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Telefonicawatch Report #49 Executive Brief

27 September 2010

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Executive Brief from Telefonicawatch, report #49. Click through for: an Extract from this month’s report; the Report Snapshot; or to contact us for more information about the full 48-page report, this industry standard monthly report service, and ongoing subscription access.

  1. TELEFÓNICA GROUP reportedly has EUR9bn in unused credit lines at its disposal, even after the EUR7.5bn acquisition of Vivo is cleared. This potential for a further spending spree saw speculation of where money could be spent next. However, Group Chief Executive Julio Linares indicated the Group is happy once again to pursue organic growth. Having funds available to manage debt, and to cover potential costs of pricey mobile spectrum auctions is the Group’s most likely intention. [pp.4,6.]
  2. Telefónica Group returned to the position of the world’s fourth largest telco, as its market capitalisation started to rise once again, usurping regional rival América Móvil, which is in the midst of its own asset integration — a move that will ultimately see it overhaul Telefónica as the largest integrated telecoms group in Latin America. [p.4.]
  3. Nokia Siemens Networks highlighted its close relationship with Telefónica in Spain, where the pair have a joint smartphone research lab studying ways to optimise the balance of devices, networks and applications. The vendor also trumpeted a contract to deliver HSPA services for Movistar in Chile, claiming this would pave the way for the arrival of LTE services in the country. [pp.5,22.]
  4. Speaking at the Telecoms Sector Summit in Santander, Julio Linares returned to the discussion on the challenges faced by mobile networks posed by the data explosion, the wider issue of the demands of unrelenting traffic growth on networks, and the thorny question of who pays the price for bandwidth. The Telefónica executive suggested femtocells, Wi-Fi and other alternative technologies would need to take more of the data strain, and that operators would need to be more open, and more collaborative. [pp.5-6.]
  5. CommScope division Andrews Solutions announced its cable solutions had been cleared for deployment on many of Telefónica’s mobile networks around the world, and that its kit is already installed in one South American market. [p.8.]
  6. Telefónica Group is reported to have a non-compete deal in place with Portugal Telecom covering the Iberian peninsula, potentially running to the end of 2011. The agreement is said to have formed part of the final deal on the Vivo acquisition. [p.8.]
  7. MOVISTAR ESPAÑA is upgrading the connection speed of many of its broadband connections, with the 6Mbps services being boosted to 10Mbps without charge. The operator also trumpeted upcoming boosts in mobile broadband speeds in the country’s major cities. [p.10.]
  8. Aula 365, an online education support service launched in Spain, mirroring similar internet resources used to drive broadband growth in Latin American markets. [p.10.]
  9. A EUR57m fine imposed on Telefónica in a dispute over anti-competitive practices against wholesale line rental players was overturned by the Supreme Court in Spain. Telefónica may face further examination of its business practices, however, as regulator CMT investigates claims that startup altnets are being denied access to the incumbent’s networks. [pp.11,16.]
  10. Movistar España continues to hold its own in the Spanish mobile market, according to the latest figures from the CMT, being the best performer out of the “big three” operators in the country. Other players including MVNOs are continuing to make small but significant steps in the market, however. In the broadband sector, ISPs deploying services using the Telefónica wholesale network made large gains, while Telefónica’s retail share slumped. Fixed-line numbers continued to decline, pulled down by continuing reductions in business lines. A review of competition in Spanish regions showed Telefónica’s market strength concentrated in rural areas, with fixed line and mobile rivalry taking a toll where present. [pp.11-13.]
  11. Movistar España announced the launch of a femtocell-based service to boost 3G coverage. [p.15.]
  12. Telefónica withdrew from the bidding for a contract to manage network infrastructure for the government of Catalonia after the budget was decimated by an EU ruling on areas that could be outsourced under a deal. [p.15.]
  13. MOVISTAR ARGENTINA announced MyMail Movistar, a new service collecting email from a number of different addresses and delivering it to any mobile phone, using WAP or text message for more basic handsets. A new enhanced mobile version of Windows Live Messenger also debuted in Argentina, powered by solutions from Synchordia and initially developed by Colibria. [pp.17-18.]
  14. In BRAZIL, OnVideo, a new converged video-on-demand offering, was launched, integrating IPTV and a web portal that can be accessed via television. UK-based Oregan Networks is reportedly behind the interface. [p.19.]
  15. Gilat Satellite Networks trumpeted a deal to provide broadband solutions for Telefónica in Brazil. [p.20.]
  16. Telefónica Brasil won a EUR2.5m contract to provide IP network management services for the government’s Intragov IP network. Broadband prices were cut by more than 10% in Brazil, as public sentiment about the company was seen continuing to improve. [p.20.]
  17. VIVO completed integration of contract customer platforms for Telemig customers in the Minas Gerais region of the country, completing a migration started in 2009. Vivo is likely to get a chance to acquire additional national spectrum when the Brazilian authorities auction 2.5GHz band spectrum for next generation mobile services. The country as a whole is seeing 3G networks completed ahead of regulator mandated schedules. CHILE is also expected to launch an auction for spectrum to be used for 4G networks, by the end of 2010. Telefónica began deployment of next-generation fixed-line services in Chile, with support from the government; earthquake-affected areas are to be the first to benefit. [pp.21,23-24.]
  18. In COLOMBIA, it was reported that Telefónica has withdrawn from the bidding for a controlling stake in local government-owned network operator ETB, due to overly onerous conditions. [p.24.]
  19. In MEXICO, Movistar is to provide mobile network services for pay-TV and triple-play operator Megacable, further building the companies’ relationship and increasing pressure on América Móvil controlled incumbents. Movistar Mexico was said already to be making progress with the rollout of services using spectrum acquired in early-summer, but further tranches of spectrum assigned to the company in August 2010 may not be available for use for some time due to legal challenges surrounding another participant’s spectrum award. [pp.25-27.]
  20. Telefónica in PERU protested plans for new mobile transit charges to be imposed by the regulator, but highlighted its network investment, and the robustness of its systems, in the wake of participation in government-led natural disaster simulation programmes. [p.27.]
  21. Movistar in VENZUELA took its problems with government-imposed foreign currency restrictions into the public domain, with announcements that roaming services would be suspended as the OpCo could not raise the currency needed to pay its bills. It was also reported that local hardware manufacturing plans were being hampered by excessive import duties. [pp.28-29.]
  22. TELEFÓNICA O2 CZECH REPUBLIC highlighted use of Smooth Streaming technology from Microsoft for broadcasting live events, working in conjunction with LIVEBOX. 3G expansion plans were announced for the country. [p.31.]
  23. In GERMANY, Michiel van Eldik was appointed Managing Director for Wholesale and Partnering for Telefónica O2 Germany. O2 Germany’s low-cost mobile unit Fonic led national customer satisfaction surveys. [pp.32-33.]
  24. O2 IRELAND could be investigated by regulator ComReg for plans to migrate all contract customers under 65 to online billing. A new fixed and mobile services bundle for SMEs called Total Business was announced by the Irish O2 unit, and a mobile social networking solution called O2 Social Link was launched in conjunction with US-based iSkoot. [pp.33-35.]
  25. TELEFÓNICA O2 UK saw its SME business grow, it claimed, despite renewed efforts by rivals, and with its channel partners also said to be seeing increased success. The operator is planning to launch new fixed and mobile phone bundles intended to better reflect customer needs. More stratified pricing is predicted for mobile data, as demand increases and levels of consumption continue to vary substantially. Ofcom increased power limits for use with 3G spectrum, but there were warnings about the environment for successful LTE deployment in the UK. [pp.36-38,40,41-43.]
  26. CHINA UNICOM is working with Huawei on telemetrics projects, and committed to additional NFC research. TELECOM ITALIA is thought to be on the verge of stabilising its interests in Argentina, after a long period of turmoil. [pp.44-45.]

About Telefonicawatch

Report: #49
Covering: August/September
Published: September 2010
Next report: October 2010

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Written by AB · Filed Under Telefonicawatch (Movistar/O2) 

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