Skype steps up negotiations with mobile operators to permit internet calls (UK)
Skype technologies, a software application that allows users to make voice and video calls and chat over the Internet, has reportedly approached Ofcom, UK’s telecom authority, as British mobile operators have blocked Internet based calls on their networks. According to reports, Ofcom has said that by blocking Skype’s services mobile operators were restricting innovation and that it may intervene if the operators continue to block the services.
Mobile operators in the US such as Verizon Wireless, have not paced any restrictions on the services offered by Skype, but have infact offered the software on some of its handsets since the past year. However, on the other hand, British operator Vodafone Group Plc requires users to pay an additional charge of $ 23 each month to gain access to Web-based calls on their mobile phone. Further, reports suggest that France Telecom and Deutsche Telekom in UK have banned access to such services.
Sources claim that operators impose such restriction in an attempt to safeguard their profits as well as counter the fall in revenues from traditional voice and message services.
Initial valuation of 4G services at US$3.3bn (Italy)
The Italian government has reportedly received early offers totaling $ 3.3 billion for its 4G mobile frequencies to be auctioned this week. 4G technology provides a comprehensive and secure IP (Internet Protocol) solution, allowing users to access high quality video streaming along with voice and data at a much higher speed than previous generations.
As per reports, some of the operators that have put in their offers include Telecom Italia SpA, Vodafone Group Plc, Wind Telecomunicazioni S.p.A of VimpelCom Ltd. and Hutchison Whampoa Ltd.’s 3 Italia.
Bharti, Idea Cellular, Vodafone to sign 3G deal (India)
If the sources are to be believed, Bharti Airtel Ltd., Vodafone Essar Ltd. and Idea Cellular Ltd. are close to signing an agreement to share their 3G radio bandwidth.
According to sources, the agreement is almost in the final stages. Just the details need to be worked out.
Idea Cellular is scheduled to hold a media conference to announce the commercial launch of its 3G telecom services. Bharti Airtel and Vodafone Essar, the Indian unit of Vodafone Group PLC, have already launched similar services.
Bharti Airtel has licenses and radio bandwidth to offer 3G services in 13 service areas, Idea holds licenses for 11 service areas and Vodafone Essar can offer the services in 9 areas.
The agreement, if signed, will allow the companies to bring down their average cost of radio bandwidth by accessing each other’s networks in areas where they don’t own 3G licenses.
The companies had bought 3G licenses and bandwidth through a contested auction last year. Bharti paid US$2.77 billion for 3G spectrum, Vodafone Essar paid US$2.47 billion and Idea Cellular US$1.30 billion respectively.
The high cost of acquiring 3G bandwidth had led to concerns about the profitability of 3G operations. Telecom operators are expected to charge a premium for 3G services and hope for a boost to their revenue and profitability which have been hit in recent times due to extremely low tariffs for basic phone services amid intense competition.
The three companies had separately stated earlier that they were in talks with other 3G license owners for tie-ups to share networks in areas where they didn’t hold licenses.
The three companies already share their telecom towers and are the joint owners of Indus Towers Ltd., which has about 110,000 towers.
Polkomtel Binding bids due in early April (Poland)
Binding bids for Polish mobile operator Polkomtel SA are reportedly due in early April, after which two or three bidders will be selected to conduct due diligence.
According to reports, seven bidders–Polish tycoon Zygmunt Solorz-Zak, Sweden’s TeliaSonera AB, Norway’s Telenor ASA, and four private equity firms–Apax, KKR, Bain Capital, and Providence Equity Partners–are scheduled to meet with Polkomtel’s management on March 21.
Reports added that the bidders won’t be allowed to conduct their own due diligence until after they file this second round of bids and are selected to remain in the process. Until then, they can speak with Polkomtel management and have access to a virtual data room.
Polkomtel is owned by five companies, with the Polish government holding substantial stakes in three of them.
Poland’s largest power group, PGE Polska Grupa Energetyczna SA, holds a 21.85% stake in Polkomtel and is advised by ING Securities; oil refiner PKN Orlen SA holds 24.39% and is advised by Nomura; copper miner KGHM Polska Miedz SA has 24.39% and is advised by Rothschild. Poland’s Treasury owns stakes of 84.99%, 27.52%, and 31.79% in the three companies, respectively.
The remaining shareholders in Polkomtel are U.K.-based telecommunications operator Vodafone Group PLC, which has a 24.39% stake, and is being advised by Goldman Sachs and coal miner Weglokoks SA, which is wholly owned by the Treasury and holds a 4.98% stake.
Portugal needs to raise $273.6 million in 4G auctions
The head of local telecom company has stated that Portugal’s cash-strapped government needs to raise US$273.6 million through the sale of 4G mobile telephony licenses this year, an urgency that may help push a revamp of the country’s communication network.
According to Xavier Rodriguez-Marin, Chief Executive of Oni Telecom, Portugal’s government budget for this year already includes such planned revenue from the sale of 4G licenses.
He added that this is a significant amount at a moment when every euro counts. The auction could let big international (telephony) corporations in the country.
Portugal already has three main mobile operators: Portugal Telecom SA; the local unit of the U.K.’s Vodafone Group PLC, and Sonaecom’s Optimus, providing sophisticated third-generation telephony services including high-speed mobile Internet connections.
There are several smaller mobile virtual network operators in the country.
The biggest draw of 4G for Portugal, as in the case of other European countries, is not only the improvement in network speed, but the revenue from the sale of 4G licenses, at a time when global markets are keeping close track of government pledges to cut large budget deficits.
Vodafone, Essar to appoint UBS for Indian Valuation
If sources are to be believed, Essar Group and Vodafone Group Plc are set to appoint UBS AG as a third investment bank to help reach an independent valuation of their Indian joint venture.
According to sources, UBS’s task would be to help the companies reach a compromise on the valuation of Vodafone Essar Ltd. Vodafone Chief Executive Officer Vittorio Colao stated this month that Vodafone appointed Goldman Sachs Group Inc. and Essar appointed Standard Chartered Plc. The investment banks may submit a report in March.
Sources added that Essar has an option to sell its entire 33% stake for $5 billion to Vodafone or it can sell a smaller stake at an independently appraised fair market value. Essar, founded by billionaires Shashi and Ravi Ruia, is seeking a higher valuation of its stake in Vodafone Essar. The company may sell about 22% in the venture before the window to divest the holding closes in May. Essar may hold the remaining 11 percent stake in a listed Indian company as part of an earlier agreement between both the companies.
Last year, bankers had valued the company at between $13 billion and $18 billion when Essar had considered an initial public offering for the Indian venture. That would have valued Essar’s stake at $4.3 billion to $6 billion.
Apple to begin Verizon iPhone sales (USA)
Apple Inc would start online sales of the Verizon Wireless iPhone on February 9, a day before the device hits its store shelves.
As per Electronics retailer Best Buy Co Inc, it, too, would distribute the new version of iPhone 4 in its stores starting on February 10, the device’s official launch day. It already sells earlier iPhone models.
Verizon Wireless will start online sales of a limited number of iPhones to its existing mobile customers starting at 3 a.m. ET February 3 for delivery on or before February 10.
Apple stated that people ordering the phone on February 9 can have it delivered or reserve it for an in-store pickup February 10, when both companies plan to start offering the phone in their stores a 7 a.m. local time.
Verizon Wireless, a venture of Verizon Communications and Vodafone Group Plc, will be the second U.S. operator to offer iPhone after AT&T Inc’s more than three years of exclusive rights to the popular device.
Vodafone, Essar Group hire bankers to evaluate Essar stake in mobile JV
Vodafone Group Plc. and the Essar Group have appointed Goldman Sachs Group Inc. and Standard Chartered PLC to evaluate the worth of the Indian conglomerate’s 33% stake in the U.K. telecommunications major’s Indian unit, Vodafone Essar Ltd.
Vodafone owns about 67% of Vodafone Essar, India’s third-largest mobile phone operator by subscribers that was formed in 2007, while Essar Group companies Essar Telecommunications Holdings Pvt. Ltd. has an 11% stake and Essar Communications Holdings Ltd. holds 22%.
The appointments come as the May 8 deadline for the Essar Group to exercise a put option relating its exit from the venture draws near. Vodafone has a pact with the Essar Group, which gives the Indian group a put option for its 33% stake that it can sell to the U.K. Company for $5 billion between the third and fourth years of the deal’s completion.
The alternative is that Essar Group could sell shares in the venture worth between $1 billion and $5 billion to Vodafone at a market-determined price, to be evaluated by two investment bankers, with one each appointed by the two parties. In the case of a dispute over the valuation, a third banker would be appointed jointly by the companies to make a final decision on the worth of the stake.
Under the second option, Vodafone would need to pay an additional $725 million over the market-determined price–as agreed by the two parties–to account for the extra debt that Vodafone Essar has due to its investments in third-generation mobile operations, including the $2.8 billion it paid to get the bandwidth.
The two partners, however, have been involved in a recent war of words over how the Essar Group could exit the venture.
Essar states that it wants to merge Essar Telecommunications into its listed group company India Securities Ltd. to discover the true value of its stake in Vodafone Essar. Vodafone objects to the move, saying it is concerned that the value of India Securities after the merger could be misinterpreted as a fair market value of unlisted Vodafone Essar.
Essar Group accuses the U.K. Company of trying to keep the value of Essar’s holding in their India telecom joint venture artificially depressed. The Indian partner said that it wanted to list Vodafone Essar in 2010 but Vodafone didn’t allow it to go through, and that no market value could be established.
Vodafone has previously denied these accusations.
However,according to sources, the Essar Group is backing away from its stand and is veering towards the option of allowing just investment bankers to value the stake.
The Essar Group denied any such move, however.
According to Essar , there is no change in our plans to merge Essar Telecommunications Holdings Pvt. Ltd. with India Securities. As they have stated before, the investment banks are free to choose whether or not to consider the listed value of ISL in their fair value determination.
Egypt withdraws access to the Internet Following Street Protest
Egypt, following days of anti- government protests, withdrew the Internet after Egyptian authorities shut connections to the outside world.
According to reports, Internet traffic in and out of the country slumped shortly after midnight Cairo time. Mobile-phone services run by local units of Vodafone Group Plc and France Telecom SA were also halted.
According to sources, rather abruptly, in a coordinated fashion, the entire major Internet providers that have traffic in and out of Egypt basically withdrew from the Internet.
National authorities shut the connections after demonstrators took to the streets, inspired by an uprising that ousted Tunisian President Zine El Abidine Ben Ali on Jan. 14. Egypt has one of the most advanced telecommunications markets in the Middle East and Africa.
Facebook Inc., owner of the world’s biggest social- networking site, is seeing only minimal traffic from Egypt. Google Inc., the largest search engine, stated people in Egypt are unable to access Google and its YouTube video service, or at best are having real difficulty doing so.
