Telefonica with ZTE launches Movistar Prime Android handset
Telefonica in partnership with ZTE has launched Movistar Prime Android handset. The device will be commercially available in 12 Latin American markets where Telefonica operates starting with the second quarter of this year.
Users will be able to access multiple types of applications and services, including email and office applications, as well as social networks, instant messaging, and GPS. Customers will be able to expand the capacity of the device by using the Telefonica pre-installed services, or by downloading new applications from the operator’s applications store.
The handset also features a 3.2 megapixel camera for photos and videos and multimedia player for all types of content (games, music, videos). The new model includes a 3.5 inch capacitive touch screen, high capacity processor, and multiple connectivity options (HSDPA, Wi-Fi and Bluetooth).
As a result of the agreement reached with ZTE, Telefonica has brought six Movistar brand handsets onto the Latin American market. Four new handsets are expected to be included in the Movistar portfolio over the next few months, in addition to the Movistar Prime model.
Global mobile transaction value to reach $1 Trillion by 2014
A research report has revealed that while mobile transaction usage is growing, consumers show little willingness to pay for these services. The researcher’s predict unparalleled growth in mobile transactions worldwide, with the total value of global mobile transactions increasing from $162 billion in 2010 to $984 billion in 2014.
However, according to a survey result, less than 10% of respondents would be willing to pay extra for mobile transaction services such as mobile banking, mobile coupons and mobile payments.
Every silver lining comes with a big, dark cloud and the explosion in mobile transactions is much the same. Although mobile transaction service usage is increasing phenomenally, consumers show little interest in paying any additional fees for them. If banks, mobile operators, card networks and retailers want to tap mobile transactions as a revenue stream, they’ll need to come up with more creative schemes than per-transaction fees.
Researchers mobile transaction forecast tracks metrics on mobile banking, international and domestic remittances, contactless cards, mobile coupons and NFC communications. Other forecast findings include:
- Asia-Pacific overtakes EMEA as the mobile banking powerhouse: In 2010, EMEA leads all regions with 42 percent of worldwide active mobile banking users, followed by Asia-Pacific (38 percent), North America (16 percent) and Latin America (4 percent); by 2014, Asia-Pacific will lead with 54 percent, followed by EMEA (32 percent), North America (10 percent) and Latin America (4 percent)
- Mobile coupon usage explodes: The number of active mobile coupon users is expected to grow from 2.7 million in 2010 to nearly 35 million in 2014
- Near field communications (NFC) takes off: The number of NFC-enabled phones will grow from just 834,000 in 2010 to 151 million in 2014, a CAGR of more than 300 percent. Similarly, the value of NFC-based transactions will explode from $27 million in 2010 to $40 billion in 2014.
Millicom sees 10 % rise in Q4 revenue
Millicom International has posted that its fourth-quarter revenues increased by 10% to US$1.07 billion, including the consolidation of its Honduras subsidiary earlier in the year.
Net profit decreased to US$157 million, compared to US$454 million a year ago. After issuing the one-off gain of US289 million in 2009, the profits dropped by almost 5%. For the full year, revenues rose by 16% to US$3.9 billion.
In Q4 10, Millicom added 1.1 million net new mobile customers, reaching 38.6 million total mobile customers, which is an increase of 14% versus Q4 09. Out of this number, over 1.7 million were using 3G enabled devices for data services (handsets and data cards) in Latin America, a gain of 15% from Q3 10. One half of all the new customers added in Latin America in 2010 were 3G data users.
According to Mikael Grahne, President and CEO of Millicom, the execution of Millicom’s value creation strategy continues to deliver good results, with close to $1.1 billion of revenues, $497 million of EBITDA and an EBITDA margin of 46.5% recorded in the fourth quarter. They have produced double digit top line growth in all four quarters of 2010 with an evolving distribution of growth by region in the latter part of the year. Growth in Africa remains strong at 12% in local currency although it is lower than in previous quarters as market price decreases have accelerated lately. In Central America, revenue growth has improved quarter on quarter and is now reverting to positive.
They have also made further progress in the fourth quarter with a number of their strategic objectives. In the area of asset optimization, they were pleased to announce two additional tower deals with Helios Towers Africa in December. Almost two thirds of their towers in Africa should be outsourced by the end of 2011, creating over $400 million of value through cash and equity and expected future cost savings.
To optimize balance sheet, they have redeemed their 10% corporate bond in full on December 1, following the raising of $450 million of debt by their operation in El Salvador in September. The company is now in a position where 100% of their debts are at an operating level which reduces net financing costs, improves tax efficiency and mitigates country risk.
He added that this year, as in 2010, the company aims to achieve the right balance between top line growth, profitability and cash flow generation. They expect their EBITDA margin to be in the mid 40s and operating free cash flow to be in the mid teens as a percentage of revenues for 2011. The company also expects capex to exceed $800 million in 2011, excluding new spectrum expenditure, as they roll out 3G in Africa and add capacity in Latin America.
America Movil Profit decreases 4.7% on depreciation costs
Latin America’s largest wireless carrier, America Movil SAB has stated that its fourth-quarter profit fell by 4.7% as costs to depreciate older technology increased.
Net income fell to $2.01 billion, from US$2.10 billion a year earlier and sales rose 6% to US$13.40 billion.
According to the company, the pace of technological advances in the market is growing so quickly that America Movil had to reduce the value on its books of older equipment. It categorized US$736.53 million of its US$2.21 billion in depreciation and amortization expenses in the quarter as extraordinary charges.
The company also recorded an extraordinary deferred tax credit of US$413.78 million in Brazil.
America Movil added that the depreciation charges represented 16.5% of sales in the fourth quarter compared to 14.3% in the previous three-month period. The charges will decline to 12% throughout 2011.
The company added 8.2 million mobile subscribers to close the quarter at 225 million. The biggest additions came in Brazil and Mexico.
America Movil expects to add as many as 17 million mobile phone subscribers in 2011, as compared to 24 million last year.
Carlos Slim to invest $3.6 billion in Mexico in 2011
Mexican billionaire Carlos Slim has announced that companies he control will invest US$3.62 billion in Mexico this year, including significant amounts in infrastructure, mining and telecommunications.
According to reports, the Mexican billionaire, who controls Latin American mobile giant America Movil, will invest around US$820 million in the group, while a further US$820 million is expected to be set aside for Mexican fixed line incumbent Telefonos de Mexico (Telmex).
With Telmex still awaiting regulatory approval to offer television services of its own, it currently offers billing services for direct-to-home satellite company DISH; delays in allowing the operator to enter the TV sector stem from the government’s concerns that competition in the market could be hampered should such approval be granted.
The report notes that in response to queries regarding whether Slim could consider acquiring a stake in the satellite TV provider the executive noted that they are not focused on that, they are waiting (for the authorization) to offer triple-play.
Mobile finance to take off across Latin America with new joint venture
Mobile payments could soon be greatly facilitated across Latin America following the announcement of a new joint venture between MasterCard and Telefonica. The two firms have stated their aim to lead the development of mobile financial solutions in 12 countries in Latin America where Telefonica is present with the Movistar brand.â€
The two firms have an equal stake in the joint venture, which will leverage banking relationships of both companies, Telefonica’s telecommunications assets and MasterCard’s payments expertise.â€
The alliance between the firms will allow customers to use their handsets and devices for various financial services, including money transfers, online shopping, reloading airtime and bill payments. Telefonica has called the agreement a step toward achieving financial inclusion for the underserved in Latin America positively impacting its economic development.â€
No timeframe for the launch of any products of services has yet been specified. MasterCard recently appointed a former VP of electronic payments at Orange, Mung-Ki Woo, as a Group Executive for fostering innovation, commercialization and development of go-to-market strategies to support mobile payments around the world.â€
17 countries generate 80% of its mobile advertising traffic
Google has released detailed information about where its 2 billion daily mobile ad requests come from. While the AdMob network generates monthly ad requests from more than 190 countries, 17 countries account for more than 80% percent of total traffic in December 2010.
According to their data, most regions had 2-3 countries that accounted for more than half of total ad requests. The remainder of the requests across these regions was spread across a set of smaller, but generally more rapidly growing countries.
This data is based solely on ad requests in the AdMob network of mobile web sites and iPhone, Android, webOS, and Flash Lite applications.
Three countries – India (26%), South Korea (13%) and Japan (12%) – accounted for just more than half of ad requests from Asia in December 2010. Five countries in Asia – South Korea, Japan, China, Singapore and Thailand – had growth rates of more than 1000% in 2010.
Two countries – Mexico (31%) and Brazil (26%) – drove more than half the ad requests in Latin America in December 2010. Brazil’s growth in 2010 far outpaced that of any other country in the region at 1251%.
Three countries – the UK (33%), France (17%) and Germany (12%) drove more than 60% of ad requests from Western Europe in December 2010. The top 10 countries in Western Europe all experienced a greater than 400% growth rate in 2010.
Three countries – Nigeria (21%), South Africa (21%) and Egypt (12%) – accounted for more than half of the ad requests from Africa in December 2010. Sudan experienced the most explosive growth in Africa at 2466%, but started from a small base and only accounted for 6% of African requests in 2010.
Dominican Republic to invest $333 million in 2011
The Dominican Republic subsidiary of Latin American mobile giant America Movil has announced that it expects to invest around US$333 million in 2011.
According to reports, the unit, which currently operates under both the Claro and Codetel Dominicana banners, also revealed that from April 2011 it would no longer use the Codetel moniker, instead switching solely to the Claro brand in line with its parent company’s overarching group strategy.
As per Oscar Pena, Claro Dominicana’s President, having donated around US$200 million to support Haiti’s reconstruction in 2010 following the earthquake there it also spent around US$241.61 million on its domestic operations that year. This years’ investment is expected to be directed towards the development of new technologies.
HCL Technologies bets on emerging markets to drive growth
If sources are to believed, HCL Technologies Ltd. is betting on emerging markets to drive its revenue growth over the next several years, as developed countries in the West continue to grapple with economic uncertainties.
Indian information technology companies such as New Delhi-based HCL Technologies get most of their business from the U.S. and Europe by offering services like computer software and back-office support at a fraction of cost their clients in developed markets would locally acquire.
But, budget cuts by traditional customers, the European debt crisis and a slow recovery in the U.S. have made these IT companies to diversity their markets, especially into countries in Asia, Africa and Latin America where several economies are growing at a fast pace again after shrugging off the effects of the slowdown.
They are investing in the emerging market thinking that this market will grow faster than the rest of the world, according Virender Aggarwal, executive vice president and head of Asia-Pacific, Middle East and Africa at HCL Technologies. The growth story seems to be continuing in emerging markets, making the overall outsourcing demand environment stable to good.
Tata Consultancy Services Ltd., India’s top IT Company by revenue reported a better-than-expected 30% jump in third-quarter consolidated net profit, helped by a sustained rise in outsourcing orders. Infosys Technologies Ltd., the second largest, however missed the forecast last week though its profit rose more than 14%, and cautioned that a slow economic recovery in developed markets and currency fluctuations could derail growth of India’s outsourcing sector this year.
According to Aggrawal, the company has to hedge its bets outside of two main markets–the U.K. and Americas, but didn’t give any financial forecast. It gets more than 15% of revenue from markets such as Asia, Africa and Australia, compared with about 12% four-five quarters back, he said. The strong growth in emerging markets is partly driven by demand for banking and financial services.
In Africa, HCL Technologies is experiencing higher demand from telecommunications companies after mobile-phone services provider Bharti Airtel Ltd. entered that market last year, replicating its successful Indian business model of outsourcing technology operations.
Aggrawal added that Bharti’s move has fuelled the demand for outsourcing services from African telecom companies, which are looking to cut costs and focus on core competencies. The company is also witnessing higher demand from mining, commodities, oil and retail companies in Africa. Contracts in most emerging markets are small in size–worth $10 million-$20 million and spanning several years. Orders from Australia and New Zealand are worth $50 million or more and are comparable with other developed markets. Emerging markets offer also smaller operating margins, but there’s nothing to worry. The company plans to expand its presence into markets like Kenya and the Philippines, encouraged by the strong growth in those economies. It already has operations in Russia, Indonesia, Saudi Arabia and Turkey.
