Vodafone terminates merger with Wind Hellas (Greece)
World’s leading mobile communications company Vodafone has terminated plans of a potential business deal with Wind Hellas. According to reports, the decision was taken after the British firm faced opposition by the European Union regulators. Sources claim that the merger, if allowed to go through, would result in a market having only two operators, which was the prime reason for the opposition.
As per sources, Vodafone had reported a US$ 710 million loss in November 2011 for its unit in Greece owing to discounted tariff plans and declining cash flow. The merger between the two firms would have helped Vodafone to significantly cut costs and compete better with rival OTE.
Vodafone is yet to make an official statement regarding the reason for terminating the deal.
Motorola files lawsuit against Apple over patent infringement (USA)
In another patent infringement battle in the telecom industry, US based communications corporation Motorola Mobility, has filed a legal case against iPhone manufacturer Apple Inc, for violating its technology patents.
According to reports, Motorola has claimed that Apple has violated six of its patents as seen in the launch of its recent device range, including the much hyped iPhone 4S. As per sources, the patents are related to wireless antennas, software management, data filtering and messaging.
Reports reveal Motorola has claimed that Apple’s infringing activities have caused and will continue to cause Motorola Mobility irreparable harm, for which it has no adequate remedy at law, unless Apple’s infringing activities are enjoined by this Court.
Motorola Mobility is currently awaiting approval by the European Union regulators for acquisition by Google. The takeover, if approved, will provide Google with access to over 17,000 patents held by Motorola.
EU to deliver verdict for Google-Motorola deal on Feb13 (Europe, USA)
The European Union is reviewing Google Inc’s proposed plans to purchase Motorola Mobility and will announce its final decision on 13 February 2012. As reported earlier, the EU regulators had halted their review earlier claiming they required additional information.
According to reports, the takeover will give Google access to over 17,000 patents of Motorola Mobility enabling the firm to better compete with its rivals such as Apple Inc. As per sources, the EU Commission has said that Google has provided them with the required documents supporting the deal.
Industry analysts have a positive outlook on the deal with many expecting the formalities to be completed by the first half of the year.
EU regulators work towards improving mobile payment services (Europe)
European Union regulators are reportedly working towards improving the mobile payment services within Europe, as large corporates such as Google Inc, Apple Inc and Visa Inc have shown major interest in entering this business segment.
According to industry reports, the market for mobile payment is expected to be worth $ 50 billion globally by 2014, largely supported by the near field communication (NFC) technology. As per sources, the European Commission believes that the region lacks a concrete European framework that would enable customers to make financial transactions using their mobile phones. Further, sources claim that the number of m-payment users in Western Europe were 7.1 million as compared with 62.8 million users in the Asia-Pacific region.
As per reports, Visa and Visa Europe Ltd. had agreed to license mobile payments technology to Google, which could be incorporated into its new range of smartphones.
France Telecom expected to pay $1.55 billion to French government (Europe)
France Telecom SA may be required to pay the French government an amount of $1.55 billion in back taxes, in the event that it loses the appeal over an order by the European Union. As per sources, Niilo Jaeaeskinen, an advocate general for the EU Court of Justice, said that the EU court should dismiss the appeal.
The European Commission looked into the support given by the French government for the phone company when it was close to bankruptcy in 2002 and believes that France Telecom had received improper tax benefits from 1994 through 2004. As per sources, rulings by the EU’s top court take about six months from the time of the opinion. France Telecom has reportedly said that the company has set aside the funds in an escrow provision.
Telecom Malagasy to triple money-transfer users
Telecom Malagasy’s Chief Executive Officer Patrick Pisal-Hamida expects to triple the number of users of its money-transfer service by the end of this year.
According to Pisal-Hamida, Telma has attracted 200,000 M-Vola users since starting the system in May 2010 and plans to reach 600,000 by the end of December.
The company, which has 60% of the money- transfer market, competes with France Telecom Ltd.’s Orange and Bharti Airtel Ltd.’s local unit in the Indian Ocean island nation, where mobile-phone users have increased to 4.2 million from 1 million in 2007. Madagascar has a population of about 20 million.
He added that if there hadn’t been a crisis, Madagascar would be at 6 million and this is what they are expecting will happen in the two years following its resolution.
Madagascar’s economy contracted 3.7% in 2009 and 2% in 2010, according to the International Monetary Fund, the only one in Africa to shrink last year. The European Union and the U.S. halted non-humanitarian aid to Madagascar after President Andry Rajoelina, a former DJ and mayor of Antananarivo, seized power from his predecessor Marc Ravalomanana with the help of the military in March last year and later reneged on power-sharing agreements.
Pisal-Hamida stated that business is expected to stagnate this year and turnover may rise or fall by 5% depending on the crisis.
Google CEO wants to avoid long EU probe
Google Inc reportedly wants to avoid a lengthy legal battle with European Union regulators investigating its market dominance.
According to company’s CEO, Eric Schmidt, they certainly want to avoid that. He thinks it is in their interest and he would hope in their interests to a do a quick analysis of concerns that have been raised by competitors, hopefully they are minor or they are not correct. They’ll find out and make sure they are operating well within the law and the spirit of the law.
Brussels launched a formal investigation into Google in November following complaints from European rivals that it was abusing its dominant position in the market for web search services.
A previous EU investigation into software giant Microsoft snowballed into a 10-year legal battle in which the company paid $2.3 billion in fines.
EU to end Chinese telecom probe despite subsidies
The European Union will drop its inquiry into whether China is giving illegal aid to two of its leading telecom firms, even as the EU’s executive cites evidence of massive subsidies, according to EU Commission documents.
The Commission will propose ending two investigations into illegal export pricing by and state aid to Chinese wireless modem producers after the withdrawal of the complaint by Europe’s main producer, Belgium’s Option, late last year, according to a confidential document seen by Reuters.
The proposal is expected to be approved by European Union governments later this month, ending a case industry players had expected to be a litmus test of the EU’s willingness to challenge Chinese state subsidies. “It would be disproportionate to continue with the investigation and impose measures following the withdrawal of the complaint,” the Commission said in its document, which was distributed on Tuesday to interested parties in the case.
But in a separate document also dated Tuesday and distributed to EU governments, the commission cites evidence – gathered since last summer – that China’s main telecom producers Huawei and ZTE are state-controlled and receive cheap state loans that give them an unfair advantage over their European rivals.
“We would welcome the termination of the investigations as we reject any accusations of injurious dumping and subsidisation,” Huawei said in a statement. ZTE has also denied receiving state aid, but could not be reached for comment.
There was no comment from the EU Commission. Huawei and ZTE have denied receiving state aid, and neither company could immediately be reached for a response. Option dropped its complaints of Chinese subsidies and export dumping after it reached a co-operation agreement with Huawei in October.
According to the Commission, ZTE received credit lines of $15 billion from the China Development Bank and $10 billion from the China Export-Import Bank in 2009. The Commission’s findings also include allegations that ZTE and Huawei are still influenced by the state.
Beyond wireless modem manufacturing, the growth of Huawei and ZTE in other sectors has worried European telecoms hardware and network infrastructure producers such as Ericsson, Nokia Siemens Networks and Alcatel-Lucent.
EU expects major Chinese govt support for Huawei, ZTE
If reports are to be believed, the European Commission believes Huawei Technologies Co. and ZTE Corp., China’s largest telecommunications equipment makers, benefit from massive credit lines from Chinese state-owned banks and other significant government support.
The findings are likely to fuel further debate regarding the treatment of the large subsidies that–according to western governments and companies–Chinese businesses receive from the Chinese government. Western trade experts state that Huawei, which has rapidly grown to become the world’s No.2 telecommunications equipment maker, is a compelling example of a Chinese company that has been nurtured to global dominance using such subsidies.
The commission document, circulated to European Union national governments this week, explains that the preliminary results of commission investigations into unfair Chinese trade practises alleged by Option NV, a small Belgian maker of wireless modems. The commission in the document proposes to close the investigations without finishing them, because Option withdrew its complaints in October.
The document concludes that nevertheless, several important issues have come to light which remain unanswered by the major exporting producers of this product.
The major European Union producers of telecommunications equipment–Telefon AB L.M. Ericsson, Nokia Siemens Networks and Alcatel-Lucent–have seen their margins squeezed by stiff competition from Huawei and ZTE. Their rapid growth has prompted discussion among western firms that they are probably benefiting from extensive Chinese government support.
Over the last five years Option saw its share of the EU wireless modem market nearly disappear due to competition from Huawei and ZTE, which now control almost the entire European market.
Wireless modems, which connect computers to wireless Internet networks, are a relatively small business for Huawei and ZTE. The more important market is large network equipment such as Internet base stations for mobile networks–where the two Chinese firms compete with Ericsson, Nokia Siemens Networks and Alcatel Lucent.
The subsidies in question appear to be helping all parts of the Chinese firms’ business.
As per the document, the commission had the opportunity to investigate ZTE more thoroughly than Huawei before stopping the investigations. ZTE states it has access to credit lines of an enormous magnitude relative to its annual sales.
Mobile operators forced to offer 12-month contract (UK, Europe)
European mobile phone subscribers will have to be offered the choice of 12-month contracts in addition to the increasingly usual 18 and 24 month contracts, under laws passed by the European Union. The legislation is due to come into effect in May this year, subject to ratification by each of the European Union’s nation states.
According to Ofcom spokesperson, the European Telecoms Package has to be transposed into UK law by the end of May. Under it, contract lengths must not exceed 24 months and consumers should have the option to subscribe to a 12 month contract.
The imposition of 12 month contracts will however result in higher retail prices for smartphones as the networks will have less time to claw back their subsidy before the contract expires and the customer seeks an upgrade or to migrate to another operator.
The EU’s telecoms package of laws also mandates that no contract can be longer than 2 years, and that number porting will be limited to a maximum delay of one day. In addition, operators will be required to offer equivalent access to communications services, and operators will have to work towards offering location based information to emergency services when such a call is made.
Finally, consumers will have to be better informed of available tariffs, usage patterns and have the right to cost control notifications when monthly bills exceed their set threshold
