Colombia: Government moves to push through Telefónica merger
December 6, 2011
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Colombian Finance Minister, Juan Carlos Echeverry, said the government will move to liquidate Colombia Telecomunicaciones (Telefónica Telecom), a joint venture between the government and Telefónica, and auction its assets, if the country’s Congress does not approve a $7.5bn (EUR5.6bn) plan to merge the unit with Telefónica’s Movistar unit and substantially recapitalise the new entity.
In practice, a liquidation would almost certainly mean an outright sale of the government’s 48% stake in the joint venture to majority 52% shareholder, Telefónica.
The merger was originally proposed in August 2011 (Telefónicawatch, #58), in response to what Echeverry described as a “financial weakening of the company during recent years”, which could create an “enormous risk” in terms of the company’s ability to meet pension payments and other obligations. The merged entity would be in a position to offer quadruple-play services and better compete in the market, as well as exposing the government to the rapidly growing mobile market, while reducing exposure to the declining fixed-line market.
The proposals involved both parties making substantial additional capital investments, in proportion to their respective stakes in Colombia Telecomunicaciones, as well as paying off debts amounting to $1.9bn.
“ We’re supporting the capitalisation. We’re ready and able to capitalise, but if the government does not see another option than liquidating, we would agree. ”
– Alfonso Gomez, President, Colombia Telecomunicaciones.
Telefónica stressed at its latest results presentation its commitment to the restructuring of operations in Colombia as part of its regional strategy.
[Further reference: Capitalización de Coltel ascendería a $7, 5 billones -- El Universal, 24 November 2011; Colombia liquidation warning to Telefónica -- Global Telecoms Business, 25 November 2011.]
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Telefonicawatch Report #60 November 2011 Executive Brief
December 6, 2011
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- Telefónica Group announced its results for the nine months to the end of September 2011. The telco’s previously hubristic approach to its continued growth and profitability emphasised the gloom as the reality of Spanish woes prompted exceptional costs that led to the company’s first quarterly loss in almost a decade. Headline figures were distorted by exceptional events as the operator grinds gears on the road to transformation, but underlying figures show a mixed picture. Telefónica Europe continues to tough it out in competitive markets, with Germany performing well, and the UK claiming it is prepared for a new charge on the market. However, more traditional sources of good news in Latin America are looking a little deflated, with pressure on Brazil to do the Group’s heavy lifting unabated. [pp.4-7, 24-28, 34-41.]
- Telefónica Digital made a strategic investment in Wi-Fi specialist Quantenna Communications, which develops chipsets aimed at substantially increasing the bandwidth capacity of in-home wireless networks, thereby avoiding future bottlenecks as network operators roll out higher-bandwidth services. The investment comes as Telefónica undertakes a review of its digital services, sparked by the reorganisation of the wider business, which is expected to see the division’s head Matthew Key set out transformation strategy in more detail in early-2012. Telefónica also quietly took full ownership of Spanish WiMAX business Iberbanda. [pp.8, 10.]
- As Telefónica continues to draw attention to its global scale, while it embarks on its transformation strategy, the Group highlighted its relationship with Chinese operator China Unicom. The two companies are to collaborate more closely on developing M2M services supporting the Internet of Things, with a special focus on automotive applications. They are also boosting a strategic alliance on sharing network points of presence to serve multinational corporation customers. José Valles, Head of Telefónica’s BlueVia initiative, also indicated that his company is looking to expand the global developer platform into China, leveraging local support from Huawei. [pp.11, 13, 23.]
- Telefónica took another tentative step towards the introduction of mobile commerce and other NFC-based offerings, as Telefónica Digital and Research In Motion launched a trial of NFC services among a group of 350 Telefónica employees in Madrid, marking a notable shift in focus of such trials towards the handset aspects of the NFC ecosystem. In another M2M development, Telefónica and payments technology company Giesecke & Devrient demonstrated a jointly developed solution for remote management of M2M SIM subscription data, allowing device makers to manufacture devices with cheaper, standardised SIMs that can subsequently be revised throughout the lifetime of the device. Telefónica in Czech Republic launched another O2 Wallet mobile payment trial, this time building on existing schemes ahead of a potential 2012 commercial launch. [pp.14, 16, 18.]
- In Brazil, Telefónica extended its partnership with MasterCard with the formation of a new joint venture to expand their existing Latin American mobile financial solutions alliance to the massive Brazilian market. [p.17.]
- O2 UK launched a trial 4G network in London, involving 25 transmitter sites and more than 1, 000 participants, using a T & D Licence granted by Ofcom, making it the largest urban LTE network in the UK to date. O2 UK’s Chief Executive Ronan Dunne defended the operator’s approach to the 4G spectrum auction process in the UK, while also re-stating reluctance to allow too many concessions to rivals. [pp.47-48, 52-53.]
- Telefónica’s non-compete agreement with Portugal Telecom has come under scrutiny from the European Commission, for an alleged breach of European law. While the clause in the Vivo sale deal that sparked the Commission’s concerns was short-lived, the investigation is also looking at whether the two companies had a longer-term agreement in place affecting competition in their home markets. [p.9.]
- Continuing the development of its Telefónica Global Delivery Network content delivery network platform, Telefónica selected Wowza Media Systems to supply software to offer media-streaming capabilities to a wide range of video-capable devices. Meanwhile, Rafael Arranz, Vice-President of Marketing and Sales at TIWS, said that demand for CDN services is growing among content providers in Latin America. [pp.22-23.]
- Telefónica Latinoamérica signed a strategic partnership agreement with equipment supplier Amper, to jointly target large corporations and government agencies in Latin America with communications, defence, and security solutions. [p.29.]
- The Colombian government underlined its support for a proposed merger between Telefónica’s fixed-line and mobile assets in the country, with Finance Minister Juan Carlos Echeverry threatening to liquidate the government’s stake in the fixed-line venture if the country’s congress fails to approve a recapitalisation plan. [p.31.]
- After a number of delays, and sustained pre-launch activity, Telefónica Latinoamérica launched mobile services in Costa Rica. Key rival Claro, as well as local startup Fullmovil, also launched services at the same time. Movistar Nicaragua announced plans to invest EUR75m to double coverage of its 3G network, mainly in the northern regions of the country, over the next three months. [pp.31, 32.]
- As the dispute over the renewal of licences in Peru continues, local authorities said that the cost would be assessed independently of Telefónica’s current EUR545m tax bill. Meanwhile, Telefónica Chairman Cesar Alierta met with senior government officials about the dispute, heralding a potential settlement of the two parties’ differences. [p.33.]
- In one of two significant disputes with handset manufacturers, Telefónica Czech Republic said it would not list the new Apple iPhone 4S handset and will gradually phase out older Apple models, citing excessively onerous conditions from Apple. In a similar development, O2 UK has been excluded from the list of UK operators selling Nokia Lumia Windows Phone devices, after disagreements over pricing, marketing campaigns, store displays and volume targets, and public criticism of Nokia premium pricing from O2 executives. Telefónica is expected to significantly reduce the portfolio of handsets it offers customers, following a review backed by Telefónica Digital, and is evidently ready to take a more combative approach to vendor relationships. [pp.42, 51.]
- O2 Germany added to its mobile payment options with a new mobile carrier billing deal with Zong, a PayPal-owned mobile payment provider. The German business appears to be leading Group activity on contract billing for new services. [p.43.]
- While Telefónica framed its success in Germany as a by-product of its innovative commercial offerings and customer satisfaction with the quality of its network, O2 Germany was forced to acknowledge a growing number of complaints over network performance, blaming the recent rise in smartphone use as the cause, and promising a comprehensive upgrade by the end of 2011. [pp.42-43.]
- In Ireland, Telefónica launched the O2 Unified Communications IP telephony service, in collaboration with Cisco Systems, mimicking the identically-branded service from Telefónica UK. The company also launched a new ‘cloud based’ online service tool called Blueclick.ie, to help customers manage large mobile handset inventories. [p.44.]
- Telefónica España acquired additional spectrum, as the local authorities distributed blocks that were not successfully allocated at earlier stages of its auction. [p.46.]
- Telefónica in the UK made moves towards a more customer-centric business model, firstly with the launch of an initiative called 1st Edition, which is effectively a beta-testing programme for new O2 services, and the trial of a new system to give customers control over how their personal information can be used in activities such as marketing and financial services. At the same time, the unit set up a new business intelligence team to centrally collate, organise, and analyse customer data collected from its various new services divisions, for the benefit of its marketing and new product development functions. [pp.50, 55.]
- There were rumours that Telefónica Europe may be set to win back a mobile services contract with carmaker BMW thought to have been poached by Vodafone, as O2 Germany and the manufacturer notably trumpeted their joint work on using LTE technology for in-vehicle telemetry services. O2 UK also announced contract wins from BSkyB, to provide corporate mobile services over two years, and with Chargemaster, an electric vehicle recharging equipment manufacturer, to provide M2M technology for the company’s network of charging stations. [pp.14, 43, 50, 54.]
- China Unicom and rival China Telecom are both to face an anti-trust investigation from the country’s National Development and Reform Commission, in relation to activities in the broadband access and inter-network settlement sectors. [p.56.]
- Telecom Italia delivered significantly better-than-expected results for Q3, driven by strong revenue growth in Latin America, and a slowing in the rate of revenue decline in Italy. [p.57.]
Telefonicawatch Report #60 November 2011 Snapshot
December 6, 2011
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Table of Contents
4 Telefónica Group
4 Results 9m/Q3 FY11
4 Group results hit by one-offs; underlying trends worrying
4 Latin America slows as growth engine
4 First loss for nine years as Group prepares ground for new structure
5 Table 1. Telefónica Group, selected financial data, 9m and Q3 FY11
5 Traditional reporting structure to continue until 2012
6 Telefónica losing its swagger, but some cause for cautious optimism
6 Table 2. Telefónica Group, customer numbers (’000), Q3 FY11
6 Telefónica plugs benefits of partner programme
6 Associates have negative impact on Telco valuation
7 Telefónica maintains guidance in tough times
7 Margin targets looking precarious
7 Debt ratios still under threat
7 Results 9m/Q3 FY11
7 Dividend payments becoming a drag on operations
8 People
8 Table 3. People movement highlights
8 Telefónica quietly acquires Iberbanda
9 European regulation
9 Telefónica must justify non-compete agreement with PT
9 Financial
10 Telefónica Digital
10 Associates and investments
10 Telefónica invests in Quantenna
10 “…out of context…”
10 Telefónica on new digital services
11 BlueVia
11 Telefónica to launch BlueVia in China
11 Regional centres
12 Cloud services
12 Telefónica outlines position on ‘cloud’ regulation
12 Wayra
12 Telefónica opens Wayra Academy Madrid
13 M2M
13 Telefónica signs M2M agreement with China Unicom
13 Telefónica ties with Tragsa on agricultural M2M solutions
14 Telefónica ties with G&D for lifetime M2M management
14 O2 Germany and BMW demonstrate in-car LTE
16 Mobile commerce
16 Telefónica and RIM trial contactless payments
16 Telefónica shifting focus to vendor partnerships
17 Telefónica extends MasterCard JV to Brazil
17 Brazil formally brings experience to wider regional initiative
18 O2 Czech Republic to launch new O2 Wallet pilot
19 Strategy
19 Key: operators are becoming “commoditised”
20 Telefónica Global Resources
20 Devices
20 Table 4. Device highlights
22 Content delivery
22 Telefónica selects Wowza for CDN delivery
23 Demand for CDN grows in LatAm
23 TIWS
23 Telefónica to share PoPs with China Unicom
24 Telefónica Latinoamérica
24 Results 9m/Q3 FY11: Latinoamérica
24 Growth engine beginning to run out of steam
24 Table 5. Telefónica Latinoamérica, financial highlights, 9m and Q3 FY11
26 Mobile growth continues but headroom getting limited
26 Contract customers offer profitable potential
26 Pay-TV beginning to take-off for the telco
27 Table 6. Telefónica Latinoamérica, customer numbers (’000), Q3 FY11
27 Brazil favours fixed-wireless over LLU for growth
27 Brazil and Mexico provide the good news and bad news
28 Brazil dominates Latinoamérica performance
28 Table 7. Telefónica Latinoamérica, revenue by country, 9m and Q3 FY11
29 Regional
29 Telefónica ties with Amper in LatAm
29 Argentina
30 Brazil
30 Vivo to expand HSPA+ rollout
30 Telefónica continues to focus on network strengths
30 Telefónica selects Tel-NT for repair services
31 Colombia
31 Government moves to push through Telefónica merger
31 Nicaragua
31 Movistar to invest in network expansion
32 Costa Rica
32 Movistar launches services in Costa Rica
33 Peru
33 Paredes: licence dispute separate from tax debt
33 Alierta: Telefónica will “respect” government decision
34 Telefónica Europe
34 Results 9m/Q3 FY11: España
34 Telefónica finally reacts to harsh market conditions
34 Table 8. Telefónica España, financial highlights, 9m and Q3 FY11
35 New deals helping España reach inflection point
35 Change may not be as fast as impression given by Telefónica
35 Pay-TV continues modest growth
36 Table 9. Telefónica España, customer numbers (’000), Q3 FY11
36 Average revenue dropping in dwindling customer base
36 Table 10. Telefónica España, wireless key performance indicators, Q3 FY10
38 Results 9m/Q3 FY11: Telefónica Europe
38 Europe boosts profits, ups competitiveness
38 Table 11. Telefónica Europe, financial highlights, 9m and Q3 FY11
38 Contract customers account for majority of net adds
38 Tesco Mobile business continues strongly in UK
39 UK attempting to regain momentum
39 Germany confidence boosted by portfolio successes
39 Table 12. Telefónica Europe, revenue and OIBDA by country, 9m and Q3 FY11
39 Ireland on the outside
40 O2 UK better managing mobile broadband growth
40 Germany sees accesses growth across the board
40 Slovakia boosts Czech Republic performance
41 Broadband services struggle in UK
41 Table 13. Telefónica Europe, customer numbers (’000), Q3 FY11
41 Czech Republic
41 O2 establishes Wi-Fi unit as users reach 50, 000
41 O2 CR re-vamps TV offering
42 O2 CR blames Apple’s requirements for iPhone absence
42 Germany
42 Telefónica acknowledges customer network complaints
43 Embarrassing timing, as Telefónica boasts of German smartphone adoption
43 O2 signs carrier billing deal with PayPal’s Zong
43 Telefónica selects Callidus for sales coaching
43 O2 ties with tiramizoo.com for GPS tracking
44 Ireland
44 O2 ties with Cisco for large enterprise cloud service
44 O2 Ireland launches cloud service management
45 Slovakia
45 Slovakia gets new Chief Executive
45 Digital dividend auction penned for early-2012
45 Germany
45 E-Plus open to O2 acquisition
46 Spain
46 Telefónica acquires more 900MHz spectrum
46 Table 14. Summary of Spain’s Long Term Evolution spectrum auction results (second round)
47 Telefónica ties with Metro de Madrid for virtualisation
47 United Kingdom
47 O2 launches trial 4G network in London
48 Use of P2MP technology for backhaul
50 O2 engages customers through “1st Edition”
50 O2 wins BSkyB contract
51 UK spat with Nokia continues; O2 slams Lumia pricing
51 Olive branch from O2 Germany?
52 Dunne clarifies Telefónica’s position on 4G auction
52 Dunne demands “fair and open” auction process
53 Ofcom’s second consultation
53 Dunne still prepared to fight on spectrum if necessary
54 O2 ties with Chargemaster for electric vehicle charging
54 O2 gives customers control of personal information
55 O2 centralises business intelligence
55 O2 needs to be back in the game
56 Associates and investments
56 China Unicom
56 China Unicom faces anti-trust investigation
57 Vendors sign new Unicom deals
57 Telecom Italia
57 Strong LatAm results boost TI
58 Deal rumours circulate around TI
59 Index
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O2’s Wi Fi expansion plans close to reality
October 26, 2011
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Gavin Franks, Managing Director of Telefónica UK’s (O2 UK) Wi-Fi division, said the company is close to signing “several very large deals” to expand its network of Wi-Fi hotspots, from its current level of approximately 500 to around 15, 000.
In January 2011, O2 UK unveiled plans for O2 Wifi, a national network of hotspots that will be available for free to all users, developed through a series of partnerships with strategic venues, such as restaurants, retail outlets, and shops (Telefónicawatch, #52). As well as offering an improved Wi-Fi experience for customers, the company said it will integrate the capabilities of its O2 Media and O2 Money services. At the time, Tim Sefton, New Business Development Director of Telefónica UK, estimated the Wi-Fi network project would take around six months and cost “in the low double-digit millions”.
Franks’ comments appear to imply that, although a little later than originally planned, the project is now taking shape, and has provided additional detail on how the service will look. He said it will offer smartphone users of any network Wi-Fi access via a personalised welcome page with relevant content from the venue owner. From the venue’s point of view, the service will also offer data on store foot traffic, percentage of visitors using smart devices, and the websites that customers access while at the venue, as well as valuable marketing opportunities.
“ We’ve recognised that Wi-Fi has to be free to the end user, and it must add value to the venue where it’s deployed. The venue owners must realise some of the benefits from this, given they’ve been neglected by only receiving a small percentage of the revenue…It’s about using the Wi-Fi data to create value for the venue owner. But the really exciting pieces are the campaigns we’ve been running based upon our O2 Media platform using location services and geo-fencing — leading to a personalised media campaign so that we and the venue owner can connect to the customer. ”
– Franks.
Franks added that, in addition to the possibility of running targeted consumer marketing campaigns using profiling techniques from its O2 Media platform, the service could also integrate with its O2 Money services to transact payments via its m-wallet service.
As further evidence that the company’s Wi-Fi strategy is coming to fruition, it also appointed Ben Mein as its new Head of Commercial Delivery for O2 Wifi, with responsibility for developing commercial strategies, expanding relationships with clients and third parties, and driving overall financial growth, as well as leading the sales team. Mein joins from The Nielsen Company, where he served as Director for Online and Media Business. He also previously worked at News International, leading the Digital Strategy team.
Claims of data offloading miss O2 strategy focus
Franks was keen to emphasise that the business model is driven by marketing and establishing strong partnerships with venues, rather than data offload to take pressure of the company’s 3G network. Telefónicawatch considers that the executive’s statement ties in with the mobile operator’s shift in emphasis towards becoming a platform for delivering end users to corporate customers and content providers; but there were still media suggestions that the telco is building the Wi-Fi network to alleviate congestion problems.
“ We’re not installing access points as an alternative to our 3G network; and we don’t want to follow the model of Wi-Fi being used for traffic offload. ”
– Franks.
Some industry watchers have been cynical about its focus on marketing and market differentiation being behind the wider move towards Wi-Fi, insisting that data offload is the real motivation behind the moves. Thomas Wehmeier, an Analyst at Informa Telecoms & Media, for example, emphasised the degree to which data offload has come to the fore over the past six-to-twelve months, and said that “any self-respecting network director should be looking to include Wi-Fi as part of a more holistic network strategy”. Kelly Davis-Felner, Marketing Director of the Wi-Fi Alliance, meanwhile, stated that she believes operators are only interested in using Wi-Fi for data offload.
Luis Serrano, Senior Vice-President for Boingo Wireless, a retail and wholesale Wi-Fi service provider, took the view that the publicly stated approach is less important than the ultimate effect of the strategy.
“ They need to expand their footprint, and Wi-Fi does indoor coverage very well. I don’t know if the O2 Wifi economics will work, but I don’t think it matters. It’s all about retaining customers by providing good coverage and connectivity. ”
– Serrano.
Speaking at the time of the switch-on of Telefónica UK’s 3G 900MHz (3G 900) spectrum in London (Telefónicawatch, #53), Nigel Purdy, Chief Technology Officer at Telefónica UK, stated that the company’s “strategy is to intelligently layer our network to give our customers connection to 2G, 3G, HSPA+, LTE, and Wi-Fi, seamlessly, simply, and at speed”, implying that Wi-Fi is very much an integral part of the company’s strategy to deliver sufficient capacity to customers across all network types, even if it wants to specifically avoid using the term “data offload”.
Telefónicawatch considers that the claims of data offloading overlook the longer term goal of Telefónica Group in using its customer relationships to build a business as a trusted partner between content and service providers, and its end-user customers.
The plans for O2 Wifi, while no doubt having some benefit in terms of alleviating network pressure, look to be more focused on delivering useable information to retailers on potential customers, and building on programmes such as O2 More location-based advertising and the O2 Priority rewards programme.
[Further reference: European operators embrace Wi-Fi offloading with a hint of caution -- FierceWireless, 28 September 2011; O2 Wifi aiming to rapidly increase wireless broadband footprint -- Cable.co.uk, 4 October 2011; Ben Mein joins O2 Wifi as commercial delivery chief -- Mobile Magazine, 3 October 2011.]
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Telefonicawatch Report #59 October 2011 Executive Brief
October 26, 2011
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- Telefónica appeared wary of European Union interest in encouraging fibre infrastructure investment through regulation that could cut into profitability of legacy copper networks. The telco recently reiterated belief that it should be the beneficiary of its own network investment, although resources for capital expenditure look restricted by other financial pressures — as noted by Fitch Ratings as it downgraded its outlook for the company. [pp.4-5.]
- Telefónica in Spain was highlighted as a partner testing new DSL technology from Alcatel-Lucent, which promises to boost broadband connection speeds to 100Mbps without installation of fibre-to-the-premises. The Spanish operator is expected to be an early customer of the new technology, building on other recent announcements that have seen it turn to the France-based vendor for next-generation access solutions. [p.21.]
- In the UK, O2 has begun trials of an over-the-top service offering text messaging and VoIP calls over Wi-Fi networks. The move appears a tentative first step into a new approach to service delivery from the operator, and actual evidence that the operator has recognised that the status quo cannot be maintained. [p.9.]
- Movistar España made a new service available, enabling mobile applications to be accessed and managed across a range of devices. The app store idea is built on a platform announced by the telco at the Mobile World Congress earlier in 2011, and is expected to spread across the Group, and to units of associate Telecom Italia. [p.27.]
- In Brazil, Vivo launched what it claimed to be the first service enabled by its merger with Telefónica’s fixed-line business in the country, with new fixed-line services expanded beyond the São Paulo region that forms the Telesp home market. [pp.36-38.]
- The Wayra start-up accelerator and incubator programme is expected to launch in O2 markets in the near future, with the new Telefónica Europe Chief Executive, José-María Álvarez-Pallete, keen to spread the idea he has championed since its Latin American launch. Faster adoption of the new business development idea is an example of Telefónica’s recent management changes taking effect. Another indicator of changes prompted by the Group management restructure was the appointment of Shaun Gregory, who has been leading the UK’s mobile advertising effort for O2, to a Group-level role tackling advertising internationally. Mobile advertising, alongside the other six new vertical markets targeted by the telco, is expected to generate EUR1bn of revenue within five years. [pp.7, 13, 17.]
- Vivo provided more information on its planned credit card offering, which is seen as a gateway into mobile payment services. A loyalty scheme run with partner Santander is expected to appeal to customers that are not currently established credit card users. O2 Money in Ireland has attracted 50, 000 paying customers since launch, with its pre-paid debit card being principally used for online purchases — perhaps reflecting the spending habits of its young target demographic. [pp.7-8.]
- Research business Telefónica I+D entered a strategic partnership with augmented reality specialist Layar, developing visual search services. The agreement will see Telefónica license its patented inventions — an area of innovation the telco is keen to spotlight, and profit from. [pp.10, 12.]
- The O2 Wifi service is set to launch soon in the UK, with the operator emphasising its potential to nurture location-based services. The concept of using a Wi-Fi network to support Telefónica’s growth as a platform for value-added services ties in with digital transformation goals, although many observers considered it more a means of alleviating growing pressure on 3G networks. [pp.15-16.]
- Telefónica said a major new data processing centre is to be built in Spain. The telco flagged the efficiency and security of the new centre, and identified it as a key element of plans for delivering cloud services and infrastructure outsourcing to its major customers around the world. [p.18.]
- Swiss telco Sunrise was the latest named participant in the Telefónica Partners Program. The two companies are expected to pool resources on procurement service and provision, and to look at other collaboration opportunities. [p.22.]
- Telefónica International Wholesale Services is to provide network connectivity in Latin America to Easynet Global Services, a UK-based service provider looking to expand its international presence. TIWS also worked with the Spanish Telefónica unit to boost the international network capacity within its home market, deploying new interfaces that will take total interconnection capacity to 1.2Tbps in 2011, and 1.8Tbps in 2012. [p.23.]
- In the Czech Republic, O2 is embroiled in legal action with a mobile virtual network operator re-selling O2 services under what the Telefónica unit considers to be false pretences. Undeterred, the MVNO is said to be planning to expand its service to Slovakia, also using O2 infrastructure. [p.24.]
- Practical steps to integrate the fixed and mobile assets owned by Telefónica in Germany continue, with the deployment of new Oracle solutions expected to improve the unit’s ability to bundle services and offer more effective customer support. [p.26.]
- JDSU was awarded a contract to provide proactive monitoring and repairs for the Movistar Imagenio IPTV platform. [p.28.]
- The UK regulator Ofcom is to re-consult on its plans for the spectrum auction needed to enable the launch of 4G services in the UK market, adding six months to the timeframe for the planned auction. While the regulator appeared confident this need not affect commercial launch dates, the continued jostling of the UK operators, with O2 leading the way with mutterings of legal action, suggests a longer wait should be anticipated. [pp.31-32.]
- While Telefónica units across Europe announced plans for the new Apple iPhone 4S, as well as compensation for RIM BlackBerry users affected by recent outages, the telco was said to have fallen out with Nokia over an upcoming Windows Mobile device launch in the UK. The vendor is thought to believe the O2 business is not sufficiently supportive of the release. [pp.19, 33, 34.]
- Telefónica in Argentina launched a new IT Consultant service, offering SMEs hardware and connectivity advice, and ongoing support. The Argentinian unit is also supporting international expansion plans for confectioner Arcor. [p.34.]
- Telefónica is expected expand pay-TV activities in the Brazilian market, following an increase in its stake in TV operator TVA. Vivo is also planning network expansion in the north of the country, as Telefónica responds to intensifying competition in the country, and works to maintain impressive growth. [pp.35-36.]
- Telefónica in Colombia is participating in bidding for a tender to deploy a national fibre-optic network. [p.39.]
- Telecom Italia is to spend EUR1.3bn on 800MHz spectrum in its home market, although the spectrum, set to be used for LTE services, is not expected to become available until 2013. [p.40.]
Telefonicawatch Report #59 October 2011 Snapshot
October 26, 2011
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Table of Contents
1 Executive brief
4 Telefónica Group
4 Financial
4 Fitch downgrades Telefónica, cites cash squeeze
5 Network
5 Telcos wary of tougher EU copper regulation plans
5 Telefónica already facing pressure on investment
5 Acquisitions and disposals
5 Corporate social responsibility
6 People
6 People movement highlights
6 Corporate social responsibility
6 Executives
7 Telefónica Digital
7 Gregory to take on global role
7 Mobile commerce
7 O2 Money reaches 50, 000 users in Ireland
7 Management restructure
7 Marketing
8 Vivo details Santander credit card
8 Mobile payment trials with Banco Itaú
8 M-commerce
8 Visa in talks on NFC partnership
8 Partners
9 OTT services
9 O2 tentatively embraces VoIP
9 Signs that Telefónica is bowing to the inevitable
9 BlueVia
10 Telefónica I+D
10 Telefónica ties with Layar for visual search
10 Could AR replace barcodes?
10 Research
10 Telefónica hosts HomeGrid event
12 I+D stresses value of patents
12 Jariego: Future direction for Telefónica I+D
12 Role of Telefónica I+D
12 Terra
12 Terra TV continues expansion
13 New verticals expected to generate EUR7bn in five years
13 Partnerships emphasised as I+D aims to remain flexible
13 Tuenti
13 Tuenti builds base; ponders international expansion
14 Partnership with Huawei
14 Threat from Google acknowledged
15 Wireless networks
15 O2′s Wi-Fi expansion plans close to reality
16 Claims of data offloading miss O2 strategy focus
17 Wayra
17 Wayra set to come to O2
18 Telefónica Global Resources
18 Data centres
18 Telefónica plans major new data centre in Spain
19 Devices
19 Device launch highlights
21 Networks
21 Telefónica testing Alcatel-Lucent 100Mbps DSL boost
22 Partners
22 Sunrise enters Partners Program
23 TIWS
23 TIWS wins MPLS contract from Easynet
23 Telefónica expands international network capacity
24 Telefónica Europe
24 Czech Republic
24 O2 fights with grey operator
25 Germany
25 Telefónica implements Oracle solution
25 Telefónica continuing to push integration forward
26 Operators cleared to use 800MHz in four more states
26 O2 Germany overhauls data tariffs
27 Spain
27 Telefónica’s My mstore launched
27 Telefónica trumpets rural access improvements
28 Telefónica dips toes in content production again
28 Echoes of Endemol, but investment is a legal requirement
28 Telefónica picks JDSU for IPTV management
28 Slovakia
29 Mobile TV subscriptions fall dramatically in Q2
31 United Kingdom
31 Ofcom delays 4G auction in face of operator complaints
32 Telefónica succeeds in securing review, but could see a pyrrhic victory
32 3 UK claims rivals encouraging 4G auction delay
33 O2 spat with Nokia over Windows Phone devices
34 Telefónica Latinoamérica
34 Regional developments
34 Telefónica businesses respond to BlackBerry problems
34 Argentina
34 New IT Consultant service launched by Telefónica
34 Telefónica provides centralised centre for Grupo Arcor
35 Brazil
35 Telefónica to expand pay-TV; ups stake in TVA
36 Vivo trumpets integration with new fixed-line services
36 A timely launch as competition intensifies
36 Vivo launches mobile group purchasing service
36 Ecuador
38 Vivo commits to network expansion in Amazonas
38 Cielo named as Vivo mobile recharge partner
38 Peru
38 Venezuela
39 Colombia
39 Telefónica consortium in fibre bid
40 Associates and investments
40 Telecom Italia
40 TIM to shell out EUR1.26bn on spectrum boost
40 Spectrum wait necessary
40 Expectations well beaten
40 China Unicom
41 TI instigates partner programme
41 TI terminates supply contract with TI Media
42 TI could increase investment in Argentina
42 TI continues cloud development with Avaya
43 Index
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Telefonicawatch Report #58 September 2011 Snapshot
October 19, 2011
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Table of Contents
1 Executive brief
4 Telefónica Group
4 Operations
4 Telefónica details new management structure
4 Telefónica Digital management team draws senior Europe figures
5 Global Resources demonstrates wide remit
5 Competitors
5 Corporate social responsibility
6 Telefónica Europe management sees subtle shifts
6 Corporate social responsibility
6 Financial reports
7 Telefónica Latinoamérica solidifies support roles
7 Dividend cut predicted for Telefónica
8 Sector reacts to Telefónica re-org
8 Global Resources seen as aping Vodafone, Digital leading way
8 Digital division about alliances as well as competition
8 “…out of context…”
8 Telefónica re-org reaction
9 Perception of Madrid devolving power misplaced
9 Strategy
10 Telefónica Digital
10 Advertising solutions
10 O2 More boasts six million customers
10 Wayra
11 BlueVia
11 BlueVia targets Silicon Valley
11 Innovation
11 Telefónica claims progress for Innova project
13 M2M
13 Telefónica ties with Masternaut for telematics
14 Linares emphasises commitment to digital at Santander
15 Telefónica Global Resources
15 Devices
16 Networks
16 Telefónica launches CDN platform
16 O2CR and O2 Germany tie for network management
17 Telefónica Europe
17 Czech Republic
17 O2 continues to expand 3G network
18 Digital dividend sell-off tabled for 2012 — report
19 Germany
19 O2 discounts LTE for home as rural DSL alternative
19 LTE leading new wave of fixed-mobile substitution?
19 O2 stores to accept old handsets
20 Ireland
20 Hanway succeeds Shurrock as CEO of Telefónica Ireland
20 Spain
20 Gilperez steps into España role
20 Teixeira moves up ranks in Brazil
22 Telefónica to launch pre-commercial LTE service
22 Alcatel-Lucent supplies network
22 LTE competition from Orange and Vodafone
22 Slovakia
23 Longer term LTE plans
23 Ansaldo outlines investment in last speech for España
24 CMT shows Movistar still struggling, and shedding share
24 Broadband accesses dip sequentially, but fibre grows
25 Fixed-line continues decline
25 Telefónica cuts prices, but denies entering price war
26 Limited offer restricts risk to revenue
26 Telefónica claims of no price war look hollow
27 CMT to review Telefónica charges
27 Hints that mobile competition could intensify
28 Telefónica selects Redknee for pricing analysis
28 Spain following Ireland’s lead
29 United Kingdom
29 Jacada wins new O2 contract
29 O2 UK opens new store, including O2 Workshop
30 Concerns reappear that UK spectrum auction on slide
30 UK
32 3 seeks to derail mobile commerce alliance
32 O2 trumpets success of dual-screen marketing campaign
33 O2 signs Outsourcery as JUC partner
34 Telefónica Latinoamérica
34 Regional
34 Telefónica sold customer data to Santander
34 Competitors
35 Álvarez-Pallete on Latin America
36 Argentina
36 Telefónica launches UC offering
36 Telefónica making strides in corporate sector
36 Movistar launches content management platform
37 Movistar deploys Mublet solution
37 Telefónica claims 3m internet customers
37 Brazil
37 Vivo launches mobile top-up
38 Colombia
38 Colombian operations may merge
39 Ecuador
39 Government to award additional spectrum in short term
39 Costa Rica
40 Peru
40 Licence renewal dispute continues
42 Movistar and Nokia take “green” drive to Peru
42 Venezuela
43 Associates and investments
43 China Unicom
43 China Unicom extends MPS partnership with Trunkbow
44 Telecom Italia
44 No new entrant via ‘digital dividend’ sale
44 TIM Brasil invests in network to challenge Vivo
45 AES Atimus acquisition clears another hurdle
46 Index
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Telefonicawatch Report #58 September 2011 Executive Brief
October 19, 2011
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- Telefónica Group confirmed a second tier of management for its new restructured global organisation, with the new Telefónica Digital business drawing heavily on Telefónica Europe executives, as well as including personnel from Latin America and Spain. Suggestions in the media of a significant shift in control of the telco away from Madrid appear somewhat exaggerated, however. Álvarez-Pallete, new head of Telefónica Europe, is joined by another senior Telefónica Latinoamérica executive, Luis Miguel Gilperez, the new Telefónica España Chief Executive. Gilperez is credited with leading much of the integration work of Telefónica’s operations in Brazil, following the 2010 Vivo deal — skills that may be drawn upon as the Group melds its European OpCos into a single division. Spanish press reports hinted at the priorities of the expanded division, with claims that Álvarez-Pallete will be focusing on raising margins at the Group’s O2 operations. Overall, reaction to Telefónica’s decision to transform its management organisation was positive, with little to change Telefónicawatch‘s initial assessment. Hopes for the future appear to rest on Telefónica Digital, while Global Resources and Telefónica Europe will be pressed to improve efficiency in order to defend declining traditional business. [pp.4-9, 20.]
- Telefónica Group launched a new content delivery network platform, the Telefónica Global Delivery Network, which is to provide high-capacity transport for content and service provider customers internationally. The platform initially launched in Argentina and Spain, with plans to roll out in Brazil, Colombia, Chile, Mexico, and Venezuela in Latin America, and Germany and the UK in Europe. [p.16.]
- In Europe, Telefónica’s continued efforts to integrate operations, now being championed by Telefónica Global Resources, have prompted a joint project between Telefónica in the Czech Republic and Germany on network management. The initiative will see monitoring of fixed-line networks in Germany managed in the Czech Republic, while Telefónica Germany will manage Czech and Slovak mobile networks alongside its own. [p.16.]
- Telefónica España trumped rivals with the announcement of a pre-commercial LTE service to be offered to large corporate customers in major hubs across the country. The service is to be built on Alcatel-Lucent technology and, by 2012, is expected to be offering 100Mbps download speeds. While there are no compatible handsets yet available for the service, the telco is offering high-speed connections for data cards to customers signing for a EUR45-per-month mobile internet tariff. The announcement prompted similar service launches from the telco’s competitors. [pp.22-23.]
- In Colombia, there are signs that the fixed-line and mobile operations of Telefónica may be more closely integrated. The country’s government is still a significant shareholder in the fixed-line business, and a merging of interests would entail significant capital investment by both parties, but substantially strengthen the telco’s product portfolio. There would also be potential for Telefónica to make better use of tax credits relating to its struggling fixed-line business in the country. [p.38.]
- Senior figures from BlueVia, Telefónica Digital’s applications platform, toured technology hubs in the USA, on a mission to inform IT and developer communities about the capabilities of the Telefónica platform, and global scale of the business. During the event, BlueVia presented alongside partners including Amobee, Boku, and Microsoft. [p.11.]
- Telefónica in Chile held a month-long promotional event to support its Innova entrepreneurship and innovation programme, which is being positioned as a possible model for innovation across the Group. The similar, but newer, Wayra accelerator and incubator programme, held calls for start-up ideas in Argentina and Peru that closed in September 2011, with Brazil, Chile, Ecuador, and Venezuela expected to look for investment targets before the year is out. [p.10, 11.]
- Telefónica signed an agreement with Masternaut to jointly develop and market telematics-enabled fleet management services, as part of Telefónica Digital’s drive to build a market for M2M services. [p.13.]
- Julio Linares gave a speech trumpeting the importance of new digital technologies to build on the European Community’s plans for widespread high-speed broadband coverage across the continent within the next five-to-eight years. As the Group was implementing its reorganisation, the Chief Operating Officer heralded technologies that fall under the remit of Telefónica Digital — underlining questions as to the role of the Telefónica Group number-two executive in the revised management team. [p.14.]
- O2 Media, the UK-based mobile advertising unit, claimed to have boosted its customer base from 2.5 million to more than six million in around three months, on the way to a year-end goal of ten million users of the opt-in advertising solution, which is an important element of Telefónica Digital plans. Efforts to create an industry-wide open platform for mobile commerce in the UK are being hampered slightly by protests from non-participant Hutchison 3 UK, which is claiming it has been deliberately excluded, and pointing the finger at O2 UK as being chiefly responsible for this state of affairs. [pp.10, 32.]
- Telefónica Czech Republic is continuing its 3G network rollout, which has now reached 61% of the population. Rolling out 4G services is still some way off, however, with auctions of digital dividend spectrum apparently delayed further into 2012. The UK is facing similar delays, with signs that the regulator’s schedule for auctions will be thrown off by discussions with the operators on the fairness of the proposed auction. [pp.17, 18, 30.]
- In Germany, more progress is being made on LTE services, with the operator promoting its 4G coverage as an alternative to fixed-line broadband offerings — reflecting a trend building across the continent. [p.19.]
- Tony Hanway was named as the new Chief Executive of Telefónica Ireland when Stephen Shurrock, after less than a year in the position, moved to a new role in Telefónica Digital. [p.20.]
- In Spain, regulator the CMT published market statistics showing Telefónica had shed more than two percentage points of market share for both broadband and mobile services in the past year, which could explain the decision by Movistar España to offer a heavily discounted broadband connection to customers maintaining an active mobile account with the company. Despite the ongoing price-cutting promotional efforts, senior Telefónica executives claimed unconvincingly that the market is not seeing a price war. [pp.24-26.]
- Redknee, a software development company, won a contract to provide Telefónica in Spain with pricing-analysis solutions to sit on the telco’s billing platform. The deal builds on an earlier agreement between Redknee and Telefónica in Ireland. Jacada saw its customer service software deployed at Telefónica in the UK. [pp.28, 29.]
- Telefónica in Argentina launched a new Unified Communications suite offering hosted IP communications solutions in partnership with Siemens Enterprise Communications. The Argentinian operator also launched a new mobile platform to support subscription management for customers, and to promote content. [p.36.]
- Paulo Cesar Teixeira was named as the new Chief Executive of Telefónica in Brazil. The former Vivo executive had recently been charged with managing Consumer operations for the integrated Brazilian telco. [p.20.]
- A network licence dispute in Peru is continuing, with the government looking to establish an independent valuation for the Telefónica licence up for renewal. In Ecuador, short-term licences are to be awarded to address spectrum shortages, ahead of longer term auction plans. In Venezuela, authorities have halted Telefónica plans to implement new price rises, claiming it is acting unfairly. The telco insists it has upheld the terms of its licence. [pp.39-40.]
- Telefónica and Nokia’s partnership promoting “eco” handsets spread to Peru, after earlier launch in Spain. [p.42.]
- China Unicom is continuing to develop mobile payment platforms in the local emerging market with an agreement with Trunkbow. In Italy, Telecom Italia is among the four participants in the country’s 4G spectrum auctions. The Italian incumbent is also upping its investment in fixed-line networks in Brazil, enhancing its competitive position in the country. [pp.43-45.]
Sector reacts to Telefónica re-org
October 19, 2011
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There was considerable coverage of Telefónica Group’s decision to reorganise its structure to tackle a decline in its traditional businesses, and to foster growth (Telefónicawatch, #57).
The moves were widely welcomed, although the strategy was interpreted differently across the stakeholder community.
Global Resources seen as aping Vodafone, Digital leading way
The creation of a Telefónica Global Resources was described as “better late than never, ” by analysts, and it was noted that Telefónica rival Vodafone has operated a similar division for several years.
However, it remains unclear to Telefónicawatch the extent to which the new division will offer additional benefits compared to those provided by the existing Global Services business, which had seen centralising of many functions, and has been in operation since 2009 (Telefónicawatch, 2009.05).
In contrast, the Telefónica Digital division was seen as more ground-breaking. It was noted after the Telefónica announcement on the new Digital division that Vodafone had opened a research and development centre in Silicon Valley, highlighting its pursuit of innovation (and originally reported in Vodafonewatch in 2010). The moves by the mobile giants were cited as evidence of a change in mood and attitude at the large European players, which has actually been evident for some time.
The Telefónica move was described in the Guardian as “far more daring” than Vodafone’s innovation and incubator launch, due to the role Matthew Key will play in running the programme — the presence of a perceived rising star with substantial senior management experience is seen to give the Telefónica Digital division gravitas.
Digital division about alliances as well as competition
Elsewhere, the understanding of the purpose of Telefónica Digital appears to have been focused solely on innovation and new product development, when a significant aspect of the role will be in its partnering with companies. When Telefónica announced its intention to work with players in areas where it could not effectively compete, the emphasis should have been seen to be on the cooperating aspect of the declaration. Telefónica management had been making some noises about cooperating more with internet giants, and while there appeared to be some resistance in practice to partnership, the Telefónica strategy as set out at its Investors Conference in April 2011 (Telefónicawatch, #54) assumed an increased level of partnership in the pursuit of new business.
Perception of Madrid devolving power misplaced
It was noted that the reaction in Spain seemed subdued following the news of Telefónica’s reorganisation, considering that it saw its home division vanish. However, this could be due to interpretation of events — there was an assumption made in the UK press that the creation of the Telefónica Digital division with its nominal headquarters in London, combined with the folding of Telefónica España into a European business that principally comprises O2 units, implied a shift in power from Madrid.
This view is unrealistic. Senior management are to remain in Spain; the running of European operations is in reality moving closer to the Spanish capital than London, and closer control of O2 businesses can be perhaps expected. The theory that Madrid is taking more of a role in the activities of O2 operating units could be seen to be supported by the apparent changes in strategy in recent quarters from Telefónica UK (O2 UK). Telefónicawatch has regularly noted that generating more profit from existing customers appears to have taken priority over the focus on strong performance through innovation, which had been the hallmark of the O2 business in the period that saw it grow to be the largest player in the market (before the Orange and T-Mobile merger). “Value not volume” is the mantra that emerged from Telefónica España as that business suffered in the markets, and it is now being taken up by Telefónica Europe. It was noted in the Spanish press that the introduction of Alvarez-Pallette to the leadership of Telefónica Europe is expected to support a programme to raise margins at the O2 businesses.
Telefónica Digital certainly appears to have been given a degree of independence to try and build new revenue streams, but it could also be seen as being left to ‘sink or swim’. Several reports indicated that Telefónica Digital’s 2, 500 staff will be based in London, but this appears to be far from the case. However, it is an impression the Group seems unworried about correcting, particularly in the UK environment. Telefónica already appears coy on the number of staff it employs in innovation centres across Latin America, Spain, and the UK, but it is unlikely that operations are set to up sticks and move to the UK any time soon.
Senior Group management are drawing the core businesses closer into their control, and having more involvement in the running of operations. The changes in structure could actually represent the opposite of Madrid trying to diversify its business, but instead represent a company panicking about its future and trying to counter this by taking a firmer grip.
[Further reference: Alierta da otro golpe de timón en Telefónica -- Cinco Dias, 5 September 2011; Spanish locals stay calm about global Telefónica -- Financial Times, 7 September 2011; Telefónica answers the call of London's attractions -- Financial Times, 7 September 2011; Vodafone flies flag for Britain in Silicon Valley -- Guardian, 9 September 2011; The Promise and Perils of Telefónica Digital -- Yankee Group, 6 September 2011.]
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Telefonicawatch Report #56 June-July 2011 Executive Brief
July 28, 2011
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- Telefónica Group named Bouygues Telecom and Etisalat as the first members of a new Partners Program. As well as commitments to collaborating on research and development, sharing technology, and supporting the provision of roaming services to multinational corporation customers, Telefónica indicated the telcos will team on procurement of equipment and wholesale network access. The stepping-up of partnering efforts to exploit international scale reflects Telefónica’s ambitions to grow as a global player, without over-committing to risky acquisitions. The telco also reiterated its ties with IT vendor Microsoft through a new alliance, fuelled by ambitions to collaborate more in the corporate sector. [pp.9-11.]
- Telefónica is moving forward with its drive to exploit innovation and emerging digital services as the basis for development of a business providing “services beyond connectivity”. The Wayra start-up accelerator programme held events in Colombia, Mexico, and Spain, identifying 30 business ideas for investment and hands-on support. There were signs of commercial interest in the telco’s application development platform BlueVia, and its potential for delivering applications built using revenue-sharing deals for access to the telco’s APIs. Developer AlwaysOnMessage is to launch a suite of text-based versions of smartphone applications, which will be targeted at the broader base of feature phones in markets across Europe and Latin America. Telefónica’s intentions for evolving new services in areas including cloud-based services, corporate productivity, and e-health were trumpeted at a prelude event ahead of the 2011 Movilforum. Microsoft and Nokia demonstrated the progress made on their nascent partnership at the Telefónica event. [pp.6, 14, 17-18.]
- Telco SpA, the Telecom Italia holding company in which Telefónica is a key shareholder, announced another write-down on the value of its controlling stake in the Italian incumbent. After the EUR1.2bn hit to the balance sheet, Telco still values TI shares at around twice the market rate, and Telefónica appears to have limited room to manoeuvre with regard to its beleaguered partner. Ongoing claimed synergies provide something of a silver lining. [pp.4-5.]
- Telefónica Group is said to be working with Deutsche Telekom, France Télécom, Telecom Italia, and Vodafone Group on a universal logo for NFC mobile commerce services. When deployed, this is expected to support consumer awareness and understanding of where and how mobile payment services are available. The move is another indication that operators in Europe are working harder to ensure they have a key role in digital payments. The mobile commerce collaboration between O2 UK and its national rivals has been well received by advertisers, although with some caveats regarding a possible lack of competition. In Latin America, Telefónica is continuing to make strides in mobile banking, with a new partnership with the IT division of Bankinter to build a cloud financial services platform. The operator is ensuring the services it offers financial institutions via the platform are open to all regional telco customers, reaffirming the division’s commitment, previously evidenced by its plans to work with MasterCard across the continent, to ensure its services are open and accessible to the widest possible market. [pp.8, 30-31, 48.]
- Telefónica Multinational Services claimed successes with two new contracts, usurping Deutsche Telekom to win a contract with Daimler in Germany, and an extension of an existing deal with Grupo Antolin in Spain. Progress in building a converged network services business in the multinational corporation sector appears modest, however, with the bulk of work still focused on mobile services delivery. [p.16.]
- Telefónica España reached an agreement with the Spanish telecoms unions on job cuts and pay rates for the coming three years. 6, 500 jobs are to be lost, with the telco contributing towards benefit and pension costs for departing staff. The pay deal will see a performance-based element added to the criteria for pay increases, shifting away from cost-of-living linkage. The telco will book a EUR2.7bn-plus-taxes charge as a non-recurring cost in relation to the deal, but insists the measures will be cash positive for from year-one. [p.21.]
- Telefónica España announced new Movistar mobile broadband tariffs, reportedly boosting data caps and enabling single accounts to be used for a range of phones, smart devices, and tablet PCs, and, for the first time, permitting the use of P2P and VoIP on some offerings. The new deals intensified competition in a market already heating up with a price war. The operator could see a further threat from mid-2012, when switching mobile service provider will be simplified for consumers, and the timeframe for transfer reduced from four days to just one. [pp.22-23.]
- Telefónica España deployed networking solutions from F5 Networks, expected to streamline infrastructure and address challenges presented by growing demand for mobile applications; while Juniper Networks and Telefónica I+D claimed success for optical multilayer network architecture trials, which are expected to influence how networks manage traffic in the future. Cabling solutions from Radio Frequency Systems, intended to save space taken up by network equipment and support delivery of 3G in congested urban areas, were also trialled by the Spanish business. [pp.24, 26, 28.]
- Telefónica was linked to an agreement that could see it provide pay-TV and video-on-demand services via the Microsoft Xbox gaming console. [p.28.]
- Demand for paid value-added services in Latin America was described as strong by Telefónica executives in the region, although the need for operators to put their own stamp on services to foster loyalty was also stressed. [pp.31-32.]
- The head of Telefónica Latinoamérica’s satellite broadcast services warned that demand for satellite TV offerings was putting pressure on capacity, and predicted that the region will increasingly see broadband services delivered using satellite technology. [p.33.]
- Ericsson was awarded a managed services contract, to provide field support services for Telefónica’s network infrastructure in São Paulo, Brazil. [p.36.]
- Vivo increased its market-leading share in the Brazilian mobile market, with particular strength in the contract and mobile data sectors. The operator also launched a new push-to-talk service, to compete with existing two-way radio offerings. [pp.34, 35.]
- Telefónica’s Brazilian fixed-line business is to participate in the roll out of a government-backed national broadband programme, and will make wholesale offerings available to start-up ISPs to foster innovation in the market. [p.36.]
- In Chile, Telsur is set to launch the country’s first MVNO using Movistar network assets, increasing competition in the market. In Mexico, federal authorities are said to be looking at pushing incumbent Telmex’s prices up to encourage competition, which could benefit number-two player Movistar. [pp.37, 39.]
- Movistar Mexico has ambitious plans to boost the number of users of mobile internet among its customer base from 150, 000 to one million in 2011. In Colombia, the local Telefónica unit is also introducing low-cost daily access to basic mobile internet services to drive growth. [pp.37, 39.]
- After just six months in the role, Trevor Healy left his post as Telefónica Europe Chief Innovation Officer, to take charge of mobile advertising company (and Telefónica strategic investment) Amobee. [p.41.]
- Telefónica Germany re-launched its Alice TV IPTV offering, although growing its small customer base may be a challenge as bigger rivals begin to focus on delivering more innovative new services. [p.42.]
- Telefónica Germany set up an independent business to handle its hosting and cloud services operations for corporate customers, marking something of a reversal of its integration strategy. [p.43.]
- Telefónica UK unveiled its new Priority Moments marketing service, which is expected to address the operator’s twin goals of engendering customer loyalty, and providing an attractive platform and engaged potential customer base to its advertising partners. The O2 business also highlighted, through its work with health club chain Fitness First, the potential for mobile advertising to generate measurable revenue, with additional prospects of creating long-term relationships. The company is hoping to dramatically build the opted-in customer base for its advertising services. [pp.45-47, 55.]
- Telefónica in the UK expressed intention to undertake trials of fibre-based, fixed-line broadband services by the end of the year, although details of the services, or any partners, were sketchy. [p.49.]
- Telefónica UK signed a five-year EUR11m contract with Datapoint for the vendor to provide new contact centre solutions linking Telefónica’s UK centres, with aspirations to use the partnership to explore the potential of new channels for customers to interact with the telco, including instant messaging and social media, and possibly to extend services across the Telefónica European footprint. Telefónica España also launched a new customer support service, using the Facebook social-networking platform, as the Group looks to extend the scope of its customer service efforts. [pp.19, 53.]
- China Unicom is hoping to accelerate 3G adoption, as it pursues ambitious 2011 customer targets with the introduction of lower cost smart devices. Telecom Italia is bolstering its Brazilian operations through acquisition of fibre backbone network provider AES Atimus for EUR700m, and signature of vendor agreements valued at EUR450m to improve its capacity and performance. [pp.56-60.]
