TeleGeography CommsUpdate

SLT increases sales, EBIT by 9%, 14%; PSTN lines rise

Wed, 16 May 2012 12:00:00 +0000

Sri Lanka Telecom (SLT) has reported that its consolidated operating profit (EBIT) grew by 14% year-on-year to LKR1.86 billion (USD14.5 million) in the first quarter of 2012, on revenues which climbed 9% to LKR13.53 billion. The consolidated results, including SLT’s mobile arm Mobitel, showed a 72% drop in profit after tax caused by the depreciation of local currency due to the significant US dollar exposure at Mobitel. The exchange loss of LKR1.4 billion for Q1 meant that net income fell to LKR365 million. SLT’s fixed network division posted its highest quarterly revenue since 3Q 2009, at LKR8.59 billion, up 7% year-on-year in January-March 2012, while standalone net profit at the fixed unit registered a 39% y-o-y increase to LKR1.37 billion. Newer services such as fixed broadband and IPTV were key drivers of the telco’s revenue and profitability growth in the quarter, offsetting a rise in operational expenditure which was mainly driven by the doubling of the country’s International Telecommunication Levy to USD0.30 per minute. Demand for broadband and entertainment via ‘PEO TV’ resulted in PSTN line customers growing by 6% year-on-year. Mobitel posted Q1 revenue growth of 12% to LKR5.84 billion, and EBITDA which rose 22% to LKR2.03 billion.

3G licensing draft approved by regulator’s committee; 4G trials okayed

Wed, 16 May 2012 12:00:00 +0000

A committee of the National Broadcasting and Telecommunications Commission (NBTC) yesterday approved Thailand’s draft licence auction framework for the 2100MHz 3G mobile frequency band, reports the Bangkok Post. Under the draft, the regulator will divide available 2100MHz bandwidth into nine 5MHz blocks, scrapping an earlier framework based on the ‘N-1’ model which would have made available a number of licences equal to the number of bidders minus one. The NBTC said the removal of this condition is aimed at promoting a level playing field under the Frequency Allocation Act. Another condition that would require the winners to list on the Stock Exchange of Thailand three years before entering the auction will also be scrapped under the draft. However, a reserve price for licences has not yet been agreed on. The draft will be submitted to the NBTC board for approval next month, ahead of a public hearing within the next two months, with the auction scheduled for around September. TeleGeography’s GlobalComms Database notes that state-run TOT remains the country’s sole holder of 2100MHz spectrum, and the two largest cellcos, AIS and DTAC, are forced to offer 3G services in lower frequencies under their existing revenue-sharing build-transfer-operate (BTO) concessions with TOT and sister telco CAT respectively, whilst the third private operator, True, operates 850MHz HSPA-based 3G services outside of the BTO framework via a series of wholesale/resale contracts with CAT which have attracted widespread allegations of non-transparency and are undergoing political and legal scrutiny set to drag on for years. The upcoming 2100MHz concessions will be issued as full network operating licences, and will permit 3G and 4G operations. In another development reported by the Post, the NBTC's telecom committee yesterday said that DTAC and True could proceed with 4G Long Term Evolution (LTE) mobile trials on existing 1800MHz frequencies. AIS had previously been given permission for 4G trials using its existing 900MHz frequencies.

Lightsquared files for Chapter 11 bankruptcy

Wed, 16 May 2012 12:00:00 +0000

Stricken open-access Long Term Evolution (LTE) start-up LightSquared has announced that it has commenced voluntarily reorganisation cases under Chapter 11 of the US Bankruptcy Code to give it time to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. The company will also file a recognition proceeding in Canada, which relates to cross-border insolvency cases. The company fully expects to continue normal operations throughout this process. The firm says that it intends to work with all key constituents to conduct an orderly restructuring process with a view to maximising its asset value and exiting Chapter 11 in the quickest and most efficient manner possible. The filing was made in the US Bankruptcy Court for the Southern District of New York and the recognition proceeding will be filed in the Superior Court of Justice in Toronto, Ontario. Marc Montagner, interim co-chief operating officer and chief financial officer of LightSquared, commented: ‘The filing was necessary to preserve the value of our business and to ensure continued operations. The voluntary Chapter 11 filing is intended to give LightSquared sufficient breathing room to continue working through the regulatory process that will allow us to build our 4G wireless network’.

Tele2 denies Russian exit rumours

Wed, 16 May 2012 12:00:00 +0000

Swedish telecoms giant Tele2 has denied Russian media reports suggesting that the company plans to sell its Russian subsidiary. In a statement issued late on Tuesday, Tele2 said: ‘The management of Tele2 Russia is not holding any talks on the sale of its business’. Earlier that day RBC Daily reported that Tele2 intended to sell its Russian unit if it does not manage to obtain frequencies in the government’s long-delayed Long Term Evolution (LTE) spectrum auction. With this in mind, the business daily revealed that Tele2 had already held preliminary consultations with national wireline operator Rostelecom, a company which harbours ambitions of taking on Russia’s self-styled ‘Big Three’ mobile operators (Mobile TeleSystems [MTS], MegaFon and Vimpelcom) in the emergent 4G sector. According to TeleGeography’s GlobalComms Database Swedish alternative operator Tele2 entered the Russian mobile market in late 2001 via the acquisition of Fora Telecom, the holding company for the Russian mobile assets of Millicom International Cellular (MIC). Tele2 has subsequently expanded its footprint by gaining new licences in government spectrum auctions, and currently has a presence in 43 regional markets. However, much to its chagrin, the cellco has been repeatedly denied a licence to operate in Moscow, whilst an all-important 3G concession has also been withheld from the firm, limiting future growth prospects.

PURA enforcing mid-June deadline for SIM registration

Wed, 16 May 2012 12:00:00 +0000

Gambia’s Public Utility Regulatory Authority (PURA) has confirmed that it will block all unregistered mobile SIM cards which remain at the 15 June deadline which it has set for the country’s mandatory user registration scheme. Director general of PURA, Abdoulie Jobe, explained that unregistered users will at that date be unable to use voice services, although they will continue to be able to send and receive text messages, until an unspecified date when their account will be deactivated. Jobe did not clarify whether or not users have a final chance to unblock their lines by registering after the mid-June deadline. In April 2011 the government issued an executive order which mandated Gambia’s four GSM operators to register all pre-paid SIM owners.

AzTelekom widens broadband coverage in rural areas

Wed, 16 May 2012 12:00:00 +0000

Azeri telecoms operator AzTelekom, which is wholly owned by the state via the Ministry of Communications and Information Technology (MCIT), is set to expand the availability of broadband services in rural parts of the country through the deployment of a 600km fibre-optic cable. Telecompaper cites a report by news agency Trend as saying that the operator is carrying out the project in partnership with seven private internet service providers (ISPs), five of which have already commenced work, with 200km of fibre deployed to eleven telecoms access nodes. TeleGeography’s GlobalComms Database states that AzTelekom operates in the internet market through its subsidiary AzTelekom.NET, which was established in September 2004. It provides a range of connection options, including dial-up, leased lines and ADSL (offering transmission speeds of up to 10Mbps), and also provides voice-over-internet protocol (VoIP) telephony.

HAKOM extends broadband tender to August

Wed, 16 May 2012 12:00:00 +0000

Croatian telecoms regulator, the Postal & Electronic Communications Agency (HAKOM), has extended a bidding deadline in a public tender for the award of state aid to roll out broadband networks in underserved, remote areas, to 20 August from 15 June. The tender was first announced in mid-March, with the intent of covering mountain and offshore areas.

Gateway steps up terrestrial network initiative

Wed, 16 May 2012 12:00:00 +0000

Pan-African telecoms service supplier Gateway Communications has announced that it has brought additional capacity from submarine cable SAT-3 to landlocked Botswana via South Africa, under its Southern African Development Community (SADC) initiative. Customers can now access high speed, reliable connectivity, which will help to improve Botswana’s economic sectors, including mining, tourism and agriculture. Gateway has also revealed that more routes are being added to the networks already created in Zambia and Malawi during the initial phase of its terrestrial network initiative. A new path, utilising both SAT-3 and SEACOM connectivity, has been developed to provide Zambia with a fully redundant path through Zimbabwe. During the next few months Gateway will be extending its terrestrial network by deploying another link into Malawi through the eastern border town of Mulanji. Under the next step of the project, Gateway aims to bring additional capacity to Mauritius by connecting the island via SAFE to a neutral data centre facility in South Africa and then onward to Europe via EASSy and SAT-3. This will connect Mauritius to Africa and will allow the country to connect internationally using Gateway’s pan-African MPLS network and international peering stations in London, UK. ‘Through this innovative project, we will make sure that the benefits of high speed services are available to everyone using our pan-African network,’ commented Mike van den Bergh, CEO of Gateway Communications, adding: ‘This brings us closer to our goal of ensuring that every country in Africa has access to cost-effective and reliable capacity.’

Oi reports tripling in Q1 profits as business plan gains traction

Wed, 16 May 2012 12:00:00 +0000

Brazilian telecoms group Oi SA, the company formed through the restructuring of Telemar Participacoes’ former operating divisions Brasil Telecom, Tele Norte Leste Participacoes, Coari Participacoes and Telemar Norte Leste, says net income tripled to BRL346 million (USD174 million) for the first three months of this year, up from BRL93 million in Q1 2011. However the group, which completed a corporate restructuring programme during the January-March quarter, booked a 2.2% decline in pro forma net revenue to BRL6.8 billion, while earnings before interest, taxes, depreciation and amortisation (EBITDA) edged up 1.4% to BRL2 billion. Investments for the three-month period totalled BRL1.091 billion, 31.6% higher than the amount spent in 1Q11. Operationally speaking, Oi ended the first quarter of this year with a total of 70.826 million revenue generating units (RGUs), up 7.2% from 66.074 million in 1Q11. Of the total, cellular (Personal Mobility) customers accounted for 44.106 million (+12.2% y-o-y), with growth being driven by post-paid take-up and a focus on greater profitability in the pay-as-you-go user base. Additionally, the group reported 2.385 million corporate users for its mobile services, taking the overall total to 46.491 million at end-March 2012. The carrier’s residential fixed line telephony, broadband internet and pay-TV base ended Q1 with a total of 17.850 million connections, down 2.2% from Q1 2011, with Oi noting that while broadband and TV expanded, its fixed line customer base continues to contract – albeit at a slower pace. The number of residential fixed lines in service stood at 12.841 million at 31 March this year, down 7.8% from 13.925 million a year earlier. However, Corporate fixed lines in service at end-March 2012 stood at 5.192 million, up 3.9% year-on-year, while residential fixed broadband connections expanded 15.4% over the same period to 4.614 million and pay-TV subscriptions climbed 16.1% to 396,000. Oi says that through a focus on offering bundled solutions, it aims to increase the proportion of residential users with more than one product. Quarter-over-quarter, the total residences with more than one Oi product/service grew 1.3 percentage point, it said, to 6.238 million. Further, Oi reached a total 5.2 million Oi Velox clients (residential + business broadband users) at the end of March 2012. It now offers fixed broadband service in every Brazilian state except for Sao Paulo, and expanded its base with a strategy aimed at bundled services and offers a wide portfolio of internet access services, including fixed (Oi Velox) and mobile broadband (Oi Velox 3G) and Oi WiFi.

NetCologne to bring services to Burscheid

Wed, 16 May 2012 12:00:00 +0000

Regional network operator NetCologne has announced that it will begin offering high speed internet services in Burscheid, a town in the federal state of North Rhine-Westphalia, from autumn this year. The company plans to launch its ‘Doppel-Flat Premium’ broadband service, which supports maximum download speeds of up to 50Mbps, on 1 October 2012, although Burscheid residents can already register their interest on the operator’s website. NetCologne is owned by the municipality of Cologne through utilities firm GEW Koln. Its coverage includes Cologne and the surrounding municipalities of Hurth, Bruhl, Frechen, Bergisch Gladbach, and the towns and cities of Rhein-Erft-Kreis, Leverkusen, Rhein-Sieg-Kreis, Bonn, Duren, Aachen, Lohmar, Rosrath, Overrath, Bensberg, Euskirchen and Langenfeld.

Tesco Mobile Ireland doubles revenues, posts pre-tax profit

Wed, 16 May 2012 12:00:00 +0000

Mobile virtual network operator (MVNO) Tesco Mobile Ireland, a joint venture between retail giant Tesco and Telefonica O2 Ireland, booked revenues of EUR21.5 million (USD27.5 million) in FY 2011, more than double the EUR10.6 million figure reported the previous year. In a filing to the Republic’s Companies Office, the MVNO also reported it turned a pre-tax loss of EUR678,000 in fiscal 2010 into a pre-tax profit of EUR5.3 million last year, and booked an operating profit of EUR5.9 million, compared with EUR8,000 in FY 2010. Tesco Mobile Ireland’s directors’ report states that it grew its share of the pre-paid segment in 2011 on the back of offering simple value-for-money offerings. ‘The company launched a pay monthly proposition into the market place in October 2011 … The company has based its business plan on continuing to grow market share in 2012,’ it added. The report goes on to say that the management believes ‘the company will have sufficient funding for its operating requirements for this period [2012] and therefore consider it appropriate to adopt the going concern basis in the preparation of the financial statements’. According to TeleGeography’s GlobalComms Database, in July 2011 Tesco Mobile Ireland reported breaking the 100,000 subscriber barrier, saying its success has been built on offering competitive products with low-cost domestic and international voice calls. By 30 September 2011 (latest official figure) the base has increased to 115,000. The company can provide coverage of 99.6% of the Republic through its tie-up with O2 Ireland.

GNC-ALFA claims national coverage for fixed telecoms services

Wed, 16 May 2012 12:00:00 +0000

Armenian alternative fixed line service provider GNC-ALFA claims it can now provide services across the entire country using non-geographic numbers from the list (060) 46????. Local news journal ARKA says that as a result of the move, GNC-ALFA’s corporate clients are now able to make calls to any destination in Armenia or abroad at more affordable rates. Although the service is currently limited to business/corporate clients, from June this year the altnet intends to offer it to residential customers too. In January this year, the carrier announced the extension of its countrywide 10Gbps bandwidth IP/MPLS network to the cities of Gavar, Idjevan, Martuni and Noemberyan. GNC-ALFA said that its network aggregation nodes – using equipment supplied by Juniper Networks – have been put into operation in the above-mentioned areas. The network allows the altnet to provide a range of communications services including IP transit, internet access, data telecommunication, virtual private networks (VPNs) and other services to other operators, ISPs and corporate customers. Then in February, Russian telco Rostelecom announced that its wholly-owned subsidiary, Teleset Networks, had invested RUB682 million (USD22.5 million) to take a 75% minus one share stake in GNC-ALFA, giving it access to a well-developed infrastructure for broadband and pay-TV services in a sector which has a significant growth potential.

Eircom rescue plan thrown into doubt following court application

Wed, 16 May 2012 12:00:00 +0000

Eircom’s rescue plan, currently in the throes of being finalised by the court-appointed examiner Michael McAteer, has been thrown into doubt following an unprecedented application to the Commercial Court, which is expected to be heard today. Local press reports say that with McAteer poised to conclude a rehabilitation plan with Eircom’s creditors on Friday, New York-based DW Investment Management, which is representing 52.4% of creditors holding EUR350 million (USD448 million) in floating rate loan notes in troubled carrier Eircom, and Hong Kong-based Hutchison Whampoa, the parent company of Irish mobile phone operator 3, are seeking recourse through the courts following the examiner’s decision last week to reject a revised EUR2 billion cash offer from 3 Ireland and Hutch. Under the examiner’s current plan for Eircom and its subsidiaries Meteor Mobile Communications and Irish Telecommunications Investments, creditors holding floating rate loans will not receive a dividend and will have their debt effectively ‘extinguished’. However, DW Investment is seeking a ruling and claims its clients are being unfairly treated under the preferred scheme, noting that Hutch’s rejected bid contained a provision for a EUR50 million payment for those holding floating rate notes. The Hong Kong group has gone one step further, suggesting that where Eircom’s restructuring is concerned, the Irish telecoms group and its first lien senior lenders seemingly agreed to lock in any potential deal between themselves, at the time of the examiner’s appointment in March, thus preventing any real meaningful exploration of a possible resolution that included second lien lenders.

Bouygues loses 379,000 subscribers as competition bites

Wed, 16 May 2012 12:00:00 +0000

French operator Bouygues Telecom lost 379,000 subscribers in the first three months of 2012 due to the increased competition following the launch of low-cost cellular operator Free Mobile on 10 January this year. Contract subscribers accounted for 210,000 of these losses, but the firm says that since mid-March portability requests have gradually been returning to their previous level. There was some good news at Bouygues’ fixed broadband division, which saw 88,000 net customer adds in the three months to 31 March 2012, taking the total to just under 1.33 million. First quarter sales fell 3% year-on-year to EUR1.37 billion (USD1.76 billion), while revenues from network services were down by the same margin to EUR1.22 billion. Stripping out the effect of a regulator-enforced cut in voice and SMS call termination rates, the company said sales from network services would actually have risen by 6%. Earnings before interest, tax, depreciation and amortisation (EBITDA) declined 8% to EUR296 million, which mainly reflected the cut in call termination rate differentials. Net profit dropped 34% from a year earlier to EUR59 million. Bouygues Telecom confirmed that it expects sales to contract by 10% in 2012 and EBITDA to decrease by around EUR250 million. The company has embarked on a EUR300 million cost-cutting plan which it says will start to have an impact in 2013.

Mobily prepares for MVNO deals with Xius contract

Wed, 16 May 2012 12:00:00 +0000

The Saudi Arabian telco Etihad Etisalat, which trades as Mobily, has awarded India-based software vendor Xius a mobile virtual network enabler (MVNE) management contract. With the Saudi government preparing to offer its first mobile virtual network operator (MVNO) licences, network owners such as Mobily need to be ready to host resellers. Mobily has therefore contracted Xius to deploy its Mobile Services Platform infrastructure and framework. Mobily is the second largest cellular operator in Saudi Arabia, with 21.3 million subscribers and 37% of the overall wireless market at the end of 2011, according to TeleGeography’s GlobalComms Database.

Djezzy sees 7% increase in sales in Q1 2012

Wed, 16 May 2012 12:00:00 +0000

The Algerian telco Djezzy, which is backed by the Russia-based telecoms group Vimpelcom, has reported a 7% rise in sales for the first three months of 2012 to DZD34.3 billion (USD457 million), which the operator attributed to an increased focus on higher-end subscribers. Earnings before interest, tax, depreciation and amortisation (EBITDA) grew 8% year-on-year to reach DZD20.6 billion, while subscriber numbers were up 14% at 17.69 million. Vimpelcom is currently in negotiations with the Algerian government, with the state keen to acquire a majority holding in Djezzy.

IIJ reports 18% rise in sales for FY2011

Wed, 16 May 2012 12:00:00 +0000

The Japanese internet service provider (ISP) Internet Initiative Japan (IIJ) has reported full-year net income of JPY3.64 billion (USD44.1 million) in its 2011 fiscal year to 31 March 2012, a year-on-year increase of 13.7%, on the back of an 18.1% rise in revenues to JPY97.32 billion. Koichi Suzuki, president and CEO of IIJ, said the company is expecting another year of double-digit growth in 2012. IIJ reported 397,191 home internet subscribers and 93,807 corporate customers at the end of March 2012, up from 374,328 and 86,803 respectively a year earlier.

Zain to invest JOD85m in infrastructure in 2012

Wed, 16 May 2012 12:00:00 +0000

Kuwait-backed Zain Jordan plans to invest JOD85 million (USD119.42 million) in infrastructure and new technologies in 2012, the company’s CEO Ahmad Al Hanandeh told Dow Jones Newswires. The figure represents a step down from the amount spent last year, having invested JOD90 million in 2011, and JOD70 million in 2010. As noted by TeleGeography’s GlobalComms Database, Zain launched commercial services over its 3.5G W-CDMA/HSPA+ network in March 2011 and claimed to have signed up 700,000 users to 3G services by the end of the year.

Fresh threats over TRAI proposals

Wed, 16 May 2012 12:00:00 +0000

Russia’s Sistema, majority owner of Sistema Shyam TeleServices (SSTL), has threatened to withdraw from operations in India if the government accepts the controversial proposals put forward by the Telecoms Regulatory Authority of India (TRAI) regarding revised base prices for spectrum, reports Zeebiz news. Sistema executive Andrey Terebenin railed against the proposals, saying: ‘If the government just rubber stamps everything, then we will pull out of India.’ Terebenin went on to criticise the recommendations as an attempt to make ‘quick money’ rather than ensuring that telecoms services are provided at an affordable rate in the long run.*Norway’s Telenor, which currently operates in India under the Uninor brand, has also raised threats to quit the Indian market, reversing its previous plans to remain in India through a new joint venture agreement with a different partner. ‘Telenor Group has stated that if these recommendations are accepted by the government as a final policy, then the company would be forced to exit India,’ Telegraph India quotes Uninor managing director Sigve Brekke as saying. Telenor centred its protest on the devastating detrimental effect to consumers and competition that the new pricing plan would have, reiterating previous claims that tariffs would more than double as operators looked to recoup the higher fees. *Should Sistema and Telenor carry through with their threats, they would join the growing number of foreign investors that have been forced to pull out of the Indian market, including Bahrain’s Bateleco and Etisalat of the UAE. As previously noted by CommsUpdate, Norway’s trade and industry minister cast doubts on future investment in India as a result of the 2G licensing debacle, and Russian diplomats have accused the Indian government of breaking the terms of their investment protection treaty. *Joining in the chorus of protests, Jamuldin Ibrahim, the CEO of Malaysia’s Axiata Group, which owns a 20% stake in Idea Cellular, has said that whilst Axiata is not planning on withdrawing, the terms of the new spectrum auction might limit future investment. ‘We are here for the long term, so we are not exiting…[but] the extent of how much we invest will be determined vis-a-vis the additional cost of spectrum,’ the Economic Times cites Ibrahim as saying. The Axiata head added that the Indian telecom sector would struggle to attract foreign direct investors should the TRAI’s recommendations be accepted.

Subtel and Entel complete rural connectivity project

Wed, 16 May 2012 12:00:00 +0000

Chilean telecoms regulator the Sub-Secretaria de Telecomunicaciones (Subtel) has announced the completion of its public-private initiative, to deliver broadband services to remote rural communities. The project, which saw Subtel partner with local operator Entel and was launched December 2009, rolled out wireless broadband networks to 1,474 towns and villages allowing around three million Chileans to access the internet more easily. The project cost USD110 million, with Entel providing USD65 million, and USD45 million coming from the Fund for the Development of Telecommunications (FDT) and the Ministry of Transport and Telecommunications (MTT). As noted in TeleGeography’s GlobalComms Database, the first stage of the project was completed in September 2010, having connected 451 communities, consisting of around 1.7 million people.

Digicel Barbados launches fixed substitution bundles

Wed, 16 May 2012 12:00:00 +0000

Digicel Barbados has launched a new alternative to landline voice and fixed internet services with the introduction of the cellcos’s latest bundle, ‘Digicel Choice’, which offers voice and internet services via an integrated gateway device and a single SIM card. Packages are offered in two tiers, one for consumers and one targeting the small office or home office (SOHO) user.

Morgan Stanley trims KPN stake to 4.93%, financial regulator*says

Wed, 16 May 2012 12:00:00 +0000

MarketWatch reports that Morgan Stanley has reduced its stake in Dutch telco KPN Telecom (also known as Royal KPN) from 10.01% to 4.93%. Citing a report by the Dutch financial regulator Autoriteit Financiele Markten (AFM), the journal says the change was made on 11 May. The AFM filing confirms that Morgan Stanley’s stake comprises 2.33% in shares and 2.60% in futures and options. The original stake of 10.01% consisted of 4.93% in shares and 5.08% in futures, options and swaps. The group purchased its original 10.01% holding in KPN on 4 May, just days before Mexico’s America Movil (AM) announced its intention to up its holding in the Dutch incumbent. As reported by CommsUpdate, Carlos Slim’s Mexican group revealed plans to acquire up to 28% of KPN on 8 May. In what would be the Mexican group’s biggest foray into Europe to date, Slim is considering a deal worth up to USD3.45 billion to up its stake in the Dutch carrier. AM already owns 4.8% of KPN’s stock but has announced plans to table a cash offer worth EUR8 (USD10.4) per share to increase its equity holding to 28%. The Dutch carrier has since dismissed AM’s initial bid as too low.

Cellcom suffers amid increased competition as it posts 43.5% drop in net profit in 1Q12

Wed, 16 May 2012 12:00:00 +0000

Amid increasing competition and lower prices for consumers in the wireless sector, Israel’s largest cellco by subscribers, Cellcom, has revealed a 43.5% year-on-year on drop in net profit. For the three months ended 31 March 2012 the operator posted a net income of ILS173 million (USD47 million), down from ILS306 million in the same period a year earlier, with Cellcom attributing the drop in the main to lower service revenues. In the first quarter of 2012 Cellcom generated a total turnover of ILS1.585 billion, almost unchanged against 1Q11 when it saw revenues of ILS.1587 billion. Of the total, service revenues accounted for the bulk – ILS1.186 billion – although this was down by 1.6% y-o-y from ILS1.205 billion. Such declines were offset by higher turnover from handsets and equipment, which rose by 4.5% against 1Q11 to reach ILS399 million. Looking in more detail at service revenues, Cellcom noted that the drop in turnover had ‘resulted mainly from the ongoing price erosion, due to the increased competition in the market’. It did, however, say that a 10.9% rise in revenues from content and value added services (VAS) in the first quarter of 2012 had helped offset some of the service revenue declines. Earnings before interest, depreciation and amortisation (EBITDA), meanwhile, stood at ILS475 million for the first three months of 2012, representing a fall of almost 26% compared with the year-ago period. As at end-March 2012 Cellcom’s total mobile subscriber base numbered 3.362 million, down from 3.395 million a year earlier and a drop from a peak of 3.415 million three months earlier. Meanwhile, in the first quarter of the 2012 fiscal year Cellcom said that it had added approximately 57,000 net new 3G subscribers, bringing the number of customers signed up to its third-generation services to 1.388 million, up from 1.188 million at end-March 2011. Quarterly churn in 1Q12 was 6.3% compared with 7.1% in the same period of 2011, while average monthly minutes of use (MoU) per mobile subscriber in the most recent financial period was 365, up from 334 in 1Q11. Average revenue per user (ARPU) for the quarter, however, was down compared to a year earlier at ILS90.5, compared with ILS115.2, with the drop attributed to the ‘ongoing airtime price erosion’. Commenting on the results, Cellcom CEO Nir Sztern said: ‘Comparing the results of the first quarter of 2012 with the first quarter of 2011, we see a decline in profitability as a result of the regulatory changes and increased competition. However, if we compare the first quarter 2012 with the fourth quarter 2011, we can see a decrease in the Company's expenses of approximately ILS80 million as a result of the efficiency measures we implemented ... The intensified competition which characterised this past year, led to a continued reduction in service revenues. The decline in service revenues will continue in the following quarters and may even escalate as a result of the new competition, and so, we intend to implement additional efficiency measures regarding costs and merger synergies, but we estimate that these measures will only partly compensate for the decrease in revenues.’

O2 UK rolling out DC-HSPA+?

Wed, 16 May 2012 12:00:00 +0000

British mobile network operator O2 UK has reportedly begun the deployment of Dual Carrier HSPA+ (DC-HSPA+) technology, CNET UK claims. Citing an unnamed O2 UK spokesman as confirming the development, the cellco is understood to be rolling out the technology with a view to increasing theoretical downlink speeds to up to 42Mbps. The increased speeds are expected to be available initially in ‘major cities’, and while no details of launch locations have been formally announced, the report speculates that London, Birmingham and Manchester are likely locations for the initial deployment. In separate but related news, meanwhile, Chinese vendor Huawei has reportedly bagged a five-year managed services deal with O2 UK for the latter’s core network. According to Cellular News, under the terms of the deal between the two companies 56 employees will be transferred from the Telefonica-owned mobile operator to work for Huawei’s managed services business, with the vendor taking responsibility for planning and managing the core transmission, mobile access and core network build in the multi-vendor core network. Commenting on the deal, Huawei UK CEO Victor Zhang was cited as saying: ‘We are very pleased to announce our first major managed services agreement in the UK. Huawei works with Telefonica in a number of markets around the world and today's agreement means we are extending our relationship to the UK. Today's announcement is an important first step in building a world-class managed services capability in the UK.’

CMT begins public consultation on MVNO legislation update

Wed, 16 May 2012 12:00:00 +0000

Spain’s Comision del Mercado de las Telecomunicacinoes (CMT) has announced the launch of a public consultation examining proposals for the future regulation of the country’s mobile virtual network operator (MVNO) sector. The regulator notes that it is aiming to adapt existing regulations to take into account conditions applied to spectrum that were issued by the Ministerio de Industria, Energia y Turismo (Minetur) in mid-2011. With the CMT reiterating that current MVNO legislation – which was adopted in 2006 – stipulates that network operators should allow access to their respective infrastructure at reasonable prices, it also highlighted Minetur’s approval of Royal Decree 458/2011 in mid-2011, which stated that those operators holding spectrum in the 900MHz band would be required to provide wholesale access to those operators not holding any frequencies. The public consultation is expected to last for a month, and alongside seeking the views of all stakeholders, the regulator has revealed that it will also include a request for a report from the competition watchdog, the Comision Nacional de la Competencia (CNC). On completion of the consultation the draft measures are expected to be submitted to the European Commission (EC). In announcing its plans to re-examine legislation governing virtual operators, the CMT also confirmed that today there are 23 active MVNOs in Spain, together accounting for an approximate 6.8% market share of the country’s wireless voice sector. It also noted that since the introduction of MVNOs in 2006 the average price of domestic mobile-to-mobile calls had fallen from EUR0.161 (USD0.20) to EUR0.089 (USD0.11) per minute.

Government considering regional LTE tenders

Wed, 16 May 2012 12:00:00 +0000

According to an unconfirmed report by Vedomsoti, Russia’s Ministry of Communications (MinSvyaz) is considering a plan to hold separate Long Term Evolution (LTE) tenders in at least ten regions. The tenders, which are expected to take place in mid-April 2013, will see the watchdog auction off spectrum in the 2570MHz-2620MHz band.

Las Vegas cops take a gamble on LTE

Wed, 16 May 2012 12:00:00 +0000

Florida-based Harris Corporation has announced that it installing 700MHz Long Term Evolution (LTE) configured modems in a number of Las Vegas Metropolitan Police Department (LVMPD) vehicles in a pilot programme aimed at demonstrating the potential of next generation wireless broadband technology. LVMPD is testing Harris’ Radio Access Network infrastructure, which is connected to the Harris-hosted LTE core in Chelmsford, Massachusetts. Meanwhile, Finnish vendor Nokia Siemens Networks (NSN) has supplied a number of ‘eNode B’ base stations, which are able to operate in all 20MHz of the 700MHz ‘Band 14’ spectrum allocated to public safety. This programme represents the second pilot announced by Harris in recent months; in March, Miami-Dade police officers began participating in a parallel initiative. Joseph Lombardo, assistant sheriff at the LVMPD, commented: ‘Our vision is to bring the most advanced capabilities to Nevada, so we are evaluating the possibilities of LTE in the hands of Las Vegas first responders. We are eager to explore the potential for improved situational awareness, and real-time video – capabilities that will enhance efficiency and effectiveness in the field’.

Digicel BVI: ‘If you are not living on the EDGE you are taking up too much space’

Wed, 16 May 2012 12:00:00 +0000

In a surprise move, Digicel’s British Virgin Islands’ subsidiary has announced a ‘significant’ upgrade to its EDGE network, promising to deliver a better user experience and faster transmission speeds for customers. Phase one of the two-stage upgrade is now complete, and the cellco claims that the work paves the way for the launch of its HSPA+ network later this year. Incoming Digicel BVI CEO, Declan Cassidy, commented: ‘As part of our promise to deliver the best network to our customers across BVI, we are delighted to announce the successful upgrade of our current EDGE network which is now delivering speeds twice as fast as before. And that is only the start of it. With phase two of the upgrade still to come, this is only setting the scene for what will be the fastest mobile internet browsing experience on the island when we launch 4G [technically HSPA+] mobile later this year. 4G mobile is part of Digicel’s overall technology strategy. For us, we didn’t believe 3G was significantly better than EDGE and so we are leapfrogging 3G and building a 4G network based on HSPA+ technology – which is five times faster than traditional 3G technologies’. As reported by TeleGeography’s CommsUpdate in March, Digicel’s rival LIME confirmed that work was underway to upgrade its own EDGE network to support HSPA+, although that month’s tentative deadline passed without a confirmed HSPA+ launch. In the Virgin Islands (UK)’s wireless sector Digicel competes with fellow regional giant LIME and local mobile operator CCT Wireless.