Tag: carriers Page 6 of 7

Will Vodafone acquire T-Mobile UK?

On 30/06/2009

There have been press reports (in German) according to which Vodafone is pondering an acquisition of T-Mobile UK. The reporting paper, FAZ, is not only fairly conservative but also the most prestigious German newspaper, so there would appear to be some substance in this.

The paper reports that the board of Deutsche Telekom, the owner of T-Mobile, was facing increasingly critical sentiment on its UK investment: they are said to have sunk a painful £13bn into the UK arm since their acqusition in 1999. Investment bank Sal Oppenheim’s estimated sales price of €4.5bn would at least ease some of that pain.

The UK market is hotly contested and one where a lot of the large international conglomerates are represented, namely with Vodafone, Telefonica/O2, France Telecom/Orange and Hutchison Whampoa’s 3. The strong competition would also appear to ease concerns of merger control restrictions (Vodafone would become a clear market leader in the UK): they could argue quite reasonably that there was more than capable competition in the market besides their acquisition.

Vodafone CEO Colao is apparently interested in acquisitions. T-Mobile suggested though that it is very early stage. Stay tuned…

MEF's Crystal Ball

By Volker

On 06/03/2009

In OEM

Industry body MEF had put out its top 10 predictions for the year a few weeks ago (inexplicably missed by me; well it was somewhere around Mobile World Congress, so probably at least excusable), which they gathered from their members and deep discussions around this. They believe that 2009 – recession and all – will be the year in which mobile entertainment (if you count everything in, apparently a $25bn industry) will start to deliver returns.

So now, without any further ado, here are the predictions:

The ‘iPhone effect’ -Mobile applications have emerged as a new content category and the mobile internet will finally come of age
Greater value and transparency for consumers will help sustain demand in 2009
Some delay in the proliferation of mobile advertising
Telcos begin to acts as enablers for the Entertainment industry with services such as billing, authentication and zero tariff data
The emerging dominance of services that operate at a multi-platform level
The rise of ring back tones
Social networking becomes an important driver of mobile entertainment consumption
2009 will be the year that mobile video really takes off
Emerging economies will become an increasingly important driver for mobile entertainment worldwide
A proliferation of touch screen devices drives discoverability and content usage

Now, now. I am glad to see that a lot of this ties in with “what I have been saying all along”… 😉 But let’s have a closer look at a few of the points:

The iPhone effect. Yes, I have elaborated on this plenty a time, so I will only refer to previous posts, for instance here, here and here.

“Some” delays in mobile advertising. Also: dealt with on numerous occasions, and a while ago, too (see here and here)…

And now for a whole bunch of stuff that can, I believe, be grouped, namely greater (perceived?) value to consumers and carriers moving into smart-pipe models. The jury is still out on this, isn’t it? Although it has to be said that there seems to be a learning curve indeed. But is this from new-found wisdom or because of the fruity pain from the guys in Cupertino?

Another group: multi-platform services and social networking. I would class the latter as the shining beacon of the former: social networks do one thing. They connect the dots, they are the switchboards of the digital life. And since users per se do not really care on which screen this happens, a lot of them have seen significant value contributions from mobile (e.g. MySpace sees incredible growth rates).

So there you have it…

Vodafone ponders and prepares to bulk up

By Volker

On 29/01/2009

Did you know about Vodafone’s Flipfont app? No, I didn’t think so; it seems to have gone more or less unnoticed. Well, it allows you to – listen to this – customise your phone frontpage. Woah! How cool is that? The downside? Well, you need to pay £1.99 for the pleasure, per screen! I don’t think so… And, apparently, (now) so does Vodafone. Amidst the iPhone/AppStore rage and the “revelation” that UI might actually matter to people, they seem to have realized that changing a font will not necessarily change the uptake of consumption to new levels. And because they cannot have the iPhone (although it has the Blackberry Storm, which is performing much better than the initial damning reviews would have suggested), they will launch their very own app store, or so they said (if you read Dutch, that is; how nice that we have a Dutch blogger amongst us who translated it for us).

This is not the only bit of news though: Vodafone also wants to tighten relationships with two other players in the market, and these are none other than giants China Mobile and Verizon Wireless. Now if you thought that Vodafone was large, take this in: together, these 3 carriers combine 821 million (!) subscribers (Vodafone 280m, China Mobile 457m and Verizon Wireless 84m [although I believe that VF counts a number of VZW subscribers proportionate to its shareholding in]).

Here’s what Vodafone’s CEO Vittorio Colao told the FT:

“If you think of three players, China Mobile is very strong in China; it’s a big country. Vodafone is very strong in Europe, Africa, India. Verizon is very strong in the US.

“If these three companies could work more closely… in the management of customers, procurement and service creation, we could be unbeatable, quite frankly.”

And right he is…

Most Precious Mobile Operator Brands

By Volker

On 10/12/2008

And the winner is… China Mobile. Hard to guess, huh? Some research shows that the Chinese carrier’s brand is worth $30.79bn. Vodafone and Verizon took the other spots on the podium. The top 10 is below (courtesy of the good folks at telecoms.com). And for some (by now a little outdated) comparison for how they rank amongst other industries, see here.

The study applies a royalty based on forecast of sales, brand strength (from qualitative panel data) which priced in market share, growth, price positioning, market scope, preference, awareness, relevance, heritage and perception. They complement these slightly fluffy markers with data on turnover, subs, churn, market share, ARPU, profitability, etc and then took the average score of the two to determine the royalty rate applicable. Apply tax and (low) discount rate and off you go. Pretty simple, isn’t it? And, yes, I still think Cingular was cooler than AT&T… 😉

China Mobile	China Mobile	China	Asia	30,793
2	Vodafone	Vodafone	UK	Europe	22,131
3	Verizon	Verizon Communications	US	North America	20,382
4	AT&T	AT&T	US	North America	18,886
5	T-Mobile	Deutsche Telekom	Germany	Europe	16,802
6	Orange	France Telecom	France	Europe	15,489
7	NTT DoCoMo	NTT DoCoMo	Japan	Asia	14,871
8	KDDI	KDDI Corp.	Japan	Asia	14,454
9	Movistar	Telefonica	Spain	Europe	10,799
10	Sprint	Sprint Nextel	US	North America	9,661

Juniper to the Rescue…

By Volker

On 27/11/2008

In Apple, OEM

We can depend on the researchers from Juniper after all (or maybe they simply felt bad after reading my post on their last report). Whichever the reason, apparently the mobile content industry could be worth a hefty $167bn (!) if – yes, if – the operators would resolve to allowing a workable commercial environment, namely by limiting themselves to lower revenue shares. Whatever the caveats (which are, as usual, hidden in the expensive main report) this number is topping even the loftiest predictions to date; right on in times of the doom and gloom. The key apparently lies in whether operators would act as dumb pipes (no richness for anyone) or a smart pipe (lots of play money for all players on the value chain). In their own words:

“If MNOs are to benefit financially, they need to move away from their Dumb Pipe roots to the Smart Pipe model, though they will clash with the content providers which already dominate the Smart Pipe. A compromise needs to be found.”

A smart pipe is understood as one where operators would offer flexible, application-centric value configurations, allowing lean, efficient content offerings from third parties. A dumb pipe is one where content (and value) would merely rush through the pipe without any value being added by the operator. The prevailing model in the mobile games world, namely the on-portal approach where operators implement comprehensive vertically-integrated models (“walled gardens”) is suggested to be somewhat doomed as content providers would gain bargaining power (presumably through consolidation of the supply side plus entry of meatier traditional media players in music, video and TV).

This is all pretty speculative though, and without some background it is quite frankly impossible to analyse the numbers some more. Mobile content appears to include (as per their report from March) games, music, video, TV, social networking, adult content, gambling and so on, and so forth. However, the exact calculatory basis is again hidden in the depths of the report, so I don’t know (do they e.g. take the gross gambling revenue or on;y the rake, which is only a few percentage points of the former). Anyhow, due to these foggy conditions, commentators seem to either merely re-print the PR blurb or mock it (Stuart Dredge thinks that “only gas could do that kind of money”), which is a shame really; just think what you could with this much money…

Et tu, Juniper?

By Volker

On 19/11/2008

It must be truly bleak: even the best friend of every young telecoms entrepreneur on the fundraising trail whose reports rarely failed to feature as a footnote in an investment memorandum for the next big digital thing now sounds a word of caution. Juniper (whose reports I still cannot afford) issued its latest report on mobile gaming and it actually reduces (for the first time, I’m sure, even if I haven’t checked) its prior predictions on the growth and size of the sector in the next, erm, 20 years…

They see growth stifled by the restrictive operator business models. Dare I say it? May they be right? They refer to Apple‘s AppStore, which is the anti-christ to every operator’s walled garden: free for all, free price-setting, Darwinian survival of the fittest (or least-charging), thousands of applications, games, etc, etc, and relatively generous revenue shares on top (although 80% of $0.00 is not very much at all).

Juniper points however to 2 important and true factors: the tolls demanded by the operators to access their precious customer base are very high indeed considering that many do not provide a very compelling service in return. Secondly, marketing and marketing opportunities on-deck normally – well – suck. This was all well and good as long as their were no alternatives (other than the likes of Jamba, Thumbplay and few others). But with the ascent of the iPhone, everyone seems to erupt into a frenzy of trying to replicate the “beautifully simple and compelling UI” for which the purveyors of the Big Black Turtleneck are so famed for. This, Juniper fears, will lead to players exiting that business (I have heard unconfirmed rumours that SEGA decided to call it day on internal J2ME development following their huge success with Super Monkey Ball on the iPhone).

Other than that though, not much new. And Juniper would not be Juniper if they would not predict “significant” growth in the next 5 years (conveniently long in order to be basically unpredictable): they see the market to roughly double in the next 5 years, which would be 20% growth per year (on today’s terms), which is not all that bad after all.

Blyk's CEO speaks

By Volker

On 19/11/2008

I post on Blyk, and the next day its CEO rushes to give an interview… Was he upset about what he read and unleashed a PR storm to rescue his company to fight sentiment of the blogosphere? Perhaps, perhaps not. Well, maybe not. On the merits, there is nothing dramatically new but it is worth mentioning, I guess, nonetheless. Judge by yourself.