TELECOMUNICATIONS MARKET - TURKEY

Turkcell reports 56% increase in profit for 3Q
Turkish operator Turkcell today announced that net income for the quarter to end-September rose 56% to US$151 from US$117 in the same period last year. Revenue for 3Q04 stood at US$969, up 60% from US$765 in 3Q03, while EBITDA for the quarter was US$481 compared to US$351 in 3Q03.
Turkcell's CEO, Muzaffer Akpinar attributed the growth in income and revenues to the positive effects of seasonality and the effect of a favorable macroeconomic environment. Turkcell's GSM subscriber base reached 22.3 million end - September, up from 20.9 million end-June. Post paid subscribers totalled 5 million, while prepaid users stood at 17.3 million at the end of the quarter.
Blended ARPU rise to US$14.7 for the quarter, up from US$14.2 in the same period last year, while minutes of usage increased to 73.6, compared to 65.7 in 3Q03. Churn was down to 2% in 3Q04, from 3.9% in 3Q03 as churn prevention efforts and loyalty programs continued.
The operator said that its GSM businesses in Azerbaijan, Kazakhstan, Georgia and Moldova added approximately 459,000 net new subscribers during the quarter, raising the total number of subscribers to approximately 3.5 million as of September 30. Turkcell expects to launch GSM services in the Ukraine in 1Q05 having awarded infrastructure contracts to Nokia and Ericsson, while in Iran, Turkcell is waiting for approval from the local government to launch services in the country.
Turkcell said that due to negotiations with the Turkish Treasury, a payment of US$300 million has become a requirement to the settlement process, with the payment to be released from the related provisions in 4Q04.
Author: LuisB. December 2004



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MOBILE MARKET - INDIA

Indian subscribers hit 45 million
Net mobile subscriber additions in India picked up 2% month on month to 1.5 million, taking India's total subscribers base to over 45.4 million as of end-November according to research from CLSA today. Leading operator Reliance had over 9.7 million subscriber’s end-November, while second placed Bharti had over 9.4 million subscribers and BNSL had over 8.1 million subscribers.
Author: LuisB. December 2004



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TELECOMUNICATIONS MARKET - ITALY

Telecom Italia approves US$19.4 bil. TIM buyout
The Telecom Italia and Telecom Italia Mobile (TIM) boards of directors late yesterday approved a Eur14.5 billion (US$19.4 billion) merger of the two companies in order to simplify the group's ownership structure and optimize financial and capital structures of the group as a response to the integration of fixed-line and mobile platforms.

Under the deal, Telecom Italia would offer Eur5.6 per ordinary share and savings share, a premium of about 8% over the market price at close of trading on December 3, for 2.4 billion ordinary shares, or two thirds of the outstanding ordinary share free float. The move would give Telecom Italia 100% of the TIM savings shares in circulation. Telecom Italia will fund the acquisition via a financing of a maximum of Eur12 billion provided by a pool of banks led by JP Morgan and Banca Intesa, MCC, Mediobanca and Unicredito Italiano.

The remaining Eur2.5 billion will be drawn from Telecom Italia's own liquid resources of Eur 7.5 billion.

Telecom Italia will also offer 1.73 Telecom Italia ordinary shares for every TIM ordinary share; and 2.36 Telecom Italia savings shares for every TIM savings share. If the offer is fully successful, the net consolidated debt of the group would rise to a just over Eur44 billion.

Telecom Italia expects to launch the offer in early January 2005, with closure of the offer period and publication of the offer results by the end of January. Completion of the merger process is seen in time for the merger to become effective in 2H05, following the transfer of TIM's domestic Italian mobile services.

Telecom Italia said that driven by the accelerated take-up of fixed line broadband and EDGE/UMTS, technological advances are not only breaking down the barriers between different networks, but are bringing about a convergence between telecommunications services and other sectors. A reorganization of the group's structure is necessary to capture the benefits of integration between platforms and services and to ensure a consistent approach to management of the business, something that partial control of a company does not facilitate, the company said.
Author: LuisB. December 2004



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TELCOMUNICATION CORPORATE - ITALY

TIM Managing Director Mauro Sentinelli Resigns
Telecom Italia Mobile SpA (TIM.MI) said Friday that Managing Director Mauro Sentinelli, who pioneered the prepaid phone card, expanding TIM's client base from businessmen to teenagers, has resigned.
TIM said in a statement it will distribute his responsibilities to other managers in the company and is eliminating the role of managing director.
TIM also said that Sentinelli remains in "full harmony with the group" and will work as a consultant to Telecom Italia SpA (TI) Chairman Marco Tronchetti Provera to help develop "technological platforms." Telecom Italia owns 56% of TIM, and earlier this week launched a EUR21 billion offer to buy out minority investors.
Author: LuisB. December 2004



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TELECOMUNICATIONS MARKET - MALAYSIA

Telekom Malaysia takes 27.3% Excelcomindo stake for US$314 mil.
Telekom Malaysia (TM) today reportedly signed an agreement with the Rajawali Group to purchase a 27.3% stake in Indonesian operator Excelcomindo for US$314 million in cash. TM will take management control and can boost its stake to a majority shareholding in Excelcomindo for unspecified costs and terms, in conjunction with Excelcomindo's IPO in 1Q05.
Author: LuisB. December 2004



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MVNO - IRELAND

Virtual operators for Ireland
Ireland's telecoms regulator, ComReg has decided to force the country's two dominant operators, O2 and Vodafone to open their networks to virtual operators (MVNO's). ComReg has also said that existing national roaming agreements between network operators should remain in place. Vodafone and O2 will be required to maintain the roaming agreements they currently have with other operators.

In other European countries where further competition has been developed through the entry of MVNOs, the prices paid by consumers have fallen in some cases by up to 25%.

ComReg has discussed its findings with the Competition Authority who believe that intervention in the mobile market is justified at this point.

Following the introduction of new EU communications legislation in 2003, ComReg was required by the European Commission to analyse the level of competition in this market. ComReg was required to determine whether this particular market is effectively competitive and, if not, to introduce measures to stimulate more competition.

Isolde Goggin, the chairperson of ComReg, said: "This has been a long and very thorough process, and we have not taken this step lightly. We have based our decision on a very comprehensive, factual analysis of the market, and our statutory responsibilities under the European telecommunications regulatory framework. We expect that there will be vociferous opposition from the major operators, but we cannot let that deter us from doing what we believe to be in the interests of competition and of Irish consumers."
Source: ComReg. December 2004



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LEGISLATION - EUROPEAN UNION

More research into EU roaming costs
Mobile telephone network operators across the EU have been sent a questionnaire as part of an investigation into wholesale prices for "international roaming", which result in high charges for people who use their mobile phones in other Member States. This initiative, supported by the Commission, was announced today by the European Regulators Group (ERG), which brings together national regulatory authorities responsible for electronic communication markets.

"I am fully aware, both as a policymaker and as a consumer, of the impact that high roaming charges have on EU citizens and on the competitiveness of our industry. Whether we travel on business or for leisure, many of us have had an unpleasant surprise when the next bill arrived" said Information Society and Media Commissioner Viviane Reding. "I hope that today's initiative of the European Regulators Group will help us to identify remaining competition problems in the 25 Member States and to resolve these as soon as possible."

The expense and complexity of international roaming charges have long been an issue of concern for the Commission. When the Commission adopted the Recommendation on "relevant markets" as part of the EU regulatory framework for electronic communications, the wholesale international roaming market was identified as one where ex ante regulation may be warranted. This places an obligation on national regulatory authorities to examine this market. As consumers of this wholesale service are located outside the home market of a national regulatory authority, this can only be done efficiently if national regulatory authorities, through the ERG, act in concert to protect effective competition.

The harmonised ERG questionnaire issued today will provide information that could result in regulation being imposed. The questionnaire aims to establish how mobile network operators behave both as purchasers and providers of wholesale international roaming services. Replies to the questionnaire will help national regulatory authorities to define the "relevant market" within their own Member State, and hence whether any operators have "significant market power". Where such significant market power is identified, remedies should be imposed. These could include direct controls on wholesale international roaming rates, which should, in turn, lower prices for consumers.

The ERG initiative is complementary to ongoing anti-trust investigations during which the Commission had sent statements of objections to two UK mobile network operators in relation to an abuse of dominance in wholesale roaming rates. Commissioner Reding and her services will closely follow the results of these investigations and of today's ERG initiative and discuss them with the ERG in early spring 2005.
Source: ERG and European Medias. December 2004



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MOBILE MARKETING - USA

Text & get the discount
Cosmetics brand Maybelline New York has launched a mobile-based campaign to distribute discount coupons in The Netherlands. Emerce (in Dutch) explains the initiative is supported by online banners where users can find the number to text their request to in order to get a 2€ discount on Maybelline NY's products.
New media agency Clockwork and sms technology provider HotSms worked on the campaign.
Author: LuisB. December 2004



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MOBILE DEVICES - MMS MARKETING

Panasonic targets MMS users... why??
New Media Age reports that Panasonic has recently launched a direct mobile marketing campaign to promote its new X70 mobile camera phone. The campaign features a MMS message sent to MMS-enabled handset subscribers.
Given the fact the the average MMS enabled phone is one year old. My question is: why target people who already have a MMS enabled phone, instead of targeting the campaign to SMS aficionados (long time lovers)?
Author: LuisB. December 2004



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MOBILE CONTENT - SPAIN

Disney Mobile lands in Spain
Telefónica Móviles España and the Walt Disney Internet Group have signed a wireless content distribution agreement to launch Disney Mobile in Spain. Disney Town site will become part of "MoviStar emoción", Telefónica Móviles España content portal.
Disney Town offers video, ring tones, wallpapers, logos, games and greetings cards drawing from Disney's classic characters. It also includes links to the latest Disney movie content, The Incredibles, with videos, wallpapers, games, MMS cards, ringtones and calendars with their favourite characters.
Author: LuisB. December 2004



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UMTS/WLAN - GERMANY

Vodafone Germany launches combined UMTS, WLAN data card
Vodafone Germany is offering a combined UMTS and WLAN card for notebooks. Vodafone UMTS customers can use the data transmission, at transmission speeds of up to 384 kilobits per second, which corresponds to six times ISDN speed, in approximately 700 towns and communities.
The card, which offers the option of accessing the internet at WLAN hot-spots, is available for €99.50.
Vodafone currently operates some 300 WLAN hot-spots. The card supports the WLAN standards 802.11g and 802.11b.
Author: LuisB. December 2004



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UMTS - CHINA

Huawei pushes into Europe with 3G deal
China's largest telecoms equipment maker, Huawei Technologies, clinched its first European contract for a third-generation mobile network yesterday, underlining its threat to bigger international rivals.
In a deal an industry source valued at 200-400 million euros (US$266-US$533 million), Huawei will build a 3G mobile phone network for unlisted Dutch carrier Telfort.

The 10-year contract with Telfort, the smallest of the Netherlands' five mobile carriers, is Huawei's first in Europe involving a network based on the 3G (third generation) UMTS standard known as WCDMA.

The agreement, which also involves the creation of a research and development centre in the Netherlands, gives Huawei a European beachhead to compete in markets dominated by major equipment suppliers like Motorola, Ericsson and Nokia.

Huawei has contracts for networks based on the WCDMA standard in the Middle East, Hong Kong, Mauritius and Malaysia.

In an interview with Reuters, Telfort Chief Executive Ton aan de Stegge would only say the network deal was worth hundreds of millions of euros. A Huawei spokesman declined to comment on the value of the contract.

In its 3G Hong Kong deal with Sunday Communications, the smallest of the city's six mobile carriers, Huawei provided a large amount of financing as part of the overall sale.

A Telfort spokeswoman declined to say if equipment financing was part of the deal.

"Telfort's strategy is to challenge the established norms of the mobile industry, and this contract, which is the first of its kind in Europe, is exactly in line with that," Aan de Stegge said.

"Huawei will give us a much more innovative infrastructure than what the established players are offering."
Aan de Stegge has previously said he had a difficult time coming up with a business case to roll out 3G services, but yesterday he said the growing use of data services would justify the necessary investments.
Huawei, seen as one of China's fastest rising stars in its field, has embarked on a major export campaign in a bid to keep up its breakneck growth.

Most of its international deals so far have gone to less developed markets, like the Middle East and Africa.
Huawei said in September its sales could grow as much as 45 per cent to US$5.5 billion this year, with exports doubling to up to US$2.2 billion.

It said Western Europe would be a focus for the next two years, as mobile operators there build out 3G networks based on the WCDMA standard.

Its customers in Europe include BT Group and France Telecom, though neither have announced major purchases to date. The company also works in the market with Germany's Siemens.
Source: China Daily. December 2004



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3G MARKET - AUSTRALIA

Competition watchdog clears Telstra-Hutch 3G deal
As foreshadowed by Telstra officials talking to ZDNet Australia, the Australian Competition and Consumer Commission has announced it did not intend to oppose the third-generation mobile network alliance between Hutchison 3G Australia and Telstra.

The competition watchdog issued a statement detailing its position after Telstra and Hutchison 3GA on 6 December said they had signed binding agreements to jointly own and operate 3G radio access network infrastructure.
ACCC chairman Graeme Samuel indicated in a statement a change in tune from Telstra and Hutchison over third-party access to the joint network had played a key part in the decision.

"The ACCC … noted that, contrary to earlier indications from the parties, the arrangements now enable both Telstra and Hutchison to separately provide wholesale and roaming services to other service providers, after initial development phases in the agreement".

"While the agreement may ultimately reduce the extent of infrastructure-based competition between 3G mobile network operators that might otherwise have occurred in the future, the ACCC believes the arrangement has the potential to save 3G mobile operators significant costs and avoid the unnecessary duplication of mobile network infrastructure," Samuel said.

"In turn, this should enable the faster deployment of 3G mobile networks to more parts of the country sooner".

The competition regulator said it had paid particular attention to aspects of the arrangement that: ensure both Telstra and Hutchison will retail their freedom to compete in retail markets for mobile telephony services;
- Limit the extent of infrastructure-sharing between the parties and;
- Limit the scope for parties to share commercially sensitive information about their customers and their retail operations.
Samuel said the competition watchdog was also close to finalising its assessment of a separate 3G mobile radio access network infrastructure sharing arrangement between Optus and Vodafone.
Source: ZD Net Australia. December 2004
Author: Iain Ferguson