preINCLUD d FOR 2014ictions ES

Business analysis for telecoms professionals DECEMBER 2013

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A round-up of some Closing the Loop: Moving On: Big Numbers: Dates for your diary and of the major stories Mobile-only operators will 2013 saw certain big Mobile connections are details of the must-attend reported in our daily become a thing of the past, names in the industry head rocketing, driving up capex, events in the telecoms news service but telcos have to decide for pastures new, some but rveneues are not industry over the coming www.totaltele.com whether to buy or build more willingly than others following suit months opinion annual report All the news and industry trends from the past 12 months, plus a look ahead to what 2014 has in store

s is customary in this December issue, we take a look back at the key events in telecoms over the Apast 12 months and set out our predictions for the year ahead. 2013 was quite a year. This time last year ’s exit from the US was just one of those rumours that resurfaced from time to time, whenever it was a quiet news week. The idea of former Nokia CEO Stephen Elop selling the company to Microsoft was something we joked about but didn’t really believe. And we didn’t expect the likes of BT, Telecom Italia and Belgacom to be going into 2014 with new, or no, chief executives at the helm. It just goes to show that you can’t forecast the future any more than you can the British winter weather, but that hasn’t stopped us from giving it a go for next year; we stick our necks out and declare who we think will buy whom in 2014. feature While M&A dominated the telecoms headlines in recent months, our review of the year takes a slightly different tack. We look at a key trend that emerged in 2013, that of mobile operators looking to buy and/or build fixed infrastructure to support their mobile feature network rollouts and lower the cost of backhaul. For the full annual report, that is the key news REVIEW OF 2013 stories from the industry in 2013, see our six-page Faced with the prospect of hooking up timeline special. It’s all there! small cells, mobile operators are buying Mary Lennighan, editor and building their own fixed backhaul [email protected] @TelecomEditor 1 www.totaltele.com Fast, Flexible & In Control MEET THE AGILE OPERATOR

From serving more customers, to serving more needs, from running and maintaining, to caring and creating – entering the Networked Society requires a shift in focus. As the industry moves faster, the key to success is agility. Operators need to balance customer experience, efficiency and innovation all at once. This is where we can help. Working with the world’s leading operators, we know what it takes.

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AgilityAd_148x210.indd 1 11/8/13 12:36 PM A round-up of the major stories in telecoms in 2013, as reported in our daily news service www.totaltele.com

TOP STORIES analysis

VERIZON BUYS OUT VODA 2020 vision After years of speculation, in The specifications for the fifth generation of mobile technol- September Vodafone agreed ogy have not have been laid out yet and even those heavily to sell its 45% stake in involved in its development are unclear on what it will mean. Verizon Wireless to Verizon “[If you asked me] what is 5G? I would tell you I don’t know,” for $130 billion. The FCC said Bernard Barani, deputy head of the European approved the deal in Commission’s DG Connect, at the Total Telecom Festival in December and, pending London in December. shareholder approvals, it is Nonetheless, the industry is now starting to talk in earnest expected to close in Q1. about 5G. Specifically, people are discussing dates. Samsung arguably started it in May when it stated its aim to commer- NOKIA SELLS DEVICES UNIT cialise 5G technology by 2020, claiming a technology Also in September, Microsoft breakthrough related to millimetre wave spectrum that it agreed a €5.44 billion deal to said will essentially permit mobile speeds that are hundreds acquire Nokia’s mobile of times faster than LTE. Mobile industry analyst Bengt phones business. When the Nordstrom called the announcement a “PR trick”, noting that deal closes the Finnish 5G will not come about through the efforts of a single vendor. vendor will be left with NSN, However, it soon became clear that Samsung is not the mapping unit Here and a only player with 2020 in mind. In October Japan’s NTT patents portfolio. DoCoMo revealed it may try to launch 5G services in time for the 2020 Olympic Games in Tokyo. “It seems far-fetched but SOFTBANK SPRINTS INTO US nonetheless we need to consider it,” said Takehiro Nakamura, Japan’s Softbank took control director of NTT DoCoMo’s radio system design group. of US operator Sprint in July Huawei thinks it can be done. Towards the end of the year after a protracted battle with the Chinese vendor said it expects the first 5G networks, satellite firm Dish Network. capable of speeds upwards of 10 Gbps, will be up and running The $21.6 billion deal left by 2020. To help make that vision a reality, Huawei plans to Sprint with $5 billion in cash plough $600 million into 5G research in 2014-2018. And that and gave Softbank a 78% R&D effort will be very important. “We have already stake. achieved many technological breakthroughs in 5G research and innovation, but the majority of the work remains ahead AMERICA MOVIL’S kpn BID of us,” admitted Huawei’s rotating CEO Eric Xu. Mexico’s America Movil made a €7.2 billion offer to take control of Dutch operator KPN, but in October it chose to abandon WE HAVE ACHIEVED its ambitions rather than MANY TECHNOLOGICAL increase its bid when a BREAKTHROUGHS IN 5G shareholder group blocked RESEARCH AND INNOVATION the move. 3 www.totaltele.com TOP STORIES BIG NEWS

OI SWALLOWS PORTUGAL TEL BACK OF THE NET Portugal Telecom and in BT garnered a lot of attention with the August launch of its October announced that they BT Sport TV channels. However, its acquisition of broadcast will merge to create a new rights for Premiership football, rugby, and later Champions Brazil-based operator under League and Europa League football, among others, was not the leadership of current Oi made solely to shake up the UK’s pay-TV market. Rather the CEO and former Portugal telco aimed to consolidate its position in the ISP space by Telecom head Zeinal Bava. bundling BT Sport free with its broadband tariffs. It’s a strategy that does not come cheap. The rights to VODAFOnE BUYS KABEL D broadcast just 38 Premiership football matches per season for Vodafone completed a €7.7 the next three years cost it £738 million. A three-year rights billion takeover offer for deal for the UEFA Champions League and Europa League set Germany’s Kabel it back £897 million, far in excess of what fierce rival BSkyB Deutschland in October, said it was prepared to pay. Nonetheless, new BT CEO Gavin securing a 76.57% stake. Patterson said despite the significant investment, BT Sport does not fall into the category of crazy money in light of KPN sells German unit some of the other projects the UK incumbent is investing in, Telefonica in July agreed to namely its £2.5 billion nationwide FTTC network. pay KPN €5 billion in cash It is also a strategy that has won a considerable number of for its German mobile unit fans. BT Sport had 1 million customers by the end of August E-Plus and to give the Dutch and 4 million a month later. With premium sports content telco a 17.6% stake in the such a big draw for UK consumers, it will be interesting to combined entity. Regulatory see how BT’s rivals hit back in 2014. scrutiny is ongoing. opinion ITALIAN JOB Telefonica in September ADVANCING LTE brokered a deal that will see 18 months ago the UK was “behind the curve” in LTE, lagging behind coun- it increase its indirect stake tries like Azerbaijan and Angola, said EE’s chief sales officer in in troubled Telecom Italia, December. EE launched its LTE network in late October 2012 and the market which this year saw CEO has “moved very quickly since then,” he added. Franco Bernabe step down Indeed, the UK’s LTE spectrum auction took place in February, raising and reportedly canned a £2.37 billion. The big four all won bandwidth, as did BT, which insists it has network spin-off plan. The no plans to return to the UK mobile market, but will instead use the spec- deal has antitrust implica- trum to extend its broadband offers. Vodafone and O2 were anxious to bring tions in Latin America. LTE services to market though, something they both achieved on 29 August, while 3 quietly introduced a limited LTE offer in December. At the same European ambitions time, EE continued to push ahead. It reached the 1 million LTE customers Hutchison Whampoa closed milestone in September, ahead of its original target, and in November inau- its acquisition of Orange gurated a small-scale LTE-Advanced network in London’s Tech City area. Austria in January and in July The UK might not be behind the curve anymore, but there were bigger agreed to buy O2 Ireland LTE-A rollouts than EE’s in 2013. SK Telecom got the ball rolling in June from Telefonica for €850 when it launched its LTE-A network and five months later was already million–the EU is examining talking about increasing speeds to 300 Mbps by aggregating three carriers. the latter–but it failed to pull Kuwait’s Zain introduced LTE-A in November as part of its bid to become an off a mobile merger with enterprise provider, and various other operators undertook LTE-A trials. Telecom Italia. 4 www.totaltele.com TOP STORIES

TRANSATLANTIC CABLE DEAL Liberty Global in February agreed to buy UK cableco via a $23.3 billion cash and stock merger.

BLACKBERRY BLUES 2013 was a turbulent year for Canada’s BlackBerry, which changed its name, put itself up for sale, failed to complete analysis a takeover deal with Fairfax, and replaced CEO Thorsten NAME DROPPER Heins with an interim leader, Qatar’s incumbent telecoms operator stole the show at Mobile John Chen. World Congress in February with the announcement that it would rename itself and all group companies as Ooredoo, T-Mo buys Metro which means “I want” in Arabic. As if a glitzy press confer- The $1.5 billion merger of ence attended by such dignitaries as women’s rights cam- T-Mobile USA and paigner Cherie Blair and ITU secretary general Hamadoun MetroPCS closed in May. Toure weren’t enough, the telco formerly known as Qtel also The combined company is unveiled Barcelona footballer Leo Messi as its new brand known as T-Mobile US, but ambassador. The rebrand is still taking place, with Algeria’s the pair are continuing to Nedjma being the most recent group company to become offer services under separate Ooredoo in November. brands. Ooredoo wasn’t the only company to adopt a new name in 2013. Nokia took sole control of its Nokia Siemens Networks AT&T TAKES A LEAP joint venture in August and retitled it Nokia Solutions and Consolidation in the US Networks, thereby retaining its ‘NSN’ monicker. continued in July when AT&T announced a $1.19 COMPANY HIGHLIGHTS billion deal to acquire prepaid specialist Leap PROJECT LOON TWITTER FLOATS Wireless. Leap shareholders Google unveiled Project Loon in Microblogging site Twitter raised $2 approved the acquisition in mid-2013, an initiative designed to billion from an IPO that saw it list November. provide Internet connectivity to on the New York Stock Exchange hard-to-reach parts of the world via in November. Its shares are still a fleet of balloons. trading at around double their $26 IPO price. YAHOO TAKES TUMBLR 2018 Yahoo agreed to pay $1.1 billion in Facebook phone GLOBAL MOBILE cash for blogging start-up Tumblr Facebook in April partnered with SERVICE REVENUES in May. It was one of many acquisi- HTC and AT&T to launch Facebook WILL DECLINE FOR tions made by the firm, which also Home, a customised interface for THE FIRST TIME bought Xobni, Qwiki and Summly. mobile phones. (Ovum)

5 www.totaltele.com TOP STORIES MARKET SNAPSHOT mexican overhaul myanmar...VELLOUS Following the approval of a 2014 will bring with it the launch of more affordable mobile telecom reform bill, Mexico services in Myanmar, the most recent global market to got a new regulator in liberalise and one with so much potential that some of the September when Ifetel world’s biggest telecoms operators duked it out to receive an replaced Cofetel. Ifetel is operating licence there. keen to improve competition The country named Qatar’s Ooredoo and Norwegian in the market. incumbent Telenor as the winners of the two licences on offer in June. The pair triumphed over stiff competition. MAROC TELECOM SOLD Myanmar’s Ministry of Communications and Information After lengthy negotiations, Technology (MCIT) received a staggering 91 applications for Vivendi in November agreed the licences and whittled the hopefuls down to a final dozen to sell its 53% stake in Maroc that included France’s Orange, Malaysia’s Axiata and Japan’s Telecom to Etisalat for €4.2 KDDI; a Vodafone/ consortium pulled out of its billion. own accord before the final decision was made. So what now for Myanmar? CONSOLIDATION IN RUSSIA Starting next year, Ooredoo and Telenor plan to roll out sold its Russian mobile coverage to approximately 85% of the country by 2018 and unit to financial group VTB establish large distribution networks for prepaid credit and for $3.55 billion. In low-cost SIMs, which to date have been priced far beyond the December it emerged that reach of the average consumer. In fact, the $1.53 fee proposed Rostelecom’s board has by Telenor and Ooredoo is 200 times cheaper than prices approved a merger of Tele2’s charged in 2012 by Myanmar’s state-owned telcos. mobile assets with its own. Consequently the mobile penetration rate is incredibly low. To reach their ambitious network coverage targets, Sprint cans Nextel net Telenor and Ooredoo are reportedly considering sharing cell In July Sprint finally closed towers in order to keep down costs. The latter is even down the iDEN network it considering outsourcing its network build altogether in a bid gained via its 2005 acquisi- to overcome the practical difficulties of deploying infrastruc- tion of Nextel. ture in the country.

AUCTION ACTION in europe AUSTRIA UP IN ARMS SLOW PROCESS MYSTERY BIDDER Austrian operators T-Mobile and 3 Finland finally concluded its 800- Norway in December raised have filed complaints over the “ex- MHz spectrum auction in October NOK1.78 billion (€210 million) from orbitant” sums raised by October’s after nine months. DNA, Elisa and the sale of spectrum in three bands. LTE auction. In total the state netted TeliaSonera all won spectrum, pay- Newcomer Telco Data paid the most, €2.01 billion. ing €108 million in total. while Tele2 missed out.

BELGIUM AT ROCK BOTTOM no newcomers PLANS AFOOT IN HUNGARY As the only auction entrants, Telefonica, T-Mobile and Vodafone In December Hungary’s telecoms Belgium’s three mobile network op- picked up spectrum in the Czech regulator published plans to sell erators secured LTE spectrum in the Republic’s LTE auction, which failed spectrum in various bands with the 800-MHz band for the €360 million to bring newcomers to the market aim of raising up to HUF150 billion reserve price in November. after two start-ups dropped out. (€500 million).

6 www.totaltele.com TOP STORIES analysis

NEW TELCO IN PORTUGAL CARROT AND HOCKEY STICK Portugal’s Zon Optimus– Canada’s CRTC has had a tough year trying to keep the big created from the merger of three–BCE, Rogers and –in check. The watchdog has pay TV firm Zon Multimedia reserved spectrum in January’s 700-MHz auction for a new and mobile operator challenger and has twice stepped in to stop Telus acquiring Optimus–officially launched ailing rival . Still, it has struggled to convince in August. smaller players or prospective new entrants that they stand a realistic chance of success. Low-cost Public Mobile agreed a MEXICO-US TIES sale to Telus in October, and there are questions over whether America Movil in May Wind Mobile will stick around unless it can acquire the agreed to acquire US MVNO aforementioned Mobilicity. Verizon was linked with both Start Wireless and its 1.4 Wind and Mobilicity, and with participation in the spectrum million customers, via its US auction, but announced it had no interest in Canada due to unit Tracfone. Meanwhile, concerns about value creation. Meanwhile, Egypt’s Naguib AT&T sold some of its Sawiris attempted to re-enter the market with a bid for America Movil shares for Allstream but after his offer was blocked on national security $564 million, but ruled out grounds he angrily declared he was ‘finished with Canada’. exiting the operator. CANADA MOBILE MARKET SHARES, Q3 2013 bharti buys QUALCOMM op 34% Qualcomm sold 100% of its Regional 5% Wireless Business Services New Entrants 6% 34% Bell mobility 28% unit in India to Bharti Airtel Telus mobility 28% during the course of 2013. 28% ASIACELL’S IRAQ FLOAT Iraq’s Asiacell became the first telco to list on the 5% country’s stock exchange in 28% 6% January when it completed a Source: Rogers Wireless $1.3 billion IPO. AUCTIONS ELSEWHERE DT BUYS AND SELLS Deutsche Telekom acquired AUSTRALIA RAISES A$2BN HON HAI WINS IN TAIWAN GTS Central Europe for €546 The sale of digital dividend Taiwan raised NT$118.65 billion million in November, less spectrum to Telstra, Optus and (€2.93 billion) in its auction than a month after it sold TPG Internet added A$2 billion to in October. Six companies won 70% of online ad unit Australian government coffers in spectrum, including a unit of Scout24 for €1.5 billion. May but close to A$1 billion worth contract electronics manufacturer of frequencies were unsold. Hon Hai. SMART METER DEALS The UK government FIVE FOR 4G ANOTHER SPECTRUM SALE awarded contracts to provide , , Avantel, DirecTV New Zealand’s three mobile comms services for a smart and ETB/Tigo won 4G licences operators, Telecom, Vodafone and meter project to Telefonica in in June, spending 2degrees, paid NZ$176 million plus (£1.5 billion) and COP770.53 billion ($400 million). tax for 4G spectrum in October. (£625 million). 7 www.totaltele.com BIG NEWS

TOWERING EXPENSE 2013 saw a number of telecom operators move to monetise GROW5%TH IN GLO BAL their mobile towers. In one of the most high-profile deals IT SPENDING TO Crown Castle agreed to lease 9,100 towers from AT&T and $2.14 TRILLION purchase a further 600 in a transaction worth $4.85 billion. IN 2014 Latin America was a hotbed of activity; NII Holdings sold (IDC) towers in Brazil and Mexico to American Tower for $811 million, while Oi hived off a chunk of its towers real estate to SBA Communications for $645 million. And in Tanzania, agreed to sell more than 1,000 towers to Helios for TOP STORIES an undisclosed fee. Meanwhile, Telecom Italia is reportedly looking to raise €1 billion from the sale of its mobile towers. Orange in dom rep deal There were also cases of tower companies buying one Orange in November agreed another, such as American Tower’s acquisition of MIP Tower to sell its Dominican Holdings. And in India, Indus Towers completed the merger Republic business to of its towers with those of Bharti, Vodafone and Idea Cellular, investment firm Altice for while Reliance Jio Infocom entered a $2 billion pact to share €1.1 billion. towers with Reliance Communications. FIBRE IN AFRICA Google kicked off Project TELECOMS OPERATORS ARE MOVING Link by rolling out fibre in TO MONETISE THEIR MOBILE TOWERS Kampala, Uganda, to enable mobile operators and ISPs to connect to international MARKET SNAPSHOT cable links. OVERSEAS AMBITIONS EUROPE-CHINA TENSIONS Japan’s telecoms operators are looking outside their home market for The EU in October con- growth. Softbank captured most of the headlines with its acquisition of firmed it is still in talks with Sprint in mid-2013, but the US-based mobile operator was not its only buy China over subsidies it of the year. Softbank also paid $1.26 billion for a 57% stake in US-based alleges the latter’s equipment mobile distributor Brightstar and $1.53 billion for 51% of Finnish mobile makers receive from Beijing. game company Supercell. Meanwhile, NTT Communications in October agreed to pay $525 million ST-ERICSSON SPLIT for cloud services specialist Virtela, capping off a year in which it took every In August Ericsson and opportunity to strengthen its business through acquisition. Indeed, NTT Com STMicroelectronics complet- simultaneously announced that it would take an 80% stake in US-based ed the division of the assets RagingWire Data Centers. In August it picked up a majority stake in French of their semiconductor joint conferencing services and unified communications provider Arkadin for venture ST-Ericsson. an undisclosed sum and completed the purchase of US managed security services provider Solutionary. In June it agreed to buy Thai data centre ALU has a rethink provider Digital Port Asia. Alcatel-Lucent’s new CEO Just over a year ago we suggested that KDDI might need to consider Michel Combes in June jumping on the M&A bandwagon in order to keep pace with its domestic unveiled the Shift Plan, that rivals. While there were no major foreign acquisitions for the telco in 2013, it will see the vendor cut €1 completed the acquisition of Japan’s biggest cable TV operator JCOM. billion in costs, sell assets and refocus its activities. 8 www.totaltele.com World Communications WINNERS 2013 Awards 2013

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WCA Winners 2013 AD 148-210 1.2.indd 1 12/11/13 5:21 PM REVIEW OF 2013 closING the loop Mobile-only operators are set to become a thing of the past as telcos increasingly seek to own the infrastructure that connects up their base stations

ver the past 12 months German cableco Kabel to data because the cost the mobile operator Deutschland, a transaction it structure is different than Obusiness model has completed in October. It was voice,” Al-Omar explains. begun to unravel. also linked with a move for Zain operates in eight 2013 marked the begin- Italian fixed-line provider markets across the Middle ning of the end for the Fastweb in June. East and North Africa, which mobile-only operator. For “There’s room for makes the business case for some time mobile players mobile-only in certain owning fixed infrastructure have sought to offer a more countries for a certain more valid, Al-Omar says. complete service offering, by amount of time,” says Andy “The [Zain] group has adding fixed broadband into Hudson, head of spectrum started building their own their portfolios. But with 4G policy at Vodafone. “But I network,” he says. “We rollouts well underway–and don’t think we’ll be talking should own our own network the next generation of about it in 10 years,” he and provide this connectivity mobile technology just over predicts. to our operators, instead of the horizon–operators are Indeed, a number of major buying it from international having to think seriously mobile operators are already carriers.” about how they will cope moving in a direction that At present Zain partners with smaller cell architec- suggests they will not be able with Vodafone for interna- tures and the fixed assets to call themselves mobile tional connectivity, Al-Omar they will require to support operators for much longer. notes. “They skipped so them. “We would be interested many steps by buying Cable Vodafone is leading the to own our own fixed & Wireless...They provide to way, but it is not the only network,” says Omar Saud others, but most importantly mobile player to have Al-Omar, CEO of Zain to their own operators,” he addressed the fixed networks Kuwait. “It makes a lot of says. issue in 2013. Mobile sense...The demand for data But while a group like operators worldwide are showed us how much it is Zain might have the money looking to hook up their base costing us to buy the to build out its own network, stations to their own fixed required bandwidth and to that sort of project doesn’t infrastructure one way or eventually provide it to our come cheap. For many, another, and that gives rise customers.” buying ready-made infra- to one key question: whether Zain generates 25% of its structure will be a more to buy or build. revenues from mobile data in cost-effective method than Fresh from acquiring Kuwait and buying the building. Cable & Wireless Worldwide backhaul to support that “I think you’re going to and New Zealand’s traffic is proving costly. It is see more deals like TelstraClear in 2012, all very well growing or Vodafone/Kabel Vodafone this year picked up maintaining your top line, [Deutschland],” predicts where it left off, launching in “but EBITDA and net profit Alcatel-Lucent CTO Marcus July a €7.7 billion tender for are different when it comes Weldon, who says that 10 www.totaltele.com acquiring a fixed network AGAINST THE GRAIN will likely prove a more economical way for operators While most mobile operators are looking to add fixed assets, there are to backhaul large numbers of always exceptions to the rule. small cells, compared with UK mobile operator O2 actively took steps away from the fixed-line mar- leased lines. ket in 2013. In March it announced the sale of its fixed broadband business Operators are certainly to satellite operator BSkyB for £180 million and later in the year inked two concerned about the separate 10-year LTE backhaul deals, one with BT and another with Virgin financial implications of Media. It subsequently launched LTE services in August. moving to smaller cell Meanwhile, some in the industry got excited, albeit very briefly, this year networks. “Small cells are a at the idea that BT might re-enter the mobile business. In February’s LTE bit of a nightmare,” says UK auction the fixed incumbent paid £201.5 million for 2x15 MHz of 2.6-GHz mobile operator EE’s head of spectrum and 20 MHz of unpaired 2.6-GHz spectrum. However, BT immedi- spectrum Inge Hansen. “We ately announced that it has no plans to build a nationwide mobile network. know we will need them at Instead it will use the frequencies to enhance its consumer broadband and some point in the future, but enterprise offerings. it is just way too expensive to It is interesting to note though, that just as some mobile operators begin contemplate in the environ- to see fixed infrastructure as an imperative for cost-effective delivery of ment we live in, with falling high-capacity mobile coverage, a fixed-line player like BT, which has been industry revenues,” she says. quite happy to leave the spectrum to others, now sees the value of owning “How are we going to get the means to extend fixed broadband services to mobile devices. backhaul...to all of these small cells?” she asks, also listing site rental and national player and one network, but “that takes maintenance as key cost cableco with 50% coverage– time; you can spend a decade issues for network operators. and three-to-four mobile building it,” he says. “This is a real headache.” operators, points out Stephen Sometimes though, that is That backhaul challenge Howard, head of global the only option, “particularly is one of the things that telecoms, media and in markets with a strong could push more mobile technology research at fixed-line incumbent,” says operators into the M&A HSBC. “We will see more Vodafone’s Hudson. In these market. “Backhaul pricing is [fixed-mobile] convergence markets it can be difficult to based on peak usage, not over time,” Howard says. get access to the incumbent’s average, which makes it a “Some of it will be driven by network at all, let alone on difficult model,” Weldon operators with the cash and reasonable terms, he says, explains. “Unless you can confidence to invest them- and there may be a lack of somehow get really cheap selves, some of it will come viable alternative operators. backhaul, you’re going to from regulators that move Vodafone is pursuing this have to buy the backhaul from cost-oriented [access strategy in Spain in partner- company.” pricing] to equivalence,” he ship with Orange. The two However, telcos need to predicts. are co-investing in a €1 move quickly if they want to “They need to move early billion fibre-to-the-home acquire fixed-line assets because there aren’t many (FTTH) network with which since there are a limited companies to acquire [and] they aim to pass 6 million number of fixed networks there aren’t many options premises across 50 major out there. that give you scale,” Alcatel- cities by September 2017. In Europe there are Lucent’s Weldon warns. They plan to launch around 1.5 fixed networks There are alternatives, such commercial services early per market–typically one as building your own next year. 11 www.totaltele.com But not everyone will be Reliance Communications, preparing a bid for the UK able to build or to buy. owned by Mukesh Ambani’s operator, retaining some “The safest option is a brother Anil. We’re cautious- assets to boost its own cableco allied with a mobile ly optimistic about the business overseas and selling operator; not necessarily impact that Reliance Jio will off others. Such a move through mergers but have on India’s mobile might seem like a step too far through partnerships as broadband market. While it for the US giant (see well,” says Weldon. has a licence that allows it to Predictions 2014, p.12), but offer a full suite of services, AT&T was no stranger to hooking up it remains to be seen how brokering sizeable deals in Partnerships featured affordable they will be. 2013. In September it closed a prominently in 2013, as telcos In March, Telefonica’s deal to buy $1.9 billion worth in a number of markets Brazilian arm Vivo entered of spectrum from Verizon sought to rein in costs with into a network-sharing pact and completed its $780 network-sharing agreements. with local rival Claro, owned million acquisition of Alltel, Europe saw a lot of by America Movil. The and in November sharehold- activity, with network-shar- companies received regula- ers of Leap Wireless gave the ing deals between Vodafone tory backing in May. More go-ahead to a $1.19 billion and Wind Hellas in Greece, recently, three of Israel’s takeover by AT&T. and Orange and Vodafone in mobile operators–Cellcom, AT&T was not the only Romania. In the Pelephone, and Golan player in the US at the centre Netherlands, T-Mobile and Telecom–agreed to form a of M&A talk this year. The Tele2 struck a 10-year deal to joint venture tasked with long-running battle between share cell sites, in a move building a shared 4G satellite operator Dish aimed at lowering the network, and agreed Network and Japanese telco deployment cost of the separately to share 2G and Softbank for control of latter’s 4G network. France’s infrastructure. Sprint captured the head- ongoing mobile price war lines for months, coming to encouraged SFR and STITCHING IT TOGETHER a head in June when Softbank Bouygues Telecom to enter As always, M&A was high on upped its offer to $21.6 into network-sharing talks, the agenda in the telecoms billion. Dish pulled out and which at the time of going to space in 2013 as operators Softbank took control of the press are ongoing. New sought to build scale. newly-created Sprint Corp in entrant Free Mobile–which One of the biggest July; just days earlier Sprint sparked the French price transactions, not just in completed the acquisition of war–is hoping to join the telecoms but in corporate the remainder of discussions. history, saw Vodafone agree that it did not already own, In India, Mukesh in September to sell its 45% its $5 per share offer valuing Ambani’s Reliance Jio stake in Verizon Wireless to the US telco at around $14 Infocomm, the only holder Verizon in a deal worth $130 billion. of a nationwide mobile billion. The move marks This time last year we broadband licence, made Vodafone’s exit from the US suggested that there would progress towards deploying and the cash it receives will likely be more consolidation its network by striking a deal enable it to invest in those to come in the US. Not only to share fibre, undersea all-important fixed networks did that prove to be the case, cables and cell towers with elsewhere. but that same prediction is Bharti Airtel. In April, the Vodafone shedding its still valid 12 months on. As company also established a Verizon Wireless stake led to we went to press, there were tower-sharing pact with speculation that AT&T is rumours that Sprint is 12 www.totaltele.com working on a bid for number for the €5 billion cash and agreed to acquire Virgin four mobile operator stock deal it brokered for Media in a $23.3 billion deal, T-Mobile US, which came KPN’s E-Plus unit in July. It adding the UK company to into being in its current form plans to merge E-Plus with its European cable footprint. in May, following the its O2 Germany operations. Later in the year Liberty completion of its $1.5 billion The most active player in Global made a bid for Dutch merger with MetroPCS. the European M&A space in cable operator , in There were major 2013 was arguably Hong which it already holds a telecoms deals elsewhere in Kong’s Hutchison 28.5% stake. Ziggo rejected the world too. Cross- Whampoa, which started the the offer, but as the year shareholders Oi and Portugal year by wrapping up its drew to a close it admitted Telecom agreed to merge to acquisition of Orange Austria that it is holding talks with create a new, Brazil- in January, before moving on the US outfit. Meanwhile, in headquartered telco headed to new targets. In June the US there is ongoing up by current Oi chief Hutchison’s Irish unit agreed debate over the future of executive Zeinal Bava. to acquire O2 Ireland for Time Warner Cable, which is After much negotiation €850 million; the deal is still reportedly drawing takeover Abu Dhabi-based Etisalat in being examined by European bids from rivals Charter November signed a €4.2 regulators. Hutch also Communications and billion agreement to acquire approached Telecom Italia Comcast. Vivendi’s 53% stake in Maroc about merging their Italian If the world’s mobile Telecom. The deal is due to mobile operations, but operators are keen to snap up close early next year, subject discussions over a potential some cable assets to help to regulatory approvals. tie-up ultimately came to future-proof their networks, Meanwhile, Germany will nothing. they had better not wait too get a new mobile market The cable market was also long to make a move. leader in 2014 if Telefonica a hive of activity. In February Mary Lennighan, Nick Wood gets the regulatory go-ahead US-based Liberty Global [email protected]

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ACA 2014 Ad 148-210.indd 1 12/9/13 12:18 PM predictions 2014 HOME AND AWAY Next year Total Telecom expects some operators to move outside their core foot- prints while others stay put; certain devices may disappear from the shelves

BUDDING BIG DEALS remaining growth potential. the plug on the iPhone 5c... l Telefonica will persuade Rumours of AT&T buying unless China’s TD-LTE Telecom Italia to sell TIM Vodafone will persist though. market comes to the rescue Brasil and will snap up a first. portion of its assets to bulk NETWORK NECESSITIES up its Vivo unit. Talk of a l Europe’s cable operators BANDING TOGETHER merger between the Spanish will find themselves telco l Brussels’ dream of a digital and Italian incumbents will acquisition targets as mobile single market will remain come to nothing, but expect players discover that buying just that as the Connected closer cooperation between a fixed network is cheaper Continent reform package them in Europe. than building one. However, receives a fresh bashing from potential buyers will face from industry players at l America Movil’s European competition in the form of MWC 2014. Digital Agenda expansion plans will remain an ambitious Liberty Global. chief Neelie Kroes will stick on ice while it sets its sights to her guns though. on other regions. One l UK mobile operator EE possible target is the US, will prove to the sceptics that BIG VENDOR where the Mexican telco has it is possible to differentiate l BlackBerry will stop been growing its presence on its LTE network with the making smartphones. via its Tracfone MVNO. launch of an all-singing, Despite the fact that other T-Mobile US is the likeliest all-dancing LTE-Advanced OS makers are moving in the candidate, unless Sprint gets network with coordinated opposite direction, the there first. multi-point (CoMP) technol- Canadian vendor will ogy, while its rivals play relaunch itself as a software l Hong Kong’s Hutchison catch-up on coverage. and patent licensing com- Whampoa could brandish its pany. Brace yourself for chequebook once more. The MEDIA MOGULS teary-eyed retrospectives telco could make a new move l BT’s success with its sports about the ‘CrackBerry’. to bulk up its operations in programming will encourage Italy after its failed mobile operators elsewhere to spend l Talk of an Alcatel-Lucent/ merger with Telecom Italia. sizeable sums on premium NSN mash-up will refuse to We’re not ruling out a move content. The UK incumbent die, given their complemen- for the UK’s O2 either. will continue to add to its tary geographic footprints, content portfolio. Virgin newly-svelte corporate staying put Media and Sky will hit back structures and the pressure l Despite all the speculation with enhanced set-top box they face from China. The to the contrary, US telcos and mobile app features. fact that the merged entity will not expand overseas, due would require phablet-sized to healthy ARPUs, increased C MINUS business cards to accommo- competition to deal with in l Faced with overwhelming date the new name will turn their home market, and indifference, Apple will pull out to be a dealbreaker. 15 www.totaltele.com PEOPLE IN 2013 moving on 2013 saw certain big names in the telecoms industry head for pastures new; some went more willingly than others

t has been quite a year for The news that Franco cable operator Ziggo in executive changes in the Bernabe had tendered his January, passing control of Itelecoms space, with a resignation as CEO of the German incumbent to number of operators parting Telecom Italia came as less of CFO Timotheus Höttges. company with well-estab- a surprise, the press having In neighbouring Belgium, lished CEOs and the vendor been awash with rumours to one CEO left his post rather community welcoming a that end for weeks. Bernabe less willingly. Belgacom’s handful of new arrivals. stepped aside after failing to Didier Bellens was fired by For once, Europe was a convince shareholders to the government after his the centre of the action, with back a capital hike plan latest outspoken remark proved to be the last straw. And while Belgacom goes into 2014 with the CEO position vacant, it is a privilege to have will start the new year with a been offered the position new man at the helm, having of ceo of BT group and i appointed Urs Schaeppi to am delighted to accept the top job after the untime- ly death of Carsten Schloter. two of the big five incum- designed to shore up the Arguably the most bents entering 2014 with new company’s finances. Chief ‘in-flux’ European incum- CEOs. operating officer Marco bent this year was Nordic We were taken by surprise Patuano has taken the reins operator TeliaSonera. Just a in June when BT announced on an interim basis. Bernabe month into 2013 CEO Lars the departure of CEO Ian also ceded his role as Nyberg handed in his Livingston, who left his post chairman of industry body resignation in the wake of to become Minister of State the GSMA, a position that the debacle over the telco’s for Trade and Investment in has been handed to deputy activities in Uzbekistan; a the UK government. His chair and CEO of Telenor, full board reshuffle was replacement and former BT Jon Fredrik Baksaas. announced two weeks later. Retail head Gavin Patterson Looking forward, it is Former Vodacom executive took over in September, worth noting that BT and Johan Dennelind became shortly before the UK Telecom Italia will not be the TeliaSonera’s new president incumbent issued another only ones in the big five and CEO in September. unexpected resignation going into a new year with a Telenor also saw execu- announcement. The telco is new CEO. Having sported tives come and go this year, looking for a new leader for the ‘outgoing CEO’ label for mainly in Asia. It named its access network division the duration of 2013, Petter Furberg as CEO of its after Liv Garfield Deutsche Telekom’s Rene new Myanmar unit, moving quit to become CEO of water Obermann will finally take him from Thailand’s DTAC. company Severn Trent. up his new role at Dutch And Telenor India CEO 16 www.totaltele.com Yogesh Malik resigned in Services division Vodafone to Jean-Yves Charlier. November after just six created in May to bring Nokia CEO Stephen Elop months; he has yet to be together its wholesale stepped aside in September replaced. businesses with its Cable & when Microsoft agreed to Also in India, Bharti Wireless Worldwide assets. buy the firm’s mobile phones Airtel restructured its In September Vodafone UK business; he will trasfer back leadership, naming Gopal chief executive to Microsoft when the deal Vittal as Indian CEO and crossed the Atlantic to closes and is one of a number Manoj Kohli as international become CEO of Rogers of execs tipped as a successor CEO; the pair serve as joint Communications in Canada, to Steve Ballmer, who will managing directors. It also where he replaced Nadir retire as the company’s CEO appointed former MTN Mohamed; Jeroen Hoencamp next year. Group executive Christian de has taken on the Vodafone Having failed to sell Faria as chief executive of its UK job. And the following itself–in more ways than African operations. month group CFO Andy one–struggling BlackBerry Ones to watch in 2014 Halford announced he will replaced CEO Thorsten include Zeinal Bava, who leave the company in March Heins in November; John became CEO of Brazil’s Oi in 2014, after nine years in the Chen took over as interim June and in October was role, without sharing his chief exec. And having named as chief executive of plans for the future. launched the new Firefox the Brazilian-based entity Meanwhile, a former smartphone OS earlier in the that will result from the Oi/ Vodafone executive took the year, Gary Kovacs resigned Portugal Telecom merger. All eyes down under will be on next year. Morrow will take over as the new CEO of Australia’s NBN WE WILL HAVE A UNIFIED Co, leaving his post as head MANAGEMENT TEAM...I WILL of Vodafone’s local unit. He BE THE CEO OF OI AND replaces industry veteran PORTUGAL TELECOM Mike Quigley, who resigned in July, and relieves ex-Tel- stra boss Ziggy Switkowski helm at Alcatel-Lucent in as Mozilla CEO in April to from the interim CEO duties February, replacing Ben join AVG. he accepted when he became Verwaayen who resigned Lastly, December brought NBN Co chairman in earlier that month as the news of what is likely the last October. Incidentally, the equipment maker posted a major executive change of industry lost another hefty fourth-quarter net loss. 2013. Qualcomm announced well-known name in 2013, Michel Combes, who left that CEO Paul Jacobs, son of when former CEO of Vodafone in 2012 for a co-founder Irwin Jacobs, will Singapore’s StarHub Neil position at SFR that ulti- step down in March, to be Montefiore announced his mately fell through, has the replaced by 20-year company retirement. He was replaced remit of delivering sustain- veteran Steve Mollenkopf. by COO Tan Tong Hai. able profitability at Alcatel- Jacobs will keep his hand in Vodafone witnessed Lucent. SFR also changed its as executive chairman executive changes outside leader in 2013; the French though. Australia too. Newly-arrived mobile operator separated its Mary Lennighan, editor Brian Fitzpatrick was named chairman and and CEO [email protected] as CEO of the Carrier functions, handing the latter @TelecomEditor 17 www.totaltele.com 1-2 July 2014 ETC Venues St Paul’s, London

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Total Telecom Network 2014 Ad 148-210.indd 1 12/9/13 12:22 PM geography: world

EUROPE’S COMPETI- BIG NUMBERS TIVE POSITION ON The number of mobile connec- THE GLOBAL SCENE tions worldwide is rocketing; IS UNDER THREAT capex is up but revenues are not Neelie Kroes, EU Commissioner necessarily following suit

LTE GROWTH AHEAD There will be 1 billion LTE $1.28trillion connections worldwide by 2017, 9.3b n revenues of the up from 176 million at end-2013, GLOBAL MOBILE world’s top 100 SUBSCRIBERS according to GSMA Intelligence. telcos in 2013 BY 2019 (Total Telecom) By that date half of the population (Ericsson) will have LTE network coverage.

3% 0.4% HEY, BIG SPENDERS! GLOBAL CAPEX GROWTH 9% 2013 Globally service provider capex 400 20% 2% grew by 6% in 2013 compared 1% 320 20% with the previous year as 15% 2017 29% 46% Europe’s big operators increased US billions 340 their spending slightly, the BRICs 10% 47% 160 returned to the market and 39% 5% expenditure increased in Japan, 80

according to Infonetics. The firm avg capex in $ 0 0% avg capex to revenue ratio n Africa n Americas n Asia expects capex to reach $355 2012 2013 2014 2015 2016 2017 n Europe n Oceania billion in 2017. n capex — capex:revenue Source: GSMA Intelligence Source: Infonetics Research

19 www.totaltele.com calendar contacts MOBILE WORLD CARRIERS WORLD EDITORIAL advertising USA West & Canada CONGRESS AMERICAS 4th Floor, Managing Director Alan A, Kernc Welken House, and Publisher KCS International 24-27 February 2014 24-25 March 2014 10-11 Charterhouse Square, Rob Chambers [email protected] Fira Gran Via, Four Seasons Hotel, London EC1M 6EH UK rob.chambers T +1 717 397 7100 Barcelona, Miami, +44 (0)20 7608 7030 @totaltele.com F +1 717 397 7800 Spain US [email protected] T +44 (0) 20 7608 7077 EVENTS Conference Manager www.mobileworld- www.totaltele.com/ Editor Business Laura Maxwell-Bernier cwamericas Mary Lennighan Development Manager congress.com laura.maxwell-bernier mary.lennighan Charles Georgiou @totaltele.com @totaltele.com charles.georgiou CARDS AND PAYMENTS CARRIERS WORLD ASIA T +44 (0)20 7608 7044 T +44 (0) 20 7608 7069 @totaltele.com AFRICA 25-26 March 2014 Twitter @TelecomEditor T +44 (0) 20 7608 7071 Grand Millenium marketing 18-19 March 2014 Marketing Manager Sandton Convention Sukhumvit, Assistant Editor Business Kerry Lenihan Nick Wood Development Manager Centre, Bangkok, [email protected] nick.wood Claudia Zapata T +44 (0) 20 7608 7061 Johannesburg, Thailand @totaltele.com [email protected] South Africa www.terrapinn.com T +44 (0) 20 7608 7046 T +44 (0)20 7608 7027 Customer Service www.terrapinn.com Twitter @Telecolumnist Customer Services ASIA COMMUNICATION USA East Manager Art Editor Karen C. Smith-Kernc Sarah Pegden AWARDS Michelle Young KCS International sarah.pegden 19 June 2014 [email protected] [email protected] @terrapinn.com NETWORK Conrad Centennial T +44 (0) 7956 946374 T +1 717 397 7100 T +44 (0)20 7827 4171 MANAGEMENT SHOW Hotel, 1-2 JULY 2014 Singapore LONDON, UK www.asiacomm- www.totaltele.com/ sawards.com © 2013. All rights reserved. Terrapinn Holdings Ltd registered office: network 4th Floor Welken House, 10-11 Charterhouse Square, London EC1M 6EH

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Carriers World 2014 Ad 128-93.indd 1 20 12/11/13 5:28 PM www.totaltele.com