Italy regulator raises unbundling tariff
AGCOM, Italy’s telecommunications regulator will raise unbundling tariffs in 2011 and 2012 by less than previously planned on the request from the European Commission.
The commission had asked the Italian regulator to review the tariffs, which Telecom Italia SpA charges its opponents to access its fixed-line network, claiming it had applied the pricing model erratically.
Alternative operators, including FastWeb SpA and Vodafone Group PLC’s Italian unit, had complained that AGCOM’s proposed tariff increases could hamper competition and discourage investment in new broadband technology.
The new increase approved by AGCOM is US$0.16 lower than previously proposed for 2011, bringing the tariffs to US$12.28 a month; and US$0.27 lower for 2012, when the tariffs will reach US$12.64 a month.
However, there was no change in the planned increase to unbundling tariffs for 2010, and the current tariff of US$11.56 a month will be raised to US$11.85 a month.
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.
Verizon to pay $25 million settlement for overcharging (USA)
According to the US regulator, the top U.S. mobile service, Verizon Wireless, has decided to pay the U.S. Treasury $25 million on top of more than $52 million in refunds to consumers for overcharging them.
As per the earlier statements by the venture of Verizon Communications Inc and Vodafone Group Plc, it would pay refunds to 15 million cell phone customers incorrectly charged for mobile Internet use.
According to the Federal Communications Commission chairman Julius Genachowski’s statement the $25 million settlement was the largest in the FCC’s history. People shouldn’t find mystery fees when they open their phone bills and they certainly shouldn’t have to pay for services they didn’t want and didn’t use. In these rough economic times, every $1.99 counts.
According to the company, the settlement was voluntary and it apologized for the accidental data charges.
Michael Tsamaz to become the new Chairman, CEO of OTE
Greece’s biggest telecom OTE has named Michael Tsamaz as its chairman and chief executive. It will be effective from Nov. 3.
Greece and Deutsche Telekom, which together own 50% of OTE, agreed on Tsamaz as CEO and chairman of the company.
According to OTE, this selection expresses the common will of the two main shareholders.
Tsamaz, 51, replaces retiring chairman and CEO Panagis Vourloumis, who was widely credited with turning around the state-linked telecommunications operator during his six years as head of the company. Vourloumis, 73, is expected to retire at the end of his term.
Tsamaz has served as head of OTE’s mobile subsidiary Cosmote since September 2007. In the past 10 years, Cosmote has grown to become the leading mobile operator in both Greece and southeast Europe, and has been a leading profit center for OTE, which has seen its dominance in fixed-line telephony gradually eroded by competition.
According to Guido Kerkhoff, DT’s representative on the OTE board, Tsamaz’s considerable international experience and proven business skills have made him one of the leading executives in Greece, as his track record with Cosmote proves beyond doubt. These are exactly the qualifications the company was looking for in finding the right person to head OTE.
Tsamaz joined the OTE group in 2001 serving in various management positions before being appointed as head of Cosmote. He has also worked for Vodafone Group PLC’s Greek subsidiary, and for tobacco conglomerate Philip Morris in Greece and eastern Europe.
Verizon Profit drops 25% in 3Q
Verizon Communications Inc., the country’s largest wireless carrier, has revealed its Q3 results. The company’s profit chop down by 25% in the third quarter, held back by a one-time charge for a pension settlement and the performance of its landline operations, which barely broke even.
Verizon’s landline business posted operating income of US$19 million for the July to September quarter, compared to US$4.9 billion on the wireless side. As recently as the second quarter, the landline business had operating income of US$214 million.
Wireless profits are strong, but New York-based Verizon owns only 55% of Verizon Wireless, and can only put claim that to that share of the profits. The rest flows to British carrier Vodafone Group PLC, which has wide international interests.
Verizon reported net income of US$881 million in the third quarter compared with US$1.176 billion in the same period last year.
Revenue slipped 3% to US$26.5 billion from US$27.3 billion a year ago, mostly to due to the sale of landline and wireless service areas.
Verizon Wireless added 584,000 customers on contract-based plans in the quarter, roughly in line with analyst estimates. It’s about half of what it’s added in recent years, but still a healthy figure considering that nearly everyone already has a cell phone. However, when looking at all types of subscribers, Verizon Wireless added just 997,000 in the quarter, the lowest figure in a decade.
Hong Kong Operators Planning combined LTE Network
If reports are to be believed, Hong Kong’s PCCW is close to announce plans to build a new wireless network as a joint-venture with rival network, Hutchison Telecommunications.
As per reports, citing an interview with PCCW Managing Director, Alex Arena, details about the 4G network are expected to be announced within a few weeks.
The move would build on the strategy by Hong Kong’s richest family to fend off competition from China Mobile Ltd. and Australia’s Telstra Corp. in offering wireless services for smartphones such as Apple Inc.’s iPhone. PCCW and Hutchison would follow companies including Vodafone Group Plc and Telefonica SA in sharing networks to save costs.
According to Tucker Grinnan, head of Asian telecommunications research at HSBC Holdings Plc in Hong Kong, there is a broader trend globally for carriers to share networks. Companies focus less on network coverage and focus more on services and branding.
A joint-venture between PCCW and Hutchison Telecommunications won a license to offer LTE services in Hong Kong during a government auction last January. The planned network would share infrastructure, but would retail products to customers under their existing network brand names.
Verizon Wireless `Mystery’ Charges Show Need for Oversight (USA)
According to three Democratic U.S. senators Verizon Wireless’s admission it billed customers for mistaken Internet access shows the need for regulators to oversee mobile-telephone billing practices.
As per the letter to FCC Chairman Julius Genachowski by Amy Klobuchar of Minnesota, John Kerry of Massachusetts and Mark Begich of Alaska, the Federal Communications Commission should remain committed to vigorous oversight.
The FCC is probing Verizon Wireless, the largest U.S. wireless company, for charging 15 million customers mystery†fees for data use on their mobile phones.
The FCC started its investigation 10 months back after customers complained about the fees, the FCC revealed in a statement on Oct. 3.
According to reports, Verizon Wireless has put the amount of the overcharges at more than US$50 million in the past two years.
Verizon Wireless which is owned by Verizon Communications Inc. and Vodafone Group Plc will refund the amount to 15 million customers in the next two months. The refunding per customer is between US$2 to US$6.
Knook quits as Vodafone’s Web ambitions freeze
If reports are to be believed, the architect of Vodafone Group PLC’s push into internet services is quitting amid signs that the mobile phone operator is retreating in its battle with Apple Inc and Google Inc over the wireless web.
According to reports, Pieter Knook, who was poached from Microsoft Corp in 2008 to head Vodafone’s newly formed internet services unit, is leaving after important aspects of the operation were scrapped.
The report further revealed that Vodafone has been seeking to establish itself as a chief service provider on the wireless web and therefore to avoid being a dumb pipe that carries other companies’ content, but it struggles to compete with services by Apple, which has a vital first-mover advantage in the smartphone market via the iPhone; Google is also enjoying success with Android, its operating system for Smartphones.
China Mobile &Vodafone to work on 4G technology
Even after the US$6.5 billion stake sale China Mobile Ltd will continue to work with Vodafone Group Plc to develop a common 4G mobile telecommunications standard.
According to the chairman Wang Jianzhou, Vodafone’s sale of its 3.2% holding in the world’s largest mobile carrier also removed the uncertainty that had surrounded its share price. The company has worked with Vodafone for ten years, and this will continue. The areas the two companies intend to work together includes development of new markets, technology, and green development.
The sale of its China Mobile shares were a part of Vodafone’s new strategy to exit non-strategic minority investments, which analysts believe have weighed on Vodafone’s overall value in recent years.
