TeleGeography CommsUpdate

Cost-cutting helps lift BT profits despite sales decline

Fri, 03 Feb 2012 12:00:00 +0000

BT has posted revenue of GBP4.77 billion (USD7.55 billion) for its fiscal third quarter ending 31 December 2011, a fall of 5% on the back of sales declines at each of the company’s Global Services, Retail and Wholesale units. However, cost-cutting and lower regulator charges helped the telco to report a 22% increase in operating profit, reaching GBP764 million. Broadband subscriber growth was particularly positive, with 146,000 subscribers added during the period, corresponding to approximately 56% of all UK broadband subscriber net additions. Commenting on the results, CEO Ian Livingston said: ‘We have delivered another quarter of growth in profits and cash flow despite the economic headwinds. Our investment to support our customers and improve our services has resulted in new contract wins around the world, with orders so far this year up over 50% in Asia Pacific and Latin America. In the UK, our fibre rollout has accelerated bringing super-fast broadband within reach of over seven million homes and businesses and we remain the number one broadband retailer with over six million customers. Our fixed line base has now grown for the last five quarters and our active consumer line loss is at its lowest for five years.’

StarHub books rise in Q4 and FY2011 profit

Fri, 03 Feb 2012 12:00:00 +0000

Singaporean fixed and mobile operator StarHub has announced its results for the fourth quarter and full year ended 31 December 2011, showing solid gains for the group both in terms of net income and subscribers. The telco booked net profit of SGD92.6 million (USD74.2 million) for the October-December quarter, up 15% from SGD80 million in the corresponding period of 2010, while full year income climbed 20% to SGD316 million. Operating revenue for the last three months of 2011 rose 10% year-on-year to SGD612.6 million, while group EBITDA increased 9% to SGD185.3 million. On a full year basis, operating revenue was up 3% at SGD2.312 billion and EBITDA was 12% higher at SGD676 million. Service revenue for the quarter and full year also increased – by 4% and 1% respectively – with mobile and broadband services contributing the bulk of the growth. The group’s EBITDA margin as a proportion of service revenue was 33.1% for 4Q11 and 31.1% for the full year. Meanwhile, CAPEX for the quarter was up 9% at SGD116.8 million, but 9% lower on an annualised basis. StarHub said its mobile division booked a 3% rise in service revenue – both for the quarter and full year. Post-paid mobile services revenue increased 6% y-o-y in 4Q11 to SGD251.8 million and climbed to SGD968.2 million for the full year. Q4 sales from pre-paid mobile services fell 8% y-o-y to SGD60.4 million, however, and was 6% lower for the full year. The operator closed out 2011 with 2.192 million cellular customers, of which 51% were pre-paid. Net additions totalled 22,000 in the last three months of the year, it added. The operator also recorded gains from broadband services where fourth-quarter revenue of SGD60.6 million was up 3% y-o-y, and was SGD5.7 million higher for the full year. StarHub had a total of 440,000 residential broadband customers at 31 December 2011, up from 438,000 at end-September and 422,000 at the end of 2010. Broadband ARPU was flat at SGD45 per month in Q4 2011, although for the full year StarHub said ARPU dipped SGD2 due to higher promotional and discounts offers as it looked to drive take-up for its hubbing services. The telco’s fixed network revenue rose by 3% y-o-y for Q4 to SGD88 million and climbed 2% for the full year to SGD336.7 million. ‘Data & Internet’ services revenue, which account for 84% of the group’s fixed network revenue, was up 4% and 1% y-o-y for the quarter and full year respectively. Pay-TV revenue increased 8% y-o-y to SGD98.7 million for the quarter but on a full year basis, declined by 5%. StarHub attributed the fall to lower subscription revenue from its ‘Sports’ group following the reduction in the monthly subscription price from SGD25 to SGD12 in June 2010, and the non-recurrence of the 2010 World Cup event in FY2011.

Rostelecom acquires 75% minus one share stake in Armenia’s GNC-ALFA

Fri, 03 Feb 2012 12:00:00 +0000

Russian national telecoms operator Rostelecom yesterday announced that its wholly-owned subsidiary, Teleset Networks, has invested RUB682 million (USD22.5 million) to take a 75% minus one share stake in GNC-ALFA, the largest independent internet and data provider in Armenia. Commenting on the purchase Rostelecom president Alexander Provotorov said: ‘This is the first acquisition outside of Russia that we have concluded as part of our international expansion policy. The acquisition of a control stake in GNC-ALFA provides Rostelecom with access to a well-developed infrastructure for broadband and pay-TV services in the Armenian telecommunications market, a market which has a significant growth potential.’ As reported by CommsUpdate, at the end of last month GNC-ALFA announced the extension of its countrywide 10Gbps bandwidth IP/MPLS network to the cities of Gavar, Idjevan, Martuni and Noemberyan. At the time GNC-ALFA confirmed that its network aggregation nodes – using equipment supplied by Juniper Networks – had 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. GNC-ALFA’s network is based on fibre-optic cable infrastructure spanning approximately 1,500km, and covering approximately 70% of the territory of the Republic. The altnet’s network is interconnected with the region’s major backbone networks, as well as sharing international gateways with Iran and Georgia. GNC-ALFA claims to be the largest independent aggregator of national IP-traffic, and its subsequent transit, in the country. In 2012, it plans to develop its suite of broadband internet and pay-TV services for the residential segment as it looks to stimulate revenue growth in its business. GNC-ALFA reported revenues of approximately USD12 million in FY2011, with an EBITDA margin of 48%. The company’s net debt stands at less than USD1 million.

Flow to increase spending to USD350m over next five years

Fri, 03 Feb 2012 12:00:00 +0000

Flow Jamaica has announced plans to invest USD350 million over the next five years to upgrade its infrastructure and offer new services. According to Jamaica Gleaner, the cableco, a subsidiary of Columbus Communications, has outlined USD40 million to be spent in the coming year with a view to increasing download speeds available to end-users to 300Mbps, and offering 3D TV. Flow public relations manager Jeanette Lewis suggested that the cableco might branch into wireless internet services, though the company has not yet been awarded a concession granting access to radioelectric spectrum frequencies to deliver the offering.

Sprint grants LightSquared second extension to achieve FCC clearance

Fri, 03 Feb 2012 12:00:00 +0000

US giant Sprint Nextel has reportedly granted billionaire Philip Falcone's struggling open-access Long Term Evolution (LTE) venture LightSquared a new six-week extension within which to gain Federal Communications Commission (FCC) clearance to operate its controversial 4G network, which seeks to use non-traditional spectrum in 1.4GHz and 1.6GHz bands. According to Dow Jones Newswires, Sprint has given LightSquared until mid-March to resolve FCC concerns that its network interferes with GPS satellite navigation devices and aircraft flight safety equipment; the extension follows the 30-day reprieve given to LightSquared in late-December. The FCC is accepting public comment until 27 February regarding LightSquared's argument that GPS device manufacturers should not entitled to legal protection from interference caused by its signals. Last month LightSquared urged the FCC and the National Telecommunications and Information Administration (NTIA) to retake the lead on government testing for GPS filtering solutions, after alleging that a series of actions by federal agencies have demonstrated ‘bias and inappropriate collusion with the private sector’. LightSquared plans to have over 40 million connected consumer terrestrial devices (on a wholesale basis) by 2015, equating to 92% population coverage by that date.

Subtel establishes price comparison service

Fri, 03 Feb 2012 12:00:00 +0000

Hot on the heels of the implementation of mobile number portability (MNP) Chile’s telecoms regulator the Subsecretaria de Telecomunicaciones (Subtel) has completed an initiative to further encourage competition in the sector. The watchdog has set up a virtual portal (available at: cpt.subtel.cl/ComPlan/) enabling customers to compare the prices and packages of various telecoms services available in their region. Customers select their region and city, their choice of service – either mobile or a combination of fixed telephony, pay-TV and internet – followed by criteria for each service chosen, the number of minutes or channels included, or the speed of the connection. The customer is then presented with a list of packages that meet their specifications, with the option to compare the details of several plans alongside each other. Showcasing the platform, Subtel said that it was responding to an increasing demand for information from customers. Telecoms minister Pedro Pablo Errazuriz said: ‘These initiatives demonstrate the commitment we have with citizens to create the conditions for our communications system to grow and strengthen, considering users and asserting their rights to free and transparent information ... We have a more transparent market, better informed users and mechanisms for resolving consumer complaints more effectively, ensuring full freedom to choose … promoting competition and encouraging businesses to compete for better offers.’

No King Street blues as US Cellular joins LTE royalty

Fri, 03 Feb 2012 12:00:00 +0000

Chicago-based mobile operator US Cellular has announced that it is poised to launch its long-rumoured Long Term Evolution (LTE) network next month, in association with wholly-owned subsidiary King Street Wireless. The US Cellular unit won 152 regional concessions for 700MHz frequencies in the Federal Communications Commission (FCC) spectrum auction in early-2008, paying a total of USD401 million for the licences. US Cellular’s March launch will see the LTE network go live in Iowa, Wisconsin, Maine, North Carolina, Texas and Oklahoma, including a number of the cellco’s leading markets, such as Milwaukee, Madison and Racine (all Wisconsin); Des Moines, Cedar Rapids and Davenport (all Iowa); Portland and Bangor (Maine); and Greenville (North Carolina). US Cellular claims to be the first wireless carrier to offer LTE in several of these markets. The next wave of market deployments will be announced later this month, with the LTE network scheduled to cover around 25% of the cellco’s operational footprint by year-end.

TDC revenue up 0.5% in 2011; initiates share buy-back

Fri, 03 Feb 2012 12:00:00 +0000

Danish telecoms company TDC has announced that it generated revenue of DKK26.304 billion (USD4.65 billion) in the twelve months ended 31 December 2011, an increase of 0.5% compared to the DKK26.167 billion reported in 2010. The company said that turnover for the fourth quarter of 2011 rose 1.1% year-on-year to DKK6.685 billion. Earnings before interest, tax, depreciation and amortisation (EBITDA) totalled DKK10.940 billion in full year 2011, up 1.6% from DKK10.772 billion the previous year, and grew 1.8% year-on-year in Q4 2011 to DKK2.774 billion. Profit for the year excluding special items increased from DKK2.888 billion in 2010 to DKK3.498 billion twelve months later, but fell 12.3% year-on-year in the fourth quarter of 2011 to DKK870 million. CAPEX totalled DKK3.421 billion in 2011, with major investments including the rollout of HSPA+ and Long Term Evolution (LTE) networks. TDC forecasts full-year 2012 revenues of DKK26.0 billion-DKK26.5 billion and anticipates EBITDA before pension income of between DKK10.3 billion and DKK10.5 billion, while CAPEX is expected to total DKK3.4 billion-DKK3.5 billion.*Meanwhile, TDC has said in a separate statement that it will use one-off income from a legal settlement between its associated company DPTG and Poland's TPSA for a DKK750 million share buyback, scheduled to run from 6 February to 31 December 2012. The TPSA settlement is expected to boost special items related to associated companies by DKK1 billion before taxes in the first quarter, Reuters reports. TDC said its majority owner Nordic Telephone Company (NTC) – a consortium of private equity groups Apax Partners, the Blackstone Group, Kohlberg Kravis Roberts, Permira Advisers and Providence Equity Partners with 59.1% of TDC’s stock – would participate on a pro rata basis so the free float would be unchanged.

Q4 net profit down 61% at SK Telecom

Fri, 03 Feb 2012 12:00:00 +0000

South Korea’s SK Telecom has posted a 61% year-on-year fall in net profit in the fourth quarter of 2011, and a 10.4% decrease in the bottom line for the full year, which reached KRW1.58 trillion (USD1.41 billion), on annual revenues that rose by 2.2% to KRW15.95 trillion. The group said that while growing wireless internet revenues boosted its turnover, profit margins were squeezed by regulatory cuts to its mobile rates as well as the increased CAPEX needed to upgrade its networks. Revenues fell by 2.3% year-on-year in 4Q11 to KRW3.93 trillion, again reflecting tariff cuts, as net profit dropped to KRW196 billion, and three-month operating profit (EBIT) dipped by 35.7% to KRW329 billion.

FPT Telecom posts 42% rise in revenue

Fri, 03 Feb 2012 12:00:00 +0000

Vietnamese telecommunications and software company the Corporation for Financing and Promoting Technology (FPT) posted revenue of VND26.0 trillion (USD1.23 billion) in the twelve months ended 31 December 2011, an increase of 27% year-on-year. The firm said pre-tax profit totalled VND2.515 trillion, up 24.3% compared to 2010, while profit after tax grew 23.5% year-on-year to VND2.088 trillion. Telecommunications unit FPT Telecom earned revenue VND3.489 trillion in 2011, an increase of 42% compared to the previous year, and profit of VND801 billion, up 33% year-on-year.

Digital TV migration to take four years

Fri, 03 Feb 2012 12:00:00 +0000

Thailand’s National Broadcasting and Telecommunications Commission (NBTC) has announced that it hopes to see digital TV trials start this year, beginning a switchover process to digital broadcasting which will take around four years. Having finalised its broadcasting and telecoms frequency ‘master plan’, the NBTC must yet agree with the government which digital TV technology standard to adopt, writes The Nation. Once this is agreed, the regulator will issue temporary digital TV broadcasting licences to free-to-view channel operators to trial the service. The process of digital switchover will free up ‘digital dividend’ spectrum for reallocation in the 4G mobile sector.

Orange seals EUR1.4bn deal with Hutchison for Austria sale

Fri, 03 Feb 2012 12:00:00 +0000

France Telecom-Orange has announced that it has entered into a binding agreement with its co-shareholder Mid Europa Partners (MEP) for the sale of their combined 100% stake in Orange Austria to Hutchison 3G Austria (H3G), a subsidiary of Hutchison Whampoa Ltd. The French telecoms giant currently holds a 35% stake in Orange Austria, whilst Budapest-based private equity firm MEP owns the remaining 65%. FT-Orange confirmed that the agreement implies an enterprise value of approximately EUR1.3 billion (USD1.7 billion), and is expected to provide it with cash proceeds of around EUR70 million for its equity stake. The French group notes that the completion of both transactions remains subject to the approval of the relevant regulatory and anti-trust authorities, which is expected to take place by mid-2012. As previously reported by TeleGeography’s CommsUpdate, the deal – which has been rumoured since September 2011 – also involves H3G offloading around 3,000 of Orange’s 5,000 base stations, surplus frequencies in the 2.1GHz spectrum band, and Orange’s wholly-owned Yesss! mobile virtual network operator (MVNO) unit to A1 Telekom Austria immediately after the transaction.

Alcatel-Lucent wins LTE deal with Claro Puerto Rico as part of Latin American contract

Fri, 03 Feb 2012 12:00:00 +0000

Mexican telecoms giant America Movil has awarded a contract to Alcatel-Lucent to provide infrastructure for its Puerto Rican unit’s 4G Long Term Evolution (LTE) mobile broadband network, which is set to launch commercially ‘in the coming weeks’, according to a press release. As part of a wider supply agreement also covering some of America Movil’s other Latin American subsidiaries, Claro Puerto Rico is adopting Alcatel-Lucent’s LTE solutions including its ‘lightRadio’ portfolio of products, which is designed to ‘dramatically reduce operating costs, technical complexity and power consumption in mobile broadband networks.’ Enrique Ortiz de Montellano, Claro Puerto Rico’s president, announced: ‘With speeds as high as 100Mbps, our subscribers will enjoy the most advanced wireless broadband services. This includes, amongst others, HD video with video on demand, at least ten times faster high speed navigation, high definition videoconferencing, online gaming and other applications.’ As reported by CommsUpdate, local rival AT&T Puerto Rico’s LTE launch came in November 2011, which trumped smaller Puerto Rican cellco Open Mobile’s announcement of 4G launch plans. At the end of that month Claro demonstrated LTE data speeds of 27.6Mbps using modems capable of 30Mbps, having rolled out 4G infrastructure covering San Juan.

Rise of the machines: Telekom Austria confirms 19 ‘high volume’ M2M projects are in the pipeline

Fri, 03 Feb 2012 12:00:00 +0000

Telekom Austria Group has announced that it has ‘successfully concluded’ the first operating quarter since the September 2011 launch of its new machine-to-machine (M2M) division, confirming that it has acquired 19 ‘high volume’ projects, with a total enterprise value of EUR5 million (USD6.58 million). Projects realised thus far encompass the transportation, logistics, retail and industrial automation industries. M2M is essentially the exchange of data between a remote machine and a back-end IT infrastructure. The transfer of data can be two-way: uplink to collect product and usage information; or downlink to send instructions or software updates, or remotely monitor equipment. In the past, the high cost of deploying M2M technology made it the exclusive domain of large organisations that could afford to build and maintain their own dedicated data networks. However, the widespread adoption of cellular technology has effectively made wireless M2M technology available to manufacturers worldwide. As previously reported by TeleGeography’s CommsUpdate, in July 2011 Telekom Austria announced that it had created a new subsidiary to oversee its entrance into the lucrative M2M sector. Branded ‘TA Group M2M GmbH’, the new unit commenced business on 1 September, and is operational in all eight countries where Telekom has a wireless presence. Making the announcement, Telekom CEO Hannes Ametsreiter predicted that M2M penetration is set to increase from 145% to 300%-400% in the ‘forseeable future’.

ANCOM announces new MTRs for fixed, mobile operators

Fri, 03 Feb 2012 12:00:00 +0000

Romanian telecoms regulator the National Authority for Management and Regulation in Communications (ANCOM) has announced that it has finalised its new mobile termination rates for the coming year. As of 1 March 2012 the maximum tariff which the six mobile telephony operators identified as having significant market power (SMP) – Cosmote, Orange, RCS&RDS, RomTelecom, Zapp and Vodafone – may charge to terminate calls will be EUR0.405 (USD0.533) per minute, whilst from 1 September 2012 MTRs will drop to EUR0.307. Meanwhile, the maximum interconnection tariffs charged by the 51 fixed telephony operators identified as having SMP will decrease to EUR0.082 per minute on 1 March 2012, and will drop again, to EUR0.067, on 1 July 2012; interconnection tariffs charged by the fixed telephony operators will no longer be differentiated by on-peak/off-peak designations. Following a comprehensive consultation the rates established by ANCOM have been benchmarked against termination rates in other European countries, based on the avoidable long-run incremental costs (LRIC) associated with the provision of termination services. According to statistical data reported by the providers themselves, revenues obtained by Romania’s mobile phone operators from voice call termination amounted to EUR200 million in 1H11 (latest available data), accounting for 11.7% of the electronic communications market’s total value, whereas fixed telephony operators generated EUR50 million, or 2.7% of the total market value.

Airtel plots money transfer service in Kenya, Tanzania

Fri, 03 Feb 2012 12:00:00 +0000

Indian telco Bharti Airtel has confirmed that plans are underway to initiate mobile money transfer services for its Airtel units in Kenya and Tanzania, to complement its recently launched cash transfer platform in Uganda. Michael Okwiri, vice president for corporate communication at Airtel Africa, told Business Daily Africa that the firm is in the process of creating a seamless cross-border money transfer service between Kenya, Uganda and Tanzania, disclosing: ‘We have applied to the relevant authorities in Kenya, Uganda and Tanzania and are awaiting regulatory approvals’. As reported by TeleGeography’s CommsUpdate, earlier this week fellow Indian-owned cellco Essar Telecom Kenya – which operates under the ‘yu’ brand name – called on market leader Safaricom to open up its mobile money transfer service M-PESA to other networks. yu manager Madhur Taneja said that the cellco would be willing to pay royalties to Safaricom, the country’s number one operator by subscribers, for the shared use of M-PESA, and blamed the underwhelming impact of mobile number portability (MNP) on the fact that Safaricom customers are unwilling to risk losing their access to the mobile banking solution, regardless of their network preferences.

Elisa FY2011 revenues reach EUR1.53bn

Fri, 03 Feb 2012 12:00:00 +0000

Finnish telco Elisa Corporation has reported that it generated revenues of EUR1.53 billion (USD2.01 million) during the twelve months ended 31 December 2011, up from EUR1.46 billion in 2010. EBITDA for FY2011 stood at EUR506 million, up from EUR485 million on an annualised basis, whilst profit before tax increased from EUR197 million to EUR265 million. CAPEX for full year 2011 was EUR197 million, compared to an outlay of EUR184 the previous year. Revenues for the three months ended 31 December grew from EUR383 million to EUR401 million year-on-year, with EBITDA rising to EUR133 million.