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Telefonicawatch, issue 2008.03

11 May 2008

GROUP: Rumours re-emerged that Telefónica could be looking at an acquisition of Dutch telco KPN, but the company again dismissed the speculation. There were also calls from Telecom Italia shareholders for Telefónica to consider a merger with Telecom Italia, in which it already holds a stake through the Telco SpA consortium. Telco SpA was reported to have increased its stake in the struggling Italian incumbent. [pp.3,5,47.]

Telefónicawatch

Issue: 2008.03
Covering: 13 March to 30 April 2008
Published: May 2008
Next issue: May/June 2008

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

SUMMARY

GROUP: Rumours re-emerged that Telefónica could be looking at an acquisition of Dutch telco KPN, but the company again dismissed the speculation. There were also calls from Telecom Italia shareholders for Telefónica to consider a merger with Telecom Italia, in which it already holds a stake through the Telco SpA consortium. Telco SpA was reported to have increased its stake in the struggling Italian incumbent. [pp.3,5,47.]

Telefónica invested an undisclosed amount in Loomia, a web personalisation platform developer, and a venture capital fund it backs also took a stake in digital solutions provider mmChannel. [p.4.]

TELEFÓNICA ESPAÑA: Telefónica España won a EUR1.7m contract extension to provide LAN and SAN services to Correos, the Spanish postal service. [p.7.]

Telefónica continued its strong performance in the Spanish broadband market, with its share remaining at around 56%, the growth in the market does appear to be declining however. Movistar España’s share of the mobile sector was also steady at 45% at the end of February. [pp.7-8.]

Telefónica España is to introduce a charge for caller-ID services for customers that do not take a bundled offering from the telco, and occasional international call makers will also see the cost of connections rise as the fixed-line business takes steps to encourage users to take more services from Telefónica. The price rises were criticised by consumer rights groups, one of which, Facua, is also critical of mobile pricing from Movistar and the other Spanish network operators. The consumer action group claims the operators are prepared to lose millions of price conscious customers to MVNOs rather than reduce costs for the majority of mobile users. [pp.8-9,10.]

A new mobile internet service was launched for the SME sector in Spain, offering mobile handset access to email based on push technology from SEVEN. A new mobile offering was also launched targeting parents and children. [p.9.]

Telefónica hosted trials of mobile TV interoperability on behalf of the Open Mobile Alliance. While the European Union threw its weight behind the DVB-H mobile TV standard, it seems possible Movistar may participate in pilot services based on TDtv technology. [p.10.]

Telefónica saw plans for a trial fibre-optic network capped by the regulator over concerns they would have too much of an impact on the fixed-line market. Meanwhile the Spanish regulator the CMT also cut wholesale broadband prices and introduced rules that would appear to enable “naked DSL” in the Spanish market, potentially prompting heightened competition. The EU appears to favour splitting the Telefónica network from its other operations, but the CMT registered its opposition to a separation. [pp.11-12,14.]

TELEFÓNICA LATINOAMÉRICA: IBM extended an existing IT services contract with Telefónica, covering Argentina, Chile Colombia and Peru. Intel trumpeted an agreement to partner Telefónica in the region, with plans to develop ICT services for the SME sector. [p.16.]

Telefónica expects to reach 150 million Latin America accesses by the end of 2008, a year earlier than previously anticipated, as countries including Peru and Venezuela show strong market growth. [p.17.]

Telefónica de Argentina is increasing its investment in its corporate services unit by 30% in 2008, with the main focus on developing data services. [p.17.]

The Movistar TDMA network was shut down in Ecuador. In Argentina, the legacy network is set to close in June, but 1.4 million lines are still apparently yet to switch to GSM. [pp.17,24.]

Telefónica Brasil is trialling premium services in parts of Sao Paulo, which could see customers receive up to 30Mbps broadband connections and high-definition IPTV from TVA following an investment in a fibre-optic network. In Chile, however, the company considers the market is not ready for such sophisticated bundled services. Telefónica also committed to network investment in Colombia, where it has also linked to the SAM-1 international fibre cable. Telefónica is also undertaking significant network development in Venezuela. [pp.19,22,23,27.]

Vivo’s market share in Brazil was flat. The operator announced a deal with Microsoft that will see it offer flat-rate mobile access to Windows Live services to customers with Motorola handsets. Vivo also received a EUR250m loan from the EIB to fund its GSM transformation. [pp.20-21.]

In Chile Telefónica was accused of abusing its market power by rival Telmex Chile. Telefónica claimed the complaint had been prompted by its enhanced ability to compete with the América Móvil unit in the broadband market. In Telmex’s home market of Mexico, Telefónica looks set to out-spend the incumbent on investment in 2008. [pp.22,25.]

Movistar looks to have negotiated a licence renewal in Ecuador, paying $220m and committing 1% of annual revenue to a development fund. [p.24.]

The roll out of DSL services in Peru could accelerate after the regulator dramatically reduced the levels of payment service providers would need to pay for access to the Telefónica del Perú network. [pp.26.]

TELEFÓNICA O2 EUROPE: Ramon Ros was named as the new Chief Financial Officer for O2 UK, replacing new UK Chief Executive Ronan Dunne, Ros’s former CFO position at Telefónica O2 Czech Republic is to be filled by Jesús Perez de Urigen. While Telefónica veterans continue to fill O2 executive roles, O2’s head of branding Susie Moore is to take on a similar role at Group level, raising O2’s already significant influence in the area even further. [pp.3,28.]

O2 introduced a new advertising strapline, replacing “see what you can do” with “we’re better, connected”. [p.29.]

In the Czech Republic, O2 paid rival T-Mobile EUR79m to release assets it has been unable to deal in, following a ruling in a legal dispute over interconnection fees. Comverse and Blue Coat signed deals to provide applications for the Czech business. As TOCR’s ADSL customer base surpassed half a million, the spectre of regulation in the area was raised. [pp.30-33.]

O2 heralded another corporate contract won from Vodafone, replacing its rival at BMW in Germany and the UK. [p.35.]

O2 Germany announced that it had selected Huawei for a major network expansion programme. The Chinese vendor will take over work previously managed by Nortel Networks. [p.35.]

Telefónica was rumoured to be on the verge of acquiring Irish telecoms service provider Smart Telecom, which it would then merge into O2 Ireland, enabling it to offer broadband, fixed-line and also IPTV in the country. In the UK Be Un Limited, the O2-owned ISP, announced it was to extend its ADSL2+ network to cover 67% of the UK population. [pp.37,42.]

O2 Bluebook was re-launched in the UK with a £4.5m promotional campaign for the back-up and mobile content management service. O2 UK introduced a new mobile broadband service. The operator was the last to introduce a USB-based broadband offering in the country, but insisted it was waiting to make sure it had the right proposition. Analysts were unconvinced by its competitiveness. O2 UK partnered Napster to offer a full-track mobile music download service, which will be hosted by Ericsson on behalf of O2. [pp.37-40.]

O2 UK reduced the price of the iPhone by EUR127, prompting speculation that a 3G version of the handset will be available by summer, but also that O2 may be facing significant financial losses after over-estimating demand for the Apple device. [pp.43-44.]

ASSOCIATES & INVESTMENTS: China Netcom reported better than expected results, but is still in limbo as it waits for a mobile licence. While synergies between Telecom Italia and Telefónica are expected to surpass a predicted figure of EUR1.3bn, signs of the Telefónica influence at TI could be seen as the Italian operator dumped Microsoft’s IPTV platform in favour of the Telefónica-backed Alcatel-Lucent offering. [pp.45-48.]

EXTRACT

PERU

Mobile penetration rises sharply in Peru

The INEI, Peru’s national statistics and technology bureau, reported that the number of Peruvian homes with access to at least one mobile phone had increased by 16.3 percentage points in 2007, to reach 31.1%.

The figure reached 68.3% in the capital Lima, up from 55.9% a year earlier. In rural areas, access reached 17%, compared to 4.3% at the end of 2006.

[BNAmericas, 28 March 2008.]

Wholesale ADSL to be made more accessible in Peru

Osiptel, the telecoms regulator in Peru, announced it was to reduce the price that rival operators are required to pay Telefónica del Perú for access to its network by 91%.

Alternative operators will also now only have to rent three connection points to begin offering services, whereas before they had been required to pay for 34 connection points to offer nationwide coverage.

It would appear that Osiptel considers that nationwide coverage could be possible using just three interconnection points, which is why it is claiming that the cost of providing broadband has reduced by 91% — the cost of connecting to each point of presence does not appear to have changed.

Having access to all ADSL points costs $166,000 (EUR107,000) per month. The opportunity to build a service from three points of presence will, according to the regulator, mean that services can be launched more cheaply, and could see ADSL brought to more remote parts of the country.

[Osiptel, Andina, 14 March 2008; Telecompaper, 27 March 2008.]

Telefónica and Peru tourism board agree partnership

It was reported that Telefónica del Perú and the Peruvian National Chamber of Tourism (Canatur), had entered a partnership agreement that will see the telco offer network services to Canatur members.

Tourism businesses are set to be offered unlimited coverage and tariff plans, with Telefónica said to be developing a large private mobile network and a number of tourism industry-targeted products and services. Telefónica del Peru is expected to focus on the delivery of services to tourist areas where mobile communication services are as yet unavailable.

[Economía On Line, 26 March 2008.]

Telefónica agrees research contract with USIL

USIL Technology, the research and development centre of San Ignacio de Loyola University of Peru, highlighted an agreement with Telefónica Internacional that will see the university department provide software applications to the telco.

USIL Technology claims to be the first company in Peru to begin exporting software for mobile applications, as its intellectual property is set to be used by Telefónica across Latin America. Ten applications are already under development using USIL software, and the first is expected to launch commercially during April 2008. The My Mail service will enable mobile users to receive emails via text message, WAP, or in Java format.

[Telefónica, 26 March 2008.]

Tgestiona agrees strategic partnership with Oracle

Tgestiona, a Telefónica-owned outsourcing services provider, announced it had signed a strategic partnership in Peru with Oracle, a software vendor.

The new joint service from the companies will focus on the provision of outsourced administrative services, and include technical, operational and process consulting, and services implementation.

[Telefónica, 6 March 2008.]

VENEZUELA

Venezuelan mobile penetration reaches 87%

Conatel, the Venezuelan telecoms authority, reported that mobile penetration in the country had reached 86.76% at the end of 2007.

Conatel said that the number of connections grew by 26.8% during the year, with 23.8 million lines active across the country. Movilnet was said to be the largest operator, with a 39.9% market share, closely followed by Movistar Venezuela with 39.6%, and with Digitel accounting for 20.5%.

Telefónica had indicated last year that mobile penetration at the end of 2006 in Venezuela was at 69%, and had predicted a rate of around 90% by 2010 (Telefónicawatch, 2007.09).

[El Universal, 18 March 2008.]

Movistar Venezuela continues network investment

Movistar Venezuela said it had invested $10m (EUR6.4m) to deploy 40 GSM radio base stations across the country in the first three months of 2008. The investment increased capacity in a number of areas, and also expanded mobile coverage in isolated areas and along motorways.

The company was also reported to have expanded its fibre-optic network assets in Venezuela, with 365km of cable linking the cities of Barquisimeto, Cabimas, Carora, Ciudad Ojeda, Maracaibo, and Sur del Largo.

The new interconnections are expected to provide more bandwidth for mobile and fixed-wireless services. Movistar Venezuela also installed eleven new GSM cells in the west of Venezuela, with plans for a further 45 to be deployed to improve network coverage in the country.

[Telefónica, March 2008; TeleGeography, 17 April 2008.]

TABLE OF CONTENTS

3 Telefónica Group
3 Acquisitions and disposals; Appointments
4 Associates and investments
5 Financial reports;
Industry groups
6 Brokers’ reports; Executives;
Partners; Strategy
7 Telefónica de España
7 Atento; Contracts;
Market statistics; Strategy
8 Fixed-line; Imagenio;
Internet services
9 Mobile services 10 Mobile TV
11 Partners; Pay-TV; Networks
13 Retail; Wireless networks
14 Regulatory; Terra
15 Wholesale
16 Telefónica Latinoamérica
16 Regional agreements;
Regional deals
17 Argentina; Regional strategy
19 Brazil 20 Brazil: Vivo
22 Chile
23 Colombia; Equador
25 Mexico; Peru 26 Terra
27 Uruguay; Venezuela
28 Telefónica O2 Europe
28 Appointments; Competitors;
Devices
29 Marketing
30 Czech Republic; Strategy
35 Germany
37 Ireland; United Kingdom
41 Retail
43 iPhone
45 Associates and investments
45 China Netcom;
Portugal Telecom
46 Sogecable; Telecom Italia
49 INDEX

INDEX

A
Aeromobile, 22
AGCOM (Italy), 47
Alcatel-Lucent, 47
Algerie Telecom, 45
Allen and Overy, 29
Alvarion, 13
América Móvil, 17, 23
Claro, 20, 26
Comcel, 23
CTI Móvil, 17
Porta, 23, 24
Slim, Carlos, 22
Telcel, 25
Anatel, 19, 20, 46
Andersen, 28
Apple, 43
iPhone, 40, 43, 44
Asset Management Company, 4
B
Baidu.com, 45
Banco Bilbao Vizcaya Argentaria, 5
Banco BPI SA, 11
Bankinter, 8
Blue Coat Systems, 33
BMW, 35
Brasil Telecom, 20, 46
BT Group, 12

C
Canatur, 26
Carphone Warehouse, 44
Celtro, 25
China Netcom, 45
Chunjiang, Zhang, 45
China Unicom, 45
Cloud, The, 39
CMT, 7, 8, 11, 12, 14, 15
CNC (Argentina), 12, 46
Comcast, 28
Communications Workers Union, 40
Comverse Technology, 32
Conatel, 24, 27
Correos, 7
Cre8, 21
Czech Telecommunication Office (CTU), 31
D
Datamonitor, 36
Dell, 31
Deutsche Telekom, 35
T-Mobile, 28, 29, 30, 31, 36, 39, 43
Czech Republic, 31
Diageo, 28
Digicel, 24
E
EA, 9
Eazyconnect, 41
Eircom, 37
Ericsson, 40, 48
ETIS, 5
European Union, 12, 29
European Investment Bank, 21

F
Facua, 8, 10
Fitch Ratings, 25
Fonyou, 12
Fossati family, 47
France Télécom, 3, 15
Orange, 7, 10, 14, 15, 29, 30
G
Gartner Group, 43
Goldman Sachs, 45
Google, 44
Grupo Santander
Santander, 47
H
Hewlett-Packard, 32
High Tech Computer Corp. (HTC), 9
Huawei, 9, 35
I
Iberbanda, 13
IBM, 16, 29
ICQ, 32
Inland Revenue, 24
Intel, 16
IPWireless, 29
K
Komercni Banka, 30
L
La Caixa, 47
Lehman Brothers, 6
Loomia, 4

M
Mediaset, 48
Metrored, 15
Microsoft, 16, 21, 37, 47
mmChannel, 4
Mobile Interactive Group, 42
Monster.es, 10
Morgan Stanley, 43, 45
Motorola, 21
Movilnet, 27
MTV, 47
MVNOs, 7, 12
N
Napster, 40
NBC, 4
Network Rail, 35
NewBay Software, 38
NewMarket Latin America, 16
News Corporation
MySpace, 38
NH Hoteles, 18
NII Holdings, Inc., 18, 26
Nokia, 9, 29, 30, 35
Nokia Siemens Networks, 35
Nortel Networks, 11, 35
O
Ofcom (UK), 39
Open Mobile, 10
Oracle, 16, 27
Osiptel, 26
Ovum, 39, 48

P
Palm, 23, 25
Panda Security, 8
Portugal Telecom, 4, 21, 45, 46
Granadeiro, Henrique, 4, 45
Portugal Telecom, Bava, Zeinal, 45
PricewaterhouseCoopers, 29
Prisa, 46
Q
QUALCOMM, 29

R
Regions
EMEA
Czech Republic, 3, 28, 30, 31, 32, 33
Europe, 3, 5, 6, 12, 13, 21, 28, 29, 30, 40, 43
France, 3, 15, 48
Germany, 3, 28, 33, 35, 36, 43
Ireland, 33, 37, 38, 40, 44
Italy, 5, 18, 47, 48
Portugal, 4, 21, 45, 46
Slovakia, 34
Spain, 3, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 18, 27, 28, 29, 46, 47
UK, 10, 12, 28, 29, 30, 33, 35, 37, 38, 39, 40, 41, 42, 43, 44
Latin America, 3, 4, 6, 16, 17, 18, 19, 20, 26
Argentina, 16, 17, 18, 19
Brazil, 3, 4, 19, 20, 21, 26, 46, 48
Chile, 16, 22
Colombia, 16, 23
Ecuador, 23, 24
El Salvador, 24
Mexico, 3, 12, 16, 22, 23, 25
Peru, 16, 17, 25, 26, 27
Uruguay, 27
Venezuela, 17, 27
Research In Motion
BlackBerry, 38
Royal Bank of Scotland, 46
Royal KPN, 3, 4
E-Plus, 3, 36

S
Saint Gobain, 35
Samsung, 21
Savia Capital Innovacion, 4
Semp Toshiba, 21
SEVEN, 9
Shieldmp3, 41
SIC (Colombia), 45
Siemens, 12
Skytec AG, 33
Smart Telecom, 37
Sogecable, 11, 46
Sonaecom, 46
Sony, 8
SpinVox, 10
Standard and Poor’s, 18
Suptel, 24
Symbian, 9

T
Technologies
2G, 48
CDMA, 17, 21, 45
Edge, 28, 39
3G, 7, 24, 26, 28, 29, 35, 39, 41, 43, 44, 46, 48
HSDPA, 28, 35, 39, 41
HSUPA, 35
4G
WiMAX, 13, 16, 22
ADSL, 8, 14, 26, 30, 31
ADSL2+, 42
Broadband, 7, 8, 11, 13, 14, 15, 16, 17, 18, 19, 20, 22, 31, 37, 39, 42, 45, 48
DSL, 31, 35, 36
DVB-H, 29
Ethernet, 19
Femtocell, 28
FTTH, 11
GPRS, 39
GSM, 17, 21, 24, 27, 35, 45
HDTV, 19
ICT, 7, 11, 16, 18
IP, 12, 14, 18
IPTV, 8, 11, 19, 31, 37, 47
Java, 26
M2M, 39
MMS, 37
Mobile TV, 10, 29
NGN, 12
SIM, 9, 39
SMS, 10, 48
TDMA, 17, 24
UMTS, 29, 35
VoD, 19
VoIP, 12, 18
WLAN
Wi-Fi, 19, 28, 39
Tecnocom, 11
Telco SpA, 5
Telecom Italia, 5, 18, 20, 46, 47, 48
Alice, 47, 48
Bernabe, Franco, 47
Telecom Italia Mobile, 20, 48
TIM Brasil, 48
Telefónica Group, 3, 5, 6, 17, 18, 28
Associates and investments
China Netcom, 45
Portugal Telecom, 4, 21, 45, 46
Sogecable, 11, 46
Telecom Italia, 5, 18, 20, 46, 47, 48
Atento, 3, 7, 27
España, 7, 8, 9, 10, 11, 13
Movistar, 7, 9, 10, 15
Tiendas Top, 13
Executives
Alierta, César, 5, 6, 7, 17, 18, 24, 46
Anglada, Salvador, 28, 31, 34
Benevides, Juan, 5
Borloková, Ludmila, 29
Boustani, Fernando, 17
Comerna, Juan, 27
Cowdry, Sally, 29, 37, 39, 40, 41
D’Arcy, Billy, 37
De Paz Mancho, Francisco Javier, 18
Dowd, Ben, 35, 39
Dunne, Ronan, 28, 37
Faura, Kim, 11
Gomez, Alfonso, 23
Karas, Jan, 32
Key, Matthew, 44
Linares, Simon, 28
Manzanares, Javier, 26
Molés, José, 22
Moore, Susie, 3
Navarro, Eduardo, 18
Perez de Urigen, Jesús, 28
Reznícková, Zuzana, 29
Rodriguez, Jose Antonio, 24
Ros, Ramon, 28
Schneider, Frantisek, 31
Shaw, Russ, 3
Szabó, Stefan, 29
Terra, Rodrigo, 26
Ex-executives
Williams, Dave, 28
Fundación Telefónica, 16
Latinoamérica, 16
Argentina, 17, 18, 19
Brazil, 19, 20
Brazil (TVA), 19
Chile, 22
Colombia, 23, 32
Mexico, 21, 25
Peru, 22, 25, 26
Venezuela, 27
Meditel (Morocco), 4
Móviles, 28, 29
Movistar, 7, 9, 10, 15, 16, 17, 18, 19, 21, 22, 23, 24, 25, 26, 27, 32
Argentina, 17, 18, 19
Colombia, 23, 32
Mexico, 21, 25
Peru, 22
Venezuela, 27
O2 Europe, 3, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44
Be Un limited (UK), 42
Czech Republic, 3, 28, 30, 31, 32, 33, 34
Germany, 28, 32, 35, 36
Ireland, 37
O2 Broadband, 42
O2 Group, 28
Slovakia, 29
Telefónica Deutschland, 35
UK, 28, 29, 35, 37, 38, 39, 40, 41, 42, 43, 44
Products and services
DUO, 17, 18
Imagenio, 8, 11, 47
O2 Active, 37, 40
O2 Bluebook, 37, 38, 41
O2 Mobile Broadband, 39
Speedy (Latinoamérica), 19
TRIO, 11
Xda (O2), 28
Telco SpA, 5
Terra, 4, 14, 19, 26
Tgestiona, 17, 27
Teléfonos de México (Telmex), 22, 25
Telemar
Oi, 20, 46
Telemarketing Prague, 3
Telemig Cellular, 20
Telenor, 4
Televisa, 25
TeliaSonera, 3
Thomson, 5, 11, 25, 31, 46, 47, 48
Tiscali SpA, 47
Toshiba, 21
TVA, 19

U
Ubiquisys, 28
UBS, 45, 46, 48
UniOne, 16
UPC, 31
USIL Technology, 26
V
VCCP, 38
Versatel, 35
Vivendi Universal, 46
SFR
Neuf Cegetel, 48
Vivo Participações, 4, 20, 21, 46
Vodafone Group, 4, 7, 10, 15, 30, 35, 36, 39, 43, 47
Arcor, 35
Spain, 10
W
World Bank, 17
Y
Yoigo, 7

Written by AB · Filed Under KnowTelefonica 

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