REGULATORY: Pan operator efforts attract EC suspicion
March 22, 2012
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Following the joyn launch (see seperate report), it emerged that the European Commission (EC) is looking into the activities of the ‘E5′ group (the five largest European mobile players) from an antitrust standpoint, in a move that might not only stymy the inter-operator efforts on RCS development, but also threaten other joint initiatives, such as Deutsche Telekom’s mobile wallet collaboration efforts with rivals (now seeking EC approval).
The Financial Times reported that the EC has demanded information from the GSM Association (GSMA) for the probe, and outlined concerns at a ‘tense and previously undisclosed face-to-face meeting in February [2012]‘. The investigation is said to have commenced in 2011, with an initial focus on the E5 grouping, but moved its attention to the GSMA after January 2012, when the E5 is said to have been disbanded and shifted activity to the association.
The newspaper said the probe’s focus is on whether the operators colluded “to the detriment of third parties and consumers”, not only in service development, but also in discussion of long-mooted bandwidth charges for content providers (Deutsche Telekomwatch, passim).
Stephane Richard, Chief Executive of France Télécom, issued an angry response to the investigation, saying a lawyer attended the operators’ meetings, and notes shared with the Commission. “I find it scandalous that today someone dares to demand an account of these meetings”, he said.
Nevertheless, while it would be astonishing if the E5 grouping has left itself wide open to antitrust investigators, it has for years been blatantly obvious that major mobile players have been synchronising standpoints and thinly-coded messages regarding key industry themes and concerns, as frequently evidenced by chummy keynotes, briefings and announcements at gatherings like Mobile World Congress (MWC).
However, this behaviour is not necessarily anti-competitive, and, in recent years, has been astonishingly ineffective, with little or no progress achieved by increasingly desperate calls to tackle the power of device vendors and activist regulators, or to get internet players to contribute more for data. Recent joint initiatives, such as the Wholesale Applications Community and others that are often fronted by the GSMA, have been most notable by their lack of success. Together, this leads many third parties to mock, rather than fear, operator collaboration and influence — with a gathering of tier-one operator chief executives now seen almost inevitably to mire and doom any joint initiative. Indeed, the prospects for the industry-led RCS and joyn have already been widely derided, while the more nostalgic commentators harp back to the long-ago successes like GSM and SMS, which were often aided by a then more supportive and activist EC.
Assertiveness by the EC might reflect impatience at operators’ constant carping against regulators (repeated remorselessly at nearly every MWC keynote), rather than acceptance of new realities of a mood and industry that has moved on. The Commission could also seek to raise pressure on operators to modernise decaying and disjointed voice and messaging revenue-led business models, to IP-centric, technology- and service- neutral data models.
[Further reference: Telecoms antitrust probe details revealed -- Financial Times, 18 March 2012.]
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Vodafone Deutschland, Computacenter tie on enterprise ICT
February 24, 2012
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Vodafone Germany (VfD) highlighted that it has “intensified” ties with European IT services group Computacenter as part of ongoing efforts to widen its information and communication technology (ICT) portfolio.
VfD said it has now formed a “strategic partnership” with Computacenter, although it did not make clear how this differs from existing ties between the two companies, flagged by the OpCo for around the last five years (Vodafonewatch, passim).
It said the partnership will enable it to “offer more customised communications solutions”, including “cloud computing, mobile applications, managed services [including security], and outsourcing”. They will also look to jump on the bring-your-own-device bandwagon, offering “integration and centralised control of mobile devices such as Apple’s iPhone and iPad”.
VfD added that the tie-up will help position it as a “full-service provider in the ICT sector”.
Computacenter is among several ICT players with which VfD has highlighted collaboration in recent years, although with little subsequent detail on how each partnership has progressed. These include:
- Hosted service provider CGI, which has flagged work with VfD (and other Group OpCos, including Vodafone Netherlands) on enterprise application delivery, as well on VfD’s own e-commerce platform.
- IT service provider Computer Sciences Corporation, which agreed a deal to become a “strategic distribution partner” for VfD in the enterprise space during 2010 (Vodafonewatch, 2010.03).
- Google, whose Google Apps software suite VfD has resold to business customers since late-2010 (Vodafonewatch, #87).
- Microsoft, via an on-off deal, highlighted in early-2011, that sees VfD pushing the vendor’s Office 365 cloud communications and collaboration portfolio, hosted from its own data centres (Vodafonewatch, 2009.02 and #89). Microsoft has a similar agreement with Vodafone at Group level, announced in mid-2011 (Vodafonewatch, #92).
- Communications and hosted service provider NextiraOne, which formed a “strategic partnership” with VfD in mid-2011, to target “medium-sized businesses, nationally and internationally” (Vodafonewatch, #93).
[Further reference: Geschäftskunden: Vodafone künftig mit noch mehr services aus einer hand-- Vodafone, 8 February 2012.]
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Vodafonewatch Report #99 February 2012 Executive Brief
February 24, 2012
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- Q3 FY11-12: Vodafone published its Interim Management Statement for the quarter ended 31 December 2011, with service revenue growth remaining in positive territory, but momentum has now slowed for three quarters in a row, and has slipped below 1%. The figures were widely interpreted as reflecting macro pain in southern Europe, but there were also some mixed results in less challenged revenue streams, including the growth-drivers of data, enterprise, and the emerging markets-led Africa, Middle East, and Asia-Pacific Region. Executives stressed they will work to “mitigate” the economic situation, via expansion of cost-cutting initiatives, but offered little to inspire about growth plans and prospects. [pp.4-16.]
- GROUP: Vodafone confirmed that it is mulling an opportunistic move for troubled international telecoms group Cable & Wireless Worldwide — with any bid likely to be motivated by the opportunity to reduce core bandwidth expenses, as well as C&W Worldwide’s decimated share price. The news came as the Group halted efforts to enact another, synergy-led merger, having failed to reach agreement in discussions with Greek rival, Wind Hellas. [pp.18-20.]
- Relatedly, more signs emerged that Vodafone could cosy up to cable operators in Europe, again to push network efficiencies, with: Vodafone Portugal floating the possible benefits of a combination with local wireline rival, ZON Multimédia; and Vodafone Germany mooting interest in a network-sharing partnership with a similar player, possibly sector leader Kabel Deutschland. Meanwhile, Verizon Wireless continued to gradually ramp up its recent clutch of cable operator partnerships in the USA, pushing for a launch of bundled services with a second provider (Time Warner Cable), and regulatory approval of associated spectrum purchases, by mid-2012. [pp.21, 30, 38.]
- Changes started to emerge from Vodafone India as the Group lays foundations for a ‘fresh start’ at the OpCo, following: the end of Essar Group involvement; Vodafone’s capital gains tax victory against local authorities; and, ongoing but fragile signs that the competitive tide could be turning in its favour. Piramal Healthcare, the Group’s replacement junior partner, upped its stake in VfIn by another 5.5%, and took a seat on the board, as part of a wider, reported senior management reshuffle at the OpCo. Vodafone also declared interest in opportunities for spectrum acquisition, and possible sector consolidation, after the country’s Supreme Court terminated several rivals’ 2G licences that were awarded controversially in 2008. All this took place as VfIn’s results showed its first average tariff rise for years. [pp.22, 25, 26, 58-60.]
- It was suggested that Vodafone has quietly initiated expansion of its Global Security Operations Centre in Germany. [p.23.]
- INTERVIEW: Chris Robbins — a former Vodafone executive, and now Chief Customer Officer at Vodafone’s Eastern Europe ally Bité Group — spoke to Vodafonewatch about the companies’ long-running Partner Markets relationship, providing an update on the services the Group is pushing out to the federation’s members, and what opportunities the scheme offers to suppliers. The interview also touched on potential (but currently minimal) competition to the Partner Markets initiative — an emerging threat, demonstrated recently by reports that Telefónica Group is seeking to usurp Vodafone’s plans for an alliance with former investment Polkomtel. [pp.24, 31-35.]
- EUROPE: Controversy continued over Vodafone Hungary’s new, state-owned competitor after the consortium was confirmed as the winner of a 900MHz licence. Vodafone Czech Republic could also face fresh competition after its telecoms regulator confirmed it will begin consultations on a new, multi-band frequency auction in the coming weeks. [pp.36, 43.]
- VfD indicated that it is set to expand its sparse range of Long Term Evolution devices, and announce further urban LTE deployments, as part of its ongoing rollout of fixed and mobile services based on the technology. Meanwhile, VfP indicated it is close to becoming the second controlled OpCo to launch LTE, once it gains clearance to switch on coverage in several of the country’s major cities. [pp.39, 47.]
- VfD expanded ties with European IT provider Computacenter, as part of ongoing efforts to widen its enterprise service portfolio. [p.41.]
- As Group senior management continued to flag plans to increase outsourcing of functions in its pressured European markets, reports emerged that Bertelsmann’s Arvato outsourced services division could be set for a deal to manage Vodafone Germany’s broadband customer services unit. Vodafone Romania also farmed out field operations to Huawei Technologies, in what appears to be the vendor’s first such agreement with a Europe Region business. Meanwhile, Vodafone UK outsourced yet another customer service function, transferring over 200 business-to-business services jobs to Teleperformance. [pp.40, 48, 51.]
- Vodafone Romania was said to have ended a retail outsourcing arrangement with local partner Fonomat, in a possible reflection of wider Group movement towards greater, direct control of retail and distribution. [p.49.]
- AFRICA, MIDDLE EAST AND ASIA-PACIFIC: Further doubts were expressed over Vodafone and partner Hutchison Whampoa’s commitment to joint venture Vodafone Hutchison Australia, following yet another weak set of results, and confirmation that it faces a sizeable payout for renewal of expiring 800MHz and 1800MHz licences. [pp.53-55, 57.]
- VfIn flagged a Nokia Siemens Networks-led upgrade of its data-billing capabilities, in a project it said could help it boost its challenged 3G rollout programme. [p.61.]
- Vodacom Group formally opened Vodafone’s new, South African Site Solutions Innovation Centre, as part of Group efforts to alleviate energy cost pressures, and in a mark of recent radiation of research and development activity to OpCos outside of Europe. Further signs emerged that Vodacom is close to offloading its troubled business in the Democratic Republic of Congo. [pp.62, 63.]
Vodafonewatch Report #99 February 2012 Snapshot
February 24, 2012
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Table of Contents
1 Executive brief
4 Q3 FY11-12
4 Management update
4 Group preps more cuts as euro pain bites deeper
4 Table 1. Vodafone Group, Q3 FY11-12 financial highlights
5 Is Group digging itself a rut?
6 Central functions’ rise to prominence continues with new efficiency drive
6 Data growth down again
7 Table 2. Vodafone, Q3 FY11-12 geographic revenue analysis
8 Table 3. Vodafone Group, Q3 FY11-12 analysis of proportionate revenue mix
8 Europe: three-speed
9 Italian “shock” causes alarm
9 AMAP: mixed, again
10 Table 4. Vodafone OpCo average revenue per user and churn analysis, Q3 FY11-12
10 VHA mess continues to embarrass — time to exit looming?
11 Guidance: OK, for now
12 Reaction: investors, analysts still on-side
13 Society
13 Group
13 M&A
13 Vodafone mulls C&W Worldwide bid to fuel cost drive
13 Ex-Vodafone Chief Exec seeks to de-clutter
14 Suppliers
14 Just browsing
14 Group continues to aim for vertical expansion
16 Group forced to rethink in Greece as Wind talks end
16 Group turns focus to “operational cooperation”
17 Merger mooted in Portugal as Group pursues cable ties
17 ZON shareholders reposition
18 Piramal doubles up in India, reaffirms 2013 exit plan
18 Essar era quietly ends
19 Operations
19 Vodafone beefing up global security facility
20 Partner Markets
20 Polkomtel to jilt Partner Markets?
20 Threat emerging as rivals mimic Group initiatives
21 People
21 VfIn revamps top hierarchy amid growth, M&A focus
22 Pieters freshens up top tier
23 People movement highlights
24 Investments and associates
24 Terminals
24 Terminal highlights
25 TWC targets H1 launch of VZW partnership
25 Companies remain tight-lipped on development JV
25 VZW remains confident on spectrum buy approval
27 Interview
27 Q&A: Bité Group’s Chris Robbins
27 Roaming provides payback on its own; Vodafone’s supplier relationships, branding, and data provide bonus
28 Bité Group’s Chris Robbins
28 Bité: overview
29 Bité Group’s Chris Robbins
29 Partner Markets missing SME/enterprise opportunities — a function of VGE subordination?
30 Bité Group’s Chris Robbins
30 Vodafone Turkey turnaround a key case study
31 Interview opportunities
31 Partner Markets competition yet to show through
32 Europe Region
32 Czech Republic
32 Digital dividend auction penned for late-2012
32 Possibility for new player in market mooted
33 Germany
33 Q3 FY11-12: growth edges up as MTR impact eases
33 Table 5. Vodafone Germany, Q3 FY11-12 revenue analysis
34 VfD seeks cable partner to gang up on DT
34 Wider courting of cablecos taking place?
35 RealNetworks to switch off, revamp Unifi offering
35 LTE users jump 50%, but Vodafone coy on ARPU
35 City rollout is gradual
36 Arvato in frame for fixed-line services deal
36 Internal offshorers lose out
37 VfD, Computacenter tie on enterprise ICT
38 Hungary
38 Controversy reins as state-led new entrant confirmed
38 VfH adds 2MHz to existing 900MHz rights; 2G liberalisation confirmed
38 Reserve price oddity
39 Ireland
39 Division over competitive benefits, state impact
41 Italy
41 Q3 FY11-12: Group claims resilience, despite Q3 “shock”
41 Table 6. Vodafone Italy, Q3 FY11-12 revenue analysis
42 Netherlands
42 Colao sees “prolonged” battle
43 Portugal
43 VfP preps LTE launch
43 Still no LTE smartphones
44 Romania
44 Huawei wins field operations deal
44 First European break
45 VfR ends Fonomat retail partnership — report
45 Tallies with wider Group push to “go direct” on distribution
46 Spain
46 Q3 FY11-12: VfS “regaining competitiveness”
46 Table 7. Vodafone Spain, Q3 FY11-12 revenue analysis
47 United Kingdom
47 Q3 FY11-12: economy, competition hits data growth
47 Table 8. Vodafone UK, Q3 FY11-12 revenue analysis
47 MTR cuts hurt, as challenge to block reductions backfires
48 Data growth more than halves in a year; integrated plans not a catch-all
48 Teleperformance gains B2B services deal
49 Africa, Asia-Pacific & Middle East Region
49 Australia — Vodafone Hutchison Australia
49 Q3 FY11-12: Colao displeased with VHA progress
49 VHA looks to Turkey for solace
50 Fiji
50 Shareholders’ patience wearing thin…
50 Comment: Read may become VHA fall guy, but Colao could also be damaged
51 Qatar
51 “Hundreds” of jobs to go as VHA restructures
52 VHA hit with £1bn licence renewal bill
52 Expenses pile-up for VHA as Group patience wears thin
54 India
54 Q3 FY11-12: VfIn buoyed by much-needed rates uptick
54 Table 9. Vodafone Essar Ltd, Q3 FY11-12 revenue analysis
55 Kenya — Safaricom
55 Vodafone eyes M&A opportunities after licence cull
55 Eight feel pain
56 New Zealand
57 Nigeria — Vodacom
57 VfIn to address data charging via NSN deal
57 One year on; still no 3G numbers
58 Delta flags multi-state UPS win
58 South Africa — Vodacom
58 Vodacom opens green technology centre
59 Zambia — Vodacom
59 ‘Per-node’ emissions targets being developed for emerging markets
59 Democratic Republic of Congo — Vodacom
59 Congo sale moves closer; MTN, Unitel again linked
60 Index
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Vodafone Deutschland mulls Bundesliga bid as IPTV content rivalry hots up
February 1, 2012
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Vodafone Germany (VfD) was reported to be considering a bid for the broadcast rights to Bundesliga football matches, to boost the content line-up on its Vodafone TV Internet Protocol television (IPTV) service (Vodafonewatch, passim).
In an interview with Horizont.net, Dhananjay Mirchandani, Director of Access and Home Video at VfD, reiterated that the OpCo (and Vodafone, globally) is making a push to expand Vodafone TV‘s programming (Vodafonewatch, #93), which may include competing for the right to broadcast the 2013-2014 season. He did not rule out entering a cooperation agreement with other Bundesliga rights holders.
More broadly, Mirchandani went on to say that content is a “lucrative business”, and one which the OpCo plans to “expand significantly”. To this end, VfD added three additional channels to Vodafone TV in January 2012: FOX; Romance TV; and Travel Channel.
DT, Sky among rivals
Negotiations over Bundesliga rights are recently reported to have been initiated by the German football association, Deutsche Fußball Liga. If VfD seeks to compete for them, it will almost certainly go up against incumbent rival, Deutsche Telekom (DT), which currently offers Bundesliga coverage on its competitive Entertain IPTV offering; and current, ‘basic’ rights holder, Sky Deutschland — which also recently expressed an interest in expanding its own Bundesliga content to IPTV and mobile subscribers. It is understood that the negotiations are likely to be completed by May 2012.
[Further reference: Deutsche Telekomwatch, #5; Exklusiv: Vodafone liebäugelt mit der Bundesliga / ausbau von Vodafone TV soll kundenzahl zeitnah verdoppeln -- Horizont.net, 11 January 2012; Vodafone TV programm wächst weite -- Vodafone, 11 January 2012.]
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Vodafonewatch Report #98 December 2011-January 2012 Executive Brief
February 1, 2012
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- GROUP: Vodafone received much-needed positive news in India, after the country’s Supreme Court dismissed the government’s high-profile, sizeable capital gains tax claim against the Group, in relation to its 2007 acquisition of Vodafone India. It was widely suggested that the move could prove transformative for VfIn, persuading Vodafone to up investment locally, and move towards a flotation of the OpCo — although the move far from wipes away all regulatory and operational problems faced in India. Further, wider ownership changes, beyond a listing, appear to remain on the cards for VfIn. [pp.33, 34.]
- Vodafone highlighted a “strategic partnership” with French Polynesian startup operator Pacific Mobile Telecom, reviving links first flagged in 2009. PMT will join Vodafone’s Partner Markets programme and adopt Group branding, but it is not yet clear whether Vodafone has taken equity in the company. The move came as Polkomtel indicated it may also join Partner Markets, with Vodafone said to have pushed for a deal following its exit from the Polish operator in 2011. [pp.4, 5.]
- Handset rivals Huawei and Research in Motion were among suppliers seeking to strengthen their Vodafone account teams — the former, to support its European terminal push, and the latter to expand work with Vodafone Global Enterprise. [p.7.]
- Verizon Wireless used January 2012′s Consumer Electronics Show to trumpet a flowering of third-party machine-to-machine communications innovation around its Long Term Evolution network — activity that will have been watched with a mix of envy and anticipation by Vodafone (considering its growing enterprise ties with VZW, and own connected device efforts). VZW also boosted its M2M push by taking full control of its nPhase joint venture with Qualcomm. [pp.16-18.]
- There was less positive LTE-related news for VZW after two more high-profile outages hit subscribers to the flagship service, with bugs in its underlying IMS platform again deemed responsible. [p.15.]
- EUROPE: Vodafone Germany hinted at plans to compete for Bundesliga distribution rights, as Vodafone continues efforts to boost content for its fledgling Vodafone TV pay-television service in Europe. [pp.20, 21.]
- Vodafone Spain and local rivals Orange and Telefónica declared plans to perform the Group’s first RCS-e platform launch in the coming months, with further deployments planned elsewhere in Europe. [pp.24-26.]
- Vodafone continued to face considerable outlay on renewal of 2G licences that are expiring, en masse, throughout Europe and beyond. The Netherlands said it is to reserve resources for at least two new entrants when it sells existing and new rights in October 2012, increasing Vodafone Netherlands’ competitive threats. Romanian regulator ANCOM is also to auction Vodafone Romania’s expiring 2G licences, as part of a wider market shake-up, while Australia’s government proposed that Vodafone Hutchison Australia and rivals be obliged to pay large fees to renew 800MHz and 1800MHz rights. [pp.21, 22, 24, 25, 30.]
- However, there was some good news for Vodafone UK in regulator Ofcom’s latest digital dividend auction proposals, with plans to give market leader Everything Everywhere priority access to 800MHz frequencies being dropped. [pp.27, 28.]
- AFRICA, MIDDLE EAST, AND ASIA-PACIFIC: Challenged Australian joint venture VHA furthered diversification plans, connecting its first customers in a trial of the government’s National Broadband Network, and highlighting a new suite of mobile TV services, offering free and paid-for programming. [p.31.]
- The future of Vodafone Essar’s strategically vital 3G roaming deal with Indus Towers partners Bharti Airtel and Idea Cellular remained in doubt, after the country’s Department of Telecommunications placed a ban order on the operators. The companies are challenging the decision to the country’s India’s Telecom Disputes Settlement Appellate Tribunal. [p.35.]
- Uncertainty also continued over Vodacom’s plans to launch LTE in South Africa, with new proposals by regulator ICASA raising ownership complications for the company. Pieter Uys, Chief Executive of Vodacom Group, described an LTE launch as unlikely in 2012. [p.38.]
- Uys’ comments came as it was confirmed that he faces a new competitive challenge from predecessor Alan Knott-Craig, who is to return to mobile sector as Chief Executive of South Africa’s number-three player Cell C. [p.6.]
- Vodacom Tanzania mooted plans to outsource passive infrastructure, continuing African OpCos’ shift towards managed network services, amid rising cost pressures. [p.40.]
Vodafonewatch Report #98 December 2011-January 2012 Snapshot
February 1, 2012
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Table of Contents
1 Executive brief
4 Group
4 Partner Markets
4 Group’s Polynesian venture resurfaces
5 People
5 People movement highlights
6 Global Enterprise
7 Suppliers
7 Supplier people movement highlights
8 Corporate
8 Terminals
8 Terminal highlights
9 Investments and associates
9 VZW “surprised” by iPhone 4S impact; profit takes hit
9 2.2 million LTE devices shifted
10 VZW targets new expense reductions, amid margin squeeze
11 VZW, Comcast move swiftly on multi-play partnership
12 Other partners yet to reveal plans
12 VZ clearing path for Vodafone merger — analysts
14 VoLTE launch now planned for 2013
15 M&A
15 More IMS bugs hit VZW LTE network
16 M2M, connected device innovations come to fore at CES
20 Europe Region
20 Germany
20 VfD freed for urban LTE rollout in Schleswig-Holstein
20 VfD mulls Bundesliga bid as IPTV content rivalry hots up
21 Netherlands
21 DT, Sky among rivals
21 Netherlands
21 Auction pencilled for October; new entrants get leg-up
22 Portugal
22 VfN sells BelCompany B2B unit
22 Portugal
22 VfP swaps out mediation system
23 Romania
23 ANCOM seeks windfall from 900MHz/1800MHz sell-off
23 VfR licence sees last minute extension
24 Spain
24 VfS and rivals prep RCS-e launch
25 RCS now needs to move beyond annual MWC PR puffery
26 Hungary
26 Ireland
26 A place for RCS in growth markets
26 Vodafone, rivals face MVNO pricing probe
27 United Kingdom
27 Turkey
27 Atos, Ericsson tie with VfT on app development
27 EE hit as Ofcom changes 800MHz plans again
28 EE offered 1800MHz LTE consolation, but still seen as main loser
28 EE hits out at Ofcom
28 Rural coverage obligations also to be tweaked
30 Africa, Asia-Pacific & Middle East Region
30 Australia — Vodafone Hutchison Australia
30 Australia — Vodafone Hutchison Australia
30 VHA hit as government seeks renewal windfall
31 VHA’s NBN pilot goes live, with TV partnership
31 VHA seeks jump on Optus with Mobile TV offering
32 Egypt
32 Ghana
32 VfEg updates subscriber data system
33 India
33 Vodafone prevails in CGT battle
33 Four-year worry removed
33 Essar payout due?
34 A turning point?
35 Kenya — Safaricom
35 Wrangling over 3G roaming deal goes on
36 Qatar
36 Regulator seeks to up QoS focus
36 Site-sharing revival?
38 South Africa
38 South African LTE picture remains muddied
38 1800MHz LTE rollout not in plan
38 ICASA proposals pose problems
39 More delays expected
39 Democratic Republic of Congo — Vodacom
39 Vodacom assures that Congo solution “getting closer”
40 Tanzania
40 VdT mulls tower outsourcing move
41 Zambia
41 AfriConnect taps Airspan for network revamp
42 Index
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Partner Markets: Chile’s Entel re‑affirms Vodafone ties
December 22, 2011
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Vodafone quietly renewed its three-year association with Entel PCS, the mobile subsidiary of Chilean incumbent operator Entel — continuing recent strengthening of the Group’s Partner Markets federation.
The move was revealed by Felipe Prieto, Chief Financial Officer of Entel, on its Q3 FY11 (July-September 2011) earnings conference call, having taken place a “couple of months” previously. Entel PCS joined Partner Markets in May 2008, partly replacing the Group’s previous multi-country arrangement with Latin American regional operator América Móvil (Vodafonewatch, 2009.06).
Renewal of the two companies’ partnership does not come as a major surprise, with Entel having been one of the federation’s more active allies in recent years, particularly around consumer mobile value-added services. The operator, for example, markets Vodafone’s low-footprint mobile browser, developed with Opera Software, and has been regularly mooted to be working with the Group on mobile remittances (Vodafonewatch, 2010.01 and #87).
Entel pays for procurement, new services intelligence
Prieto highlighted best practice sharing as a key positive of the arrangement — as previously flagged via cooperation between Entel and Vodafone on Long Term Evolution testing (Vodafonewatch, 2009.07 and 2010.02).
“ [The partnership has been] working quite well. The way it works, we [pay] an annual fee and that opens the door to us to participate in different areas of the ‘Vodafone world’ — let’s say, purchasing, development of products, roaming agreements, and if we need to launch a new service, we [set up] a task force, we use all of the knowledge that Vodafone has, in order to understand their experience when they launch… services in some more developed countries… ”
“ The same [happens] when we need to reshape the strategy or the business models — for instance, now that we’re doing this integration within the mobile and the fixed business in the company, we are analysing what they have seen in the world, what they have learned about that, and we share all of that. ”
“ In procurement, even though we do not buy with them, we share prices… ”
“ Also, the roaming agreement…when our customers go out of Chile, the preferred network is Vodafone’s network, and when Vodafone’s clients come to Chile, the preferred network and the best conditions are with Entel. ”
– Prieto.
LatAm still a ‘whitespot’
Entel’s renewal comes amid signs that Vodafone has adopted a more assertive approach to its Partner Markets relationships, following a recent review of the division, and its amalgamation within the Group Commercial unit, run by Morten Lundal, during 2010 (Vodafonewatch, 2010.04 and #85).
However, the federation continues to have large gaps in its footprint — of which Latin America is one of the most prominent, with Digicel Group and Entel the sole regional members. Vodafone could well be expected to address this in the near future, especially as multinational corporate arm, Vodafone Global Enterprise (whose expansion is intertwined with that of Partner Markets), is understood to be pushing for alliances in the region (Vodafonewatch, #86 and #87).
Partner Markets arrangements in full
Currently, Vodafonewatch estimates that Partner Markets — which is run out of regional offices in Düsseldorf, Germany; Hong Kong; London, UK; and Moscow, Russia — brings around 60 additional markets to the Vodafone empire, taking the Group’s total reach to around 90 (when including affiliates, OpCos, and strategic partnerships).
Table 11. Vodafone Partner Markets, 1 December 2011
[Table not included in this abstract]
Sources: Market Mettle, Vodafone.
Table 12. Vodafone Group, non-OpCo relationships
[Table not included in this abstract]
Sources: Market Mettle, Vodafone.
[Further reference: Q3 2011 Empresa Nacional de Telecomunicaciones SA earnings conference call -- final -- FD Wire, 8 November 2011.]
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Vodafonewatch Report #97 November-December 2011 Executive Brief
December 22, 2011
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- GROUP: Vodafone reassured investors with a set of Q2 FY11-12 financials that was strong, relative to wobbling European rivals. While Group service revenue growth slowed for a second successive quarter, the 1.3% increase was ahead of analyst expectations, and Vodafone further calmed jitters by raising its core profit guidance for the full year. The performance was not faultless, however — with alarms raised over the Group’s ongoing, high-level effort to diversify beyond ‘mature voice’, with growth continuing to slow in both data revenue and sales at the emerging market-led Africa, Middle East, and Asia-Pacific Region. [pp.4-16.]
- Vodafone completed its exit from Polish mobile operator Polkomtel, on schedule, and appeared to cut ties with the operator altogether, with no mention as yet of plans for a Partner Markets relationship. The move leaves just three minority operator investments in the Group’s portfolio, down from seven in 2010 — Bharti Airtel, Verizon Wireless, and Zain Bahrain. [p.18.]
- The Partner Markets programme continued to build, with renewal of the Group’s association with Chile’s Entel PCS, and signals of plans to expand retail services activity with members. [pp.21-24.]
- Ongoing mobile financial services activity saw the Group finally extend its Vodafone Money Transfer (VMT) remittance platform to India, amid signs of behind-the-scenes work to integrate contactless payment technology with VMT, which could see the platform extended to Europe for the first time. Vodafone pledged to widen its rollout of Charge-to-Bill capabilities in the coming months, including to emerging markets. [pp.28, 65.]
- Verizon Wireless sprung a major surprise by tying with four US cablecos on a proposed deal that would significantly strengthen its spectrum portfolio, and change dynamics within both parent Verizon Communications and its relationship with Vodafone. [pp.33-35.]
- EUROPE: Vodafone Germany (VfD) appeared to have stolen an early march on key rival T-Mobile Deutschland, in terms of Long Term Evolution development, possibly reflecting the latter’s greater quandary over cannibalisation of legacy broadband investments. Vodafone claimed to have made around twice the level of progress of T-Mobile in base station footprint and subscriber uptake, although both remain very early stage. Vodafone Italy indicated it is to follow VfD in rolling out LTE in 2012. [pp.38, 39, 45.]
- Three OpCos expanded their spectrum portfolios, amid Europe’s recent flurry of frequency auctions — Vodafone Greece acquired (and reacquired) batches of 900MHz and 1800MHz frequencies; Vodafone Portugal became the fourth OpCo to secure 800MHz ‘digital dividend’ rights, as well as snapping up holdings in multiple other bands; and Vodafone Spain bought a block of Time Division Duplex 2.6GHz airwaves to add to frequencies acquired earlier in 2011. Meanwhile, Vodafone Hungary was confirmed as a bidder in the country’s upcoming 900MHz spectrum auction, scheduled for January 2012, but it will face competition from both outside players, and a controversial state consortium that includes partner Magyar Posta. [pp.41, 42, 48, 52.]
- Meanwhile, embarrassment grows more acute for the UK, as other countries complete digital dividend frequency sell-offs. Vodafone UK, rivals, and regulator Ofcom remained enmeshed in wrangling and recriminations over its auction, now not expected to take place until at least late-2012. [p.56.]
- Vodafone continued its policy of incremental, in-market takeovers, with the completion of Vodafone Turkey’s buyout of local IT and telecoms player Koç.net, and indications of continuing interest by Vodafone Italy in regional alternative telco Metroweb. Reports also suggested that Vodafone Spain is in talks over a takeover of the local Simyo virtual network operator arm of Dutch telco KPN, to bolster its broader effort to combat pressure from discount players. At the same time, attention continued to turn onto prospects for wider involvement by Vodafone in European mobile consolidation, with speculation emerging over a bid for one of its German rivals (including, possibly, KPN’s E-Plus), and OTE, its Greek competitor, offering support for Vodafone Greece’s ongoing merger talks with Wind Hellas. [pp.19, 20, 40, 44, 51, 52, 53.]
- Vodafone Netherlands became the seventh Europe Region OpCo to see a change of Chief Executive in the last 18 months, with Vodacom Group’s Rob Shuter replacing Jens Schulte-Bockum. Shuter — one of now three emerging markets executives drafted into to an OpCo Chief Executive role in Europe in the last year. Shuter takes over one of Vodafone’s better performing regional OpCos, but will face serious challenges, including over-the-top threats and a newly-announced Netherlands Competition Authority probe into alleged data pricing collusion by VfN and rivals. [pp.27, 44.]
- AFRICA, MIDDLE EAST AND ASIA-PACIFIC: Vodafone Hutchison Australia continued to count the cost of recent quality-of-service failures, seeing: ongoing erosion of its sales and customer base; a legal wrangle with supplier Nokia Siemens Networks come to light; and Vittorio Colao, Chief Executive of Vodafone pointedly decline to assure that the joint venture remains a “core” Group asset. [pp.57-59.]
- Safaricom signalled a shift towards managed network services, after inviting applications for a build-operate-maintain contract on a new 4, 000km fibre-optic transmission network. The move came as rising operating costs, fuelled by inflation and currency depreciation, continued to affect the Kenyan OpCo and become a key theme in the Group emerging markets businesses. [pp.66-69.]
- Vodacom Group’s interest in Malawi-based mobile operator Telekom Networks Malawi — part of renewed international expansion ambitions — appeared to hit the buffers, with talks breaking down over pricing. [p.71.]
Vodafonewatch Report #97 November-December 2011 Snapshot
December 22, 2011
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Table of Contents
1 Executive brief
4 H1 FY11-12
4 Management update
4 Group calms euro jitters despite growth slowing again
4 Table 1. Vodafone Group, financial highlights, H1 FY11-12
5 Colao plays down talk of a crisis-inspired offensive
5 Revenue, EBITDA beat forecasts
6 New cost drive in pipeline; will vendor squeeze come back to bite?
7 Data growth sees untimely slowdown
7 Table 2. Vodafone Group, revenue summary, H1 FY11-12
8 Table 3. Vodafone Group, ARPU by country, Q2 FY11-12
9 Table 4. Vodafone Group, Voice minutes by country (millions), Q2 FY11-12
10 Europe: low expectations beaten
10 Table 5. Vodafone Europe region, financial highlights, H1 FY11-12
10 Table 6. Vodafone Europe, service revenue summary, H1 FY11-12
11 PIGS OpCos continue to shrink
11 MTR impact lifting
12 AMAP: not 100% convincing; Vodacom under pressure
12 Table 7. Vodafone Africa, Middle East and Asia Pacific financial highlights, H1 FY11-12
12 Table 8. Vodafone Africa, Middle East and Asia Pacific, service revenue summary, H1 FY11-12
13 Expenses a rising threat, as VfEL and Safaricom squeezed
13 Table 9. Vodafone Group, churn by country, Q2 FY11-12
13 VHA damage lingers
14 Table 10. Vodafone Group, mobile customer numbers (’000), H1 FY11-12
14 Guidance: course steady, despite macro fog
15 Capex timing hit by network rebuilds
15 Reaction: investors reassured
16 Comment: is Supermobile sufficiently super?
18 Group
18 Global Enterprise
18 M&A
18 Vodafone firms up Polish exit
18 No Partner Markets deal, yet
18 Further sales could focus on controlled businesses
19 Global Enterprise
19 VGE furthers unified comms push with Bluefish buy
19 Consolidation again mooted for German mobile players
19 Vodafone, KPN, linked with O2
21 Partner Markets
21 Airtel-Vodafone deal flagged as Partner Markets makes play in retail
21 Partner Markets
21 Chile’s Entel re-affirms Vodafone ties
21 Entel pays for procurement, new services intelligence
22 Society
22 LatAm still a ‘whitespot’
22 Partner Markets arrangements in full
22 Table 11. Vodafone Partner Markets, 1 December 2011
23 Suppliers
24 Technology
24 “…out of context…”
24 Table 12. Vodafone Group, non-OpCo relationships
25 People
25 People movement highlights
26 People
27 Products and services
27 Operators attempt show of strength on NFC…
27 Shuter to take over in Netherlands
27 Emerging markets execs gaining power; distinction disappearing
27 Half of Europe Region OpCos now have a new Head
27 Table 13. Vodafone OpCos and investments where leadership has changed in last 18 months
28 Products and services
28 …but will cross-network activity overcome hurdles?
28 Products and services
28 Colao eyes Charge-to-Bill value in and beyond Europe
28 Eight markets now covered
29 Terminals
29 Suppliers
29 Supplier people movement highlights
29 Terminals
29 Mobile terminal highlights
30 Terminals
30 Mobile terminal highlights
31 Investments and associates
31 Investments and associates
31 Airtel, Huawei tie as BWA rollout sees squeeze
31 LTE-TDD remains in long grass — one less problem for VfEL
33 Investments and associates
33 Unlikely cable alliance sees Verizon bend to help VZW
33 DoJ, FCC approval required
34 Investments and associates
34 Mobile broadband boost, via high-frequency holdings
34 Rivals leave door wide open to spectrum grab
35 Investments and associates
35 Balance of power shifting within VZ, with implications for Vodafone
36 Europe Region
36 Albania
36 Germany
36 Czech Republic
36 VfCZ pilots Dual Carrier HSPA+ with enterprise clients
36 Germany
36 Q2 FY11-12: VfD seeks new savings as sales stay flat
37 Germany
37 Table 14. Vodafone Germany, financial highlights, H1 FY11-12
37 Data: onus on VfD to support growth, as VfUK slows
38 Germany
38 Vodafone gains early LTE lead…
39 …but 3G handover remains an issue
39 VfD in network-sharing talks
40 Greece
40 Greece
40 Rival backs Wind merger plan
40 Talks drag on
41 VfGr adds 900MHz, 1800MHz frequencies
41 Auction pushes Vodafone, Wind closer together
42 Hungary
42 Hungary
42 Six companies to compete in 900MHz auction
42 State consortium criticised
43 Ireland
43 Italy
43 Italy
43 Q2 FY11-12: VfIt “flexible enough to meet threats”
43 Table 15. Vodafone Italy, financial highlights, H1 FY11-12
44 Italy
44 Netherlands
44 VfIt reports sixth sales drop in a row, as conditions bite
44 Metroweb back on radar as VfIt seeks NGN push
45 Netherlands
45 VfIt preps 2012 LTE rollout
45 LTE again positioned as fixed-line alternative
46 Netherlands
46 Netherlands
46 VfN ties with Synchronoss on device management
48 Portugal
48 Portugal
48 VfP picks up digital dividend spectrum
48 3G/HSPA expansion planned; no word on LTE
49 Spain
49 Spain
49 Q2 FY11-12: Profit dives 25% amid transition pain
49 Table 16. Vodafone Spain, financial highlights, H1 FY11-12
50 Romania
50 Executives claim progress in turnaround
50 Customer service revamp highlighted
51 VfS in talks to buy Simyo — report
52 VfS adds 2.6GHz TDD frequencies
52 Turkey
52 Q2 FY11-12: VfT moves back into black
53 Table 17. Vodafone Turkey, financial highlights, H1 FY11-12
53 Koç.net buy completed
54 United Kingdom
54 Q2 FY11-12: VfUK continues to build sales revival
54 Table 18. Vodafone UK, financial highlights, H1 FY11-12
55 United Kingdom
55 Data growth slowing
55 Fixed-line expands behind-the-scenes
55 Customer costs remain on the up
56 United Kingdom
56 Recriminations spread over auction delays
57 Africa, Asia-Pacific & Middle East Region
57 Australia — Vodafone Hutchison Australia
57 Australia — Vodafone Hutchison Australia
57 Q2 FY11-12: VHA on notice to solve merger mess
58 Egypt
58 Problems not yet in hand
58 Network overhaul moves forward
59 Ghana
59 Colao to VHA — “fix it”
59 VHA, NSN in legal battle over network performance payments
61 India — Vodafone Essar
61 India — Vodafone Essar
61 Q2 FY11-12: Price-easing gives VfEL much-needed boost
61 Table 19. Vodafone India, financial highlights, H1 FY11-12
61 Data: 2G remains focus, amid 3G hindrances
62 India — Vodafone Essar
62 Read assures on scale benefits as VfEL dips back into loss
62 Regulatory bog continues to get stickier
63 India — Vodafone Essar
64 New Zealand
64 Indus IT services deal up for grabs — report
64 Shared Services unit planning new site?
65 New Zealand
65 Group finally takes VMT platform to India
65 ICICI partnership goes off radar
65 VMT also shortly set for first appearance in Europe?
66 Qatar
66 Kenya — Safaricom
66 H1 FY11-12: Profit halves amid cost, price squeeze
66 Confidence qualified
67 Capital spend increased as Safaricom seeks to transform
67 Share price dive — could Vodafone take a punt?
68 M-PESA disrupted by another fault
68 Safaricom seeks opex savings with shift to managed fibre
69 Wider move planned to managed services?
70 South Africa — Vodacom
70 South Africa — Vodacom
70 Q2 FY11-12: Competition hits Vodacom data growth
70 Table 20. Vodacom Group, financial highlights, H1 FY11-12
71 Democratic Republic of Congo — Vodacom
71 Vodacom Malawi entrance hits price roadblock
71 Mozambique — Vodacom
71 Huawei to replace VdM network
72 Index
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