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Russia’s mobile market profile (Russia)

  • August 8th, 2008
  • 2:21 pm

The Russian telecom market is the largest in Europe due to the size of its population. The country’s telecoms market is not homogenous due to country’s size and concentration of wealth in the west.  A number of alternative operators offer services in the liberalised market and privatisation of state holding Svyazinvest is still underway. MTS, Vimpelcom and MegaFon, the country’s ‘Big Three’ cellular operators. In lieu of subscribers, Russia’s Mobile TeleSystems (MTS)  had just 87 million cellular subscribers across Russia and the CIS countries at the end of June, an increase of 520,000 in three months. MTS is the largest cellular operator in its home market, with 61.38 million customers at 30 June 2008,  international operations include:

Cellcos in Ukraine, 19.13 million subscribers

Uzbekistan, 4.37 million

Armenia, 1.49 million

Turkmenistan, 570,000

Tele2 plans to apply for a licence which would allow it to begin offering cellular services in Moscow. Tele2 claims 9.3 million subscribers on its GSM networks across Russia. Megafon plans to invest $4.6 billion in Iran.
Apple Inc seems in no hurry to make deal with operators to sell the nifty device in these huge market of Russia officially. Russia is a home to almost half the world’s mobile users yet they are not considered.
The largest wireless telecom market in Europe (by subscribers) in 2010 will continue to be Russia. We are now forecasting that Russia will have a subscriber base of 188.5 million (previously 186 million in our 1Q08 forecast). Among them, 62.4 million will subscribe to MTS, and 56.6 million will subscribe to VimpelCom.

- We are increasing our projections on wireless penetration in the Russia market. We are now forecasting that the level of wireless penetration in Russia will increase from our projected 128.3% in 2008 to 134.6% in 2010.
- While MTS will have EBITDA margin of 51%, our models show VimpelCom to have profitability levels that are slightly lower with EBITDA margins of 50.7% in 2010.
- Market shares (by subscribers) of the largest three operators in Russia will remain roughly the same over the next several years. MTS, VimpelCom, and MegaFon will continue to have approximately 33%, 30% and 21% of total subscribers respectively from 2008 to 2010.
- ARPU’s in Russia will continue to rise in the coming years. We forecast that the average ARPU level among operators will increase from US$ 10.85 in 2008 to US$ 13.75 in 2010. Among major operators, VimpelCom will receive the highest ARPU of US$ 15.05 per month in 2010.

   

Tele2 anticipates Moscow licence (Russia)

  • July 29th, 2008
  • 1:14 pm

Tele2 plans to apply for a licence which would allow it to begin offering cellular services in Moscow. Tele2 claims 9.3 million subscribers on its GSM networks across Russia. It lacks a permit for the moscow region but has additional regional licences in government spectrum sales in 2007.

Up to $98million is expected to spend up on network expansions and upgrades in Russia this year.

Tele2 reports sales up by 7% in Q2

  • July 23rd, 2008
  • 11:36 am

Tele2 second-quarter sales of SEK 10.15 billion, up 7 percent from a year earlier. EBITDA improved 29 percent to SEK 2.07 billion, and the net result moved to a profit of SEK 114 million versus a loss of SEK 331 million a year ago.  Its reorganisation was starting to bear fruit, but it would continue to focus on improving poorly performing units or putting them up for sale the company said. The operator underlined its continued interest in expanding in the CIS region, where it has seen strong growth already in its Russian mobile operations.

Tele2 added 751,000 new mobile customers during the quarter, of which 606,000 came in Russia, for a total 18.24 million at the end of June. Mobile revenue grew by 14 percent to SEK 6.1 billion, with a 26 percent EBITDA margin, supported also by customer growth in Sweden and Croatia as well better margins in the Netherlands and France.
Tele2 said it’s focused on minimizing investment in fixed phone services and maximising cash flow from the activities. The operations reported revenues of SEK 1.95 billion, down 16 percent from a year ago, while EBITDA improved to SEK 487 million from SEK 409 million.

Mobile operators reject Free’s ‘unbundling’ offer (France)

  • April 21st, 2008
  • 2:38 pm

France’s three mobile network operators have reportedly rejected a call by French ISP Free to allow it to use their networks to offer mobile services at near-cost prices, citing a report in French paper Les Echos. Free’s latest move is being seen as a fall-back solution should it fail in its second attempt to buy the country’s unsold fourth 3G licence. The ISP is awaiting the outcome of the government’s revised tender for the award of the concession which is expected to be sold off in lots. Free parent company Iliad’s CEO, Maxime Lombardini, reportedly told the newspaper that his company does not want to be an MVNO such as Tele2 Mobile, Virgin Mobile or NRJ Mobile which enjoy ‘little financial or technological autonomy’. Instead, Free is proposing an alternative arrangement under which it would pay a fixed annual fee to its host network provider, and then pay a reduced rate for traffic volumes based on cost price plus an operator margin of less than EUR 0.02 per minute. Mirroring the company’s unbundling arrangements for fixed line broadband services, Free also proposes to be able to interconnect its own equipment with the host operator’s mobile network, especially for subscriber location functions. It is understood, however, that Orange France, SFR and Bouygues Telecom are not interested.

   

 

Vodafone revenues up 16% to GBP 9.2 billion

  • January 31st, 2008
  • 2:35 pm

Vodafone Group reported revenues for the quarter ended 31 December of GBP 9.163 billion, up 15.8 percent from the year-earlier period. Takeovers in Turkey and India and positive currency effects drove the increase, while organic growth was 4.4 percent. Proportionate for ownership, Vodafone finished the year with 252.3 million mobile customers, up by 10.8 million from September. Of the total, 24.7 million used 3G devices. Vodafone repeated its outlook for the fiscal year to March, for revenues of GBP 34.5-35.1 billion, while noting the recent strengthening in the euro could have an additional positive effect. Annual adjusted operating profit is estimated at GBP 9.5-9.9 billion, with a lower EBITDA margin year-on-year. Capital spending will reach GBP 4.7-5.0 billion for the full year, including GBP 1 billion in India.

In its core region Europe, Vodafone reported revenues up 7.3 percent to GBP 6.652 billion, with half the growth coming from exchange rate effects. Voice revenues showed an organic decline of 2.2 percent, hurt by cuts in termination and roaming rates, while messaging revenues increased 8.1 percent and data sales were up 35.5 percent on an oragnic basis. Voice usage increased 16.5 percent from a year ago, led by Germany and Italy. The region added a net 3.1 million new customers in the quarter, taking the total base to 109.1 million. The company’s fixed-line business generated revenues of GBP 462 million, with the Tele2 activities in Italy and Spain finishing the quarter with respectively 0.4 and 0.2 million ADSL customers.

In the EMAPA region, revenues jumped 46.8 percent to GBP 2.496 billion thanks to the takeover in India. Organic service revenue growth was 13.7 percent, with a 9.9 percent rise in Eastern Europe, the Pacific up 7.5 percent and the Middle East, Africa and Asia up 20.9 percent. The region added a net 7.7 million new customers in the quarter, of which 4.2 million in India, for a total abse of 112.0 million.

   

Tele2 Austria partners with 3 Austria for joint offer (Austria)

  • January 16th, 2008
  • 2:22 pm

Tele2 Austria partners with 3 Austria to offer a package including mobile telephony, fixed telephony and broadband services. The package is called Complete Home & Go and includes a 8 Mbps DSL connection via Tele2’s Austrian network plus telephony line, WLAN router, a 3 data card plus 3Data Fix subscription for EUR 29.90 per month. Customers who sign up before 26 January of this year pay EUR 9.90 per month during the first three months of their contract. For new customers who sign up after 26 January, the monthly fee is EUR 19.90 during the first three months. The Tele2 8 Mbps DSL connection has a maximum upload speed of 1 Mbps and 3Data Fix includes 300 Mb data volume. This partnership marks the return of Tele2 on the Austrian mobile market, after it sold its mobile customer base to Telekom Austria in the autumn of 2007.

   

Vivendi confirms SFR, Neuf Cegetel merger talks (France)

  • December 20th, 2007
  • 8:44 am

SFR has confirmed being in discussion with mobile subsidiary SFR and Louis Dreyfus group to buy the latter’s 29.5 percent of Neuf Cegetel. Dreyfus will sell the stake for about EUR 5 billion, at around EUR 40 per share for a stock it bought at EUR 22 in October 2006. Les Echos writes that Vivendi seeks competition authority approval to continue to operate its Canal Plus TV and Neuf’s ADSL TV services. Canal Plus, which is 65 percent owned by Vivendi, has 10.4 million subscribers, versus Neuf’s 600,000 ADSL TV users. Vivendi said that it would not sell off Canal Plus and would rather stay at 40.6 percent of Neuf.

SFR’s acquisition of Neuf Cegetel, which would be followed by a public purchase offer, would merge 56 percent Vivendi owned mobile phone operator SFR and Neuf Cegetel, thus creating a giant to challenge France Telecom/Orange. An earlier attempt by Neuf to merge and share the major investment challenge of fibre network deployment with its ISP rival Free got nowhere, so it chose the SFR option. SFR is Neuf’s biggest customers, generating 10 percent of turnover in 2006. Neuf carries SFR’s voice and ADSL traffic. The two companies invest jointly in WiMAX and fibre. SFR and Neuf are also competitors. Neuf has launched an MVNO on SFR, which had 200,000 subscribers in the second quarter. SFR also bought the fixed and internet operations of Tele2 France and now sells its own SFR Box home gateway.

Analysts see Neuf’s merger with SFR as necessary. The merger would give SFR a chance to better compete against Orange, already well entrenched in fixed and mobile. Mobile network operator Bouygues Telecom also intends to enter ADSL.The merger would also allow SFR-Neuf to make the massive investment necessary to deploy a French fibre network to rival Orange’s.

   

Dutch MVNOs takes 17.7% market share in Q3 (Netherlands)

  • December 18th, 2007
  • 2:20 pm

The mobile virtual network operator business model has proven popular in the Netherlands, attracting 3.34 million customers as of the end of September 2007, up from 2.69 million a year earlier. According to the latest research report from Telecompaper, the number of customers using MVNOs has increased 24 percent since September 2006. In total, VOs and resellers account for 17.7 percent of the SIMs in the Dutch market. In September 2007, over 40 Virtual Operators (VOs) were active in the Dutch market. While new VOs such as Esprit Telecom, Simple Mobiel, My Dads Phone Company and Miles2Call have entered the market in the last six months, the overall number of operators has declined due to consolidation, such as the merger of Tele2 Mobiel and Versatel. Over the next 12 months, Telecompaper expects the number of VOs to stabilise, as the number of newcomers is offset by VOs leaving the market and consolidation.

The report shows that the two market leaders Debitel and Tele2 have lost market share over the past year, while a number of newcomers like Lebara Mobile, Ortel Mobile and Lycamobile have done well. With slightly less than 1 million customers, Debitel is by far the largest player on the Dutch VO market. Tele2 Mobiel (including the former Versatel) is the second-largest player, with an estimated 599,000 customers at the end of September 2007. Lebara is number three, closely followed by Ortel Mobile.

The Dutch MVNO market is set to keep on growing, according to Telecompaper research director and report co-author Wilma Bekx. “New MVNEs, and a more aggressive attitude by Vodafone to win its fair share of the market, will offer existing and new MVNOs more options to choose their network partners,” she said. “This will also put pressure on the wholesale price a mobile network operator can ask MVNE/MVNOs.”

   

Tele2 secures 14 additional GSM licences in Russia (Russia)

  • December 11th, 2007
  • 2:50 pm

Tele2 Russia has been awarded fourteen new GSM 1800 licences in Russia in addition to the three licences communicated in November. After the licence award, Tele2 has GSM licences in 23 out of 28 regions in the north-west and central federal districts, two licences in the southern federal district, three licences in the Volga federal district, one licence in the Urals federal district and five licences in the Siberian federal district. Tele2 Russia’s footprint will cover 34 regions with a total population of approximately 60 million. Tele2 expects to launch mobile networks in the awarded regions by the end of 2009.

   

Dutch mobile market set for 5% growth in 2007 - study (Netherlands)

  • December 7th, 2007
  • 7:37 am

The Dutch mobile market is on track for 5 percent growth in services revenues in 2007, but could see a slowdown in 2008. In the third quarter of 2007, mobile services revenues grew 1.1 percent from Q2 and were up 4.3 percent from a year earlier, to a total EUR 1.620 billion. The market added 471,000 new customers in the quarter, for a total 18.914 million at the end of September.

Market leader KPN had the best performance in terms of subscriber additions in the quarter with 293,000 new connections, while number two Vodafone added just 2,000 new customers. T-Mobile also underperformed, adding just 1,000 new customers, while its merger partner Orange gained 38,000 customers, of which almost half were postpaid. MVNOs such as Tele2, UPC and Lycamobile also performed well in postpaid, boosting their combined postpay market share to 4.7 percent from 3.1 percent a year ago.

Revenue growth in the third quarter came from the postpaid market, which posted a 7.0 percent rise in services revenues compared to a year ago, to EUR 1.37 billion. Prepaid revenues were down 8.6 percent from a year earlier, with all four network operators showing lower prepay revenues. Non-voice services such as SMS and data also helped revenue growth in Q3, increasing 21.6 percent from the year-earlier period to EUR 337 million. Voice revenues meanwhile fell versus Q2 and showed only a small rise year-on-year, to EUR 1.28 billion.