Telefonica Net Profit More Than Doubles on Latin America (Spain)
Spanish telecoms giant Telefonica SA (TEF) said Thursday its third-quarter net profit more than doubled as revenue growth in Latin America offset weak Spanish operations.
Madrid-based Telefonica, Europe’s second-largest telecommunications company by market value after U.K.-based Vodafone Group PLC (VOD), said net profit grew to EUR5.06 billion, slightly below forecasts from 16 analysts of EUR5.29 billion, due to higher taxes.
Telefonica also said operating income before depreciation and amortization, or Oibda, rose 65% to EUR9.46 billion during the same period, while total revenue increased 7.3% to EUR15.23 billion.
The appreciation of Latin American currencies against the euro also boosted revenue growth abroad.
Telefonica recently purchased Portugal Telecom SGPS SA’s (PT) stake in Vivo Participacoes SA (VIV) in order to take full control of the Brazilian cellular company. Telefonica plans to merge the company with fixed-line telecommunications company Telesp (TSP) to bulk up its operations in the high-growth Brazilian market.
The acquisition also boosted profits due to asset valuation adjustments, Telefonica said.
Polkomtel sale likely to be completed in 1H 2011 (Poland)
As per the Chief Financial Officer, Slawomir Jedrzejczyk of shareholder PKN Orlen SA, the sale of Poland’s mobile telephone company Polkomtel SA is likely to be finalized in the first half of 2011.
In recent months, potential suitors, including some of the world’s largest private equity firms, have closely monitored the moves of Polkomtel’s handful of diverse shareholders, who need to align their various interests to pull off the sale. Shareholders include several state-controlled Polish companies and U.K.-based telecoms giant Vodafone Group PLC.
According to Jedrzejczyk, the cooperation between all Polish shareholders is good and preparation and distribution of marketing materials on the sale should be completed in the fourth quarter of this year. The company is aiming for the information memorandum to be ready in November. However, when to send it out is a separate decision.
According to the earlier report, U.S. buyout firms TPG and Blackstone Group are working on a joint bid while London-based CVC Capital Partners and Apax Partners separately are looking at the company.
Polkomtel is owned by five companies: Poland’s largest power group, PGE Polska Grupa Energetyczna SA, holds a 21.85% stake and is advised by ING Securities; oil refiner PKN Orlen SA holds 24.39% and is advised by Nomura Holdings Inc; copper miner KGHM Polska Miedz SA has 24.39% and is advised by Rothschild. And Poland’s Treasury owns stakes of 84.99%, 27.52%, and 31.79%, respectively in the three companies.
The remaining shareholders in Polkomtel are Vodafone, which has a 24.39% stake, and coal miner Weglokoks SA which is wholly owned by the Treasury and holds a 5% stake in Polkomtel.
Handset makers better placed than telcos to capitalize on mobile music
www.WirelessFederation.com/news: When it comes to capitalizing on rising mobile music uptake, handset makers are in a better position as compared to telecom operators. According to analysts, operators are limited by the number of customers on their network whereas OEMs (original equipment manufacturers) are only limited by the penetration of their device.
Though operators cannot be ruled out, OEMs definitely score over them in more than one ways. According to a latest research, during the quarter ended March 2010, the number of mobile users across the EU5 (U.K., France, Germany, Spain and Italy) markets, listening to music on their handsets reached 54 million, up 10% from a year earlier.
23.8% of total mobile customers is represented in those markets through this figure when compared to just 13.2% of mobile users in the U.S. who listen to music on their phones.
SMS Spam Reporting Service unveiled by GSMA
www.WirelessFederation.com/news: Spammers have got a new attractive victim in the form of mobile-phone users who are indulged in text messaging most of the time, courtesy, falling cost of text messaging. To help the customers in the identification and cutting off spammers abusing SMS, the association wants its mobile-network-operator members to “crowd-source” spam reports from them.
With 20% increase in 10 years, as much as 90 percent of Internet e-mail traffic today is spam. According to Brad Greene, vice president of business development at the GSMA, the proportion of spam in mobile text messages is far lower, under 10 percent in the U.S. and the U.K., rising to 20 percent in some Asian countries.
The cost of text messaging has helped a lot in controlling the number of spam via SMS when compared to e- mails as the emails are very cheap even if it receives a low response because of its very low cost. But currently, low-cost or unlimited texting plans, and the rising use of high-speed wireless modems has increased the number of spam flow via SMS. GSMA is planning to develop a new system to control spam situation and AT&T Mobility, Korea Telecom and French operator SFR will be the first operators to contribute data to the new system.
Under the new system, operators will get useful data for their own operational processes and automated systems instead of automatically blocking offending text messages.
Vodafone breaches 100m mark in India
www.WirelessFederation.com/news: 100 million subscribers mark has been crossed by Vodafone Essar Ltd., the Indian unit of the U.K.’s Vodafone Group PLC. After Bharti Airtel and Reliance Communications, Vodafone is the third company to achieve the milestone in India.
India has emerged as the world’s fastest growing telecommunications market by number of users.
Global system for mobile communications technology is used by the company to offer its services. Participation bid has also been submitted by Vodafone to be a part of the auction for third generation mobile telephony services slated to begin Friday.
France Telecom & Deutsche Telekom complete UK mobile merger
www.WirelessFederation.com/news: The UK mobile merger of France Telecom and Deutsche Telekom has been completed by the companies. The new joint venture will be accounted by the French and the German incumbents under the equity method as of April. In a bid to go ahead in the ultra- competitive market, both the companies have agreed to blend their U.K. mobile operations in September.
Before getting the final go ahead signal from the European Commission, a number of regulatory approval processes were faced by the telcos. They got the green signal only after agreeing to Commission’s condition that the merged entity will divest spectrum in the 1,800-MHz band.
No name has been decided for the new entity, however, it has already been said by the companies that they will operate under separate brands for 18 months following completion of the deal, during which time a decision will be made on branding.
Former Orange UK chief executive Tom Alexander will take on the role of CEO of the joint venture and former T-Mobile UK CEO Richard Moat takes will become the chief financial officer and deputy CEO. Non-executive chairman Tim Hottges will head the board. Gervais Pellissier, deputy CEO and CFO of France Telecom will take up the job of Tim Hottges after two years for another two years.
Hutchison’s 3 drops objection to Orange, T-Mobile merger (UK)
www.WirelessFederation.com/news: After receiving assurances of continuing to have access to cellular networks, one objection has been dropped by Hutchison Whampoa Ltd.’s 3 mobile- phone unit to the merger of Deutsche Telekom AG and France Telecom SA’s U.K operations.
The number of mobile-phone towers will be increased as a result of the agreement which can be used by 3, the U.K.’s smallest mobile-phone operator. France Telecom and Deutsche Telekom can also win regulatory approval to combine their Orange and T-Mobile units with the help of this agreement, thus creating the U.K.’s biggest mobile operator.
Failure to secure continued access to T-Mobile networks would also mean that 3 would have a much tougher time†competing in the U.K. market.
Kuwait’s Zain gets no offers for African assets
www.WirelessFederation.com/news: No offers have been received by Kuwait’s Mobile Telecommunications Co., better known as Zain for its Africa assets. Earlier it was reported that France’s Vivendi, France Telecom and the U.K.’s Vodafone Group are holding talks with Zain to buy the company’s Africa operations.
Zain, which has been in discussions with the international companies for about two months, could sell its Africa assets for $11-$12 billion and the resignation of chief executive officer Saad Al Barrak intensified the talks.
Europe telecom sector to see signs of recovery
www.WirelessFederation.com/news: Some signs of recovery are expected to be seen in the fourth-quarter results from European operators even though the regulatory drag on revenue is set to persist. Foreign exchange is expected to be a major driver with the dollar rally boosting Deutsche Telekom and Vodafone.
The theme of the telecom sector in Europe will remain the same namely mergers, acquisitions and cooperation agreements and more deal is expected to come after the merger of Orange and T-Mobile in the U.K.
According to the analysts, European telecoms operators have two options, either to postpone investments further to remain focused on free cash flow and preserve the financial flexibility that an uncertain environment requires, or use the financial flexibility created in the sector in 2009 to upgrade both fixed and mobile networks to repurpose the old voice model.
Palm Pre to be launched in Czech Republic by T-O2 in 2010
www.WirelessFederation.com/news: Palm Pre, a web-ready cellular phone produced by U.S. handset maker Palm Inc, will be launched by Telefonica O2 Czech Republic, or T-O2, by 2010.
Czech Republic’s cellular market leader T-O2 is testing the various applications of Palm Pre in order to ensure its smooth working on its network.
Palm Pre is currently offered by Telefonica’s units in the U.K. and Germany. Palm Pre is a smartphone and its various features include touch sensitive screen, physical slide-out QWERTY keyboard and also offers Internet browsing, e-mail, calendar and expanded contact features along with standard voice telephone and text message services.
