French mobile operator SFR, backed by media and telecoms conglomerate Vivendi, has launched a formal public offer for rival French telecoms group neuf Cegetel, Dow Jones reports. SFR has reportedly submitted a filing with the country’s stock exchange watchdog AMF committing to acquiring the neuf Cegetel shares it does not already own for EUR35.90 (USD55.56) per share between 19 May and 13 June. The filing also confirmed SFR already owns 77.9% of neuf’s shares.
On 16 April SFR and parent company Vivendi announced they had received permission from the government to close the purchase of the stake held in neuf Cegetel by the Louis Dreyfus Group. SFR outlined a EUR4.4 billion deal to buy the alternative telco in December 2007. The SFR/neuf Cegetel tie-up will create France’s second largest operator and provide a credible competitor to dominant telco France Telecom.
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Japanese cellco NTT DoCoMo has placed an offer for a 30% stake in GSM operator Telecom Malaysia International Bangladesh (AKTEL) currently owned by Bangladeshi conglomerate AK Khan & Co, reports local newspaper the Daily Star. The stake, valued at around USD300 million, has also been targeted by UK-based Vodafone Group, which has previously sent representatives to negotiate with AK Khan & Co. ‘It is true that we have tendered a bid for the AKTEL stake,’ an official of NTT DoCoMo confirmed to the Star, whilst an AKTEL official told the paper, ‘We are still in the dark about our new partner. But something is going on. NTT DoCoMo is on the priority list.’ AKTEL is 70%-owned by Telekom Malaysia, and is currently in third place in Bangladesh’s mobile market. According to regulator the BTRC, the Malaysian-owned firm’s subscriber base rose by 90,000 in the first three months of 2008 to 7.45 million users, but it fell behind Orascom Telecom subsidiary Banglalink’s customer base, which grew by 430,000 to 8.31 million in the same period.
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Start-up cellco Mara Telecom has signed an agreement with Nokia Siemens Networks (NSN) to design, build and operate a complete greenfield W-CDMA/HSPA network on the Pacific island. Within three years, the network is expected to serve up to 100,000 subscribers across the main islands of French Polynesia. Mara Telecom, the first cellco to be granted a 3G licence in French Polynesia, aims to be commercially operational by December 2008. Under the contract, NSN will provide Mara with a 3G end-to-end solution, including network equipment, applications and a full range of services, comprising network design, implementation, operation as well as training and competence transfer.
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Embarq, the regional telco spun off from Sprint Nextel in 2006, confirmed that it will end its MVNO deal with its former parent company next year. Embarq is following Qwest Communications lead as the later also ended its resale deal with Sprint recently. Embarq’s finance chief Gene Betts said, ‘the economics and the reach that we were obtaining was not really what we were hoping for’. It has been reported that Embarq had been aiming to reach the one million subscriber mark through its partnership with Sprint, but the reality was just 112,000 wireless customers at the end of 2007.
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The Greek government and representatives of Deutsche Telekom have struck a deal on sharing ownership and management control of Greece’s largest telecom company, OTE, an Associated Press report said.
The report quoted Finance Minister Giorgos Alogoskoufis saying that under the deal, the Greek government and Deutsche Telekom would each control 25% plus one share of OTE, while the German operator could also raise its holdings of the Greek company in the future.
Deutsche Telekom would pay €29.75 (US$45.93) a share for a 3% stake in OTE, which will allow the German company to extend its footprint in Central and Eastern Europe and win access to long-coveted markets such as Romania and Bulgaria.
“The Greek government will receive €442.3 million (US$682.9 million),” Alogoskoufis said.
Deutsche Telekom announced in March the acquisition of a 20% stake in OTE, Greece’s former monopoly telecoms operator, for about €2.5 billion (US$3.87 billion), from Marfin Investment Group Holdings.
Since then, Deutsche Telekom has been in talks with the Greek government to discuss raising its stake in OTE further, as well as the delicate issue of management control at the company and the final acquisition price.
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Mobile service reseller Virgin Mobile USA on Wednesday confirmed reports that it is in talks with South Korea’s SK Telecom about a strategic deal involving Helio, SK’s high-end U.S. mobile service reseller.
The parties are seeking a deal that could alter the fortunes of both Virgin Mobile and Helio, two firms that have faced tough times financially in the disappointing mobile virtual network operator, or MVNO, business.
Confirmation of the talks between SK Telecom and Virgin Mobile about a possible merger of the two MVNOs sent Virgin Mobile’s stock soaring more than 20 percent.
Both Helio and Virgin are jointly owned by SK Telecom and EarthLink. Virgin Mobile, which resells services from Sprint Nextel, went public in May 2007.
Virgin Mobile targets pre-paid phone service customers with relatively inexpensive service plans, while Helio aims at the youth market with more expensive services and high-end phones.
“Helio and Virgin Mobile make a very bad match,” said Alex Besen, president of The Besen Group. “Certainly a merger does not make sense either financially or operationally for either company, but particularly so for Virgin.”
The main goal of a merger of the two firms, he said, would involve the migration of many of Virgin’s five million customers to post-paid plans and would offer them enhanced services marketed by Helio.
Kajeet is a Bethesda, Maryland, MVNO, which began reselling Sprint mobile services in March 2007 aimed at “tweens,” young people between 12 and 14 years old.
Mr. Besen believes that Virgin, which has had problems adding new subscribers, should target attractive, rapidly growing cultural niches in the U.S. market such as Hispanics.
He said that Virgin, which woos Hispanics, should have at least investigated the purchase of Movida Communications, a Kansas City, Missouri-based MVNO which targets the U.S. Hispanic market.
Movida, which was backed by Sprint a Venezuelan conglomerate and a group of former Sprint executives, filed for Chapter 11 bankruptcy in March.
Cozac Wireless, a subsidiary of APC Wireless of Rockville, Maryland, bought Movida for $2.8 million in April.
“Virgin will not get the benefits of scale with Helio that it will get from Kajeet, Movida or some of the other players targeting cost-conscious consumers,” Mr. Besen said.
Topics: Earthlink, Virgin Mobile, Sk Telecom, MVNO, Sprint Nextel, Movida, Cassimir Medford, Alex Besen, Kajeet, Cozac Wireless.
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Sprint (NYSE: S) and Samsung Electronics Co,. Ltd. announced today that a new broadband wireless network offering the speed and mobility of WiMAX has met Sprint¡¯s rigorous commercial acceptance criteria including overall performance, handoff performance and handoff delay. This key technical milestone has been passed after extensive evaluation both in the XOHMTM lab environment and with the commercial service network being built in the Baltimore and Washington D.C. area. Sprint plans on launching commercial WiMAX service in those cities later this year.
Samsung has been working with Sprint in the United States to test and build Sprint¡¯s XOHM mobile broadband Internet service compliant to the mobile WiMAX standard. Since finalizing a supply agreement in 2007, the two companies have steadily made progress on the extensive project with previous key milestones including first data session in the lab (June 2007), first data session on the live network (October 2007) and successful interoperability testing with multiple other device vendors (April 2008).
¡°This is a major step towards launch readiness and Sprint is extremely pleased with the performance of the mobile WiMAX network and access devices from Samsung,¡± said Barry West, XOHM president. ¡°The collaboration with Samsung and our other partners has created a WiMAX ecosystem that has now proven that it can deliver this new technology to the marketplace well ahead of any feasible alternative.¡±
Last month, Samsung announced the introduction of several WiMAX-enabled devices. The Express Card (E100 PC Card) and WiMAX embedded UMPC (Q1 Ultra Premium Mobile PC) underscore Samsung¡¯s position as the leading provider of end-to-end mobile WiMAX network systems. With the technology proven to be ready, the Samsung mobile WiMAX systems being deployed for Sprint in Baltimore and Washington D.C. support the commercial introduction of XOHM service anticipated to begin later this year.
¡°The wireless subscribers in the United States are ready to step up to the next level of a truly broadband wireless network that surpasses the performance of existing wireless networks today,¡± said Dr. Hwan Chung, senior vice president of Samsung Telecommunications America. ¡°Sprint¡¯s acceptance of Samsung¡¯s WiMAX technology shows Samsung¡¯s strong commitment to meet our customers¡¯ needs for the most reliable, seamless, and fastest wireless network. Samsung¡¯s mobile WiMAX expertise will help Sprint answer the mobile broadband needs of U.S. wireless subscribers.¡± he added.
Samsung is the global leader in delivering mobile WiMAX technologies and offers an end-to-end solution including chipsets, infrastructure, mobile devices and consumer electronics, including devices capable of accessing both mobile WiMAX and other wireless technologies.
The XOHM business unit within Sprint specifically focuses on developing the WiMAX ecosystem and standards to bring the latest broadband wireless technology to the U.S. marketplace. Sprint is utilizing the significant spectrum holdings at 2.5 GHz that were combined in the Sprint Nextel merger to deploy mobile WiMAX technology from Samsung and other vendors.
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Singapore Telecommunications Ltd (SingTel) said Tuesday its Asia Pacific mobile phone subscriber base rose almost 50 percent to 185.34 million at the end of the March quarter from a year earlier.
Southeast Asia’s biggest telecom firm said the increase was driven by strong growth in all eight of its markets: Australia, Bangladesh, India, Indonesia, Pakistan, the Philippines and Thailand as well as the home market in Singapore.
Compared with the previous quarter, growth came in 8.0 percent higher, or a record 13.80 million new customers, SingTel said ahead of its full-year earnings report on Wednesday.
India’s Bharti, where SingTel holds a 30.44 percent stake, drew a record 6.82 million new clients for the quarter ended March 31, it said. Bharti’s total mobile subscriber base stood at 61.99 million, up 67 percent from the year before, SingTel said.
Indonesia’s Telkomsel added 3.45 million new mobile clients during the quarter, bringing its total subscribers to 51.34 million, up 32 percent from the same quarter last year, SingTel said. It owns 35 percent of Telkomsel, Indonesia’s biggest mobile phone operator.
Thailand’s AIS, where SingTel has 21.36 percent equity, expanded its customer base by 3.6 percent in the quarter or 19 percent year-on-year, while the Philippine associate Globe Telecom added 26 percent more subscribers compared with the same quarter last year, SingTel said.
Warid Telekom of Pakistan reported 14.40 million mobile clients at the end of March, up 9.0 percent from the previous quarter. Pacific Bangladesh Telecom Ltd (PBTL) grew its customer base by 11 percent from the December quarter, SingTel said.
SingTel owns 30 percent of Warid Telecom and 45 percent of PBTL.
SingTel’s wholly-owned Australian subsidiary Optus reported a total mobile customer base of 7.14 million for the March quarter, up 5.9 percent from the previous year and 2.0 percent from the December quarter.
For the Singapore home market, SingTel added a record 244,000 mobile customers, raising its customer base to 2.57 million, up an annual 41 percent, it said.
SingTel, the biggest company on the Singapore stock exchange in terms of market capitalization, is 56 percent owned by state-linked investment firm Temasek Holdings, according to the Temasek website.
SingTel shares were trading at 3.76 Singapore dollars a share Tuesday afternoon, up five cents from the previous day.
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Singapore Telecommunications (SingTel) announced a double-digit growth in net profit and double digit growth in revenue for its fourth quarter ended 31 March 2008, driven by its Singapore business, which posted another record number of mobile net additions, and the strengthening of the Australian dollar. Group revenue in the three months ended 31 March 2008 increased 11 per cent to S$3.76 billion from S$3.38 billion a year ago. Underlying net profit for the quarter posted a 9.2 per cent gain to S$968 million from S$886 million, helped by a strong performance from the regional mobile associates.
Some operational highlights:
In Singapore revenue from Data & Internet grew 12 per cent to S$356 million in the fourth quarter driven mainly by strong corporate data and broadband growth.
For the quarter, SingTel added 19,000 broadband customers and retained its leadership position with 54.3 per cent market share.
SingTel’s Wireless@SG also attracted 496,000 customers since its introduction of which 203,000 do not subscribe to SingNet’s residential broadband service.
Mobile Communications posted another strong quarter with revenue increasing 15 per cent to S$339 million from a year ago. In a market with a penetration level of 129 per cent, SingTel added a record 244,000 subscribers in the fourth quarter. This brings SingTel’s total number of users to 2.57 million with a market share of 43.4 per cent.
SingTel added 207,000 prepaid customers to 1.19 million users and 37,000 postpaid users as at 31 March 2008.Average revenue per user rose 2 per cent for postpaid customers and 16 per cent for prepaid customers from a year ago.
During the next fiscal year, capital expenditure in Singapore as a percentage of operating revenue is expected to rise to mid-teens level because of mobile capacity expansion and an upgrade of the fixed-line network.
In Australia, Optus achieved a 4.5 per cent increase in revenue to A$1.94 billion despite the ACCC’s mandated reduction in mobile termination rates by 25 per cent to 9 cents per minute from 1 July 2007 and Optus’ decision to exit the unprofitable consumer fixed-line resale market.
Optus Mobile operating revenue grew 6.5 per cent to A$1.09 billion with 135,000 new subscribers added in the quarter, including 87,000 postpaid additions, taking the total number of mobile customers to 7.14 million. 3G customer numbers increased 21 per cent from a quarter ago to 1.4 million.
Mobile EBITDA margin was 35 per cent, declining 4 percentage points from a year ago reflecting acquisition and retention costs to grow the postpaid segment.
SMS and other data revenue were at 29 per cent of ARPU, up from 26 per cent a year ago with stimulation of SMS and increased take-up of data services. The proportion of non-SMS data revenue grew to 6.0 per cent of ARPU in the current quarter compared to 4.2 per cent a year ago.
On 7 May 2008, Optus announced it would embark on a further investment program to expand its nationwide mobile network beyond 96 per cent population coverage to reach 98 per cent by December 2009.
The 3G network provided coverage to 68 per cent of the population as at 31 March 2008.
During the quarter, Optus Consumer and SMB Fixed saw continued Unbundled Local Loop (ULL) growth, with 317,000 customers provisioned with telephony and/or broadband services.
As at 31 March 2008, Optus had installed equipment in 357 ULL exchanges. The ULL build will comprise a total of 366 exchanges with a coverage footprint of 2.9 million premises.
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BT Thursday reported a 2% rise in fourth quarter group revenue to £5.42 billion from £5.29 billion a year earlier, above analysts’ expectations.
Still, group profit for the three months ending 31 March declined 18% year on year to £494 million from £601 million, which the company attributed to a rise in operating costs, and leaver costs.
The U.K. incumbent said earnings per share during the quarter rose 11% on year to seven pence, with free cash flow increasing to £1.7 billion – a rise of 9% from the same period a year earlier.
The company also raised its full year dividend 5% on year to 15.8 pence per share.
“Free cash flow is the best we’ve seen in the last six years,” said Ben Verwaayen, CEO of BT, during the company’s results presentation.
He attributed BT’s fourth-quarter results to a strong performance from its Global Services business, which provides managed IT and telecoms services to enterprises.
“Global Services now serves 60% of the Fortune 500,” said Verwaayen, who commented that BT had signed up 260 enterprise customers, or £2.8 billion worth of contracts, in the fourth quarter alone.
Revenue at the unit increased 10% on year to £2.23 billion from £2.03 billion, the highest quarterly growth for over two years, according to BT.
The performance of Global Services underpins BT’s transformation into a software and services-led company from a traditional telecoms player.
Verwaayen highlighted that traditional voice calls contributed 11% of the group’s fourth quarter revenues, a percentage now virtually equalled by its broadband business, while IT services made up 22%.
“The whole nature of our revenue has changed dramatically,” he added.
“The results are better than we expected,” Scott Morrison, research vice president at Gartner, told Total Telecom.
Yet, while Global Services was the highlight of BT’s results, it still only managed to raise its quarterly EBITDA margin by 0.4% on year to 13.7%.
“Revenues might be growing but the margins aren’t,” said Morrison.
“The numbers are moving in the right direction, but they’re just not moving fast enough,” he added.
BT Retail showed a third successive quarter of revenue growth, rising 2% on year to £2.16 billion from £2.12 billion a year earlier, while revenue at its wholesale division continued its steady decline, falling 12% year on year to £1.18 billion from £1.34 billion.
“The decline is being driven by the continued drive to LLU (local loop unbundling), and ongoing price reduction,” commented Hanif Lalani, BT’s CFO.
Openreach saw flat EBITDA on year, and revenue fall 1% to £1.320 billion, from £1.336 billion a year earlier.
One surprise came in the form of BT Vision – which saw an influx of new subscribers.
“In this quarter our net additions were 94,000, which is more than Sky and Virgin put together,” said Verwaayen.
The total installed user base for BT Vision has now reached 250,000, according to BT.
Still, with BT’s commitment to its next-generation network, 21CN, capital expenditure will continue to be an important issue.
“BT has started something it can’t stop, it has committed to that £10 billion investment in five years,” said Morrison.
Lalani said that BT expects capex of £3.1 billion during the next financial year, adding that if it could reduce this figure to below £3 billion by 2010, they will have made “good progress.”
For the financial year 2008-09, BT said it expects revenue growth to remain positive, and free cash flow to remain relatively flat.
Verwaayen said that the company expects to generate cost savings of £700 million, up from £625 million during the financial year 2007 to 2008.
Company chairman Sir Michael Rake took an opportunity during the results presentation to praise Ben Verwaayen, who announced his resignation as BT’s CEO in April.
“There is absolutely no doubt that Ben has completely reinvented this company,” he said.
“When [Ben] took over, BT was a bit like a rudderless ship – it had no mobile business, and no revenue growth engine. He, and the team he brought in really turned the company around and drove BT ahead of the competition in terms of the kinds of services they began to offer,” said Morrison.
Verwaayen’s successor BT Retail CEO Ian Livingston said he will focus on making the company more agile.
“We need to focus on our attitude to our customers, to our costs, and frankly, to our speed,” he said.
“We have to move at the speed of software…we’re in a software world now, not a telecoms world,” he commented.
“With Livingston at the helm I think we’re going to see a period of consolidation for BT,” said Gartner’s Morrison.
He explained that while Verwaayen took risks, made acquisitions and concentrated on the top-line, he expects Livingston to reign in the spending on inorganic growth and focus his attention on the bottom-line.
“BT still has a segmented approach to its customers, so I expect Livingston will address this by streamlining the company and simplifying its operations,” he commented.
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SFR launches neuf Cegetel buyout offer
