Zain to distribute most of Bharti deal money among shareholders (Kuwait)
www.WirelessFederation.com/news: A large portion of proceeds from a $9-billion asset sale will be distributed by Kuwait based mobile operator Zain to shareholders of the company. With this announcement, the possible purchases have been pushed lower on agenda.
Use of the money gained by Zain through the deal with Bharti Airtel has raised a question about what the company will do with it- invest or pay out to shareholders? Zain expects to pocket up to $5 billion from the sale after paying down debt and says it is open to new investments in the Middle East.
According to chairman Asaad al-Banwan, regarding the surplus (returns from the sale), a big portion of it will be distributed to shareholders, in addition to our future investment operations.
Reliance rolls out cheapest CDMA phone in India
www.WirelessFederation.com/news: CDMA phone S100 will be rolled out by Reliance Webstore, the retail subsidiary of Reliance Communications and Coolpad Communications, the Indian joint-venture of Hong Kong-listed China Wireless Technologies Limited, across India.
The ‘touch-screen’ model will be retailed and distributed through Reliance World stores across 100 top Indian cities. According to Coolpad Communications’ Managing Director, Sami Al-Lawati, in the current scenario, the firm sees CDMA subscribers as the key drivers of mobile data business in India and feature-rich CDMA handsets will play a crucial role in addressing this segment.
Dual-mode handsets have already been introduced by Coolpad in India and the S100 is the company’s first CDMA-only handset being introduced in the country. 15 CDMA handset models is also planned to be launched by the company in India during the current fiscal.
Verizon plans landline business spinoff on July 1 (USA)
www.WirelessFederation.com/news: Land line business of Verizon Communications Inc will be spinoff in 13 states plus parts of California. According to the company, the record date for the planned spinoff of New Communications Holdings Inc., a subsidiary of Verizon, to Verizon stockholders will be June 7.
The sale of the landline operations of Verizon to Frontier Communications Corp resulted in the formation of New Communications.
Verizon stockholders will collectively own between about 66 percent and 71 percent of the shares of Frontier and Frontier stockholders after the spinoff.
Apple iPad super hit in Britain
www.WirelessFederation.com/news: Apple’s flagship store in London has been mobbed by the shoppers in a hope that they will get the gadget of the year- the super hit Apple device, iPad.
Regent Street in the British capital was flooded with the people who stood in long line to posses the hand-held computer.
The iPad was first launched in the United States in January and according to the company, it is launching the iPad in nine countries on Friday — Australia, Canada, France, Germany, Italy, Japan, Spain, Switzerland and Britain.
Orange plans to launch low cost Android phone in Europe
www.WirelessFederation.com/news: LG-made low-cost Android smartphone is planned to be launched by Orange in Europe later this year. Operator’s affordable smartphone strategy has been emerging this week and it includes a range of devices made by Chinese vendors including Huawei, ZTE and Gigabyte.
According to Patrick Remy, Orange’s vice president of devices, at the beginning of 2010, 15% of Orange portfolio was smartphones and this will rise to 30% by the end of the year, and will be 50% by 2013 while with the plethora of white label devices in the pipeline, Orange’s low-cost smartphone portfolio will also include handsets designed by “A-brand” phone makers. The company LG is on the first A-brand product in its affordable smartphone range.
No specific information about the launch timetable and likely cost of the device has been revealed yet. The handset includes the entire standard features like a touchscreen interface, WiFi, GPS, full Web-browsing, and a five megapixel camera and the Android-powered smartphone will launching soon in Spain, Austria, Slovakia and Romania.
The company has explained its objective as- to make low-cost smartphones available for free even on low-cost tariffs and it is in discussions that could see it offer cheap smartphones to prepay customers, with devices that are priced around €120. Orange’s aim of doubling revenues from mobile multimedia services between now and 2012 will get a push from these cheap smartphones.
The operator is putting extra focus on highlighting services like mobile social networking, instant messaging, location-based services and content, taking lesson from the fact that at the beginning of 2009 only one in 10 Orange customers was using mobile multimedia services.
Remy also opined that 25% of Orange’s customers are now using mobile multimedia, which is significant and tremendous growth, but it still means 75% of its customer base are not multimedia users and Orange’s affordable smartphone range will further lower the barrier to mobile multimedia uptake.
Idea plans to raise $528 million through foreign debt (India)
www.WirelessFederation.com/news: 25 billion rupees ($528 million) is planned to be raised by India’s third- largest mobile-phone company by value, Idea Cellular, by selling debt or borrowing funds overseas after winning high-speed phone licenses. Plan to borrow 40 billion rupees has already being completed by the company and is looking to raise debt in foreign currency.
509.7 billion rupees has been raised by the Indian government from auctioning the wireless permits to phone companies including Idea and Vodafone Group Plc. It has raised concern that the demand for funds will boost short-term interest rates. Rise in the two year swap rates in relation to the five-year borrowing cost has narrowed the spread between them to near the least in 14 months.
Analysts are of the opinion that in India if you go for any of the banks your interest rate will be eight to nine percent and if you fund the same thing through foreign borrowings, and you can do it cheaper.
15 percent of Idea is owned by Malaysia’s second-largest mobile- phone company Axiata Group Bhd, and its share fell 2.4 percent to 50.15 rupees in Mumbai on May 26. Licenses in 11 circles have been won by the telco at the end of the 34 day auction and it has agreed to pay the government 57.7 billion rupees for the rights.
According to Chief Financial Officer Akshaya Moondra, the company won’t ask its investors for equity to fund its expansion and added that if 3G picks up, and there are large capacity expenditure requirements, then it will see whether that has to be done
As a result of the of increasing risk of a cash call by its Indian unit, Axiata was cut to neutral†from outperform†at CIMB Investment Bank Bhd. on May 12. 15 billion rupees has also been borrowed by the company from the European Credit Agencies.
Portugal Telecom hails Telefonica offer for Vivo as insufficient
www.WirelessFederation.com/news: Portugal Telecom has announced that 5.7 billion- euro ($7 billion) offered by Telefonica for its stake in their Brazilian joint venture is clearly insufficient. Earlier, the Portuguese company had described its holding in Vivo Participacoes SA, Brazil’s largest wireless operator as strategic and a fundamental growth pillar.
Spanish company’s offer for the stake was rejected by its board on May10 but the latest comment by the SGPS SA Chief Executive Officer Zeinal Bava suggest that the Lisbon-based company may be holding out for a better price.
Telefonica Chairman Cesar Alierta has been trying to merge Vivo with Telecomunicacoes de Sao Paulo SA, or Telesp, the Spanish company’s fixed-line unit in Brazil and for this purpose, it has been trying to gain control of it since at least 2006. Telefonica even threatened to curb Portugal Telecom’s ability to pay dividends, seeking to force it to the negotiating table.
Analysts also feel that Telefonica should raise its offer to 7.5 billion euros. Telefonica and Portugal Telecom jointly own Brasilcel, a holding company with a controlling stake in Vivo. In case the offer fails, Portugal Telecom’s ability to secure Vivo dividend payments via Brasilcel might be blocked by Telefonica.
Depending upon the performance by Vivo in 2009, Brasilcel is due to pay a dividend of €111m each to Telefonica and Portugal Telecom this year. Vivo had 30 percent of Brazil’s 179 million wireless subscriptions at the end of March and Vivo has driven revenue growth for Portugal Telecom as growth in Europe slows and competition increases at home.
Telefonica Brazilian fixed-line phone business, Telesp is also underperforming amid increased competition and the telco wants to improve its position by merging Vivo and Telesp so that it can secure €2.8bn of cost savings. Due to Portugal Telecom’s skepticism about the merger, Telefonica had to make an offer to buy the Portuguese company out of Vivo.
USA subscribers surprised by unexpected fees- FCC
www.WirelessFederation.com/news: According to a survey released by the Federal Communications Commission as part of a drive to extract clearer information from wireless carriers, unexpected monthly fees is faced by one in six U.S. mobile-phone customers. It has also been revealed that almost half of consumers subscribing to plans with fees for dropping service before the end of a contract didn’t know the amount they would be charged.
FCC Chairman Julius Genachowski opined that there is still more that can be done to help customers navigate what is sometimes a confusing marketplace and consumers would be helped by simple and easy to understand purchase and billing procedures. Rules similar to the ones applied in Europe might be faced by the telecom operators like Verizon Wireless, AT&T Inc in the USA.
As per the research, out of the 30 million Americans who were surprised by their bills, 88 percent weren’t contacted by their carriers when charges increased and 84 percent weren’t contacted when they were about to exceed their allowed minutes, text messages, or data downloads. Only 36 percent of mobile-phone customers who are familiar with their bills believed that they include very clear information on early termination fees. More than a third of people surprised by a bill felt that the charges jumped by at least $50 and 23 percent said the increase was $100 or more.
According to Steve Largent, president of the Washington based CTIA , The Wireless Association, it seems the commission is going to attempt to micromanage what is an incredible array of choices for consumers and asserted that the wireless industry does provide simple and easy to understand plans for every type of American consumer.
3,005 adults were included in the telephonic survey that extended from April 19 to May 2 and for responses based on those with personal cell phones, or about 80 percent of respondents, the margin of error was plus or minus two percentage points.
Vodafone Qatar plans to launch legal action against Virgin entry
www.WirelessFederation.com/news: Legal action against the regulator in Saudi Arab is planned to be launched by Vodafone Qatar, which began operations as the Gulf Arab state’s second mobile operator last summer, over Virgin Mobile’s entry into the market. Richard Branson’s Virgin Mobile entered into a licensing tie-up with incumbent operator Qatar Telecom, or Qtel and got launched just 10 days ago in Qatar. Shares in the company closed up Wednesday 0.6% at QAR8.2.
According to Grahame Maher, Vodafone Qatar’s chief executive, Vodafone Qatar is happy to compete and is not threatened by Virgin Mobile’s entry into the market, but the company sees this as a change to the rules of its license.
A unit of U.K. telecoms giant Vodafone Group, Vodafone Qatar released a statement in it was made clear that it is pursuing legal action against the gas-rich state’s telecoms regulator, ictQatar, over Virgin Mobile and that it thought Virgin’s partnership with Qtel was unlicensed. Vodafone Qatar feels that its second public mobile telecommunications networks and services license conditions are violated by this move. It also violates the telecoms law in Qatar which states that no further mobile service provider would enter into the market, and be licensed, until the proposed Sector review.
After raising QAR3.38 billion ($928 million) in a 40% share sale to the public in July 2009, Vodafone Qatar got listed on the Doha bourse. The sale has been hailed as the biggest initial public offering last year in the Middle East and North Africa region.
According to Vodafone Qatar’s chairman Sheikh Abdulrahman Bin Saud Al-Thani, the company is taking legal action for the damages this has caused its shareholders and it is simply protecting their interests; 82,000 of which are individual Qataris that paid 40% of the second mobile license fee.
A net loss of QAR673.4 million for a full year 2009 has been posted by the company earlier this month.
Sprint’s better health good for the USA telecom sector: Verizon CEO
www.WirelessFederation.com/news: Sprint Nextel recovery and stabilization has been hailed as a positive sign for the telecom industry by rival Verizon Wireless Chief Executive Lowell McAdam. Sprint came out to be the most aggressive of all the national operators in cutting the price of its service plans, on both the postpaid and prepaid ends.
But now the scene seems to have taken a positive turn with the telco reaching a state of stability suggesting that there will be fewer cuts down the line. Even though the Sprint had become very competitive, the overall porting ratios of the Verizon Wireless or the amount of customers coming versus leaving with their cellphone numbers have remained positive.
Verizon Wireless has expanded its presence in the area through reseller agreements despite having a limited direct position in prepaid. It has been revealed by the company that the margins for resellers are as good, if not better, than its traditional postpaid business and McAdam also added that he was not every captivated with the idea of bringing its brand down to the prepaid level. Concern has been raised by the CEO over unlimited data plans going away while addressing the growing demand for data services.
He opined that the introduction of fourth-generation, or 4G could change the price of the data plans and noted that consumer could have multiple products connected to the cellular network. He also expressed his disappointment in the Federal Communications Commission report that omitted the conclusion that the industry was effectively competitive. According to him, the FCC’s proposal to more heavily regulate the Internet industry could be dangerous to the overall health of the industry and the plans won’t curb its investment in 4G.
Verizon Communications Inc. and Vodafone Group PLC together own Verizon Wireless in the USA.
