EC decision gives another blow to mobile sector
www.WirelessFederation.com/news: Digital Agenda, part of the Europe 2020 strategy has been presented by the European Commission and increasing access to broadband services, including possible state aid for remote areas, and spectrum harmonization has been projected as important elements for the telecom sector. Willingness for a certain amount of government intervention has already being shown by ICT commissioner Neelies Kroes.
Countries like the Netherlands are already well on the way to meeting the goals and here 50Mbps is already available to around 90 percent of the population. 100 percent Broadband might not be possible but the target does not seem to be too far. One cannot consider the target of universal access to at least 30Mbps by 2020, with at least half of households on 100Mbps as ambitious.
In the statement, by 2015, the international roaming prices should be so low that a mobile user doesn’t even notice when it crosses a border at least, not from the mobile prices. Artificially high tariffs and subsidizing mobile with fixed networks soon will be things of the past.
While announcing its Q1 results, Dutch telco KPN estimated that mobile termination rate cuts cost the company EUR 55 million in revenues and EUR 20 million in EBITDA. KPN’s market expectations centre on a small revenue decline this year to EUR 13.4 billion from EUR 13.5 billion in 2009. Small increase in 2011 and 2012 to EUR 13.45 billion (both years) has been estimated by the market currently.
But if the national regulators and the EC actions are taken into consideration, it’s highly questionable whether this growth will materialize already in 2011.
Telekom Austria Q1 profit rises 6.9%
www.WirelessFederation.com/news: 6.9% rise in first-quarter net profit has been reported by Telekom Austria as strict cost control and lower amortisation, depreciation and interest payments more than offset lower sales. Earnings of the company also fell 6.4% in the quarter, comfortably overshooting expectations.
The first-quarter net profit rose to EUR91.2 million (USD115.9 million), from EUR85.3 million a year earlier, EBITDA fell to EUR425.9 million, from EUR454.8 million a year earlier and sales fell 5.9% to EUR1.13 billion from EUR1.2 billion.
According to the company, the drop in sales could be ascribed mainly to lower prices, regulation of roaming and mobile termination rates and a decline in fixed line customers, but that it was compensated to a large extent by mobile customer growth and cost reductions evenly distributed across the group. As the growth in subscribers failed to offset tougher regulation and currency losses in Eastern Europe, Telekom Austria’s mobile division saw sales decline 7.1%, to EUR734.2 million.
KPN Q1 revenue falls 3.5% (Germany)
www.WirelessFederation.com/news: The first-quarter revenues of Dutch operator KPN fell 3.5% in line with market consensus to EUR 3.28 billion from 3.39 billion the year before. Poor Dutch sales and negative effect from disposals and cuts to mobile termination rates were the major reason behind the fall in the revenues.
According to KPN CEO Ad Scheepbouwer, the company continued to feel pressure from the general economic situation and regulatory measures, offset by a continued focus on customer value and cost-cutting measures but now the service revenue trend in Germany was improving, with a continued strong EBITDA margin.
7.2 percent rise in the group EBITDA has also been recorded from 1.23 billion to EUR 1.32 billion while the EBITDA margin went higher to 40.4 percent from 36.3 percent. Even the net debt rose slightly at the end of the quarter due to a net tax prepayment to EUR 11.4 billion from 11.1 billion at the end of the previous quarter.
Bharti includes low cost model in its strategy for Africa
www.WirelessFederation.com/news: Indian telcos have made a mark for offering low cost service and Bharti Airtel is ready to enter the African market with its trademark expertise after acquiring Zain African assets. The aim of the company is to reduce costs with the motto to earn high profits by offering ultra low cost service.
The low cost model is expected to be applied in all the 15 markets with a local flavor to emerge successful. Maximizing the consumption of minutes, which has been successful strategy of Bharti in India, is also on its cards for Africa. This can be achieved by two ways- either by increasing usage per subscriber by way offering lower tariffs or by raising subscriber per base transceiver station.
CAPEX investment will have to be included in the strategy formulated by Bharti involving cost reduction and increased usage besides building a strong network to compete with other players on the continent involving an investment of around $1.5 billion. Bharti strategy might also encounter some problems from the higher taxes and mobile termination rates.
UK MTR to drop to €0.005 per min by 2015
www.WirelessFederation.com/news: Deduction in mobile termination rates in the UK has been proposed by Ofcom, a regulatory body in UK, to £0.005 (€0.005) per minute by March 2015. O2, Orange, T-Mobile, and Vodafone have been proposed to get gradual cuts in the MTRs from £0.043 at present, and 3UK from £0.046.
The price for new entrants and smaller players will be set on a fair and reasonable basis. According to the UK regulator, new rates are necessary to ensure new, smaller, communications providers that have entered the market since it last set rates in 2007 are able to compete on price, adding that reduced rates should also mean cheaper calls for consumers.
The rates of UK’s leading mobile operator will come in line with smaller player’s rates thus encouraging other firms to enter the market. 12-15% of European mobile operator’s total service revenues come in MTRs account.
2-3% drop in service revenue growth will be encountered as a result of the future cuts to the rates. Ofcom’s proposals are open to consultation until June 23.
Lowering mobile termination rates a costly affair: Vodafone New Zealand
www.WirelessFederation.com/news: Despite the fact that charges are unlikely to be regulated, bringing down the mobile termination rates has still being described a costly affair by Vodafone. Telecom and Vodafone’s undertaking that they will lower their rates has been accepted by the Commerce Commission and the recommendation will now go to Communications Minister Steven Joyce for consideration.
According to Ernie Newman, Chief executive, Telecommunications Users Association, text messages sell for about half a cent each, but Vodafone and Telecom charge competitors several times that to receive one which entrenches the dominance of the two large networks.
Regulatory and commercial manager Bill McCabe feels that New Zealand continues to have some of the highest mobile prices in the world and the large companies have only offered to lower prices because they were threatened with regulation.
Dispute between H3G and other telcos opened for consultation by Ofcom
www.WirelessFederation.com/news: A consultation on a draft determination has been published by UK’s telecoms regulator Ofcom to resolve disputes between the country’s smallest mobile network operator Hutchison 3G UK (H3G) and each of its four major rivals O2 UK, Vodafone UK, Orange UK and T-Mobile UK.
The mobile termination rates (MTRs) for calls to ported numbers is the reason behind the disputes between H3G and the other telcos. H3G applied to the regulator in March 2008, to examine the four spate cases to be resolved.
It has already been concluded by Ofcom that a switch to alternative charging arrangements could be appropriate. However, it has also noted that the other operators acted reasonably in rejecting previous proposals from H3G regarding changes to the existing arrangements. The calculation will close on February 12.
Lower mobile termination rates proposed by Vodafone & Telecom NZ
www.WirelessFederation.com/news: Commerce Commission received proposals from Vodafone New Zealand and Telecom NZ on lower mobile termination rates. Since late 2008, the commission has been looking at whether to regulate the tariffs and the entry of a third operator on the market, 2degrees.
Telecom’s proposal will experience a drop of 12 cents of minutes in rate until the end of 2010 and the per-second billing introduced form 1 April 2010. By 2012, the rate will come down to 10 cents in 2011, 9 cents in 2010, 8 cents in 2013 and 6 cents in 2014.
Vodafone will try the same price cuts but from October 2010 as under the current proposal, Vodafone risks of losing around NZD 50 million in revenues. The Commerce Commission will make the recommendations to the ICT ministry in February.
Ofcom calls for mobile termination rate cuts
UK
regulator Ofcom has proposed cutting wholesale mobile termination rates further. The current agreement on rates expires in March 2007. The five major network operators have all been deemed to be significant powers in the market and will be subject to rate cuts in four steps for the four years to early 2011. Average charges for Vodafone, O2 ,
Orange
and T-Mobile are expected to fall to GBP 0.053 per minute by
31 March 2011
. This would remove the current difference in charges between users of 1800 MHz and 900 MHz spectrum. Network operator 3′s charges are expected to fall to GBP 0.06 per minute by 2011, reflecting a different cost base for the 3G operator. Ofcom will re-evaluate the proposed final level of the charges and the glide path cap for implementing the gradual reductions following a public consultation. The consultation runs until 22 November, with a final decision on the rates expected in early 2007.
Source- http://www.telecompaper.com
Technorati : O2, Ofcom, Opreator, Orange, UK, Vodafone
Ice Rocket : O2, Ofcom, Opreator, Orange, UK, Vodafone
