Home > Telefonicawatch (Movistar/O2) > Telefonicawatch Report #52 December 2010-January 2011 Executive Brief

Telefonicawatch Report #52 December 2010-January 2011 Executive Brief

16 March 2011

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Executive Brief from Telefonicawatch, report #52. Click through for: an Extract from this month’s report; the Report Snapshot; or to contact us for more information about the full 60-page report, this industry standard monthly report service, and ongoing subscription access.

 

     

  1. A message coming out of Telefónica as 2011 began is that innovation is taking increasing significance across the group. In Latin America, Telefónica is said to be planning a $100m innovation fund, tied in with the Innova programme led by senior executive Oliver Flogel. The Innova initiative is reportedly being considered as a model for similar projects in Europe. Telefónica Europe announced a new Chief Innovation Officer – Trevor Healy, formerly Chief Executive of JAJAH. He is also taking on the Chairman role at JAJAH and will be replaced as Chief Executive by Steve Alder, an O2 executive with a full CV of responsibility in projects that have defined the operator’s strategy over the past five years. It is also interesting to note the Telefónica Europe and JAJAH roles are based in California. [pp.25,33-34.]
  2. An emphasis on innovation goes hand in hand with pursuit of revenue from new services. Increased activity is now being seen in several of the core verticals being targeted globally. James Parton introduced Bluevia , an application development programme currently being piloted, and expected to build on experience gained from earlier efforts in the applications area such as O2 Litmus and Open Movilforum. New cloud service infrastructure from Cisco and BMC Software was welcomed by Telefónica’s Cloud Services division, which is working with Ericsson to implement the new offerings. Telefónica Group and MasterCard announced they are to begin a Latin American joint venture that will offer mobile-based financial services to Movistar customers in twelve countries in the region. The telco is engaging on its first mobile payments initiative on such a widespread scale, and a sign of its commitment to ensuring it gains a satisfactory foothold in the market is the willingness to work on an open model that will enable the unbanked, and other network customers, to interact with the service. The MasterCard venture does not appear to be planning a presence in Brazil, although the two companies are already working together in the country. Vivo also announced a global first partnership with PayPal. [pp.5,7,16-17,22.]
  3. Telefónica España claimed its mobile payment trials in Sitges in Spain were a success with high-levels of participation among triallists and clear indications that the service will see continued use. However, in a market where simple to use and effective electronic payment platforms are already in place, the challenges of bringing mobile financial services to Europe are likely to be markedly different. The operator appears strongly behind NFC, however, with reported plans for all new devices to be ready for NFC payments by 2012. [pp.11-12.]
  4. A reorganisation of management was undertaken at Telefónica O2 UK, with sales and customer service more closely linked, and an increasing senior focus on the enterprise sector. Tim Sefton was also handed a role leading the UK unit’s assault on new markets. The management shuffle was accompanied by news that O2 is to cut back its retail presence, with more specialised staff, but job cuts overall. Job losses could also reach Spain, according to reports. [pp.8,35-36.]
  5. Telefónica O2 UK announced it is to roll out its own Wi Fi network, which it claims will offer a premium service, and, by 2013, feature a presence at around twice the number of key locations currently offered by rivals The Cloud and BT Openzone. The UK business is also increasing network investment for 2011, and stressed the spending boost accompanying the permission from Ofcom to re-use 2G spectrum for 3G services. [pp.42-44.]
  6. TELEFÓNICA GROUP increased its stake in China Unicom to 9.7% as part of its long term plan to build a 10% stake in the Chinese telco. In turn, Unicom is to raise its interest in Telefónica to 1.37%. [p.4.]
  7. Telefónica is said to have ended any possible interest in acquiring a stake in Serbian telco Telekom Srbija. [p.4.]
  8. Telefónica and Portugal telecom’s non-compete clause in their deal over the change of hands of Vivo in Brazil is being examined by the European Commission, with the investigation potentially considering longer-term implications of pre-existing agreements on competition between the two companies. [p.6.]
  9. Movistar España’s market lead in all areas of the Spanish telecoms sector continues to be eroded by rivals, with Orange showing strong performance in the mobile sector, and service providers’ bundles of voice and broadband taking customers from the incumbent. The operator maintains a strong position, but it remains to be seen whether promotional efforts over the 2010 Christmas period saw Movistar put up a robust defence of its market. [pp.9,13.]
  10. Telefónica researchers in Spain are working on developing enhanced location based services and applications which can take into account factors such as the mood of users, and are also building social networking elements of the services. The Telefónica owned Tuenti social network announced that its MVNO will be called Tu, and it has launched on an invitation only basis set to spread among its nine million users. [pp.10,15.]
  11. Asavie, a telecoms software company from Ireland, was the latest supplier to see its relationship with a local Telefónica unit prompt additional business in other countries, as its mobile connectivity solutions are deployed for the SME market in Spain. [pp.12-13.]
  12. Telefónica España is back in the television content sector, although the new presence appears to be more about fulfilling legal obligations on re-investing some funds made from selling television services into supporting production of new content. Movistar Imagenio could see 3D services launched in 2011, and more high definition channels are planned. [p.15.]
  13. TELEFÓNICA LATINOAMÉRICA won a licence to provide mobile services in Costa Rica, clinching the most desirable spectrum ahead of arch rival América Móvil. Services are likely to launch in the third quarter of 2011, and it is likely the unit will fall into the remit of the challenger division of Latinoamérica, led by Jaime Smith. [p.17.]
  14. Several Telefónica units in Latin America reflected on 2010 performance and plans for 2011. In Argentina, the unit was said to have signed up more than one million new accesses in the past year, and anticipates adding another 1.6 million in 2011 through continued mobile growth, and a larger boost to fixed-line based services. The unit said more than 30% of its customer base are already using mobile broadband services, and predicted a doubling of access in 2011. Telefónica in Argentina is well underway with LTE testing, working in partnership with NEC. [pp.18,20.]
  15. Convergence and innovation were highlighted as priorities for Telefónica in Brazil, as it starts to integrate Vivo and Telesp. The Brazilian business is aiming for one million fibre broadband customers in five years, from a base of 11,500. [pp.21-22.]
  16. Telefónica de Argentina launched a new video on demand service, On Video . Telefónica is also looking to build its pay TV customer base via its fibre network in Brazil. The telco is attempting to build a triple play business, but faces obstacles based on foreign and cross media ownership in many countries, as IPTV and on demand services are apparently being used as a bridgehead to overcome these challenges. [pp.19,21.]
  17. Myriad Group extended its value added mobile solutions contract with Telefónica Latinoamérica to cover Brazil, adding 60 million accesses to its potential customer base. [p.23.]
  18. Telefónica Chile was fined in relation to service outages, blamed on copper thefts, and stolen network assets and intellectual property were also said to be causing problems for Telefónica units in Argentina and Peru. [pp.19,27,29.]
  19. Telefónica del Peru signed an agreement to work with utility company Elector Oriente on deployment of fibre optic infrastructure in the country. The unit continues to pursue public private partnerships to extend its network coverage across the country. [pp.28,30.]
  20. Mobile broadband is said to be making a significant impact on the general broadband sector in Venezuela. As the level of Movistar Venezuela spending on roaming charges was reported, the operator announced the expansion of its Mundo Movistar discounted rates for calls to international Movistar customers. [pp.31-32.]
  21. TELEFÓNICA EUROPE’s O2 Media named Gary Cole as Commercial Director, as it works to build relationships with advertisers. Marks & Spencer and House of Fraser signed for O2 location based marketing solutions. [pp.38,46.]
  22. Telefónica O2 Czech Republic said Nokia led in sales of smart devices during the Christmas period. An increase in mobile advertising spending in the country was also reported. [p.39.]
  23. In Germany, O2 was among operators objecting to proposed mobile termination rate cuts. Altair Semiconductor highlighted its role alongside AVM working on O2 Germany’s LTE trials. [pp.40-41.]
  24. O2 Ireland was forced to review its billing policy by regulator ComReg, after online billing was introduced without proper consultation. [p.41.]
  25. O2 UK and 2e2, an IT services company, announced a new IT and communications outsourcing joint venture called O2 Unify, which is to target the corporate market. O2 noted that 30% of contract bids it is involved in are now for fully converged services. [p.45.]
  26. CHINA UNICOM continues to see 3G growth, and is expanding its range of devices and cutting prices to support momentum. TELECOM ITALIA launched a new pay TV offering, Cubovision . [pp.51-56.]

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Report: #52
Covering: December 2010 to January 2011
Published: February 2011
Next report: March 2011

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

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