, 52
SomeOne, 42
Sonaecom, 50
Sony Ericsson, 28, 35
SpinVox, 26
Splendid Communications, 42
Subtel (Chile), 24
Supertel (Ecuador), 25
Symbian, 53
Syntagm, 44
T
Technologies
- 2G, 46, 47, 49
- CDMA, 46
- Edge, 35
- GSM, 8, 33, 34, 47, 49
- 3G, 10, 23, 24, 33, 35, 46, 47, 48, 49, 53
- 3.5G, 28
- HSDPA, 33, 35
- UMTS, 12, 32, 34
- WCDMA, 46, 47, 48
- 4G
- LTE, 6, 53
- Broadband, 6, 9, 10, 11, 12, 16, 18, 19, 20, 21, 22, 23, 24, 27, 33, 34, 36, 37, 40, 41, 42, 49, 50, 53
- ADSL, 9
- DSL, 9, 10
- VDSL, 9
- VDSL2, 9
- Cloud computing
- DaaS (Desktop as a Service), 14
- PaaS (Platform as a Service), 14
- SaaS (Software as a Service), 14
- Ethernet, 12
- GPS, 11
- IP, 9, 12, 16, 37, 49
- IVR, 43
- MMS, 32, 43, 46
- Mobile Broadband, 23
- Mobile TV, 35
- NFC, 49
- RFID, 53
- SIM, 41, 42
- SMS, 16, 26, 45
- TV, 9, 20, 32, 35, 50
- IPTV, 16
- WLAN, 7
- Wi-Fi, 30, 31, 46, 47
Telco SpA, 4
Telecentro, 52
Teleco, 23
Telecom Argentina, 4, 19, 20, 51, 52
Telecom Italia, 4, 19, 51, 52, 53
- Bernabe, Franco, 51
- Entel, 24
- HanseNet, 51
- Telecom Italia Mobile, 52
- TIM Brasil, 23, 53
Telefónica Group, 3, 4, 5, 6, 7, 15, 18, 24
- Associates and investments
- China Unicom, 3, 46, 47, 48, 49
- Portugal Telecom, 50
- Telco SpA, 4
- Telecom Italia, 4, 19, 51, 52, 53
- España, 9, 10, 11, 12, 13, 14, 15, 16, 17, 19
- Telefónica Clientes, 13, 19
- Executives
- Abril, Luis, 5
- Álvarez-Pallete Lopez, Jose Maria, 18
- Ansaldo, Guillermo, 11, 12, 13
- Bifaretti, Fabian, 26
- Calvo, Carlos, 13
- Cowdry, Sally, 45
- Devaney, Damian, 36
- Dowd, Ben, 41
- Dunne, Ronan, 5, 29, 30, 40
- Evans, Kylie, 42
- Fairman, Mike, 42
- Gamero, José, 27
- Gardelliano, Ernesto, 19
- Grau, Jaime, 17
- Gregory, Douglas, 29
- Gregory, Shaun, 43
- Haas, Markus, 33
- Hanway, Tony, 35
- Herrera, Fernando, 13
- Kane, Stephen, 38
- Karas, Jan, 33
- Key, Matthew, 7
- Kickartz, Manfred, 34
- Kuntze, Roland, 35
- Lada, Luis, 13
- Linares, Julio, 6, 15
- Loundes , Mike, 37
- Manzanares, Javier, 27
- Morgan, James, 44
- Poston, Richard, 29
- Rava, Federico, 13, 19
- Rocillo, Jose, 13
- Schloemer, André, 34
- Tetiva, Bohdan, 32
- Valente, Antonio Carlos, 20
- Ward, Matt, 43
- Watt, Colin, 5
- Latinoamérica, 17, 18, 25
- Argentina, 13, 19
- Brazil, 3, 20, 21, 22
- Chile, 24
- Colombia, 24
- Mexico, 26
- Peru, 27
- TIWS, 7
- Venezuela, 28
- Movistar, 10, 11, 12, 13, 16, 17, 19, 24, 25, 26, 27, 28, 53
- Argentina, 19
- Chile, 24
- Colombia, 24
- Espana, 10, 11, 12, 16, 17
- Mexico, 26
- Peru, 27
- Venezuela, 28
- Products and services
- Aplicateca, 14
- Giffgaff, 42
- Imagenio, 9, 16
- Joined up, 41
- Mail Movistar, 25
- Movistar Emoción, 11
- mstore, 11
- O2 Bluebook, 32
- O2 Load & Go, 41, 45
- pay-TV, 9, 50
- Professional Response, 13, 14
- Speedy (Latinoamérica), 20, 21
- Telefónica Europe (O2), 5, 6, 8, 29, 30, 31, 32, 33, 34, 35, 36, 37, 39, 40, 41, 42, 43, 44, 45
- Be Un limited (UK), 37
- Czech Republic, 32, 33
- Germany, 33, 34, 35, 36
- Ireland, 31, 34, 35, 36
- Manx Telecom
(Isle of Man), 37, 38
- Nucleus, 44
- O2 Group, 37
- O2 Media, 43
- O2 Money, 45
- O2 TV, 32, 35
- Slovakia, 39
- UK, 5, 29, 30, 40, 41, 42, 43, 44, 45
- Telefónica Servicios Audiovisuales, 9
Teléfonos de México (Telmex), 24
Telemar
- Oi, 21, 22
TeliaSonera
- Yoigo, 10
Tesco, 44
- Tesco Mobile, 44
Thrane & Thrane, 51
Tigo, 24
Time Warner
- AOL, 41
- CNN, 35
Travel Channel, 35
Trilantic Capital Partners, 51
TÚSR (Slovakia), 39
U
UBS, 3, 20
V
Verizon, 8
Virgin Group, 44
- Virgin Mobile, 44
Vivendi SA, 3, 20
Vivo Participações, 19, 23
Vodafone Group, 10, 11, 29, 30, 31, 32, 33, 34, 40, 41, 42, 50, 52
- Czech Republic, 33
- Ireland, 34
VTR, 24
W
World Expo, 47
Z
Zen Internet, 40
ZTE, 6, 48

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.]

Issue: 2009.07
Covering: August 2009
Published: September 2009
Next issue: August/September 2009

Delivering valuable insight into the labyrinth that is Spain’s global telco giant. A unique monthly report for the industry.

• About Telefonicawatch
• Executive Brief
• Extract
• Table of Contents
• Index

ABOUT TELEFONICAWATCH

• Telefónicawatch delivers all the information on Telefónica Group worldwide in one place, and keeps it up-to-date in a uniquely thorough and digestible fashion.
• This ongoing report service encapsulates Telefónica’s three core divisions — España, Latinoamérica and Europe — along with its central functions, strategy, financial and operational performance, and numerous other units and interests (including China Unicom, Portugal Telecom, Telecom Italia, Vivo, Atento, TIWS, Terra, etc.).
• If Telefónica really matters to you — whether as a vendor, competitor, investor, regulator or any other major stakeholder — it pays to keep properly informed and there is simply no easier or better way to become and remain fully briefed.
• Our ‘watch’ titles are repeatedly described by clients and end-users as the single most valuable source of third-party intelligence. Considered invaluable by many high-achieving commercial teams and account directors.
• A unique source of valuable opportunities, knowledge, planning, strategy, and much more. Both tactical tool and strategic reference. An invaluable reference, input and even springboard for corporate planning, reporting, and meetings.
• A ‘must-have’ for sales teams focused on high-value sales, maintaining strategic relationships, and managing extended sales cycles. Just one nugget, insight, or validation can pay for the service many times over.
• Pricing typically USD $4k / EUR EUR3k / UKP £2.5k per year for a workgroup or small/midsize account, tailored to meet your needs and situation. Delivered electronically 10-12 times a year. Also available are back issues, which provide unparalleled reference and insight into major events, strategic initiatives, financials and KPIs.
• Copies of individual reports are available, priced from UKP 200 plus any applicable sales taxes (or around USD $300 / EUR EUR230, governed by prevalent foreign exchange rates). Contact sales@marketmettle.com to place an order or find out more. Multiple purchasing options available, including payment cards.
• Contact us for further information, including samples and evaluation trial requests. info@marketmettle.com / +44-20-7083-0055.
• Below is a free taster from issue 2009.07 (August/September 2009), including an Executive Brief, Extract, Table of Contents and Index, giving a valuable snapshot of the full report.

EXECUTIVE BRIEF

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.]

GROUP: Vodafone’s Chief Executive conceded that Telefónica had benefitted from its exclusive deals with Apple for the iPhone in Europe, but Telefónica’s other imminent exclusive high-profile device, the Palm Pre, was said to have seen demand slump in markets where it is already available. [p.4.]

An executive search company indicated that it is recruiting on behalf of Telefónica for building out new infrastructure in Latin America, and in relation to the network-sharing agreement reached with Vodafone in Europe. [p.5.]

ESPAÑA: Telefónica succeeded in securing a legal order to prevent rival Vodafone from advertising fixed-line service deals, when the technology utilised is based on mobile infrastructure. [p.6.]

A Telefónica FTTH network reportedly launched in Spain, although only in Bilbao and a Madrid municipality. VDSL2+ services are also expected to launch commercially, which could see 30Mbps broadband products made more widely available. Vodafone is to use the Telefónica ADSL network to launch its own broadband services, covering 30% of the country. [p.8.]

Telefónica signed a distribution deal with Fnac, which will see the retail chain’s 19 Spanish stores sell Telefónica’s entire portfolio of products from Movistar Zones . It is notable in this instance that the Movistar brand is being used in relation to both fixed-line and mobile products. [p.9.]

Solutions provider Olista was awarded a contract to provide a mobile user-experience platform for Movistar España, which is expected to support growth of premium mobile broadband services. [p.9.]

A simultaneous translation service was launched by Telefónica in Spain, in conjunction with platform provider Dualia, and translation service TST. The new offering, which supports seven major languages, is to boost the telco’s integrated communications management solutions portfolio. [p.10.]

Mobile termination rates will continue to decline on a glide path in Spain over the next two-and-a-half years, with Movistar’s rate to be slashed by 40% by April 2012. A new tax, which could cost Telefónica 0.9% of its annual gross revenue, moved a step closer to passing into law. [p.10.]

LATINOAMÉRICA: Telefónica is reportedly looking for new partners to support the rollout of IPTV and video-on-demand services in Latin America, with a request for proposals for set-top box and headend suppliers issued. Cisco and Harmonic were named as companies being encouraged to bid for contracts. [p.11.]

Ericsson highlighted its role in providing revenue assurance services to Telefónica across Latin America, while BMC Software said it had helped the telco save money on IT system implementation in several territories. [p.11.]

In Argentina, Telefónica extended availability of its Trío bundled voice, broadband and pay-TV service, which is offered in conjunction with DirecTV, but protested the prospect of a rival operator offering a similar bundle. In Brazil, there were indications that internet television plans were developing, with decoders mooted that enable internet content to be viewed on a television. Video-on-demand was also heralded for the Brazilian market. [pp.12,17.]

ECtel announced it had secured a deal with Vivo that will see existing ECtel fraud-management systems upgraded, which for the first time are available in Portuguese. [p.18.]

Vivo saw a slight increase in its market share and its market lead, in July 2009. However, in Colombia, Movistar market share tumbled, dropping 1.5 percentage points in a quarter. Complications in GSM deployment and a failure of competitive pricing were blamed for the slump. [pp.18,19.]

Mobile ticketing company Mobiqa trumpeted its relationship with Movistar Chile, which has seen the UK-based solutions provider deliver mobile ski passes and concert tickets for Movistar events. [p.19.]

3.5G services were heralded by Movistar Ecuador, which claims to offer the fastest-available mobile broadband speeds in the country, although availability is limited. It was suggested that rollout of new mobile infrastructure will see the Ecuador unit spend 30% more than anticipated on capital expenditure in 2009. Movistar Panama was said to have effectively combated new entrants to the market through its 3G rollout, and the unit promoted its expanding 3.5G coverage and availability of video-calling. 3.5G services were launched in some areas of Uruguay, and deployment of the technology was also expanded in Venezuela. [pp.20,23,25.]

Movistar Guatemala highlighted its UMTS 3G deployment, which was undertaken with Ericsson following earlier CDMA200-based rollouts. Movistar Mexico is expected to acquire spectrum licences in upcoming auctions, enabling it to offer 3G services across the country. [pp.21,22.]

The SpinVox voice-to-text service is set to launch on the Movistar Mexico network. In Peru, Telefónica claimed more than 500,000 customers for its fixed-wireless service FoneYa , which offers contract and pre-pay residential phone services targeted at the urban outskirts. [pp.22,24.]

There was speculation suggesting shady political manoeuvring around a rumoured deal that has supposedly involved Telefónica investing in a shipping company in Venezuela. [pp.27.]

TELEFÓNICA EUROPE: O2 Zaloha, a mobile back-up service in the style of O2 BlueBook, was launched in the Czech market. [p.29.]

O2 Germany said it would not block VoIP services over its 3G mobile network, stealing a march on larger competitors that are also apparently pondering a move feared by the industry as a revenue cannibaliser. [p.31.]

O2 Germany launched new simplified DSL tariffs, with options for bundling additional services. A new SHDSL product is also to be introduced to the company’s wholesale portfolio. O2 Germany is to participate in NFC trials with German rail operator Deutsche Bahn. [pp.32,33,34.]

O2 Advertising Services, intended to offer targeted advertising services to brand-owners, was launched in Germany. O2 Media, the UK mobile advertising unit, appointed ex-Vodafone executive Shan Henderson to lead its sales team. [pp.33,38.]

Mobile TV was launched by O2 Ireland, with daily and monthly passes for content from RTE and BSkyB. The BlackBerry Managed Service also launched in Ireland. [pp.34-35.]

New mobile termination rates were set in Slovakia, which favour O2 as the smallest player. In the UK, BT Group accused O2 of scaremongering over the effect of termination rate cuts. [p.36.]

The O2 UK marketing department is being restructured, as the company focuses on developing its reputation for services. [p.36.]

Telmap was awarded a contract to provide its Navigator solution to O2 customers with GPS-equipped handsets. After a slight delay, the Samsung Galaxy i7500 Android-powered handset was launched in the UK. [p.37.]

ASSOCIATES & INVESTMENTS: China Unicom confirmed it is to offer Apple’s iPhone exclusively in China. Telecom Italia expressed confidence in its turnaround, but may be forced to sell its interests in Argentina due to competition concerns. Portugal Telecom profit was hit by termination rate cuts and increased domestic competition. [pp.43-46.]

EXTRACT

Telecom and Unicom to undertake $1bn share swap

As Telefónicawatch published, news emerged that Telefónica and China Unicom are undertaking a $1bn (EUR700m) equity swap.

Following the transactions, Telefónica will hold an 8.06% stake in Unicom (up from 5.38%), which in turn will hold up to 0.892% of the Spanish telco. Both companies have the option to pay in cash or stock, making it potentially cash-neutral. Unicom will issue new shares, while Telefónica may release existing Treasury stock.

As a consequence, Unicom appears set to become the only non-Spanish core shareholder at Telefónica. While Telefónica is the largest foreign investor in Unicom, it is not alone, with South Korea’s SK Telecom holding a stake of around 3.8%.

Telefónica currently has a market valuation of around EUR80bn, while Unicom is valued at around HK$250bn. The Chinese mobile market leader, China Mobile, is the world’s largest player, by both market capitalisation and customer numbers.

The companies also confirmed a non-compete agreement, restricting sale of shares to, or investment in, rivals. Additionally, further cooperation was agreed in the areas of procurement (including handsets), infrastructure, roaming, mobile services, multinational clients, and R&D.

” We are delighted with this alliance, which will bolster both of our companies’ leadership positions, giving us a combined global customer base of nearly 550 million. ”
– Cesar Alierta, Chairman, Telefónica Group.

Whilst Telefónica’s desire to raise its stake in Unicom to 10% has been long-flagged, and thus making this step relatively unsurprising, Unicom’s reciprocal investment is unexpected and so more interesting.

Observers will be left pondering the strategic implications of this now bipartite equity-backed strategic alliance, although the development should not be entirely surprising, since Telefónica’s (and peer Vodafone’s) one-sided investment in a China telco was already looking rather quaint. China’s telecom market and sector valuations have rocketed and can now overshadow Western players, making it only natural that Telefónica and Unicom should opt to recalibrate their partnership on a more equal-footed basis.

Further questions relate to how the rebalanced alliance will affect the partners internationally, such as expansion into new emerging markets, and technologically (the Chinese market is rapidly catching up here, too). It also leaves unanswered how equity holdings will evolve; there had seemed deep State reservations about larger foreign stakes in Chinese players, but this reticence might ease should relationships become more reciprocal. The shift also coincides with the relative maturing of the Chinese market (and economy, generally), with local players taking greater interest in their own international expansion. Indeed, closer partnership with Telefónica could prove commercially advantageous to Unicom on multiple levels, such as: helping to ease political hurdles that often face assertive Chinese investment overseas; and providing the opportunity to better serve Chinese entities themselves expanding overseas.

[Further reference: Telefónica and Unicom to swap $1 billion in shares -- Reuters, 6 September 2009; Telefónica, China Unicom to Swap $1 Billion of Stock -- Bloomberg, 6 September 2009; Spain's Telefónica increases China Unicom stake -- AFP, 6 September 2009; Telefónica and Unicom to exchange $1bn in shares -- Financial Times, 6 September 2009.]

Rumours of unusual investments by Telefónica Venezuela

A blog by Caracas Gringo, a commentator who claims to be a journalist, analyst, and guest lecturer on US-Latin America issues for government bodies, has reported on alleged deals undertaken by Telefónica in Venezuela, suggesting that the telco has invested up-to-$500m (around 25% of its non-repatriated funds) in a local shipping company.

The money for the investment was also apparently placed with a state-controlled bank, Banco Confederado, and was said to be under threat of insolvency. The moves were posited as a strategy devised by Telefónica leadership and both Spanish and Venezuelan politicians to stave off the threat of the government of Hugo Chavez renationalising Movistar Venezuela.

Caracas Gringo claimed he had been informed by banking sources that the shipping deal has been finalised, but did not have further details of the name of the business or the sums involved. The deal was reportedly finalised while Spain’s Foreign Minister Miguel Angel Moratinos was on an official visit to Venezuela.

The blog claimed that the rumoured shipping company acquisition is the third “major strange deal” undertaken by a Spanish company operating in Venezuela, which the blog claimed hinted at corruption in the governments of both Spain and Venezuela.

The blogger also claimed El Nacional newspaper had written an extensive newspaper report on the alleged Telefónica deal with Banco Confederado based on information gathered by the blogger, but which was withdrawn after printing prior to distribution following political pressure on the publishers, and because of the government involvement of some of its owners.

The veracity of the claims cannot yet be ascertained by Telefónicawatch.

[Further reference: Movistar (Telefónica), Banco Confederado and shipping -- Caracas Gringo, 6 August 2009; Banco Confederado: Another Bolivarian duck? -- Caracas Gringo, 8 August 2009; Antonieta, Bobolongo and Banco Confederado -- Caracas Gringo, 21 August 2009.]

TABLE OF CONTENTS

3 Telefónica Group

3 Associates and investments
3 Acquisitions and disposals
3 Telefónica to sell Meditel stake for EUR400m
3 Telefónica closing in on Hansenet acquisition
4 Suppliers
4 Telefónica deals give credibility to SpinVox claims investor
4 Devices
4 Vodafone’s Colao bemoans ‘iPhone effect’
4 Pre hits problems in USA
5 Telco SpA
5 Employment
5 Telefónica recruits for LatAm and Europe network builds

6 Telefónica España

6 Devices
6 Movistar criticised in MiFi review
6 Competitors
6 Telefónica order against Vodafone for fixed-line claims
6 Devices
6 New BlackBerry Curve launched in Spain
7 Market statistics
7 CMT reports on telecoms market growth
8 Network
8 VDSL2 services predicted for Spain
8 Telefónica broadband network experiences “massive collapse”
8 Network
8 Telefónica FTTH makes commercial debut in Spain
8 Vodafone to launch ADSL services on Telefónica network
9 Society
9 Telefónica signs equal opportunities pledge
9 Partners
9 Telefónica signs retail distribution deal with Fnac
9 Telefónica España selects Olista for mobile platform
10 Products and services
10 Simultaneous translation service launched in Spain
10 Regulation
10 Termination rates to continue decline in Spain
10 New TV tax on telcos a step closer

11 Telefónica Latinoamérica

11 Regional partners
11 Regional partners
11 Telefónica requests bids for set-top box contract
11 BMC highlights Telefónica role
11 Ericsson highlights Telefónica revenue assurance deal
12 Argentina
12 Argentina
12 Telefónica bundled pay-TV services offered across Argentina
12 New Trío ad campaign launched
13 Argentina
13 “Comunidad Movistar” discounts to include fixed-line calls
13 Movistar Argentina offers free account management
13 Telefónica notes broadband traffic rise
14 Brazil
14 Internet use continues to rise in Brazil
14 Telefónica objects to rival’s bundled services plans
14 Brazil
14 Speedy sales ban lifted
15 Brazil
15 Telefónica in Brazil wins award
15 Telefónica sees success in cutting cable theft
15 Telefónica Brasil highlights broadband upgrade efforts
15 Mesquita emphasises training
15 De Beer on Telefónica’s corporate commitments
16 Brazil
16 Calls for greater broadband availability in Brazil
16 Further enhancements to Telefónica procedures announced
16 Support for block lifting highlighted
17 Telefónica rolls out broadband to 91 more cities
17 Telefónica plans further steps towards internet television
17 Video-on-demand trailed at ABTA conference
17 Telefónica service complaints drop
18 Brazil: Vivo
18 Vivo confirms iPhone 3GS availability
18 RIM app store launched in Brazil
18 Brazil: Vivo
18 ECtel wins Vivo deal
18 Vivo sees slight market share rise
18 Vivo consolidates online services
19 Chile
19 Fundación Telefónica highlights educational role
19 Colombia
19 iPhone 3GS launched in Colombia
19 Chile
19 Mobiqa highlights Movistar partnership
19 Colombia
19 Movistar hit as mobile subscriptions slip in Colombia
20 El Salvador
20 Movistar Colombia offers additional minute bundles
20 Ecuador
20 3.5G launched in Ecuador
20 Additional investment expected in Ecuador
21 Movistar Ecuador offers incentives for personal data
21 Guatemala
21 Movistar trumpets investment in network with Ericsson
22 Mexico
22 Movistar Mexico aims for new spectrum licences
22 Movistar Mexico to launch SpinVox
23 Panama
23 Video calling promoted in Panama
23 Movistar Panama expands 3.5G coverage
23 Movistar succeeds in pre-empting Claro threat — report
24 Peru
24 Peru
24 Telefónica claims success for fixed-wireless in Peru
24 Uruguay
24 3.5G launched in Uruguay
25 Venezuela
25 Movistar highlights new LG handsets
25 Venezuela
25 3.5G network expanded in Venezuela
25 Movistar Venezuela launches SMS prize draw
26 Venezuela
26 Fundación Telefónica marks ten years in Venezuela
26 Telefónica plans submarine cable repairs
26 Movistar runs promotion for infrequent users
26 Movistar Venezuela launches electronic top-up promotion
27 Terra
27 Terra trumpets new partner deals
27 Rumours of unusual investments by Telefónica Venezuela

28 Telefónica Europe

28 Czech Republic
28 TOCR picks Oracle inventory management suite
29 Czech Republic
29 TOCR launches back-up service
29 TOCR trumpets success of O2 ZERO
30 TOCR offers discounts and support to flood victims
31 Germany
31 Germany
31 Ericsson lands IMS contract
31 Ericsson continues to build Telefónica links
31 O2 opens up VoIP access
32 Germany
32 O2 Germany simplifies DSL offering
33 O2 launches new targeted ad platform
33 O2 adds SHDSL to wholesale line-up
34 Ireland
34 O2 signs up for Deutsche Bahn NFC project
34 Ireland
34 O2 Ireland launches mobile TV
35 Ireland
35 Isle of Man
35 BlackBerry Managed Service launched in Ireland
35 O2 Ireland takes lead in contract customers
36 Slovakia
36 McGuigan named O2 Slovakia Chief Executive
36 United Kingdom
36 O2 offers “try-before-you-buy” broadband
36 Slovakia
36 New termination rates set in Slovakia
36 United Kingdom
36 O2 UK restructures marketing department
37 United Kingdom
37 O2 ties with Telmap for GPS navigation offering
37 Android handset launched by O2 UK
38 United Kingdom
38 Rumours continue over iPhone deal
38 O2 Media appoints new head of sales
39 United Kingdom
39 O2 surpasses BT in customer connection numbers
39 O2 names new Accelerator partners
40 United Kingdom
40 Pickering reveals career influences
40 O2 tenders for public affairs business
40 BT accuses O2 of termination rate scaremongering
41 United Kingdom
41 Pickering reveals career influences cont’d
41 Dunne bullish on SME, enterprise plays
42 Devices
42 UK: Be Un Limited
42 Be offers term-time broadband contracts
42 Be Un Limited highlights

43 Associates and investments

43 China Unicom
43 Telecom and Unicom to undertake $1bn share swap
44 China Unicom
44 Apple confirms Unicom iPhone distribution deal
44 China Unicom reports declining H1 net income
45 China Unicom
45 China Unicom to spend CNY 10bn on widespread 2Mbps broadband
45 Telecom Italia
45 Telecom Italia
45 TI beats estimates, bullish on turnaround
46 Anti-trust body calls for TI to sell Telecom Argentina
46 Telecom Argentina voting ban overturned
47 Portugal Telecom
47 Termination rate cuts hit PT financials
47 PT plans to acquire transmitter business

49 Index

INDEX

A
ABTA, 17
Academy Music Group (AMG)
O2 Academy, 37
Agence Nationale de Réglementation des Télécommunications (ANRT), 3
Aker BioMarine ASA, 29
América Móvil, 18, 19, 22, 23
Claro, 18, 23
Comcel, 19
Slim, Carlos, 22
Telcel, 22
Anatel, 14, 15, 16, 18
AnyDATA Corp., 25
Apple, 4, 34, 35, 38, 44
iPhone, 4, 18, 19, 34, 35, 38, 44
Ariadne Capital Ltd, 4
Asicom Mobile Solutions, 19
AT&T, 42
B
Banco Confederado, S.A., 27
Barclay Communications, 38
Bebo, 36
Beijing CandidSoft Technology Co. Ltd, 43
Benjelloun Group, 3
Finance.com Group, 3
RMA Watanya S.A., 3
Berliner Verkehrsbetriebe (BVG), 34
BMC Software, Inc., 11
BSkyB, 34
BT Group, 38, 39, 40, 41, 42
Bundesnetzagentur für Elektrizität, Gas, Telekommunikation, Post und Eisenbahnen (Federal Network Agency for Electricity, Gas, Telecommunications, Postal Service and Railways, BNA/BNetzA/RegTP, Germany), 31
C
Carphone Warehouse
TalkTalk, 42
Chavez, Hugo (Venezuela), 27
Chime Communications plc
Bell Pottinger Group, 40
China Mobile, 43, 44
China Netcom, 43
China Telecom, 43, 44
Cisco Systems, Inc., 11
CMT (Spain), 7, 8, 10
CNDC (Argentina), 46
Collins Stewart, 4
Conatel, 21
Confederación Española de Organizaciones en Favor de las Personas con Retraso Mental (FEAPS), 9
Consumers’ Association
Which?, 42
Credit Suisse Group CS, 46
Credit Suisse First Boston, 46
CSOB Group, 28
D
Deutsche Bahn, 34
Deutsche Post
DHL, 28, 41
Deutsche Telekom
T-Mobile, 28, 31, 34, 36
Germany, 31
DHL, 28, 41
Digicel, 23
DirecTV, 12, 14
E
EasyJet plc, 41
eBay
Skype, 31
ECTel, 18
Ericsson, 11, 21, 24, 31
F
Ford Motor Co., 28
France Télécom
Orange, 7, 10, 36, 37, 42
Fundação de Proteção e Defesa do Consumidor (PROCON, Brazil), 16
G
Gartner Group, 22
Global Crossing, 26
Google, 4, 37
Android, 4, 37
Groupe Bull, 18
Groupe Caisse de Dépôt et de Gestion (Groupe CDG), 3
Fipar-Holding S.A., 3
Grupo Clarín, 14
Cablevisión, 14
FiberTel, 14
H
Hansenet, 3, 45
Harmonic, 11
Hewlett-Packard, 25
High Tech Computer Corp. (HTC), 4, 23
Huawei, 25
Hutchison Whampoa
H3G
UK, 40
Hyundai Group, 25
I
Internet Advertising Bureau (IAB), 38
Intuition Publishing Ltd, 39
Isle of Man Bowls Festival, 35
K
KKCG, 28
Kyocera Corp., 25
L
Lew TelNet GmbH, 31
LG, 25
London Web Ltd, 39
M
Management Recruiters Global (MRG), 5
McConnell’s Advertising, 34
Microsoft, 32
Mobiqa, 19
MoCo Communications Ltd, 37
Morgan Joseph & Co. Inc., 4
Motorola, 30
MVNOs, 7
N
Ness Technologies, Inc., 28
NewBay Software, 29
News Corp.
BSkyB, 34
Sky, 34
Twentieth Century Fox Film Corporation, 27
Nielsen, 14
NII Holdings, Inc., 4
Nokia, 22, 23, 30, 31
Novatel Wireless, 6
O
Ofcom (UK), 39, 40
Olista Ltd, 9
Omnicom Group, Inc.
DDB Worldwide, 12
DDB Argentina, 12
ONO, 8
Oracle, 28
Organic, 45
Oystercatchers, 40
P
Palm, 4
Pantech Corp., 42
Portugal Telecom, 3, 47
Meo, 47
TMN, 47
PPR S.A. (Pinault-Printemps-Redoute)
FNAC, 9
Publicis Groupe
Starcom MediaVest Group (SMG), 34
R
Raidió Teilifís Éireann (RTÉ), 34
Rede Teledifusora Independente, S.A. (Reti), 47
Reed Elsevier
In-Stat, 43
Regions
Africa
South Africa, 32
Africq
Morocco, 3
APAC
Australia, 32
China, 32, 43, 44, 45
Hong Kong, 32
Japan, 32
Malaysia, 32
New Zealand, 32
Singapore, 32
Taiwan, 32
EMEA
Andorra, 32
Austria, 32
Belgium, 32
Bulgaria, 32
Croatia, 32
Cyprus, 32
Czech Republic, 28, 29, 30, 32, 34
Denmark, 32
Estonia, 32
Europe, 4, 5, 8, 28, 29, 32, 33, 34, 36, 38, 39, 40, 47
Finland, 32
France, 9, 32, 44
Germany, 3, 4, 10, 31, 32, 33, 34
Greece, 32
Hungary, 32
Ireland, 4, 29, 32, 34, 35, 39
Isle of Man, 35
Israel, 32
Italy, 3, 5, 11, 32, 45, 46
Liechtenstein, 32
Luxembourg, 32
Monaco, 32
Netherlands, 32
Norway, 32
Poland, 32
Portugal, 3, 11, 32, 47
Russia, 32
Slovakia, 32, 36
Slovenia, 32
Spain, 4, 6, 7, 8, 9, 10, 14, 18, 27, 29, 31, 32, 34, 43, 44
Sweden, 32
Switzerland, 32
Turkey, 32
UK, 4, 14, 29, 32, 33, 34, 36, 37, 38, 39, 40, 41, 42
Vatican City, 32
Latin America, 4, 5, 11, 14, 17, 19, 22, 23, 25, 27
Argentina, 11, 12, 13, 14, 18, 22, 32, 46
Brazil, 11, 14, 15, 16, 17, 18, 27, 32, 45, 47
Central America, 31
Chile, 11, 18, 19, 32
Colombia, 11, 19
Ecuador, 19, 20, 21
El Salvador, 20
Guatemala, 21
Mexico, 18, 22
Panama, 23
Peru, 11, 24
Uruguay, 24
Venezuela, 25, 26, 27, 32
North America
Canada, 32
USA, 4, 14, 32, 42
Research in Motion, 27, 39
Research In Motion, 6, 18, 35
BlackBerry, 4, 6, 18, 35, 39
Rotcho Ltd, 34
Royal Ahold N.V. (Koninklijke Ahold N.V.), 28
Royal Bank of Scotland
NatWest, 36
Royal KPN
E-Plus, 31
S
Samsung, 27, 37
Secretaría de Comunicaciones (Secom, Argentina), 14
Signals Telecom Consulting, 19, 23
Sindicato dos Empregados no Comércio (SINDEC), 17
SK Telecom, 43
Skype, 31
Slovakian Telecommunications Office (TU), 36
Sony, 23
Sony Ericsson, 23
SpinVox, 4, 11, 22
Sprint Nextel, 4
T
Technologies
2.5G, 20
2G
Edge, 20
3G, 6, 18, 21, 22, 23, 24, 31, 34, 44
3.5G, 20, 23, 24, 25, 28
HSDPA, 20, 24, 34, 35
4G
LTE, 43
WiMAX, 17
ADSL, 8, 11, 30, 33
ATM, 26
Broadband, 3, 6, 7, 8, 9, 11, 12, 13, 14, 15, 16, 17, 18, 20, 21, 24, 25, 28, 31, 32, 33, 36, 38, 39, 42, 44, 45, 47
Business/Operations Support Systems (BSS/OSS), 28
DSL, 8, 32, 42
FTTH, 8
GPS, 37
GSM, 19
IMS, 31
IP, 11, 12, 17, 28, 31, 38
IPTV, 12, 17
ISDN, 30, 32, 39
MMS, 29, 33
Mobile TV, 34
NFC, 34
NGN, 31
R&D, 43
SHDSL, 33
SIM, 29, 30, 32, 37
SMS, 24, 25, 26, 29, 32, 33, 44
TV, 10, 11, 17
UMTS, 21
VDSL2, 8
VoIP, 31
WLAN, 32
Wi-Fi, 25, 37, 44
Telco SpA, 3, 5, 46
Telecom Argentina, 14, 45, 46
Telecom Italia, 3, 5, 45, 46
Bernabe, Franco, 45, 46
HanseNet Telekommunikation, 3
TIM Brasil, 18
Telecom Plus plc
Utility Warehouse, 42
Telefónica Group, 3, 4, 9, 22, 43, 47
Associates and investments
China Netcom, 43
China Unicom, 43, 44, 45
Portugal Telecom, 3, 47
Telecom Italia, 3, 5, 45, 46
España, 6, 7, 8, 9, 10
Movistar, 10
Universal Service Obligation, 16
Executives
Abril, Luis, 9
Aherne, Karl, 34
Alierta, César, 43
Alvarez, Cristina, 9
Bargues, Andrés, 12
Bartholomew, Steven, 40
Botas Bañuelos, Antonio, 34
Cowdry, Sally, 36
De Beer, Mariano Sebastián, 15
De Salterain, Pablo, 24
Dunne, Ronan, 41
Earle, Jonathan, 39
Folgueiras, Andrea, 31
Goulu, Juan Federico, 20
Gregory, Shaun, 38
Henderson, Shan, 38
Hodgers, David, 36
Johnson, Alistair, 36
Karas, Jan, 29
McGuigan, John, 36
McMullan, Ilona, 39
Mesquita, Paulo, 15
Pickering, Ann, 40
Prokopik, Tomas, 28
Pruchnow, Johannes, 33
Rampling, Peter, 36, 37
Schneider, Frantisek, 28
Schüler, Lutz, 31, 32
Sedivy, Juraj, 36
Tetiva, Bohdan, 29
Whelan, Paul, 35
Whelan, Ronan, 35
Fundación Telefónica, 12, 15, 19, 25, 26
Latinoamérica, 11, 25
Argentina, 12, 13, 14, 46
Brazil, 11, 12, 14, 15, 16, 17
Brazil (TVA), 17
Chile, 19
Colombia, 19, 20
Ecuador, 20
Mexico, 22
Peru, 24
Venezuela, 25, 26, 27
Meditel (Morocco), 3
Móviles, 11
Movistar, 4, 6, 7, 9, 10, 11, 12, 13, 19, 20, 21, 22, 23, 24, 25, 26, 27
Argentina, 12, 13
Chile, 19
Colombia, 19, 20
Mexico, 22
Venezuela, 25, 26, 27
O2 Europe
Be Un limited (UK), 42
Products and services, 29
Aula365 Speedy, 13
FonoYa, 24
mobile ticketing, 19
mpass, 34
O2 Load & Go, 36
pay-TV, 11, 12, 14, 17, 47
Speedy (Latinoamérica), 13, 14, 15, 16, 17, 24
TRIO, 12
Xda (O2), 42
Telco SpA, 3, 5, 46
Telefónica Europe, 4, 9, 19, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42
Accelerator Partner Programme, 39
Be Un limited (UK), 42
Czech Republic, 28, 29, 30
Germany, 31, 32, 33, 34
Ireland, 34, 35, 36
Manx Telecom (Isle of Man), 35
O2 Advertising Services, 33
O2 Group, 39
O2 Media, 33, 38
O2 TV, 30, 34
Slovakia, 36
UK, 19, 31, 36, 37, 38, 39, 40, 41, 42
Terra, 13, 27
Teléfonos de México (Telmex), 22
Televisa, 22
Telmap Ltd, 37
Time Warner
AOL, 42
CNN, 34
Tiscali SpA, 42
Travel Channel, 34
TST (Training Services & Technologies), 10
TVA, 17
U
United Nations, 24
V
Virgin Group, 40, 42
Virgin Media, 40, 42
Vivendi SA
Universal Music Group (UMG), 27
Vivo Participações, 18, 47
Vodafone Group, 4, 5, 6, 7, 8, 10, 28, 31, 34, 35, 38, 43
Germany, 31
Ireland, 35
Spain, 8, 10
UK, 4
VVCP, 34
W
Walt Disney, 13
World Bank, 46
International Centre for Settlement of Investment Disputes, 46
X
Xansa, 40
Xfera, 10
Y
Yahoo!, 38
Yoigo, 7, 10
Z
Zen Internet, 42
Zenprise, Inc., 39
ZTE, 20, 25

Issue: 2009.06
Covering: H1 FY09 results and trends
Published: August 2009
Next issue: September 2009

Delivering valuable insight into the labyrinth that is Spain’s global telco giant. A unique monthly report for the industry.

• About Telefonicawatch
• Executive Brief
• Extract
• Table of Contents
• Index

ABOUT TELEFONICAWATCH

• Telefónicawatch delivers all the information on Telefónica Group worldwide in one place, and keeps it up-to-date in a uniquely thorough and digestible fashion.
• This ongoing report service encapsulates Telefónica’s three core divisions — España, Latinoamérica and Europe — along with its central functions, strategy, financial and operational performance, and numerous other units and interests (including China Unicom, Portugal Telecom, Telecom Italia, Vivo, Atento, TIWS, Terra, etc.).
• If Telefónica really matters to you — whether as a vendor, competitor, investor, regulator or any other major stakeholder — it pays to keep properly informed and there is simply no easier or better way to become and remain fully briefed.
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• Below is a free taster from issue 2009.06 (H1 FY09 results and trends), including an Executive Brief, Extract, Table of Contents and Index, giving a valuable snapshot of the full report.

EXECUTIVE BRIEF

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.]

Capital expenditure across the Group dropped by nearly 20% (16% in organic terms) as the company focused on maintaining operating cashflow and emphasised its commitment to being flexible in its spending to reflect the demands of the market and protect its balance sheet. Spending in Spain took a particular hit, falling 29.6%, as the company’s plans for fibre rollout slowed, and the economic downturn in the construction industry stifled demand for associated new infrastructure. [p.6.]

Telefónica’s customer base continues to swell, with the June 2009 total of 264 million being 7.6%-higher than a year earlier. Brazil was a major contributor to accesses growth as was the UK (considering the levels of market saturation), while net adds were also strong in Germany and Mexico, both markets where Telefónica OpCos still have relatively small market shares. [p.7.]

While the results were generally welcomed, there appeared to be uncertainty over what to expect from Telefónica in 2010, with the Board saying it anticipated performance within the bounds of its “stress test” of worst-case scenarios, but holding back on more detail until October 2009’s Investor Conference. [p.8.]

Telefónica España Chief Executive Guillermo Ansaldo indicated that trading conditions looked to be stabilising, although that was also the view expressed last quarter. Telefónicawatch was struck by the poor performance of the Spanish fixed-line business, particularly in relation to broadband and IPTV sales, where a complacent approach to growing the market seems to be returning to haunt the company. Mobile broadband was flagged as an area of growth for Telefónica, but with a significant element of fixed-broadband revenue cannibalisation potentially heralding further bad news for the wireline business. [pp.9-16.]

Telefónica Latinoamérica continues to be the growth engine of the Group, but, increasingly, observers are looking under the bonnet and expressing concern that the division is unlikely to be able to maintain current levels. Shaky performances were noted in key Brazil and Colombia units, accompanied by seemingly ever-present concerns of undue political influence in the region, focused this time on Venezuela, where Telefónica was pushed to defend its claims of success in the country in the light of the prospect of major associated currency write-downs. [pp.17-23.]

“Market momentum” was maintained at Telefónica Europe, where the UK performed strongly, and appeared only held back by local currency weakness, while the German unit’s turnaround continued to gather pace. However, in the Czech Republic, an uncertain view of the future led the unit to abandon revenue guidance, while confirming fairly gloomy OIBDA predictions. [pp.24-29.]

TRENDS & INNOVATION: Drawing on insight from Analysts at Market Mettle, and interviews with Telefónica partners, Telefónica’s prospects in three key areas of innovation have been considered. IPTV is a service that Telefónica has been attempting to build for some time, but appears in danger of losing momentum in Spain, and is hampered in Latin America by network and regulatory constraints, while its position within Telefónica Europe is uncertain. IPTV partner Alcatel-Lucent considers the technology could provide the interactive television service that consumers reportedly want, but warns that fibre investment is vital to providing a differentiating experience. It could be the case that IPTV becomes the second phase of Telefónica’s pay-TV plans, following a partnership approach with existing providers on other platforms that helps to gain a foothold in the market. [pp.32-37.]

For an integrated operator like Telefónica, converging technologies such as WiMAX and femtocells could become a key part of network coverage. However, how these services, which have the potential to cannibalise traditional revenue, fit in the company’s strategy is not yet clear. The potential for WiMAX deployment as a solution to network coverage provision in remote areas that lack fixed-lines is particularly striking and an area the company is already making strides in Latin America and Spain. Femtocell technology partner Ubiquisys highlighted the potential for new revenue streams from offering consumers unified communications in the home. [pp.38-41.]

Mobile commerce has been on Telefónica’s radar for several years now, but a coherent strategy has yet to fully emerge from the company. While recent months have seen the emergence of several small commercial offerings and trials in the area, it would appear there is some uncertainty as to the best direction forward in current market conditions. In the UK, O2 has made several forays into mobile ticketing and associated services, although partner Mobiqa has suggested that early efforts amounted to little more than a marketing ploy, and that the unit was “clogged up with initiatives” in the area. [pp.42-44.]

EXTRACT

Faltering fixed-line services a concern in Spain

There appeared to be some disquiet among the analyst community, with attention particularly focused on Latin America and Spain.

Most troubling for Spain is the slowdown in broadband and pay-TV, two segments that are substantially under-penetrated when considered alongside European counterparts.

The sluggish broadband market appears to be of particular concern, and can perhaps be attributed to Telefónica’s position as a fixed-line incumbent with considerable experience in managing the regulator. This may have led to a complacent attitude that restricts growth of the broadband market, while maintaining respectable market share and margins for Telefónica. However, as the recession in Spain continues, demand for broadband has slowed, and it may notable that in markets such as the UK, also affected by difficult economic conditions (although perhaps not to the extent of Spain), broadband has proved itself to be less of a luxury and more a day-to-day requirement.

Broadband penetration is also considered key to development of Telefónica’s pay-TV service in Spain, which is another segment suffering from local conditions. The company reacted to the economic crisis in Spain earlier in 2009 with competitive offers for fixed-line and mobile customers that have become unemployed, but, other than securing clearance from the regulator to make attractive offers to broadband customers migrating from a rival, Telefónica in Spain has failed to respond proactively to the slowing broadband market.

The operating company gives an impression that it is satisfied with its policy of competing on quality-of-service rather than price. Telefónicawatch wonders whether this view is an example of the lack of responsiveness the company has shown in the broadband market in Spain, possibly brought about by the requirement to make wholesale versions of its products simultaneously available to potentially more-agile competitors, which can negate the appeal of innovation.

The company is offering a summer promotion of fixed-line voice and 6Mbps broadband for EUR19.90-per-month, but it is unclear whether short-term offers for new customers will be sufficient to compete with aggressive new tariffs from rivals such as Vodafone, which is promising long-term low prices.

Spain: Mobile broadband: a threat as well as an opportunity?

Telefónicawatch was also interested to note that the Spanish unit is claiming that mobile broadband is slowing growth of the fixed-line broadband market. If it is the case that customers are turning to mobile broadband as an alternative to fixed-line services, as opposed to as a complementary service, this could be bad news for the future of the wireline business as a whole, and could be a spark for a accelerated abandonment of fixed-line services.

While Telefónica can position itself as an “integrated operator“, and say that it continues to benefit from customers adopting mobile broadband through Movistar España, the mobile market is notably more competitive, and Telefónica will not be able to exert the same levels of dominance.

” Obviously, what’s going on in Spain in the fixed-broadband side, the market is not growing, so, basically, we are taking share of a smaller market. That is due to two things in my opinion: one is the overall economic environment, which is tougher; and [two] also the surge of the mobile broadband, which is exploding and from which we are taking very good share of that market. As an integrated operator, that gain is a positive gain. ”
– Guillermo Ansaldo, Chief Executive, Telefónica España.

Telefónica’s own analysis apparently showed that around one-third of mobile broadband customers could be viewed as having cannibalised fixed-broadband, with an even split within that group between people who substituted fixed-broadband connections, and those who never had a fixed-broadband service. It was unclear whether this breakdown related to the market as a whole, or just Movistar España mobile broadband users.

Internet Protocol television service Imagenio is viewed as an important value-add for the wireline business, but the Spanish unit only managed a small increase in customers in Q2, coming off the back of a decline in the preceding quarter. While analysts considered that domestic rivals are performing strongly, Ansaldo said claimed it was the market as a whole that was declining and “not behaving very well”. The company also appeared to retreat from its target of reaching one million Imagenio subscribers in 2010, which would require a sharp increase in demand, with Ansaldo accepting that, “despite the fact 2010 is not yet tomorrow, it will be tough to get those numbers”.

Some scepticism over Latin American performance

The Telefónica results conference call for the H1 FY09 results saw particularly tough questioning on performance in Latin America, where political uncertainty remains and questions over commercial performance emerged.

Shaky fixed-line performances in Brazil and Columbia were noted, which the company hopes to address through network investment in the former, and revised commercial offerings in the latter.

Concern was also expressed about the ability of Telefónica to repatriate funds from Latin America to Spain, with particular worry expressed over cash balances held in Venezuela. Valbuena said there was “no particular issue” regarding remitting funds to Spain from most of the region, but he did admit that some dividend repatriation had been delayed in Venezuela. Meanwhile, a blog from an unnamed analyst and lecturer on South America, made unsubstantiated claims that Telefónica had invested funds in government-linked banks in the country, which were thought to be on the verge of insolvency, and had also invested in a local shipping business as a means of securing its future independence in the country under the government of Hugo Chavez, who has previously nationalised a number of businesses, including operator CANTV, in which Telefónica held a stake.

There was also an assumption from analysts that there would be a write-down on Venezuelan assets, as it was considered that much of the growth in the country was “driven by inflation, and supported by an artificially pegged currency”. However, the company said that, at present, there was no need to consider this action as the operating company was performing well, and that, so long as the group considers it could repatriate funds, it did not need to take action over a potential realignment of the exchange rate. Valbuena stressed that the company’s independent accountants and auditors were satisfied with this view, although he did himself appear to concede that a problem with the currency realignment could occur at some point in the future, saying “what we have been doing so far is warning the investment community that…the sustainability [for] very long [of] the trend of the exchange rate is not an easy thing to hold”.

In Brazil, Vivo has previously positioned itself as a provider of high-end services, building a customer base of profitable customers rather than just chasing volume. However, it is worth noting that recently, as has been the case in previous quarters, SIM-only customers contributed significantly to the unit’s new customers, which raises questions as to the true extent of its market share lead. Regional Chief Executive Álvarez-Pallete experienced a tense moment as he was pushed on Vivo’s loss of market share, maintaining it was “pretty stable”, while an analyst insisted it was declining, arguing that the executive’s version of events was different to the view of regulator Anatel and its market statistics. However, the spat appeared to be more a predictable difference in emphasis, than reliance on different information. The latest Anatel figures show a decline, with Vivo’s market share hovering at just over 29%, but an overall declining trend has still seen some months of marginal improvement.

Czech Republic puts a crib in Telefónica Europe performance

For Telefónica Europe, the results were generally well received, with questions from analysts focused more on how the level of performance would be maintained.

Telefónica Europe Chief Executive Matthew Key was predictably questioned about iPhone exclusivity, which were effectively batted away without revealing anything on the nature of the agreement with Apple in the UK and Ireland (although the degree of coyness could in itself be telling). Telefónica O2 UK is expected to see a 4%-hit to revenue due to mobile termination rate cuts in H2 FY09, amounting to a predicted 2%-cut in anticipated revenue for the whole year.

Germany was considered a particular success story, as recovery plans set in motion in FY07 continued to bear fruit. Nevertheless, there were concerns that the market in Germany is stepping up a level in terms of competition. Key was confident that performance could be maintained, however, highlighting the four “drivers of profitability” in the market. The success of the fixed-line Telefónica Deutschland business in moving into profit was flagged, along with increased direct sales, lower reliance on roaming, and attractive new customer propositions. Levels of operating income before depreciation and amortisation (OIBDA) growth, which were very high year-on-year at the end of FY08, are unlikely to be sustained, but underlying profitability was considered solid, and underlying revenue was also growing, after the effects of termination rate cuts in the market were excluded.

Telefónica Ireland was hard-hit by economic conditions, but it was in the Czech Republic, where the operating company still issues its results to the local stock exchange, that expectations can be seen to be clearly faltering. The company said it is focusing on improvements to operating performance and making more effective use of capital expenditure, in an effort to meet OIBDA guidance of 0%- to 4%-decline, and a 2%- to 5%-increase in operating cash flow. However, guidance for revenue was dropped, due to lack of clarity in the market going forward, apparently in large part due to uncertainty over likely information and communication technology work for the Czech government.

Analyst reaction

Despite the fact that Telefónica delivered revenue in line with analyst expectations, and OIBDA and net income above consensus estimates, the better-than-expected performance was not obviously reflected in the company’s share price, which rose just 1% (to EUR17.65) on the announcement, broadly in line with movements in the wider Spanish market.

In contrast to the upbeat tone of executives, there was a degree of mildly hostile scepticism from certain analysts on the conference call, with a number probing the company’s reticence to update FY10 guidance, questioning the validity of some quoted indicators in South American markets, and querying the general justifiability of executives’ self-congratulatory stance.

However, in subsequent press coverage, analysts seem to take a more balanced and broadly-positive position on the results, with a cautiously optimistic outlook.

” The cost-reduction efforts are very significant and encouraging. …The results prove the companies can protect cash and ensure dividend payments by reducing costs and investments. …Taking into account the current situation in the world’s economy, the results are outstanding. ”
– Alberto Espelosin, analyst, Ibercaja Gestion, commenting on the performance of Telefónica, BT and France Télécom.

Banesto, in a research note, described Telefónica’s second-quarter results as “solid”, but added they were overly dependent on Latin America and capital expenditure cuts. The bank said the results would likely support the stock over coming weeks, and suggested the company may announce a new share-buyback programme or improvements in its FY09 guidance in the autumn.

” Telefónica remains the choice name in the sector in my view. The shares have been one of the best large-cap performers this year, and should be well supported again today. ”
– Saeed Baradar, analyst, Société Générale.

[Further reference: Telefónica S.A. January-June 2009 results -- Telefónica, 29 July 2009; Telefónica H1 profit up 0.7 pct -- Reuters, 30 July 2009; Telefónica 2Q net dn 6.1% on year-ago asset sales -- Wall Street Journal, 30 July 2009; Telefónica, BT, France Telecom beat analyst estimates -- Bloomberg, 30 July 2009.]

TABLE OF CONTENTS

3 Telefónica H1 FY09 results

3 Telefónica Group
3 Overview
4 Telefónica, selected financial data, H1 and Q2 FY09
5 Regional
5 Telefónica Group, revenue, by region, H1 FY09
5 Telefónica Group, OIBDA, by region, H1 FY09
6 Telefónica Group, capital expenditure by region, H1 FY09
7 Customer numbers
7 Telefónica Group, customer numbers (‘000), Q2 FY09
8 Forecasts
8 Uncertainty over expected 2010 performance main area of concern
9 Telefónica España
9 Overview
9 Telefónica España, financial highlights, H1 and Q2 FY09
10 Customer numbers
11 Telefónica España, customer numbers (‘000), Q2 FY09
12 Wireline
12 Telefónica España, wireline financial highlights, H1 and Q2 FY09
13 Telefónica España, wireline revenues by type, H1 and Q2 FY09
13 Wireless
13 Telefónica España, wireless financial highlights, H1 and Q2 FY09
14 Telefónica España, wireless revenues by type, H1 and Q2 FY09
14 Telefónica España, wireless key performance indicators, H1 FY09
15 Faltering fixed-line services a concern in Spain
16 Mobile broadband a threat as well as an opportunity?
17 Telefónica Latinoamérica
17 Overview
17 Telefónica Latinoamérica, financial highlights, H1 and Q2 FY09
18 Customer numbers
18 Telefónica Latinoamérica, customer numbers (‘000), Q2 FY09
19 By country
20 Telefónica Latinoamérica, revenue by country, H1 and Q2 FY09
21 Telefónica Latinoamérica, OIBDA by country, H1 and Q2 FY09
22 Key performance indicators
22 Telefónica Latinoamérica, Key Performance Indicators, H1 FY09
23 Signs of scepticism over Latin American performance
24 Telefónica Europe
24 Overview
24 Telefónica Europe, financial highlights, H1 and Q2 FY09
25 Customer numbers
25 Telefónica Europe, customer numbers (‘000), Q2 FY09
26 By country
26 UK
26 Germany
27 Ireland and Czech Republic
27 Telefónica Europe, revenue by country, H1 and Q2 FY09
27 Telefónica Europe, OIBDA by country, H1 and Q2 FY09
28 Key performance indicators (KPIs)
28 Telefónica Europe, Key performance indicators, H1 FY09
29 Czech Republic puts a crib in Telefónica Europe performance
30 Atento Group
30 Atento Group, financial highlights, H1 and Q2 FY09
31 Analyst reaction

32 Trends and innovation

32 Where next for Telefónica?
32 IPTV analysis: Can Telefónica compete in the pay-TV market?
32 Introduction
32 Telefónica’s IPTV services
33 Telefónica España
34 Telefónica Latinoamérica
35 Telefónica O2 Europe
35 Czech Republic
35 UK
36 Ireland
36 Germany
36 Alcatel-Lucent — Telefónica’s Partner for IPTV
37 Bundles are important, but is IPTV investment justified?
38 FMC analysis:Where does it fit in Telefónica strategy?
38 Introduction
38 Telefónica looks to WiMAX as a potential remote solution
39 Intel supports importance of WiMAX in LatAm
40 Femtocells could boost 3G in Europe…
40 …Partner Ubiquisys pleased with trials
41 Conclusion — potential for addressing current weaknesses
42 Mobile commerce analysis: New ways to make money from mobile
42 Introduction
42 Mobile commerce and Telefónica
43 Mobile payments — waiting for market to catch up?
44 Mobile ticketing — Mobiqa unsure of Telefónica strategy
44 Conclusion — clear strategy yet to emerge

45 Index

INDEX

A
Airwave Safety Communications Ltd, 3
Alcatel-Lucent, 32, 36, 41
Alvarion, 38
Anatel, 19, 23
Anschutz Entertainment Group (AEG), 43
Apple, 29, 41
iPhone, 26, 29, 41
Atos Origin, 43
B
Banco Bilbao Vizcaya Argentaria, 42, 43
Banco Itaú, 42
Barclaycard, 43
British Broadcasting Corporation, 35
BSkyB, 35, 36
BT Group, 31, 35
C
CANTV, 23
Carphone Warehouse, 35
Chavez, Hugo (Venezuela), 23
Columbia Ventures
Magnet, 36
D
Deutsche Telekom
T-Mobile, 24, 26
E
Endemol N.V., 32
F
France Télécom, 31, 32
Orange, 32, 33
Orange Spain, 33
Freeview, 35
I
Iberbanda, 38
Ibercaja, 31
Intel, 39, 41
Inter-American Development Bank, 42
ITV, 35
J
Juniper Research, 43
L
Live Nation
Wireless Festival, 44
Lycos, 32
M
Microsoft, 36
Mobile World Congress, 40
Mobipay, 43
Mobiqa, 44
Motorola, 39, 41
N
NEC, 40
News Corporation
BSkyB, 35, 36
Nokia, 43
O
O2 Arena, 43, 44
ONO, 33
Organic, 5, 6
P
Portugal Telecom, 33
Prisa, 33
Digital+, 33
Project Canvas, 35
R
Regions
EMEA
Czech Republic, 7, 24, 27, 28, 29, 35, 41, 42
Europe, 3, 4, 5, 6, 15, 24, 25, 26, 27, 28, 29, 32, 33, 35, 37, 40, 41, 43
France, 31, 32
Germany, 7, 24, 26, 27, 28, 29, 36, 37, 43
Ireland, 24, 27, 28, 29, 36, 37, 42
Italy, 33
Portugal, 33
Spain, 4, 6, 7, 9, 12, 13, 15, 16, 23, 30, 31, 33, 37, 38, 41, 43, 44
UK, 7, 15, 24, 26, 27, 28, 29, 35, 36, 37, 40, 42, 43, 44
Latin America, 4, 15, 23, 30, 31, 34, 37, 38, 39, 41, 42, 43, 44
Argentina, 17, 18, 19, 20, 21, 34, 41, 43
Brazil, 7, 17, 18, 19, 23, 30, 33, 34, 39, 42
Chile, 7, 18, 20, 21, 32, 34, 37, 43
Colombia, 7, 20, 21, 43
Ecuador, 20, 21
Mexico, 7, 18, 19, 20, 21, 30, 43
Panama, 43
Peru, 7, 17, 18, 19, 30, 41, 43
Uruguay, 20, 21, 43
Venezuela, 7, 17, 18, 19, 20, 21, 22, 23, 30, 43
Royal Bank of Scotland
NatWest, 43
S
Smart Telecom, 36
Société Générale, 31
Sogecable, 3
T
Technologies
2.5G, 39
2G, 6
3G, 38, 39, 40
3.5G, 38
4G
WiMAX, 38, 39, 41
ADSL, 6, 7, 10, 11, 33, 34
Broadband, 6, 7, 9, 10, 11, 12, 13, 15, 16, 18, 19, 25, 26, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41
DSL, 26, 41
Femtocell, 38, 40, 41
Fixed-mobile convergence (FMC), 38, 40
GSM, 6
HDTV, 36
ICT, 39
IP, 32
IPTV, 32, 33, 34, 35, 36, 37
LLU, 7, 10, 11
Mobile Broadband, 16
NFC, 43
P2P, 14, 28
R&D, 32
SIM, 23, 25, 26
SMS, 14, 26, 28, 44
Wholesale line rental, 11
WLAN
Wi-Fi, 38, 39
Telecom Italia, 33
Telefónica Group, 3, 4, 5, 6, 7, 8, 38
Associates and investments
Iberbanda, 38
Portugal Telecom, 33
Sogecable, 3
Telecom Italia, 33
Atento, 30
España, 3, 5, 6, 9, 10, 11, 12, 13, 14, 16, 33, 34, 36, 37, 42, 43
Movistar, 16
Universal Service Obligation, 12
Executives
Álvarez-Pallete Lopez, Jose Maria, 19, 23
Ansaldo, Guillermo, 9, 16
Dev, Vivek, 41
Dunne, Ronan, 35
Fernández Valbuena, Santiago, 4, 8, 23, 24
Key, Matthew, 26, 29, 35
Linares, Julio, 6
Ex-executives
Viana-Baptista, Antonio, 42
Latinoamérica, 3, 5, 6, 7, 17, 18, 19, 20, 21, 22, 23, 34
Argentina, 20, 21
Brazil, 19, 20, 21, 34
Brazil (TVA), 34
Chile, 20, 21, 34, 37
Colombia, 20, 21
Mexico, 20, 21
Peru, 20, 21
Telefónica International Wholesale Services, 20, 21
Uruguay, 20, 21
Vivo (Brazil), 19
Móviles, 20, 21
Ecuador, 20, 21
Uruguay, 20, 21
Venezuela, 20, 21
Movistar, 16
Products and services
DUO, 10, 18
Imagenio, 16, 32, 33, 34
Mobile banking, 42
mobile payments, 42, 43
mobile ticketing, 42, 43, 44
MobiPay, 42
mpass, 43
O2 Wallet, 43
pay-TV, 7, 10, 15, 18, 32, 33, 34, 35, 36, 37
TRIO, 10, 18, 33, 34
Telefónica Europe, 24, 26, 27, 28, 29, 35, 36, 40, 43, 44
Czech Republic, 27, 28, 35
Fonic, 26
Germany, 24, 26, 27, 28, 36, 43
Ireland, 27, 28
O2 TV, 35
O2 Wireless Festival, 44
Telefónica Deutschland, 29
UK, 26, 27, 28, 29, 35, 40, 43, 44
Terra, 32
Ticketmaster, 44
Tiscali SpA, 35
Transport for London, 43
Oyster Card, 43
TranSys, 43
TVA, 34
U
Ubiquisys, 40
V
Virgin Group, 35, 36
Virgin Media, 35, 36
Visa Europe, 43
Vivendi Universal, 33
Vivo Participações, 19, 20, 21, 23, 33, 42
Vodafone Group, 15
VTR, 34, 37
Z
ZTE, 40

Issue: 2009.05
Covering: July 2009
Published: August 2009
Next issue: August/September 2009

Delivering valuable insight into the labyrinth that is Spain’s global telco giant. A unique monthly report for the industry.

• About Telefonicawatch
• Executive Brief
• Extract
• Table of Contents
• Index

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• Below is a free taster from issue 2009.05 (July 2009), including an Executive Brief, Extract, Table of Contents and Index, giving a valuable snapshot of the full report.

EXECUTIVE BRIEF

MAIN STORIES: Telefónica reported H1 FY09 results, showing a “solid” consolidated performance, although wider economic fall-out continues to take a toll. [p.3.]

Telefónica Chairman César Alierta was cleared on insider-trading charges by the Spanish criminal courts because the Statute of Limitations meant no sentence could be issued. The judges’ ruling reportedly indicated that Alierta’s conduct “would have constituted the elements of the crime” . Prosecutors are considering an appeal. [p.5.]

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.]

O2 UK entered the financial services market in partnership with NatWest, offering two pre-paid Visa card products to its customer base, one of which targets the 13- to 16-year-old market. While the unit has trialled mobile payments using NFC technology, it indicated there are no plans to introduce a mobile-based payment element until there is wider support for the concept from retailers and handset manufacturers. [pp.33-35.]

In Brazil, Telefónica’s most important Latin American market, its fixed-line business has embarrassingly seen its right to sell broadband connections suspended due to ongoing network faults. The unit acted quickly to outline an emergency-upgrade plan, and senior executives including Latinoamérica Chief Executive Álvarez-Pallete took steps to reassure that problems would be remedied, with extra funds available if needed. [pp.18-21.]

GROUP: Telefónica appointed bankers to manage the prospective sale of its interest in Moroccan operator Meditel. There were rumours that a Telefónica bid for US operator Sprint was potentially in the wings. [p.3.]

Telefónica Group awarded NEC a contract to build a software-as-a-service platform for the telco. [p.4.]

As previously rumoured, Telefónica Europe and Telefónica España won exclusive deals to offer the new Palm Pré smartphone, which is due to be launched on the continent before Christmas. [p.4.]

In Brazil, it was ruled by the regulator that Telefónica and Telecom Italia are not linked, despite Telefónica’s stake in TI. Telefónica is a shareholder in the Telecom Italia-controlling consortium Telco SpA, which also saw a ruling that had required it to offer to buy-out minority shareholders in the Telecom Italia Brazilian mobile business overturned. Press reports suggested, somewhat improbably, that the two companies could now work together more closely in the Brazilian market. [pp.7-8.]

ESPAÑA: CMT customer-acquisition figures for the second quarter of 2009 saw Telefónica businesses in Spain struggle to keep up with smaller rivals as the company’s domestic market showed some signs of opening up. In the broadband sector, Telefónica claimed only 17% of net new customers in the period, while, in the mobile sector, Movistar was a net loser for the quarter. [pp.9-10.]

Telefónica performed poorly in a broadband speed review, compared to its cable rivals. Nevertheless, regional cableco R Cable is considering using Telefónica’s wholesale network to offer services outside of its existing footprint. [p.10.]

Movistar España signed an interoperability agreement with Vodafone and Orange to enable the wider use of two-dimensional bar codes in the country. The technology behind the platform is being delivered by Telefónica partner Scanbuy. [p.11.]

Biometric-security software from solutions provider Authentest is to be deployed on critical access points of the Telefónica network. [p.12.]

A new offering from Telefónica España is to provide free calls between family fixed-line and mobile numbers for an additional EUR3-per-month, for customers subscribing to both fixed and mobile services from the company. Free mobile access to Digital+ TV channels is being offered to mobile broadband subscribers. [pp.12,14.]

Fixed-line rental charges were frozen for 2010 in Spain, which will mark the fourth consecutive year of no price increases as the regulator attempts to bring costs in line with the EU average. [p.13.]

LATINOAMÉRICA: India’s OnMobile won a contract to provide value-added services across Telefónica’s mobile units in Latin America, many of which will be run on an exclusive-basis. OnMobile is expected to spend $50m on rolling out its portfolio. Mobile messaging solutions provider Colibria said it expects to see its services launched in another Latinoamérica market in the near future. There were reports that vendor Ericsson and Telefónica’s Central American units are to collaborate on solutions to foster growth in the region. [pp.15,23.]

In Argentina, Movistar launched its voice-to-text message conversion service from controversial solutions provider SpinVox. New text services were launched in El Salvador that enable “reversed charge” text messages to be sent, and also for customers to pay the cost of texting them. Velti reported it had won a deal to provide mobile marketing solutions to Movistar Mexico. [pp.16,26,27.]

Movistar Argentina ran promotions offering extra credit for topping-up, as well as discounted rates on texts sent while roaming. In El Salvador, Movistar customers are being offered monthly free minutes between linked on-net numbers. Pre-paid roaming was announced by Movistar Venezuela. [pp.16,26,28.]

Telefónica Empresas in Argentina said it had won a contract to update the South American communications platform of Unisys. [p.17.]

New SME-orientated IP telephony and broadband bundles were launched in Argentina. A new SME product portfolio was unveiled in Peru, featuring services including IT support. [pp.17,27.]

An e-payment trial was launched by Vivo in Brazil, in conjunction with financial institution Itau Unibanco. The operator is also offering branded MasterCards to its customer base. Pre-pay television services were launched in Peru, with satellite access to premium channels offered via commitment-free pre-paid cards. [pp.22,27.]

It was reported that Movistar Chile could cap mobile broadband usage as data traffic on its mobile network increases dramatically. The Chilean operator also claimed to be the first to demonstrate LTE 4G technology in the country, following an announcement of actual LTE trials by rival Entel PCS. [pp.23-24.]

Telefónica Chile lost a claim for $300m compensation, related to allegedly unfair tariff restrictions imposed by regulatory bodies between 1999 and 2004. A dispute between Nextel and Telefónica Mexico rumbled on, with a new complaint filed with Cofetel by the trunking operator subsidiary. [pp.24,26.]

There were rumours that Telefónica Colombia could expand its presence in the country’s capital, with a bid for a stake in state-owned operator ETB. Other Colombian acquisitions are also reportedly being considered by Telefónica. [p.25.]

TELEFÓNICA EUROPE: Telefónica O2 Czech Republic is to introduce time-based, rather than data volume-based, charging for mobile broadband. Per second roaming billing was introduced by O2 in Slovakia. [pp.29,33.]

O2 Germany selected Acme Packet to provide session border controllers for its next-generation network. [p.30.]

The launch of the Toshiba TG01 handset in Germany was swiftly followed by its temporary withdrawal due to a virus relating to some units’ memory sticks. [p.31.]

O2 Ireland won a contract to provide its AccessMyLan offering to construction company Sisk. O2 Ireland’s joint-venture Tesco Mobile reported a EUR7.3m-loss for 2008, according to recently-filed accounts. [pp.32.]

A telephone-based IT support service was launched by O2 UK. There were also reports of a new mobile-fixed convergence product for the SME market set to be launched in the UK. [pp.36,42.]

O2 UK agreed a deal with micro-blogging site Twitter , to enable messages sent through the service to be delivered via SMS. The deal was described as a potential model for other agreements across Telefónica’s global business. [p.36.]

Telefónica Europe did not rule out an acquisition of the UK T-Mobile business, although the prospect was played down. [p.37.]

Ericsson won a network-maintenance contract with O2 UK — the vendor said it hoped this would lead to more opportunities to work together. O2 UK agreed a partnership deal with global managed services company Wyless. [pp.38,39.]

ASSOCIATES & INVESTMENTS: As China Unicom rolls out 3G, expectations increased of a launch of the Apple iPhone on its network, with a Dell Android handset also anticipated. Telecom Italia may sell its stake in Telecom Argentina, but is planning greater investment in Brazil. A network-sharing deal was signed with 3 Italia by TI in its home market. [pp.43-47.]

EXTRACT

FINANCIAL RESULTS: Telefónica continues to be buffeted by economic storms

Telefónica Group issued its financial results for the six months to 31 June 2009 (H1 FY09), with reported revenue down 2% to EUR27.6bn, compared to H1 FY08. Operating income before depreciation and amortisation (OIBDA) shrank 1.7% to EUR10.9bn over the same period, as operating income (OI) slipped 0.8% on a year earlier to EUR6.6bn. Net income, however, rose 0.7% for the period, to reach EUR3.62bn.

The company attributed the patchy performance to exchange rate fluctuations and the impact of capital gains booked in FY08. On a consolidated basis, revenue rose 1.4% year-on-year in organic terms, OIBDA grew 3.0%, and net income was up 10.7% — excluding the impact of FY08 capital gains from the sales of Airwave and Sogecable.

There were strong indications that wider economic factors are still weighing on the company’s performance. While Latin America results continued to show signs of some immunity to the global downturn, with Telefónica’s regional unit strengthening its position as group growth engine, domestic performance in Spain was hit by the depth of the country’s recession, as Telefónica O2 units in Ireland and the Czech Republic were also affected by local economic weakness. O2 UK performed strongly, but its contribution was diminished by sterling’s depreciation against the euro.

The telco described its performance as “solid” and reiterated guidance for the year, highlighting organic growth and strong cashflow generation. Further coverage of the results will feature in the next Telefonicawatch.

[Further reference: Telefónica first half net profit, ex-capital gains, up 10.7% to 3,619 million euros -- Telefónica, 30 July 2009.]

M&A: Telefónica appoints bankers to sell Meditel stake

Following earlier reports that Telefónica was considering the disposal of its stake in Moroccan telco Meditel (Telefonicawatch, passim), Group Executive Chairman César Alierta confirmed that bankers Lazards have been appointed to manage the prospective sale.

Telefónica jointly controls Meditel with partner Portugal Telecom. A potential buyer has not yet emerged, although several Middle East operators have already shown an interest in acquiring Portugal Telecom’s stake in the company, which has been up for sale for several months now.

Bahrain Telecom, Etisalat, Orascom, Qatar Telecom, and Saudi Telecom were named as Middle East companies interested in the Telefónica stake, while France Télécom was also linked to a prospective bid.

[Further reference: Telefónica to sell Meditel stake -- Datamonitor, 8 July 2009.]

Speculation links Telefónica to Sprint bid

A report in publication Barron’s, which linked Telefónica to an acquisition of US mobile operator Sprint as part of global consolidation occurring in the mobile sector, was said to have boosted the share price of the US company.

While a recent bolstering of Telefónica’s presence in the USA to increase its international profile sparked rumours of a possible move into the US market (Telefonicawatch, 2009.03), little news of substance has corroborated the prospect.

However, Telefónicawatch noted the appointment of Jaime Smith, a European acquisition integration veteran, to a Group strategic role, which could be a herald of the mergers and acquisition activity to come for the Spanish telco (Telefonicawatch, 2009.04).

[Further reference: M&A expected in saturated US wireless sector-Barron's -- Reuters, 7 July 2009.]

TABLE OF CONTENTS

3 Telefónica Group

3 AGM
3 Telefónica maintains growth and returns theme at AGM
3 Financial results
3 Telefónica continues to be buffeted by economic storms
3 Acquisitions and disposals
3 Telefónica appoints bankers to sell Meditel stake
4 Environment
4 Telefónica receives environmental award
4 Speculation links Telefónica to Sprint bid
4 Contracts
4 NEC awarded SaaS contract with Telefónica
4 Devices
4 Telefónica Europe wins Palm Pré exclusivity
5 Partners
5 Legal
5 Alierta grudgingly cleared on insider-dealing charge
5 Worries over effect on Telefónica should Alierta reputation be tarnished
6 Strategy
6 Telefónica to centralise global purchasing
7 Telco SpA
7 TI and Telefónica not linked in Brazil — Anatel
7 Telco not required to make buy-out offer for TIM Brasil
8 Reports of closer TI and Telefónica ties

9 Telefónica España

9 Advertising
9 Telefónica tops 2008 ad spending
9 Contracts
9 Telefónica unit provides tagging equipment for criminals
9 Competitors
9 Telefónica takes action against Vodafone fixed-line offer
9 Market statistics
9 Telefónica captures 17% of net broadband adds in Q2
9 Fixed lines declining steadily
10 Networks
10 Advanced ADSL2+ upload trials launched
10 Cableco considers wholesale broadband deal
10 Smaller mobile operators see a strong quarter
10 Telefónica performs poorly in broadband speed review
11 2.6GHz and 3.5GHz auctions planned for 2009
11 Partners
11 Operators reach BiDi code agreement
12 Telefónica to deploy Authenware security solution
12 Pricing and tariffs
12 Family calls bundle launched by Telefónica España
13 CNC fails to find collusion evidence on tariff changes
13 Spain’s fixed-line rental charge frozen for 2010
14 Products and services
14 Movistar launches personalised handset covers
14 Movistar offers free mobile Digital+ access
14 Sponsorship
14 Telefónica supports Campus Party network event

15 Telefónica Latinoamérica

15 Regional
15 Telefónica volunteers in Latin America for Pro Nino
15 Mobile banking could cut poverty claims Telefónica
15 Huawei trumpets LatAm platform deployment
15 OnMobile wins LatAm VAS contract
16 Argentina
16 Telefónica opens access to Aula365
16 Colibria expects second Movistar LatAm launch soon
16 New voice-to-text service launched in Argentina
16 Movistar launches extra credit promotion
17 Movistar Argentina opens mobile technology centre
17 Movistar cuts customer access hours on flu advice
17 Movistar Argentina launches roaming promotion
17 Telefónica updates Unisys communications platform
17 SME broadband package unveiled
18 Brazil
18 Brazil internet penetration trumpeted
18 Telefónica to deploy CCTV security in Buenos Aires
18 Anatel halts Telefónica broadband sales
18 Telefónica responds with emergency network upgrade plans
19 Three phases of improvement planned
19 Valente defends performance and reassures on future
20 Telefónica moves to placate existing customers
21 Álvarez-Pallete visits Brazil to rally troops
21 Voice services could also be hit by sanctions?
22 Brazil: Vivo
22 Vivo wins Quality Standard Award for Brazil B2B
22 Vivo to begin e-payment trials
22 Telemig integration continues
22 Emergency messaging developments highlighted by Vivo
22 Vivo to offer iPhone 3GS from August
23 Chile
23 Winners of Movistar Chile incubator contest announced
23 Central America
23 Telefónica and Ericsson to partner for market push
23 Movistar Chile could cap mobile broadband
24 Movistar aims to be first with LTE in Chile
24 Telefónica indemnity claim rejected
25 Ecuador
25 Telefónica attends ICT and environment symposium
25 Colombia
25 Telefónica linked to prospective ETB bid
25 …Other Colombian assets also being considered
25 Telefónica announces Fundación Telefónica Classrooms
26 El Salvador
26 Movistar offers free minutes between linked numbers
26 New messaging solution launched in El Salvador
26 Mexico
26 Nextel-Telefónica dispute drags on
27 Peru
27 Telefónica receives ISO certification
27 Velti trumpets Movistar Mexico deal
27 Telefónica del Perú unveils new SME portfolio
27 Telefónica launches pre-pay TV services in Peru
27 Telefónica contests Osiptel fine
28 Venezuela
28 New service centre opened in Venezuela
28 Pre-paid roaming launched in Venezuela

29 Telefónica Europe

29 Czech Republic
29 TOCR to implement time-based data billing
29 TOCR announces movie special offers
30 Germany
30 Telefónica O2 Germany selects Acme Packet’s SBCs
31 TG01 launched in Germany…
31 …But soon hit by virus
31 German mobile market shrinks in Q1
32 Ireland
32 Isle of Man
32 O2 wins Sisk contract
32 O2 and Tesco reveal EUR7.3m-deficit
33 United Kingdom
33 Slovakia
33 O2 Slovakia announces per-second roaming billing
33 O2 enters financial services market with NatWest
34 O2 UK launches interactive 3D cinema game
34 O2 confident strong brand can profitably translate to new sector
34 No immediate plans for NFC
35 O2 wins Consumer Service Innovation Award
35 Some misgivings expressed in the media over Load & Go
36 T-Mobile looks to grey market for UK iPhones
36 Dunne confident of revenue growth in 2009
36 O2 launches Tech Support
36 O2 UK announces Twitter deal
37 Operators cut churn with longer contracts
37 O2 possibly eying T-Mobile acquisition
38 O2 UK awards Ericsson maintenance contract
38 First O2 and Vodafone shared site goes live
39 O2 ties with BT Openzone to extend mobile broadband
39 O2 UK partners Wyless
40 Expectations of end to O2 UK iPhone exclusivity reported
40 Digital Britain report hopes for rapid move to 4G
40 Legacy spectrum settlement central to future network development
41 A “big auction” in 2010?
42 Ofcom identifies mobile “not-spots”
42 O2 to launch new convergence service

43 Associates and investments

43 China Unicom
43 China-specific iPhone could launch on Unicom in October
44 Unicom to launch Dell Android phone
44 Unicom continues 3G expansion
44 CNY 1.42bn set aside for Unicom dividend
45 Unicom commits to Shanghai investment
45 Telecom Italia
45 TI receives offers for Telecom Argentina stake
45 Credit Suisse reviewing TI options
46 TI plans investment in Brazil
46 AgCom proposes public-private network company
46 Telecom Italia and 3 sign network deal
47 Portugal Telecom
47 TI’s HanseNet linked to liquidity “tricks”
47 TI supports NFC-based loyalty programme

48 Index

INDEX

A
Acme Packet, 30
AgCom (Italy), 46
Agency Republic, 34
Airwave Safety Communications Ltd, 3
Alcatel-Lucent, 5
América Móvil, 45
- Claro, 22, 46
- Slim, Carlos, 45
Americatel, 27
Anatel, 7, 18, 19, 20, 21
Apple, 22, 33, 36, 39, 40, 42, 43, 44
- iPhone, 22, 33, 36, 39, 40, 42, 43, 44
AsiaInfo, 44
ASIMELEC, 4
Authentest, 12
Avenir, 33
B
Bahrain Telecom, 3
Banco Itaú, 22
Beijing Digital China Si-Tech Information Technology, 44
British Broadcasting Corporation, 16
BT Group, 32, 39
- Openzone, 39
C
Caja Madrid, 11
Campus Party, 14
Carphone Warehouse, 33
CFC (Mexico), 26
China Mobile, 43, 44
China Telecom, 43, 44, 45
CMT (Spain), 9, 10, 13
CNC (Spain), 13
Coca-Cola, 11
Cofetel (Mexico), 26
Colibria, 16
Commissao de Valores Mobiliarios (Brazil), 7
Conecta 2009, 24
Credit Suisse Group CS, 45
D
Datamonitor, 3, 15, 30, 46
Dell, 44
Deutsche Telekom, 36, 37
- T-Mobile, 36, 37, 40
- UK, 36, 37
Digital Britain, 40, 41
E
EasyFix Products, 32
Entel, 24
Ericsson, 23, 30, 38, 46
ETB, 25
Etisalat, 3
European Union, 13, 33
- European Commission, 33
Euskaltel, 10
F
Fone Logistics, 33
Foxconn Technology, 43
Fox Mobile, 30
France Télécom, 3, 37
- Orange, 9, 10, 11, 34, 37, 38, 40
- Orange Spain, 9, 11
- Orange UK, 37
G
GeoSentric, 44
Google, 44
- Android, 33, 44
Grupo Werthein, 45
GSM Association, 11
Guangzhou Sunrise, 44
H
HBO, 29
Hits Telecom, 27
Huawei, 15, 44
Hutchison Whampoa
- H3G
- UK, 37
I
ICQ, 30
InfoAdex, 9
Innova, 23
Inter-American Development Bank, 15
International Telecommunications Union, 18, 25
Itaucard, 22
J
Jacada, 35
Jazztel, 10
John Sisk and Son, 32
JPMorgan, 37
L
Lazards, 3
LG, 22
Linkage Technology, 44
M
MasterCard, 22
Media Capital, 47
Metodologia ECi de Transformação Competitiva de Empresas, 22
Miroglio Fashion, 47
Mobilcom-Debitel, 31
Motorola, 22
MVNOs, 10, 31
N
NEC, 4
Neoris, 12
NII Holdings, Inc., 26
Nimbuzz, 31
Nokia, 14
O
Octantis, 23
Ofcom (UK), 41, 42
OnMobile Global, 15
ONO, 10
Orascom, 3
Osiptel, 27
P
Palm, 4
- Pré, 4
Pearl and Dean, 34
Portugal Telecom, 3, 8, 47
Prisa, 14, 47
- Digital+, 14
Procter and Gamble, 9
ProInversión, 27
Q
Qatar Telecom, 3
R
R Cable, 10
Real Madrid, 11
Regions
- EMEA
- Czech Republic, 3, 29
- Europe, 4, 6, 7, 8, 10, 11, 13, 15, 29, 30, 31, 33, 36, 37, 39, 44, 46, 47
- France, 3, 5, 37
- Germany, 4, 6, 30, 31, 47
- Ireland, 3, 4, 32, 42
- Isle of Man, 32
- Italy, 7, 37, 45, 46, 47
- Portugal, 3, 8, 47
- Slovakia, 33
- Spain, 3, 4, 5, 6, 7, 9, 10, 11, 13, 14, 16, 25, 30, 31, 37, 47
- UK, 4, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42
- Latin America, 3, 8, 15, 16, 17, 21, 23, 45
- Argentina, 7, 15, 16, 17, 18, 45
- Brazil, 7, 8, 15, 18, 19, 20, 21, 22, 23, 45, 46
- Central America, 23
- Chile, 19, 23, 24
- Colombia, 25, 28
- Ecuador, 15, 25
- El Salvador, 15, 26
- Mexico, 15, 19, 26, 27
- Panama, 15, 23
- Peru, 15, 16, 27
- Uruguay, 17
- Venezuela, 28
Research in Motion, 32
Research In Motion
- BlackBerry, 32
Royal Bank of Scotland
- NatWest, 33, 34, 35
S
Samsung, 33
Saudi Telecom, 3
Scanbuy, 11
Shenzhen Taiyuan DIC Information Technology, 44
Siemens, 17
Sogecable, 3, 14
Sony, 14
Sony Ericsson, 14
Space2, 33
Spinnovo, 23
SpinVox, 16
Sprint Nextel, 4
Strategy Analytics, 37
Symbian, 42
T
Technologies
- 2G, 38
- CDMA, 43
- 3G, 10, 22, 38, 40, 41, 42, 43, 44, 45
- 3.5G, 11
- 4G
- LTE, 11, 24, 40
- WiMAX, 11
- ADSL, 10, 13, 29
- ADSL2+, 10
- Anexo M, 10
- ATM, 33
- BiDi (barcodes), 11
- Broadband, 9, 10, 11, 14, 16, 17, 18, 19, 20, 21, 23, 27, 28, 30, 32, 36, 39, 40, 41, 46, 47
- Business/Operations Support Systems (BSS/OSS), 15
- Carrier pre-selection, 9
- CCTV, 18
- DSL, 10
- GPS, 9
- GSM, 11, 23, 28
- ICT, 25
- IMS, 30
- IP, 17
- M2M, 10, 39
- MMS, 29
- NFC, 34, 47
- NGN, 30, 40
- SIM, 31, 36, 37, 40
- SMS, 15, 16, 29, 36
- VoIP, 17, 30
- WCDMA, 45
- WLAN
- Wi-Fi, 22, 39, 43
Telco SpA, 7
Tele2, 10
Telecom Argentina, 7, 45
Telecom Italia, 7, 8, 45, 46, 47
- Bernabe, Franco, 46
- Entel, 24
- HanseNet Telekommunikation, 47
- TIM Brasil, 7, 22, 46
Telefónica Group, 3, 4, 5, 6, 15, 38
- Associates and investments
- China Unicom, 43, 44, 45
- GestureTek, 17
- Portugal Telecom, 3, 8, 47
- Sogecable, 3, 14
- Telecom Italia, 7, 8, 45, 46, 47
- España, 9, 10, 11, 12, 13, 14, 15
- Movistar, 10, 12, 13, 14, 31
- Executives
- Alierta, César, 3, 5
- Antunes, Sílvio, 22
- Black, Cheryl, 35
- Bosch, Fernando, 12
- Dunne, Ronan, 34, 35, 36
- Earle, Jonathan, 36, 39
- Folgueiras, Andrea, 30
- Gilpérez López, Luis Miguel, 15
- Johnson, Alistair, 34
- Karas, Jan, 29
- Key, Matthew, 37
- Parák, René, 33
- Pirie, Andy, 32
- Saiz, Fernando, 24
- Schroeder, Karsten, 30
- Short, Mike, 39
- Smith, Jaime, 4, 8
- Valente, Antonio Carlos, 18
- Venegas, José, 23
- Fundación Telefónica, 15, 25
- Pro Nino, 4, 15
- Latinoamérica, 15, 21
- Argentina, 16, 17
- Argentina (Telefónica Negocios), 17, 27
- Brazil, 11, 18, 19, 21
- Chile, 16, 23, 24
- Colombia, 25
- Mexico, 27
- Peru, 27
- Telefónica Empresas, 17
- Telemergencia, 18
- Venezuela, 28
- Meditel (Morocco), 3
- Movistar, 4, 10, 12, 13, 14, 16, 17, 23, 24, 25, 26, 27, 28, 31
- Argentina, 16, 17
- Chile, 16, 23, 24
- Mexico, 27
- Venezuela, 28
- Products and services
- AccessMyLan, 32
- Aula365 Speedy, 16
- Aulas Fundación Telefónica, 25
- Connection Manager, 39
- DUO, 12, 17, 26
- Mensaje por Cobrar, 26
- Mensaje Prepagado, 26
- Mobile banking, 15
- Movistar de Voz a Texto, 16
- Movistar Messenger, 16
- O2 Active, 36
- O2 Cash Manager, 33
- O2 Joggler, 34
- O2 Load & Go, 33, 35
- O2 Mobile Broadband, 39
- O2 Tech Support, 36
- O2 Zero, 29
- pay-TV, 14, 27
- Personaliza, 14
- Solucion Familiar, 12
- Speedy (Latinoamérica), 17, 18, 19, 20, 21
- Telefónica Voice4Carrier, 30
- Telefónica Voice4SIPOwner, 30
- TRIO, 12, 27
- Telco SpA, 7
- Telefónica España
- Telefónica Securitas Direct, 9
- Telefónica Europe, 3, 4, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42
- Czech Republic, 29
- Germany, 30, 31, 33
- Ireland, 32
- Manx Telecom (Isle of Man), 32
- O2 Money, 33, 34, 35
- O2 TV, 29
- Slovakia, 33
- UK, 3, 33, 34, 35, 36, 37, 38, 39, 40, 42
- Telefónica Information and Fraud Prevention, 12
- Telefónica Latinoamérica
- Cable Magicó (Peru), 27
- Terra, 16
Tesco, 32
- Tesco Mobile, 32
Toshiba, 31
Twitter, 36
U
UBS, 22
UNE Telecomunicaciones, 25
Unisys, 17
V
VCCP, 34
Velti plc, 27
Virgin Group, 37
- Virgin Media, 37
- Virgin Mobile, 37
Vivo Participações, 7, 8, 11, 22
- Telemig Celular (Brazil), 22
Vodafone Group, 9, 10, 11, 15, 36, 37, 38, 40, 41, 42
- Spain, 9, 11
- UK, 37, 38, 40, 42
Volkswagen, 11
Vue Cinemas, 34
W
World Expo, 45
Wyless, 39
Y
Ya.com, 10
Yoigo, 10
Z
ZenithOptimedia, 34
ZTESoft Technology, 44

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.]

Issue: 2009.04
Covering: mid-May to late-June 2009
Published: June 2009
Next issue: July 2009

Delivering valuable insight into the labyrinth that is Spain’s global telco giant. A unique monthly report for the industry.

• About Telefonicawatch
• Executive Brief
• Extract
• Table of Contents
• Index

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• Below is a free taster from issue 2009.04 (May-June 2009), including an Executive Brief, Extract, Table of Contents and Index, giving a valuable snapshot of the full report.

EXECUTIVE BRIEF

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.]

GROUP: Telefónica increased its stake in China Unicom to 5.5%, and was reported to have the consent of the Chinese government to further raise this to nearly 10% in the longer term. However, there was speculation over the company’s continued involvement in the controlling group of Telecom Italia, with rumours ranging from claims that a merger could be on the cards, to reports that a Telefónica exit is likely. There appears to be a realistic possibility that Telefónica’s interest in Moroccan operator Meditel could be sold. [pp.26-28.]

ESPAÑA: Telefónica España announced it had partnered Japanese operator NTT DoCoMo for the launch of a new Toshiba smartphone handset, the TG01, in the Spanish market. The device is to be one of the first promoted through the operator’s Internet Experience range of mobile broadband handsets. The partnership could further be viewed as significant because the Japanese market leader, with close business and investment links with its domestic handset vendors, is looking to expand its business outside its home market. [p.31.]

Spanish telecoms regulator the CMT estimated that fibre-to-the-home could reach 43% of the country’s population within 15 years, with reasonable levels of competition for the incumbent, without the need for heavy intervention in areas with populations greater than 1,000. [p.32.]

Hughes Europe highlighted a contract that will see it provide satellite VoIP services to Telefónica customers in remote areas of Spain, enabling the telco to fulfil its Universal Service Obligations. Telefónica-controlled wireless broadband provider Iberbanda awarded Alvarion a contract to expand its WiMAX network. [p.33.]

New simplified mobile broadband tariffs priced between EUR10- and EUR25-per-month were announced in Spain, with a promise of no unexpected charges when usage caps are surpassed. [p.34.]

Fixed-line broadband prices were revised by Telefónica España, to help the company defend its customer base. The CMT cleared the company to offer up-to-30% retention discounts when customers plan to move to a cheaper provider. [p.35.]

Mobile advertising company Amobee drew attention to its provision of a single mobile advertising platform to Telefónica España, in the wake of a global agreement with Telefónica Group. A marketing service from Celltick that sends adverts to the ‘idle’ screen on mobiles is to be rolled out by Movistar España following successful trials in Argentina. Software provider SEVEN trumpeted its provision of the system powering the Movistar Mail mobile email offering, which is now available to consumer customers as well as corporate users. [pp.35-37.]

LATINOAMÉRICA: In Brazil, Telesp is continuing its fibre rollout, bringing services to less affluent areas of São Paulo with the aid of tax incentives for its investment. The IT services business of Telefónica’s Brazilian operation was said to have outstripped growth of other units in 2008, showing 25% growth. [p.40.]

Four new sales performance management modules were implemented at Vivo, in anticipation of “significant expansion” of its distribution channel in 2009. However, the Brazilian mobile joint venture was reportedly slow in building its subscriber base in the North-East of the country, where it recently launched services and finds itself in the unusual position of chasing rather than leading the market. [p.41.]

Internet video was said to be seeing strong growth in Chile, with mobile TV also seeing signs of uptake. [p.42.]

Movistar Colombia is to invest EUR160m in 2009, and expects to its 3G network to reach 67 cities, covering 30 million people, by the end of the year. New “experience centres” are also being opened to showcase the range of services Telefónica can offer in the country. [pp.42-43.]

Telefónica expressed confidence that it can raise its customer base in Mexico to 18 million by the end of 2009, with a further seven million customers across the rest of Central America. However, there were indications that competition in the Mexican market, still dominated by Telmex, could be increasing. [pp.43-44.]

Fixed-wireless services were launched by Movistar in Panama, intended to challenge the fixed-line dominance of Cable & Wireless. Initially available in Panama City, wider rollout of the service is expected later in the year. [p.44.]

Movistar Peru launched a mobile payment service, in partnership with VisaNet del Perú, apparently beating rival Claro to the deal. [p.45.]

3G services were introduced in the Peruvian capital Lima, ahead of wider deployment in a country that has traditionally seen low levels of mobile spend. Telefónica del Peru signed a deal with SES AMERICOM-NEW SKIES for satellite capacity to support network coverage expansion in remote areas of the country. [pp.45-46.]

TELEFÓNICA EUROPE: Telefónica O2 Czech Republic indicated 3G coverage would reach 30% of the population by the end of 2009. OFS was awarded a deal to provide fibre-ribbon optical cables for the Czech network. The Slovakian O2 unit was said to have reached 90%-population coverage for its GSM network. [pp.50-51.]

A raft of new services was launched by O2 in the Czech Republic, including location-based travel advice, missed-call notifications, and new top-up options for pre pay customers. [pp.51-52.]

Roaming rates were cut in the Czech Republic for text messages sent from within the European Union. In Slovakia, the maximum time for number porting was brought closer to EU norms. [pp.52-57.]

A new instant messaging service provided by NeuStar was launched by O2 in Germany. Promotional pushes in the country include a free SIM offer with free texts on top-up, and ‘limited edition’ 3G dongles. [pp.53-54.]

O2 Ireland awarded EMC a contract to provide a data solution for EU data-compliance requirements. A new SMS-blocking service was launched in Ireland, as part of anti-bullying efforts. [pp.54-55.]

ADSL2+ was rolled out by Manx Telecom, and Empirix won an IMS quality assurance contract from the Isle of Man O2 subsidiary. [p.56.]

O2’s mobile advertising business heralded a deal with Fitness First that will see it provide the gym chain with postcode-targeted advertising. [p.58.]

O2 UK performed well in the JD Power Customer Satisfaction Study for mobile phone users — particularly for pre-paid customers — with its loyalty schemes singled out for praise. A new NFC solution for the homecare sector was demonstrated. [p.60.]

ASSOCIATES & INVESTMENTS: China Unicom launched 3G in limited territories and outlined its strategic plans for the service. Huawei and Alcatel-Lucent were awarded network deals with Portugal Telecom. Telecom Italia was rumoured to be considering an exit from its Argentinean business. [pp.62-69.]

EXTRACT

O2 Germany’s Smith handed senior group role

Telefónica announced that Jaime Smith, Chief Executive of Telefónica O2 Germany, is to take on a Group role managing the business’s industrial alliances and reporting directly to Chairman César Alierta. Smith will be replaced at O2 Germany by Rene Schuster.

” I am glad to have Jaime [Smith] in this new role because of his in-depth knowledge of the telecommunications markets, his strategic background, and his success in his European assignments as [Chief Executive Officer] of Czech Republic and Germany. ”
– César Alierta.

Smith is to be responsible for developing partnerships “operationally and strategically” with China Unicom, Portugal Telecom, and Telecom Italia, giving him a role addressing issues on three continents, Asia, Europe, and South America. Prior to his German assignment, he successfully integrated the company’s Czech fixed and mobile businesses under the name of Telefónica O2 Czech Republic, and launched the mobile business in Slovakia. He will continue to hold the role of Chairman of the supervisory board of Telefónica O2 Czech Republic.

The former Telefónica O2 Czech Republic and O2 Germany Chief Executive was recognised for his contribution to the restructuring of Telefónica O2 Germany, which saw its product portfolio revised, mobile network built-out and upgraded, and the fixed-line business more closely integrated. Similarly, in the Czech Republic, he was praised for his successful integration of fixed and mobile assets under Telefónica O2 branding, and work on the launch of a new network in Slovakia.

Promotion a portent of deals to come?

Telefonicawatch notes that while the new role that Smith is taking on is portrayed as relationship management, his experience and trumpeted successes are in operational matters, rather than strategic thinking.

This leads us back to a previously expressed view that Telefónica may be gearing up for further bold acquisitional moves, with a rising executive in place to bring a new company into the fold. Telefónica needs to resolve the situation regarding its assets in Brazil, where it owns a joint-venture share in Vivo, a fixed-line business expanding into pay-TV, and an indirect interest in the number-three mobile player. A bid for Portugal Telecom, its joint-venture partner in Vivo, would go some way to resolving that tangle. Alternatively, taking control of Telecom Italia would put it in a position where it could jettison its interest in Vivo and focus on building TIM Brasil, while also solidifying the Italian incumbent’s position in its home market.

O2 looks to rival for new leader for Germany

Schuster is an unusual senior appointment for Telefónica in that he is an external rather than an internal candidate. He has previously worked at Compaq, Hewlett-Packard, and, most recently, for rival mobile network operator Vodafone, where he was Global Marketing Director.

” As one of the world’s leading telecommunications companies, Telefónica operates on a global/local model — so that we gain the benefits of our international scale and expertise, at the same time as ensuring that we remain close to local market conditions and sensitivities. I am therefore delighted to welcome Rene Schuster to the team. As a German-US national, Rene has a deep understanding of Europe’s largest market, and, with his considerable expertise and impressive track record across telecoms, technology, and a range of other industries, he is the ideal person to build further on the solid foundations for growth that now exist with Telefónica O2 Germany. Under his management, I firmly believe that the business is well positioned to maintain its recent significant improvement in performance. “
– Matthew Key, Chief Executive of Telefónica Europe.

[Further reference: Management changes at Telefónica Europe: Jaime Smith succeeded by Rene Schuster as German CEO -- Telefónica, 13 May 2009.]

TABLE OF CONTENTS

2 Telefónica Q1 FY09 results
2 Telefónica Group
3 Overview — Operational expertise overcomes local weakness
4 Telefónica, selected financial data, Q1 FY09
5 Regional
5 Telefónica, revenue, by region, Q1 FY09
5 Telefónica, OIBDA, by region, Q1 FY09
6 Telefónica Group, capex by region, Q1 FY09
6 Customer numbers
6 Telefónica Group, customer numbers (‘000s), Q1 FY09
7 Forecasts
7 Telefónica España
7 Overview
8 Outlook
8 Telefónica España, financial highlights, Q1 FY09
8 Customer numbers
9 Telefónica España, customer numbers, (‘000), Q1 FY09
9 Wireline
10 Telefónica España, wireline financial highlights, Q1 FY09
10 Telefónica España, wireline revenue by type, Q1 FY09
11 Wireless
11 Telefónica España, wireless financial highlights, Q1 FY09
11 Telefónica España, wireless revenue by type, Q1 FY09
12 Telefónica Latinoamérica
12 Overview
12 Telefónica Latinoamérica, financial highlights, Q1 FY09
13 Customer numbers
13 Telefónica Latinoamérica, customer numbers (‘000), Q1 FY09
14 By country
15 Telefónica Latinoamérica, revenue by country, Q1 FY09
16 Telefónica Latinoamérica, OIBDA by country, Q1 FY09
17 Telefónica O2 Europe
17 Overview
17 Telefónica Europe, financial highlights, Q1 FY09
18 Customer numbers
18 Telefónica Europe, customer numbers (‘000), Q1 FY09
19 By country
20 Telefónica Europe, revenue by country, Q1 FY09
21 Telefónica Europe, OIBDA by country, Q1 FY09
21 Atento Group
21 Atento Group, financial highlights, Q1 FY09
22 Analyst reaction — FX weakness fails to dampen optimism
23 Comment: Group’s diversity cushions impact of economic troubles

24 Telefónica Group

24 E-learning
24 Telefónica rebrands e-learning unit
24 Executives
24 O2 Germany’s Smith handed senior group role
24 Promotion a portent of deals to come?
25 Financial reports
25 O2 looks to rival for new leader for Germany
25 Marketing
25 Interbrand DDB and Y&R Lambie Nairn win brand project
26 TIWS
26 Telefónica to launch Sweden wholesale services in July
26 Implementation of the new brand strategy
26 China Unicom
26 Telefónica to increase China Unicom stake
27 Meditel
27 Meditel sale still under consideration
28 Telco SpA
28 Speculation that Telefónica plans to exit TI shareholder group
28 Contracts
28 Telefónica wins Santander deal in UK

29 Telefónica España

29 Marketing
29 Telefónica trumpets Spanish brand reputation
29 Applications
29 Developers gather at Movistar Movilforum
30 Market statistics
30 Movistar predicted to gain share at Vodafone’s expense
30 Devices
30 Telefónica España launches iPhone 3GS
30 iPhone price cut in Spain
30 Movistar España launches N97
31 Telefónica and NTT DoCoMo partner on Toshiba launch
32 Networks
32 FTTH in Spain to reach 43% in 2023 — report
33 Hughes Europe awarded Telefónica VoIP deal
33 Iberbanda selects Alvarion for WiMAX extension
34 Pricing and tariffs
34 Telefónica launches new promotions for Internet Day
34 Movistar España launches new mobile broadband tariffs
34 New mobile broadband tariffs
35 Telefónica cuts broadband rates as retention ploy
35 Partners
35 Amobee selected for Spanish mobile ad services
36 Celltick delivers new marketing solution to Telefónica
36 SEVEN powering Movistar Mail
37 Regulatory
37 Alternative operators protest alleged Telefónica tax benefits
38 Regional
38 Digital TV market expected to treble by 2014

38 Telefónica Latinoamérica

38 Regional
38 Colibria signs LatAm messaging deal with Telefónica
39 Telefónica rolls out SpinVox text conversion in LatAm
39 Argentina
39 Movistar market share at 34.8% in 2012, report predicts
40 Celltick highlights Argentinian trials of ad platform
40 Brazil
40 Telesp to expand fibre rollout
40 IT services growing rapidly for Telefónica in Brazil
41 Brazil: Vivo
41 Vivo announces restructure following Telemig acquisition
41 Vivo installs Callidus software modules
41 Vivo secures 2.3% market share in new regions
42 Chile
42 Terra heralds growing strength of internet video in Chile
42 Colombia
42 3G to reach 67 cities in 2009 claims Movistar Colombia
43 New “Experience” stores to support growth in Colombia
43 Ecuador
43 Movistar still distant second in Ecuador
43 Mexico
43 Telefónica expects 18m customers in Mexico by 2010
44 Telefónica could see new competitors in Mexico
44 Panama
44 Fixed-wireless launched in Panama
45 Peru
45 Investment in Peru to reach $400m in 2009
45 Telefónica del Peru concession ratified
45 Mobile payment launched by Movistar Peru
45 Movistar 3G reaches Lima
46 Peruvian mobile number portability expected to cost $75m
46 Telefónica del Peru signs satellite deal

47 Telefónica Europe

47 iPhone
47 Rumours of O2 losing iPhone exclusivity in September
48 O2 confirms exclusive iPhone 3GS in UK
49 O2 UK raises iPhone rival handset costs
49 Partners
49 Amdocs heralds potential of Telefónica Europe deal
50 Czech Republic
50 TOCR expected to boost 3G coverage to 30% in 2009
50 OFS awarded TOCR optical-fibre deal
51 TOCR launches 8Mbps broadband, TV promotions
51 TOCR awarded PPF contract role
51 Location-based travel advice launched by TOCR
51 New notification service for missed calls launched
52 TOCR appoints new HR head
52 TOCR highlights Top-up and Win promotion
52 New pre-paid services offered by TOCR
52 Roaming rate cuts in Czech Republic
53 Germany
53 KPN reiterates interest in O2 Germany
53 IM launched for O2 Germany
54 O2 Germany offers free SIM cards
54 Ireland
54 EMC trumpets O2 Ireland deal
55 O2 Ireland notes effects of recession
55 O2 Ireland to introduce SMS blocking
56 Manx Telecom
56 Manx Telecom rolls out ADSL2+
56 Number portability reaches Isle of Man
56 Manx Telecom deploys Empirix network solution
57 Slovakia
57 Slovakia network investment continues
57 Number portability boosted in Slovakia
58 UK
58 Twelve new members join O2 Centres of Excellence
58 Critical Path extends O2 partnership through Joggler app
58 O2 trumpets mobile ad deal with Fitness First
59 Samsung and O2 in mobile device promotion
59 O2 UK sells photo solution from Handheld PCS
59 O2 UK leads pre-paid customer satisfaction in study
60 MyCom highlights role in O2 broadband provision
60 O2 UK passes on N97
60 Resellers ambivalent on revenue-sharing
61 O2 showcases NFC homecare solution
61 O2 promotes Priority service on radio stations

62 Associates & Investments

62 China Unicom
62 China Unicom outlines 3G strategy with soft launch
62 Wide range of handsets, network cards, and netbooks made available
62 3G dominates investment plans
63 Unicom adds 1.1m GSM users but growth slows
63 Strategic priorities
63 Unicom targets high-value customers with 3G tariffs
64 PCCW privatisation appeal pondered
64 Could Unicom spark a price war?
64 China Unicom cuts ad spending ahead of WO launch
64 Massive EPON tender planned by Unicom
65 Unicom joins Android alliance
65 Unicom linked to submarine cable projects
65 UBS price target boosts Unicom shares
66 Unicom participates in investment across China regions
66 Portugal Telecom
66 Telecom Italia
66 Huawei to provide FTTH technology to PT
67 Alcatel-Lucent wins PT fibre contract
67 PT becomes Cisco alliance partner
67 PT announces Q1 results
68 TI preparing for Argentinian exit — report
69 TI commits to strengthening Telefónica ties
69 TI to sue 3 Italia

70 Index

INDEX

A
Accedo Broadband, 66
Acer, 62
Active Business Communications, 58
ADSI,, 58
Aerial Telephones Group, 58
Alcatel-Lucent, 29, 67
Alegro, 43
Alterna, 45
Alvarion, 33
Amdocs, 49
América Móvil, 39, 43
- Claro, 39, 45, 46
- Porta, 43
- Slim, Carlos, 68
- Telcel, 44
Apple, 19, 30, 42, 47, 48, 49, 60, 62
- iPhone, 19, 30, 34, 42, 47, 48, 49, 60, 62
Ariel Pontón, 42
Astel, 37
Atlas Communications, 58
B
Banco Bilbao Vizcaya Argentaria, 45
Barclays, 25
- Barclays Bank, 25
Bauer, 61
C
Cable & Wireless, 44
Callidus Software, 41
Carphone Warehouse, 60
Casiopea Re, 25
Celltick, 36, 40
Cellular Solutions (North-East), 58
CFE (Mexico), 43
Challenger Mobile Communications, 58
China Mobile, 31, 62, 63, 64
China Netcom, 26
China PTAC Communications Services, 62
China Telecom, 62, 63, 64, 65
Chunghwa Telecom, 65
Cisco Systems, Inc., 67
CMT (Spain), 32
CNDC (Argentina), 67, 68
Colibria, 38
Crédito, 45
Credit Suisse Group CS, 68
- Credit Suisse First Boston, 68
Critical Path, 58
Cygnet, 58
D
Daiwa, 22
Daiwa Institute of Research, 63
Datamonitor, 68
DBS, 62
Deutsche Telekom
- T-Mobile, 52, 53, 57
- Germany, 53
- Slovakia, 57
Direct Line Connections, 58
Dopod, 62
E
eBay
- Skype, 55
EMC, 54
Empirix, 56
Etisalat, 27
European Union, 52, 54
F
Facebook, 38
Fitness First, 58
France Télécom
- Orange, 49, 57, 59
G
Global Radio, 61
Google, 36, 62, 65
- Android, 62, 65
Grupo Werthein, 68
H
Handheld PCS, 59
Hewlett-Packard, 25, 29
- Compaq, 25
High Tech Computer Corp. (HTC), 29
Huawei, 62, 66, 67
Hughes Europe, 33
Hughes Network Systems, 33
Hutchison Whampoa
- H3G
- 3 Ireland, 55
I
Iberbanda, 33
ICQ, 53
Intel, 29
Interbank, 45
Interbrand-DBB, 25, 26
Internet Day, 34
IPC, 61
IPSOS, 29
J
Jazztel, 35
JD Power, 59, 60
K
KDDI Group, 65
Korea Telecom, 65
L
Latinia, 29
Lenovo, 62
LG, 62
M
McCann Erickson, 26
Microsoft, 29, 36
Morgan Stanley, 22, 27
Motorola, 62
Movilforum, 29
MTC, 45
MyCom, 60
N
National Health Service (UK), 61
NAVTEQ, 29
NeuStar, 53
Nokia, 29, 30, 34, 49, 60, 62, 67
NTT, 31, 34, 65
- DoCoMo, 31, 34
O
OFS, 50
Ono, 35
Open Handset Alliance, 62, 65
Open Mobile, 62
Oracle, 22
Orascom, 27
- Wind Telecomunicazioni SpA, 66
Organic, 5, 6
Osiptel, 45
P
Palm, 47
PCCW, 64
- Li, Richard, 64
Portugal Telecom, 24, 27, 66, 67
- Meo, 66
Portugal Telecom, Bava, Zeinal, 66
Q
Qatar Telecom, 27
QUALCOMM, 29
R
Regions
- EMEA
- Czech Republic, 17, 20, 24, 50, 51, 52, 57
- Europe, 3, 5, 6, 7, 17, 18, 19, 20, 21, 22, 23, 24, 25, 29, 35, 37, 47, 48, 49, 52, 53, 54, 56, 57, 58, 65
- Germany, 3, 6, 17, 19, 23, 24, 25, 53, 54
- Ireland, 17, 20, 23, 54, 55
- Isle of Man, 56
- Italy, 24, 28, 66, 67, 68, 69
- Portugal, 24, 27, 66, 67
- Slovakia, 20, 24, 57
- Spain, 3, 5, 6, 8, 9, 21, 22, 23, 24, 26, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 39, 40, 53
- UK, 3, 17, 19, 23, 35, 47, 48, 58, 59, 60, 61
- Latin America, 3, 6, 7, 14, 21, 22, 23, 24, 29, 31, 34, 35, 37, 38, 39, 40, 44, 68
- Argentina, 6, 13, 14, 15, 36, 39, 40, 67, 68
- Brazil, 6, 12, 13, 14, 15, 21, 22, 24, 28, 31, 39, 40, 41, 67, 69
- Central America, 43
- Chile, 13, 37, 42
- Colombia, 13, 14, 21, 35, 37, 39, 42, 43
- Ecuador, 14, 37, 39, 43
- El Salvador, 37, 39
- Guatemala, 37, 39
- Mexico, 6, 12, 13, 14, 15, 21, 35, 37, 39, 43, 44
- Nicaragua, 37, 39
- Panama, 37, 39, 44
- Peru, 13, 14, 15, 21, 37, 38, 39, 45, 46
- Uruguay, 39
- Venezuela, 12, 13, 14, 15, 21, 39
Research in Motion, 49
Research In Motion, 29
- BlackBerry, 19, 29, 34, 49
Reslink, 61
Royal KPN, 53
- E-Plus, 53
RTVE, 37
RWE, 52
S
Samsung, 29, 59, 62
Satdata, 29
Scotiabank Perú, 45
SES AMERICOM-NEW SKIES, 46
SEVEN, 36, 37
Shenzhen Aisidi Industrial, 62
Singapore Telecom, 65
Skype, 55
Sofora, 68
SoftBank, 31
Sony, 29, 62
Sony Ericsson, 29, 62
SpinVox, 39
StarHub, 65
Supertel, 43
T
Technologies
- 2G, 60, 63
- CDMA, 62
- 3G, 26, 29, 30, 31, 34, 42, 45, 48, 49, 50, 60, 62, 63, 64, 65, 67
- 3.5G, 33
- HSDPA, 53
- 4G
- LTE, 31
- WiMAX, 33, 66
- ADSL, 6, 9, 34, 35, 50, 68
- ADSL2+, 56
- Broadband, 3, 6, 8, 9, 10, 13, 14, 18, 19, 22, 23, 25, 30, 33, 34, 35, 40, 43, 45, 46, 49, 50, 51, 55, 56, 58, 60, 62, 63, 66, 69
- Business/Operations Support Systems (BSS/OSS), 60
- DSL, 17, 19
- EPON, 64
- Ethernet, 64, 67
- FTTH, 32, 66, 67
- GSM, 40, 42, 46, 62, 63
- IMS, 56
- IP, 33, 66
- IPTV, 38, 40, 66
- ISDN, 56
- Java, 38
- LLU, 6, 9
- Mobile Broadband, 55
- NFC, 61
- NGN, 66, 67
- PSTN, 56
- SIM, 18, 19, 38, 41, 54
- SMS, 19, 38, 40, 52, 54, 55, 58
- TD-SCDMA, 62
- UMTS, 66
- VoIP, 33, 66
- WCDMA, 62, 63, 65
- Wholesale line rental, 9
- WLAN
- Wi-Fi, 34
Telco SpA, 28
Telecom Argentina, 67, 68
Telecom Italia, 24, 28, 66, 67, 68, 69
- Bernabe, Franco, 69
- Galateri de Genola, Gabriele, 68
- TIM Brasil, 24, 69
Telefónica Group, 3, 4, 6, 7, 21, 24, 25, 29, 36, 68
- Associates and investments
- Amobee, 35
- China Netcom, 26
- China Unicom, 24, 26, 62, 63, 64, 65, 66
- Iberbanda, 33
- Portugal Telecom, 24, 27, 66, 67
- Telecom Italia, 24, 28, 66, 67, 68, 69
- Atento, 21
- España, 5, 6, 7, 8, 9, 10, 11, 23, 27, 29, 30, 31, 32, 33, 35
- Movistar, 29, 30, 34, 35, 36, 58
- Universal Service Obligation, 7, 9, 10, 11, 33
- Executives
- Alder, Steve, 60
- Alierta, César, 24
- Amatriaín, Bélen, 25
- Anglada, Salvador, 52
- Ansaldo, Guillermo, 8, 27, 29
- Barroso, Roberto, 42
- Bifaretti, Fabian, 43
- Connolly, Owen, 54
- Dowd, Ben, 61
- Dunne, Ronan, 47
- Erskine, Peter, 23
- Ezcurra, Luis, 31
- Fernández Valbuena, Santiago, 4, 7, 12, 14
- Flores Ganoza, Carlos, 46
- Gilpérez López, Luis Miguel, 38
- Gregory, Shaun, 58
- Key, Matthew, 19, 20, 23, 25
- Linares, Julio, 29
- Lynch, Jude, 55
Matejovsky, Petr, 51
- Purdy, Nigel, 60
- Rodríguez Urgel, Susana, 35
- Schmitt, Oliver, 53
Schueler, Lutz, 53
- Schuster, Rene, 24, 25
- Smith, Jaime, 24, 25, 26
- Urvalek Michal, 52
- Latinoamérica, 3, 5, 6, 12, 13, 14, 15, 16, 38
- Argentina, 15, 16, 39
- Brazil, 3, 14, 15, 16, 40
- Chile, 14, 15, 16, 39, 42
- Colombia, 15, 16, 42, 43
- Mexico, 15, 16, 44
- Peru, 15, 16, 38, 45, 46
- Telefónica International Wholesale Services, 15, 16, 26
- Uruguay, 15, 16
- Meditel (Morocco), 27
- Movistar, 25, 29, 30, 34, 35, 36, 38, 39, 40, 42, 43, 44, 45, 46, 49, 58
- Argentina, 39
- Chile, 39
- Colombia, 42, 43
- Ecuador, 15, 16
- Mexico, 44
- Peru, 38, 45, 46
- Uruguay, 15, 16
- Venezuela, 15, 16
- Products and services, 61
- Block It, 55
- DUO, 9, 35
- Internet Experience, 34, 36
- Mail Movistar, 34, 36, 37
- Movistar Messenger, 38
- Na prijmu, 51
- O2 Dobiji mi, 52
- O2 Homecare, 61
- O2 Joggler, 58
- O2 Ozvi, 52
- O2 Spojovatelka, 51
- pay-TV, 6, 9, 12, 13, 14, 22, 24, 38, 66
- Priority List, 48
- simplicity, 59
- Terra TV, 42
- TRIO, 9
- Telco SpA, 28
- Telefónica Europe, 17, 19, 20, 21, 23, 24, 25, 26, 29, 47, 48, 49, 50, 51, 52, 53, 54, 55, 57, 58, 59, 60, 61
- Czech Republic, 20, 21, 24, 50, 51, 52
- Germany, 17, 19, 20, 21, 24, 25, 26, 53, 54
- Ireland, 20, 21, 54, 55
- Litmus, 29
- Manx Telecom (Isle of Man), 56
- O2 Broadband, 58
- O2 TV, 51
- Slovakia, 57
- UK, 17, 19, 20, 21, 47, 48, 49, 58, 59, 60, 61
- Telefónica Learning Services, 24
- Terra, 42
Teléfonos de México (Telmex), 38, 44, 68
Televisa, 44
Telling Telecom, 62
Tesco, 59
- Tesco Mobile, 59
Toshiba, 31, 34
Twitter, 48
U
UBS, 50, 65, 67
Unicom Huasheng Telecommunications Technology, 62
Uplands Mobiles, 58
V
VCCP, 26
Verizon, 31
Verizon Communications
- Verizon Wireless, 31
Vincle, 29
Virgin Group, 59
- Virgin Mobile, 59
VisaNet del Perú, 45
Vivio, 58
Vivo Participações, 3, 14, 15, 16, 24, 39, 41, 67
- Edington, Christiane, 41
- Telemig Celular (Brazil), 12, 14, 41
Vodafone Group, 25, 29, 31, 34, 35, 47, 52, 53, 66
- Germany, 53
- UK, 47
Y
Ya.com, 35
Yoigo, 29
YouGov Psychonomics, 53
Y&R Lambie Nairn, 25, 26
Z
ZTE, 62