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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Vodafone UK partners Virgin Media on public sector deal
December 7, 2011
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Lambeth Council, a local authority in London, awarded a £100m (EUR115m) telecoms services contract to a joint bid from Vodafone UK (VfUK) and Virgin Media Business, the cable operator’s enterprise arm, after earlier deals with their mutual rivals BT Global Services and Orange UK were put out to tender.
The six-year deal, called Project Signal, will see the two providers supply services to around 180 council buildings and 4, 500 users, with VfUK providing fixed and mobile telephony services. Virgin Media Business will contribute data communications and wide area network infrastructure, including a public access Wi-Fi network in key council buildings and libraries. The new deal is said to contain an option to extend the contract for a further four years, as well as the possibility of expanding services to other organisations in the borough, via Lambeth’s “Co-operative Council” programme.
The Guardian reported that the Council hopes to achieve savings of £2m or more over the course of the contract, through “property rationalisation, the introduction of flexible mobile working for staff, and reduced call charges”. The former two elements indicate plans to implement Vodafone’s previously flagged flexible working framework, which VfUK also recently provided to West Berkshire Council, as well as implementing internally (Vodafonewatch, 2009.07).
The move comes following VfUK’s recent reorganisation of its public sector business, with new vertical units targeting central government, criminal justice, health, and local government clients (Vodafonewatch, #89).
Neither VfUK nor Virgin Media suggested their tie-up is more than a one-off, but the companies’ decision to team against BT does lend weight to suspicions over the status of VfUK’s two-way wholesale relationship with the incumbent, including on stagnant broadband and telephony offering Vodafone At Home (Vodafonewatch, #91 and passim).
Virgin Media: growing appeal as infill acquisition for VfUK?
Virgin Media’s successive large enterprise contract wins may strengthen its credibility as a fuller rival to wireline incumbent BT Group, and this could make it more interesting as acquisition prospect to a player like Vodafone, which, in other countries, has shown interest in wide area, fibre, and cable infrastructure, as part of its Total Communications strategy.
Virgin Media could boost Vodafone’s own credentials, at a time when reinvention of telcos as media companies is regaining currency (against the backdrop of growing fear of Internet Protocol-led mobile value-chain disenfranchisement). The cableco is the UK’s number-two pay-TV player and has experience as content creator. Further benefits for VfUK, which was relegated to third-place in the mobile segment by creation of Everything Everywhere, would include market consolidation and bulking up, and significant expansion of its consumer, business, and wholesale portfolios.
Such a deal would have echoes with other OpCos, notably Vodafone Germany, which subsumed the fixed operations of Arcor, operates in the pay-TV market, and has repeatedly been linked with possible cableco acquisitions. The mechanics of a deal could be convoluted, since benefits from optimising expensive debt and tax might be critical. Virgin Media currently has market valuation of £4.5bn (EUR5.3bn) and nearly as much debt.
[Further reference: Lambeth Council awards network services deal -- Guardian, 10 October 2011; Vodafone and Virgin clinch Lambeth deal -- Mobile Today, 12 October 2011.]
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Vodafonewatch Report #96 October-November 2011 Executive Brief
December 7, 2011
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- GROUP: Vodafone’s exit from Poland’s Polkomtel appeared set to conclude, after it and co-shareholders received approval from the country’s competition regulator for their sale to media mogul Zygmunt Solorz-Zak. However, the Group continues to be coy on whether it plans to retain a relationship with the operator when Solorz-Zak takes over. [p.4.]
- The last few months’ spike in OpCo board-level changes continued, following on in-country Chief Executive shake-ups and other moves to support Group-level emerging initiatives (particularly in India and the USA). Former TELUS executive Kevin Salvadori surfaced as the new Chief Technology Officer at Vodafone UK, following Jeni Mundy’s move to focus on the Verizon Communications partnership. New Safaricom Chief Executive Bob Collymore and Vodafone Romania counterpart Inaki Berroeta continued their recent management clear-outs by announcing a new Finance Director (John Tombleson) and Senior Director of Regulatory, Legal, and Corporate Affairs (Florina Tanase), respectively. [pp.7, 8.]
- Vodafone pulled few surprises in confirming that its Vodafone 360 web services offering is to be withdrawn at the end of 2011, although the Group has yet to outline how it will position and market some 360 components that are set to be retained or reworked. [p.9.]
- Vodafone saw two of its estranged Asian relationships morph into a competitive threat in India, with Bharti Airtel and SoftBank announcing a partnership to develop mobile services for the country. [p.11.]
- EUROPE: Vodafone Germany continued to meet resistance to its ongoing outsourcing programme, with workers protesting against planned ‘efficiencies’ within its fixed-line broadband customer services division. [p.15.]
- Vodafone Germany introduced LTE connectivity in its home city of Düsseldorf — the first leg of a programme to extend the technology to key urban areas in the coming weeks and months. The launch furthered Vodafone’s positioning of faster wireless networks as fixed-broadband enablers, with both landline and mobile plans on offer for residents of the city. Similarly, Vodafone Italy announced further progress in its 3G/HSPA-based 1000 Communities rural broadband programme, and Verizon Communications flagged intent to shortly roll out an in-home, LTE-based offering, using Verizon Wireless infrastructure. [pp.12, 16, 18.]
- While Germany’s LTE rollout progresses, uncertainty continues to dog the UK’s delayed auction of LTE-enabling digital dividend spectrum, with Ofcom announcing another round of consultation on the sell-off’s terms and conditions, and is now not expected to bring down the hammer until late-2012. [pp.19, 21.]
- Vodafone UK revealed a potentially interesting tie-up with cable player Virgin Media Business on a fixed-line and mobile services contract with London’s Lambeth Council. [p.22.]
- AFRICA, MIDDLE EAST, AND ASIA-PACIFIC: Vodafone Hutchison Australia continued efforts to put recent churn-inducing quality-of-service failures behind it, with the roll out of a new, multi-channel customer service system based on Alcatel-Lucent technology. [p.24.]
- India’s eagerly-awaited telecoms policy framework update was finally revealed, albeit in draft form. Some questions remained unanswered, and Vodafone itself had yet to respond publically, but other operators and investors appeared optimistic that the proposals — including frequency-trading and consolidation-related rule changes — could help ease competitive challenges and spectrum restrictions. Conversely, reports continued to indicate the government is taking a very close look at Vodafone Essar’s recent 3G roaming arrangement with Indus Towers’ partners Bharti Airtel and Idea Cellular — a deal geared towards offsetting the same pressures. [pp.26, 27, 29.]
- Vodafone Essar became the second emerging markets OpCo, after Vodacom South Africa, to release a mobile application store under the Group’s recent deal with white-label provider Appia. [p.29.]
- Activity continued to simmer around enterprise services in Africa, with Tim Gigg, Vodafone’s Head of International Transport Programmes, providing some interesting insight into the Group’s wide-scale regional infrastructure overhaul, to support OpCo’s Total Communications ambitions; and Kenyan associate Safaricom flagging the launch of a new family of hosted, on-demand IT services, dubbed SafaricomCLOUD. [pp.5-7, 31.]
- Local media reports suggested Safaricom is set to wrest at least partial control of its high-profile M-PESA mobile remittance system from Vodafone’s centrally-run platform – another reflection of the OpCo’s increasing confidence and capabilities in business-to-business services and infrastructure. [p.30.]
- Vodacom Group could be close to offloading its highly-challenged operation in the Democratic Republic of Congo, and progressing broader plans to reboot its regional presence, with talks reportedly taking place with several regional rivals over a sale of the business. [p.34.]
Vodafonewatch Report #96 October-November 2011 Snapshot
December 7, 2011
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Table of Contents
1 Executive brief
4 Group
4 M&A
4 Polkomtel exit clears antitrust hurdle
5 Operations
5 Gigg on managing Vodafone’s African network rollout
7 Global Enterprise
7 People
7 People movement highlights
8 Global Enterprise
8 PARTNER MARKETS
9 Regulatory
9 Products and services
9 Vodafone calls time on 360 adventure
9 Suppliers
9 Supplier people movement highlights
10 Society
10 Terminals
10 Mobile terminal highlights
11 Investments and associates
11 Investments and associates
11 Bharti, SoftBank gang up in India
12 Investments and associates
12 VZ confirms rural LTE broadband plan
12 DirecTV partnership to reach market?
14 Investments and associates
14 VZW ties with VMware in emerging BYOD space
15 Europe Region
15 Germany
15 Workers protest against broadband outsourcing plan
16 VfD takes LTE live in first city
17 Czech Republic
17 Greece
17 VfGr to bid in November sale, despite Greek woes
18 Ireland
18 Italy
18 Portugal
18 VfP denies interest in state broadcaster sell-off
18 VfP hits out over new MTR cuts
19 Italy
19 Netherlands
19 United Kingdom
19 Wrangling forces another digital dividend auction delay
19 Take two for consultation
19 UK falls further behind rivals’ progress
21 Romania
21 Spain
21 Stalemate
22 Vodafone partners Virgin Media on public sector deal
22 Virgin Media: growing appeal as infill acquisition for VfUK?
23 VfUK backs rural coverage push
23 Public femtocell trials planned
23 VfUK ties with Velti on prepaid retention
24 Africa, Asia-Pacific & Middle East Region
24 Australia — Vodafone Hutchison Australia
24 VHA signs ALU to help revamp customer service
24 Customer lawsuit escaped?
25 Ghana
25 Egypt
25 VfEg adds to Callidus sales software relationship
26 India — Vodafone Essar
26 New telecoms framework draft published
26 Operators’ response positive
27 Government seeks to boost Indian vendors
27 3G roaming deal remains under fire
29 Mozambique — Vodacom
29 Fragmented auction terms come back to bite
29 VfEL extends Appia app store deal to India
30 Kenya — Safaricom
30 Safaricom wants to regain M-PESA control — report
30 Outsourcing and hosting arrangements to be reviewed?
31 New Zealand
31 Safaricom expands into IaaS with SafaricomCLOUD
31 Clash with Quintica tie-up?
31 Broad targeting — enterprise, governments, NGOs, SMEs
32 Regional plans flagged again
32 Seven Seas acquisition mooted
33 New Zealand
33 VfNZ cleared for rural broadband investment
33 2degrees unhappy
34 South Africa — Vodacom
34 MTN in talks to provide Congo exit — reports
36 Tanzania — Vodacom
36 NSN completes VdT billing upgrade
37 Index
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Vodafone reboots Asian ties with Partner Markets; makes fresh start in Japan
October 19, 2011
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Vodafone unveiled a considerable shake-up of its strategic alliances in Asia-Pacific, with plans to phase out several bilateral Partner Markets arrangements in favour of tie-ups with members of the regional Conexus Mobile Alliance.
The reshuffle — billed by Vodafone as a boost for its multinational corporate (MNC) and roaming operations, but also appearing to cause significant collateral damage to legacy interests and relationships — will see the Group retaining two existing Partner Markets arrangements in Asian countries not covered by Conexus — with Celcom, in Malaysia, and Dialog, in Sri Lanka.
New alliances have been formed in six countries, officially replacing existing Partner Markets tie-ups as and when they expire (imminently, in some cases, with others presumably set to be wound down in the interim):
- In Hong Kong, the realignment will create yet another Group connection with Hutchison Telecom, seen as one of the more likely candidates for future merger and acquisition activity involving the Group (Vodafonewatch, passim). On the way out, from December 2011, is Vodafone’s six-year relationship with SmarTone-Vodafone — which, while having created brand exposure (and, presumably, royalty fees) for the Group, appears to have had precious little value beyond that. Douglas Li, Chief Executive of SmarTone, said the two companies’ “interests have diverged for some while, and, after extended discussions, both parties agreed it best for each to pursue its own course”. “Customers will not be affected in any way, as all services will continue unchanged”, added SmarTone.
- In Japan, the Group will tie with market leader NTT DoCoMo — essentially drawing a line under Vodafone’s ill-fated former Vodafone Japan operation, and subsequent financial and operational ties with the business’s acquirer SoftBank Corp. While significant, this might not come as a complete surprise, considering a conspicuous lack of cooperative noise from either company since Vodafone disposed its remaining interests in SoftBank during late-2011 (Vodafonewatch, #87). Interestingly, the aims of the DoCoMo relationship appear especially wide, covering “global corporate sales, terminals, and best practice sharing”. This raises questions, notably relating to the fast-emerging area of enterprise-class cloud computing, where NTT’s Dimension Data unit is the leading regional competitor in Africa to Vodacom Business, and a rival to the major international cloud operations of Verizon Business (to which Vodafone has appeared to be getting closer) and the nascent efforts of other operating companies.
- In the Philippines, where Partner Markets has no presence, Vodafone will form a partnership with cellco SMART Communications. A slight oddity here is that Vodafone Qatar recently created a mobile remittance partnership with SMART’s main rival Globe Telecom, despite SMART also being an active player in that space (Vodafonewatch, #87). However, as a unit of Philippine Long Distance Telephone Company (PLDT), 21% of SMART is owned by NTT DoCoMo.
- In Taiwan, Vodafone will team with mobile operator Far EasTone — replacing its relationship with rival and market leader Chunghwa Telecom. Sacrificing Chunghwa is likely to have been a wrench for the Group, with the Taiwanese operator forming one of the more recent additions to the Partner Markets federation (in late-2009 — Vodafonewatch, 2009.11), and the relationship appearing relatively active, particularly around smartphone deployment and purchasing (Vodafonewatch, #89). On the other hand, the link with Far EasTone better aligns Vodafone with former investment and “strategic cooperation” partner China Mobile, to which the Taiwanese telco is affiliated. It is not known how long the Chunghwa deal still has to run.
- In Singapore, StarHub will replace M1 as Vodafone’s local partner following expiry of the latter’s Partner Markets agreement on 31 December 2011. StarHub’s owners include Qatar Telecom (Qtel, a Vodafone Qatar rival), NTT, and ST Telemedia. ST’s state-owned parent, Temasek, also controls StarHub’s domestic rival Singapore Telecom, with in turn holds major investments in Vodafone competitors Airtel (India and Africa) and Optus (Australia), as well as rivals to other Partner Markets.
- In Thailand, a tie-up with TrueMove will supplant Vodafone’s links with rival Telenor-owned dtac — again ending a relatively recent (March 2009) and outwardly active relationship, even leading at one stage to speculation that Vodafone could buy into the operator (Vodafonewatch, 2009.07, 2009.08-09, and 2009.12).
Elsewhere, Vodafone also “intends” to form partnerships with other Conexus members, which include: KT, in South Korea; Vinaphone, in Vietnam; and Indosat (another Qtel investment) in Indonesia. None of these countries are currently covered by Partner Markets, although there was previously a relationship with Axiata’s XL, serving Indonesia.
Vodafone will not seek a tie-up with Conexus‘s remaining members — India’s state-owned operators Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd, which compete with the Group’s Indian OpCo Vodafone Essar (VfEL).
Axiata left looking half-in, half-out — still on the M&A menu?
Asian regional group Axiata now looks awkward. Having seen two of its investments dropped (XL and M1), two stronger operating companies remain Partner Markets: Celcom (Malaysia) and Dialog Telekom (Sri Lankan). The group also holds a stake in VfEL rival Idea Cellular and is the dominant force in Conexus rival Asia Mobility Initiative (AMI Alliance). AMI’s eight members include one present (Celcom) and four past (dtac, M1, SmarTone-Vodafone and XL) Partner Markets, with five affiliated to Axiata.
Previously, Vodafonewatch has wondered whether Axiata was being patiently lined up as an acquisition candidate for Vodafone, to fill out South-East Asia in its global portfolio, although the likelihood was lessened by the objections considered inevitable to a deal that would see a multinational take out a Malaysian ‘national champion’, and the further political challenges of consolidating Idea into VfEL, although the latter element might be very appealing in terms of market and spectrum consolidation.
Swisscom partnership extended
Shortly after announcing the Asian realignment, Vodafone disclosed that it has extended its four-year Partner Markets alliance with existing member (and former Swisscom Mobile partner) Swisscom, which had been due for expiry in 2012.
Partner Markets refocus showing through
Partner Markets has always been one of the more difficult-to-decipher operations within Vodafone, with the Group historically offering little concrete information to explain the division’s role, or financial performance, and individual partnerships appearing to fluctuate wildly in terms of ambition and payback.
In the past, Vodafonewatch suspected the division was to a large extent about the Group’s corporate ‘ego’, reflected in its tendency to define Partner Markets‘ significance by the number of markets it brought into the Vodafone empire, rather than anything substantive. This appeared evidenced in deals like the SmarTone partnership mentioned above, which seemingly offered little beyond brand exposure; and — to go back further — the division’s grandiose but ultimately ill-fated tie-up with Latin American giant América Móvil, which petered out pathetically in 2008-09 (Vodafonewatch, 2009.06). There have also been rumblings of discontent from other members, seemingly unwilling to passively project the Group’s branding and services, and seeking a more “two-way” relationship.
Perhaps inevitably, a more clear-headed Partner Markets has emerged amid the more restrained Group management of Chief Executive Vittorio Colao — effected, since 2009, by a behind-the-scenes review of the division’s aims and focus (Vodafonewatch, 2010.04); and its amalgamation into the Group Commercial business run by Morten Lundal (Vodafonewatch, 2010.09).
Vodafone has still yet to articulate the unit’s new make-up, but the Conexus partnership, and other recent deals, point to a division working more closely with other parts of the Group (including Group Terminals, Vodafone Global Enterprise, Vodafone Internet Services, and Vodafone Procurement Company) to create tangible value. While this could be seen as subjugation of Partner Markets — by giving it a supporting role to other central Group functions, and adopting a more equitable relationship with partners — it might also see the division benefiting from improved stability, having seen its membership eroded significantly since the América Móvil exit.
A further interpretation is that Vodafone has truly neutered its global ambitions, with Conexus featuring many of Asia’s alpha players, with whom Vodafone was considered at loggerheads in its expansionist periods, while Partner Markets traditionally resembled a menu of acquisition candidates and the unaligned.
Vodafone can be seen taking a more assertive and ruthless role with Partner Markets, culling those lacking commitment or less attractive, and, in doing so, appearing firmly to prioritise ‘market’ over ‘partner’, and so seemingly also taking a shorter-term direction.
[Further reference: SmarTone and Vodafone agree not to renew their marketing cooperation -- SmarTone, 19 September 2011; M1 and Vodafone end partnership -- M1, 20 September 2011; Vodafone and Conexus mobile alliance form strategic partnership -- Vodafone, 20 September 2011; Vodafone to swap M1 for StarHub from Jan -- Business Times, 21 September 2011; Vodafone details new AP approach -- Telecom Asia, 21 September 2011; Smart, Vodafone form strategic partnership -- PNA, 26 September 2011; Vodafone and Swisscom to extend their strategic partnership -- Vodafone, 29 September 2011; Vodafone partnership could boost StarHub's data roaming business -- The Edge, 29 September 2011.]
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