Vodafone’s growth hit in the wake of riots in Egypt
Egyptian riots, and Vodafone’s conceivably subsequent mishandling of its operations at the time, had resulted in 80 percent drop in the telco’s growth rate in the country. The company suffered loss of millions in both customers and revenues.
During the January uprising, the Egyptian Vodafone network was suspended as it succumbed to the demands of former president Hosni Mubarak’s regime, and also sent four propaganda messages by text to its customers. The company has eventually, come under heavy criticism. The suspension of the Vodafone network entailed 24 hours cancellation of all voice services, in addition to shutting down data services for five days, all of which meant hindered contact with the outside world at a critical juncture.
In a bid to justify its actions, Vodafone asserted that the move was undertaken in view of the safety of its staff; adding that the Egyptian users understood the circumstances. Apparently, political commentators overseas did not agree. In addition, resentment against Vodafone appears not to have subsided as yet, in view of nasty Twitter remarks by users.
Figures released by Vodafone bear testimony to the telco’s slump in new business. Three months prior to December 31 – before the eruption of the riots – Vodafone witnessed an increase of 3.1 million users to hit a total of 31.3 million, in comparison to 2.4 million net additions in the quarter before that.
Yet, this figure in particular saw a drastic drop and touchdown to 561,000 during the three months when the riots occurred, representing a growth level of slightly more than a sixth of the earlier levels. And, in the quarter to June 30, Vodafone witnessed a recovery of sorts with 1.9 million net additions.
According to Vodafone, the general chaos in this part of the world at the time must have much to do with respect to the decline in its rising net subscriber additions. Apparently, Egypt is a key growth territory for Vodafone, and the slowdown in net additions is likely to put more pressure to examine the company’s contracts with governments in emerging markets.
Although, governments reserve the rights to control mobile networks during emergencies, commentators argue that the response provided by Vodafone did lack the punch.
Vodafone serving 40 percent of Egypt’s mobile users, together with rival operators France Telecom and Etisalat that have 40 percent and 20 percent market share respectively negotiated with Egypt’s then new coalition government, eventually to be forced to suspend services.
Apparently, Vodafone having gone with its legal obligation to stay silent on the subject had done a great deal of damage to the company’s refutation, and then being exacerbated by the leakage of a of a promotional video in which Vodafone Egypt appeared to take credit for overthrowing Mr Mubarak’s regime.
The advertising agency JWT had produced the video, intended for internal use, and not authorized by Vodafone.
The number of SIM cards in use exceeds the population in France
Arcep is the telecom regulator in France which revealed that the number of SIM cards in use exceeds the population in the whole of France. As on end of June, there were 66 million SIM cards in use in the country, representing a 101.6% population penetration level while the annual growth reflected 6% over the past four quarters.
The number of flat rate accounts that include M2M and internet access cards sustained a rise of +7.2% over the previous years. The growth rate was a tad slower though, in view of the previous quarters that produced 8% to 9% growth over the last five quarters. On the other hand, the last six months has seen a 4.1% growth rate in prepaid cards as compared to Q2 2010 for the same period.
There were 5.9 million cards ending the last quarter with regard to the number of M2M (machine to machine) and 3G data only SIM cards being used, representing 8.9% of the total base, and fuelled by a rise by 260,000.
Powered by an increase of 190,000 customers, the residential market grew slightly during the quarter while the increase in the number of MVNO customers over the past three months has yet again, offset network operators’ losses.
ZTE unveils its UK network testing centre
ZTE has unveiled its network testing and development centre based in the UK, at London Docklands. The innovation centre has links to all major networks in the UK as well as to the critical Docklands’ Telehouses.
ZTE’s centre for network testing and development will have QiComm’s core interconnects and data centre as its close neighbor while it will facilitate ZTE to test its infrastructure products in a live network environment. In addition, ZTE’s UK based headquarters in Brentford, West London where the company houses its rapidly increasing ZTE infrastructure support and development team will have supplementary work space for accommodating them.
ZTE’s centre in the UK happens to be the first of 10 international Innovation Centers, the company is looking to establish across countries like Spain, France and Germany, in a bid to facilitate R&D programmes in tandem with major operators.
ZTE had recently, joined hands with QiComm by appointing the latter as the former’s preferred service integration partner in the UK market. Systems integration, project management, logistics and ancillaries will be provided by QiComm with regard to UK-focused implementation and support for ZTE.
A test and demonstration suite that will be workable with any ZTE network equipment and powered by a full connection via QiComm to the major commercial UK telecom networks will be housed in the ZTE Innovation Centre. Also, the centre will have offices, meeting rooms and a training and demonstration centre.
Digicel sets the ball rolling for prepay platform upgrade for Diaspora Customers
Digitalk stated that they have inked a deal with Digicel, the Pan-Caribbean mobile network operator with regard to the latter’s Multiservice Platform dedicated to the prepaid services across the USA and the Caribbean islands.
Digicel is known to offer prepaid calling card, in addition to pre/post paid PIN-less services in the USA, Miami and Florida in particular by way of a white label hosted service, specifically targeting the Diaspora communities. The platform architecture adopted by Digicel is characterized by an in-house management of operations, looks to augment greater control over distribution, pricing and promotions, and supports its plans to introduce services in other countries.
To begin with, the Digitalk prepaid consumer platform is expected to accommodate all of Digicel’s existing services. Eventually, it will facilitate the roll-out of services to other countries with significant Diaspora communities from the Caribbean Islands; the UK and France included.
According to Justin Norris, CEO of Digitalk, they have managed a number of large-scale deployments on one side of the Atlantic while they take pride in the fact that their reputation as leaders in prepaid consumer platforms in the traditional European Markets has stood the test in the Americas and Caribbean.
Alcatel-Lucent’s second quarter revenue rise stamps its resurgence (France)
Alcatel-Lucent announced the rise in the company’s second quarter revenues by 2.4% to $5.6 billion. It also stated that discounting currency fluctuations, the rise in revenues would have stood at 10.4%. On the other hand, the company’s net profit stood at $62 million while it had suffered a loss of $263.19 million last year.
The constant currency adjusted traction remained healthy across North America, representing a year-on-year sales increase of 18% while the rise in revenue across the Asia Pacific propelled to 14% in the same quarter. However, the revenue growth in the Asia Pacific was pushed by more than 40% rise specifically in China, as compared to last year quarter. In addition, Central and Latin America stood out in the company’s revenue growth with regard to the rest of world which represented more than 30% year-on-year growth. With regard to Europe, there was a slight revenue rise in Western Europe but nullified by a drop in revenue across Eastern Europe.
Alcatel-Lucent’s networks segment posted a revenue rise of 7.4% to $3.55 billion in the second quarter 2011, as compared to $3.3 billion in the preceding-year quarter. Discounting currency fluctuation, revenues from the networks segment rose at 14.1% year-on-year, with 5.8% sequential increase. In addition, the adjusted operating profit from this segment stood at $68.65 million that represented an operating margin of 1.9% while the same stood at $78.67 million a year ago at a margin of 2.4% for the second quarter.
With regard to the Applications segment, the company witnessed a revenue decline by 0.6% that represented a drop from $699.46 million a year ago to $695.17 million, for the second quarter 2011. However, the preceding figure represents an increase of 7.8% in comparison the first quarter 2011 figure. Applications revenues at constant currency exchange rates rose by 4.7% year-on-year, with a 10.2% sequential increase. In addition, there was an adjusted operating profit of $27.17 million with an operating margin of 3.9%. In contrast, this segment had suffered an adjusted operating loss of $24.31 million last year; a margin of -3.5%.
The Services segment posted $1.25 billion worth of revenues for the second quarter 2011, representing a decline by 1.4%. In comparison, it was $1.26 billion for the second quarter last year; yet, the figure represents a rise of 7.7% as compared to the first quarter 2011′s revenues worth $1.16 billion. Discounting currency fluctuations, there was a rise of 2.9% year-on-year revenues for the Services segment, with a 9.8% sequential increase. In addition, the adjusted operating profit stood at $75.8 million, representing a 6.1% adjusted operating margin for the second quarter 2011 as compared to an adjusted operating profit of $27.18 million and a margin of 2.2% last year for the same quarter.
BBC unveils iPad app in Europe for its TV shows
BBC, the UK based broadcaster has announced the unveiling of an app for Apple’s iPad. The app makes it possible for reviewing the BBC television shows by way of the iPad’s inbuilt iPlayer app.
It is going to be an on-demand subscription service. Western Europe will witness the app’s launch in 11 markets, ahead of subsequent launches elsewhere. Services will be offered at $10.04 per month or $71.86 annually in Austria, Belgium, France, Germany, Italy, Luxembourg, The Republic of Ireland, The Netherlands, Portugal, Spain and Switzerland, in the app’s initial launch.
Subscribers will be able to both stream and download shows for offline viewing – the major highlight of the BBC app.
France Telecom profits decline; sale of its Swiss network possible
France Telecom posts 1.9% rise in its first-half revenues to $32.6 billion. However, the company’s net profit declined to $2.8 billion from $5.31 billion the preceding year. The decline in profits is largely attributed to setting up of the UK based Everything Everywhere joint venture last April. Discounting the UK based business, the company would have still seen profit decline by somewhat above $862.56 million.
Reasserted EBITDA stood at $11 billion with margin erosion capped at -1.5 percentage points. In addition, -0.6 percentage points of the margin erosion was attributed to the crises in Egypt and Côte d’Ivoire, and the adverse impact of the VAT increase in France which was only partly passed on to the consumers.
The company saw an increase of 7%, in the number of customers. The total number of Group customers stood at 217.3 million as on 30 June, 2011; pushed by a 23% rise in mobile services across Africa and the Middle East.
In anticipation of the review of its European asset portfolio, the company stated that it has started the process for a potential sale of its consumer business in Switzerland. Last year, the company had looked to merge Orange Switzerland with Sunrise, its rival network. However, the proceedings were stalled by the Swiss Competition Commission.
In addition, a review of operations in Africa and the Middle East as well as those for the Enterprise sector is also awaited by the company, expected to be over before the end of this year.
Orange and Google join hands to offer Africa, related mobile services
France Telecom-Orange and Google have come together under the umbrella of a ratified partnership, looking to aid seamless access to Google’s services across the African continent, supported by Orange’s networks. Apparently, the companies are linked in a symbiotic relationship; users of mobile services offered by Orange stand to stay connected by way of Google services while a Google faithful can expand his network on the back of SMS-based services.
Senegal, Uganda and Kenya constitute the club of few countries that already enjoy the “Gmail SMS Chat” service. The Orange-Google partnership will see to the launch of the same service across Orange’s footprint in Africa as well as the Middle East. The launch in Cameroon, Côte d’Ivoire, Guinea Conakry and Niger is slated for the coming months while Egypt (Mobinil) will witness the launch on a trial basis.
The companies are also considering encompassing other services as well, by way of their association.
Orange and Google are known to be building SMS-based services supported by all mobile networks while striving to augment the reach of a range of internet services to all Orange mobile customers that were previously limited to smartphone and broadband users.
390,000 customers opt out of Everything Everywhere (UK)
The holding company of both Orange and T-Mobile in the UK happen to be Everything Everywhere. The company has stated that it has experienced an exodus of 390,000 customers opting out over the last one year. The current figure of the number of customers for the mobile operator stands at 27.93 million as on June 2011.
The biggest loser has been the prepay customers segment that has witnessed a fall by 1.17 million. However, the number of contract customers soared by 880,000. Again on the company’s positive side, contract churn hit record low at 1.1% while 85% of new contract customers had chosen a smartphone; the same figure in 1st quarter 2011 stood at 84% while it was 64% year-on-year.
Nonetheless, the second quarter revenues represent a fall by $87.03 million to $2.7 billion.
There was also a free cash flow generation of $599.36 million by the company during the last six months up till 30 June, 2011. In addition, Deutsche Telekom and France Telecom were also paid dividends of $765.21 million by Everything Everywhere.
Vodafone’s quarterly revenues up 3.5 percent
The second quarter results announced by Vodafone show that the telecom operator has witnessed 3.5 percent rise in revenues to $18.8 billion. However, the company does not release its quarterly profit figures.
India at +16.8%, Turkey +32.1%, in addition to Vodacom +7.8% represent its strong service revenue growth while Germany’s +0.2% and UK’s +1.7% added to Vodafone’s resilient performance. Apparently, Vodafone faces a testing market in southern Europe with Italy’s service revenue at -1.5% and Spain deteriorating to -9.9% as a result of price reductions.
Vodafone’s net debt stood at $37.4 billion, in the wake of a receipt of $11 billion from the sale of its 45% stake in France’s SFR.
According to Vittorio Colao, Chief Executive, they have made a good start to the year in view of the robust results despite challenging macroeconomic conditions across southern European economies and the impact of cuts to mobile termination rates. In addition, revenue from their key focus areas of data, enterprise and emerging markets continues to grow strongly. He also believes that Vodafone’s presence across a broad geographical mix; in addition to improving market positions hold them in good stead for the rest of the financial year.
On the other hand, Vodafone’s capital expenditure stood at $1.95 billion, representing a rise of $326.12 million on a year on year basis, mainly attributed to LTE investment in Germany and network enhancements in Vodacom.
