Decision on Telecom Italia & Telefonica merger soon
www.WirelessFederation.com/news: In the next three months, decisions will be taken regarding the planned merger between Telecom Italia and Spain’s Telefonica. Telefonica has 46.18 percent stake on Telecom Italia which is a holding company that owns 22.5 percent of the Italian telecommunications operator.
The performance of Telecom Italia’s stock has made Telefonica and other telco shareholders unhappy. Telefonica’s presence in Telco has also limited Telecom Italia’s maneuverability, especially in Latin America where both the companies face antitrust issues.
Telecom Italia is under pressure in Argentina to sell its indirect stake in a telecommunications operator because of Telefonica’s investments in the same country.
Cheap Valuation & dividend highlight better year for China Mobile
www.WirelessFederation.com/news: Cheaper valuation compared to its competitors, China Unicom (Hong Kong) Ltd. (CHU) and China Telecom Corp. (CHA), an attractive dividend yield and improving growth prospects with the launch of more third-generation value-added telecom services is highlighting a better year for China Mobile in 2010.
After the merger of China’s six telecom operators into 3 nationwide full-service operators in late 2008, after a government-mandated industry restructuring, the world’s biggest telecom operator by subscribers, has largely underperformed the broader market due to worries over rising competition. China Mobile’s shares fell 6.4% in 2009.
The stable cash flow and high dividend yield of China Mobile along with the expansion of its 3G handset devices including some low-cost CNY1, 000 phones and new value-added services are major selling points in an increasingly volatile market. According to analysts, other share price catalysts would be the company’s forthcoming mainland listing and the likelihood that China Mobile may raise its dividend payout ratio on lower capital spending.
FTC approves LG telecom’s merger plans in South Korea
www.WirelessFederation.com/news: LG telecom got antitrust approval from Fair Trade Commission (FTC) to merge its three local telecoms subsidiaries- LG Dacom, LG Telecom and LG Powercom.
The South Korean antitrust regulator was satisfied after examining the proposal saying that the tie up is unlikely to harm competition either in the fixed line or wireless sectors.
FTC also claimed that after the merger, LG units will compete more effectively with SK Telecom and KT Corp, the rival companies. FTC also said that it would not impose any conditions on the merger but at the same time, it will monitor the market conditions and take strict actions against any illegal activities.
According to the proposal, that got the approval of the LG shareholders, LG Telecom will absorb both LG Powercom and LG Dacom on 1 January 2010. KT Corp merger with its own wireless affiliate, KT Freetel, in June 2009 will follow this merger.
Merger may solve Vodafone- Verizon tensions in the USA
www.WirelessFederation.com/news: According to US analyst, the solution to the problem between Vodafone and Verizon wireless over the latter’s lack of dividend payment from the US operator could be merger. According to Execution analyst Will Draper the likelihood of the two companies merging together is 30% to 40% as compared to 10%, a couple of years ago.
However, other industry watchers are discouraging Vodafone for any kind of merger as Verizon Wireless will approach the UK-based company for help. Some also feel that Verizon Wireless might make a divided payment next year providing a transformational cash return of nearly US$4 billion to Vodafone.
Vodafone will have to pay a huge tax bill if it sells 45 per cent stake in Verizon valued at US$65 billion. In that case it would have to rely on the only likely bidder, Verizon Communications.
MTN and Bharti now rivals in a bid for Zain.
What was to be a merger is now likely to turn into a battle to acquire Zain. Reliable sources have revealed that a dialogue between Airtel and Zain has now been initiated via intermediaries. With this Bharti will now take on MTN in a bid to acquire Zain.
Last month, MTN CEO Phutuma Nhleko had stated that it would consider buying the African assets of Zain Telecom if the deal with Bharti did not go through.
Bharti Airtel is trying its hardest best to get a foothold in Africa, which is where the growth story is playing out as well.
Zain is considered a valuable asset because it has over 69 million customers and operations in 24 countries across West Asia and Africa, and a market capitalisation in excess of $19 billion. In Africa alone, it has 41 million customers and is the number one mobile operator in 12 of the 16 countries it operates in. As a comparison, MTN has over 103 million customers and operates in 21 countries.
Solid revenues for Hutch from India
NEW DELHI: Hutchison Essar reverted to its first- half revenue, mainly through its
India operations, even as it is embroiled in a row with its Indian partner, over the merger of BPL (Mumbai) circle. The mobile telephony business has contributed almost 45 percent of its global turnover HK$15,666 million in the first half of 2006.Hutchison has attributed the improvement in its profitability to strong performance in the India and Israel markets.Declaring the results, Hutchison Telecom’s CEO, Dennis Lui maintained that the ties between Hutchison and its associate, Essar remained harmonious. “We are in control of Hutchison Essar since we own 67 percent of the company. So I think we have the ultimate say. I think both our interests are to grow the value of the business,” he stated.Hutchison Essar is Hutchison Telecom’s largest revenue contributor with its earnings before interest, tax, depreciation and amortization (EBITDA) increasing to 47 percent to HK$2,316 million.However, the sustenance of the profitability in the second half relies on the timing of the launch of operations in Indonesia and Vietnam, which are scheduled to happen in the second half of this year.
Source- Siliconindia
Technorati : EBITDA, Essar, Hutchison, India
Ice Rocket : EBITDA, Essar, Hutchison, India
