CLIC YOURTO REA K H IP ERE H ONED ON /IPA D

Business analysis for telecoms professionals Special edition Gaining weight

Sponsored by:

REVIEW OF THE YEAR 2012 AND PREDICTIONS FOR 2013 timeline

A round-up of the major stories in telecoms in 2012, as reported in our daily news service www.totaltele.com

JANUARY-MARCH areas and to share the terminal operations with those of rival SingTel buys Amobee segment elsewhere. player Wind Hellas, blaming SingTel agreed a cash deal worth France gets Free market uncertainty. US$321 million for US-based Free Mobile launched as France’s Slim gets Net Servicos mobile advertising solutions firm fourth mobile operator, offering a Carlos Slim’s Embratel was given ALU’s Genesys sale closes Amobee. €19.99 per month unlimited calls, the green light by Brazilian Permira’s $1.5 billion acquisition messaging and Internet tariff. regulator Anatel to take over of Genesys from Alcatel-Lucent Batelco sells out of India Orange immediately responded cableco Net Servicos. closed following receipt of Bahrain’s Batelco agreed to with price cuts. regulatory approvals. sell its 42.7% stake in Indian CEO change at Telecom Egypt mobile operator STel to Sky Chile merger off Telecom Egypt appointed Hungary’s new state operator City Foundation for 65.8 million After being blocked by a Chilean company insider Tarek Aboualam A consortium led by state-owned dinars (€130 million). antitrust court, the planned as its new chief executive, electricity wholesaler MVM won merger between Entel and GTD replacing acting CEO and spectrum in Hungary’s 900-MHz Tata circles world Manquehue was called off when managing director Mohammed auction in January. MPVI Mobil India’s Tata Communications GTD’s controlling shareholder Abdel Rehim Hassanein. planned to launch services in completed the final leg of its Tata backed out of the deal. early 2013, but its licence was Global Network–Eurasia cable India scraps 2G licences voided by a Budapest court in system, which also constituted Zambia privatisation reversed India revoked the 122 mobile September. the last link in its wholly-owned, The Zambian government licences it awarded in 2008 that round-the-world cable. reversed the 2010 sale of Zamtel became the focus of a corruption LightSquared blocked to Libya’s LAP Green Networks scandal, affecting a number of The FCC in February blocked UK gets first TD-LTE network after an investigation concluded major global telcos and some LightSquared’s plan to roll out PCCW-owned UK Broadband that the telco had been grossly local players. It reauctioned the a wholesale LTE network in switched on its 3.5-GHz band, undervalued. LAP Green paid spectrum in November. the US on the grounds it could TD-LTE network in London. $257 million for a 75% stake. interfere with GPS signals. CEO Voda’s Greek merger off Sanjiv Ahuja later resigned and Fibre on demand OTE sells out of Serbia Vodafone backed away from the company filed for Chapter 11 BT’s Openreach division detailed Telekom Srbija bought back 20% plans to merge its Greek mobile bankruptcy protection in May. the fibre-to-the-premises (FTTP) of its own shares from Greek on-demand 300-Mbps service incumbent OTE for €380 million. Global connections by technology generation it plans to make commercially available from spring 2013. n 2G n 3G n 4G New RIM CEO 100% Thorsten Heins was named as VoLTE victory 80% new chief executive of RIM, Ericsson and Qualcomm replacing under-fire co-CEOs 60% announced a successful voice call

and chairmen Mike Lazaridis and 40% handover from LTE to WCDMA Jim Balsillie. Lazaridis became using Single Radio Voice Call vice chairman of RIM’s board, 20% Continuity (SRVCC). while Balsillie left the company in 0% March. 2000 2002 2004 2006 2008 2010 2012 2014 2016 Telus launches LTE Source: Wireless Intelligence Telus launched LTE services in 14 French FTTH deal There will be 8.5 billion mobile connections in the world by 2017, half of which cities, making it the third mobile Orange agreed to allow Bouygues will be 3G or 4G connections, split 40% 3G and 10% 4G, Wireless Intelligence operator in Canada to do so, after predicts. Today, 26% or 1.7 billion of the 6.5 billion total are 3G/4G; just 1% of all Telecom to use the horizontal connections are either LTE, TD-LTE or WiMAX. By 2017 the FDD variant of LTE Rogers and Bell Canada. network segment of its fibre-to- will account for 85% of 4G connections, while TD-LTE will take a 14% share. 2G the-home (FTTH) infrastructure connections will decline by more than half a million over the next five years as Google sells Clearwire stake people migrate to faster services, the firm estimates. in very densely populated Google sold its 29.4 million

2 www.totaltele.com December 2012/January 2013 timeline

shares in Clearwire for $66.5 Saudi Telecom CEO change America Movil upped its stake in who was let go by the Internet million, significantly less than the Saud al-Daweesh resigned as Netherlands-based KPN to 27.7% company in May after just four $500 million it paid for the stake chief executive of Saudi Telecom in June. It also announced a share months (see p.20). in 2008. Company. He was replaced by purchase deal that saw it raise Khaled Al Ghoneim. its stake in Telekom Austria to BCE buys data centre firm Etisalat pulls India plug... 22.76% in September. Canadian telco BCE and three Etisalat ceased operating its Google buys Moto Mobility institutional investors agreed to Cheers Mobile service in India Google completed its $12.5 billion SFR shake-up pay C$1.1 billion for data centre on 31 March, following the acquisition of Motorola Mobility Frank Esser stepped down as CEO operator Q9 Networks. The cancellation of its licences. in May and named one of its own of France’s SFR in March. He acquisition closed in October. people, Dennis Woodside as the was due to be replaced by former ...forges ahead in Afghanistan unit’s new chief executive. Vodafone Europe head Michel Microsoft $1.2bn Yammer buy The United Arab Emirates Combes, but plans changed after Software giant Microsoft inked incumbent also became the first Bharti launches LTE Jean-Bernard Levy, CEO of SFR’s a US$1.2 billion deal to acquire telco to offer 3G services in Bharti Airtel claimed to be parent Vivendi was ousted in business social networking Afghanistan. India’s first 4G operator when it June. Stephane Roussel became provider Yammer in a bid to boost launched services in Kolkata. The SFR’s new chief executive. its cloud services portfolio. Bharti launches in Rwanda operator also agreed to acquire India’s Bharti Airtel launched a 49% stake in Qualcomm’s JULY-SEPTEMBER Telefonica sells China stake commercial services in Rwanda, Indian broadband wireless access Telefonica agreed to sell a 4.56% becoming the country’s third businesses for around $165 EU roaming caps arrive stake in China Unicom to the mobile network operator. million. Caps on the cost of mobile data latter’s parent for €1.13 billion, usage while roaming in the EU reducing its holding to 5.01%. Hirai takes helm at Sony LION2 goes live came into force on 1 July. Sony announced that its video France Telecom-backed CGI snaps up Logica games and consumer electronics submarine cable system LION2– Vodafone buys C&W Canadian IT services firm CGI head Kazuo Hirai would take connecting parts of Africa with Vodafone’s £1.04 billion Group agreed to pay £1.7 billion over as president and CEO from 1 international networks–was purchase of Cable & Wireless for European rival Logica. April, replacing Howard Stringer, switched on. Worldwide was completed in who became chairman. July and changes to C&W’s Voda, O2 merge UK networks Facebook shares struggle top management immediately The UK units of Vodafone and New China Mobile chair Facebook’s long awaited IPO followed: Vodafone Global Telefonica’s O2 announced a China Mobile announced Xi came in May. The social network Enterprise CEO Nick Jeffery network-sharing deal covering Guohua as its new chairman, did not maintain its $38 IPO price replaced Gavin Darby at the 2G and 3G networks, with a view noting that Wang Jianzhou had for long, dropping to below $20 helm, while other C&W execs to adding in LTE in future. The retired for “reason of age”. in the subsequent months. There made way for Vodafone people. 50/50 joint venture will run the has been a small rebound since. network of 18,500 masts. APRIL-JUNE Verizon buys telematics firm Competition in Israel Verizon Communications agreed Sprint closes iDEN network Colombian telcos merge HOT Telecom and Golan to pay $612 million in cash for US mobile operator Sprint said it Telefonica brokered a deal with Telecom launched mobile services Hughes Telematics. The deal will close down its iDEN network, the Colombian government that in Israel, both undercutting the closed in July. the one remaining legacy from will see fixed-line firm Colombia market’s established operators its Nextel acquisition, as soon as Telecomunicaciones merged with with low-cost price plans. South Africa blocks KT deal June 2013. Telefonica Moviles Colombia. The South African government Telefonica will own 70% of the Mozambique newcomer rejected Telkom SA’s plan to sell China Telecom MVNO launch combined entity. Movitel, majority-owned by a 20% stake to South Korea’s KT China Telecom launched its UK Vietnam’s Viettel, became Corp for around 268 billion rand MVNO under the brand name City Telecom sells telco assets the third mobile operator in ($330 million). CTExcelbiz and announced it will City Telecom agreed to sell Mozambique in May. replicate the business in France in its telco operations in Hong Mayer comes to Yahoo the second half of 2013. Kong, Canada and China to America Movil in Europe Marissa Mayer became Yahoo’s Metropolitan Light Co for Having launched an €8-per- sixth CEO in five years in July. Brazil awards 4G licences HK$5.01 billion (US$645 million). share offer in May, Mexico’s She replaced Scott Thompson, The four main mobile operators

December 2011/January 2012 www.totaltele.com 3 timeline

in Brazil–Vivo, TIM, Claro and start offering mobile voice and auction of mobile spectrum Softbank M&A moves Oi–won 4G licences and have data services in East Timor. and handed over 20% of the Japan’s Softbank agreed to pay begun rolling out LTE networks. country’s available 3G airwaves $20.1 billion for a 70% stake in Brazil ban hits growth to state company Arsat. The state US-based Sprint Nextel. Just Shared data at Verizon TIM, Claro and Oi were banned said the move came following weeks earlier CEO Masayoshi Verizon Wireless unveiled from making sales in a number antitrust concerns and because Son announced Softbank’s new tariff plans enabling users of Brazilian states in late July none of the companies that acquisition of domestic rival to share their data allowance and early August as punishment submitted bids met the minimum eAccess in a stock swap valued at between up to 10 devices. for growing complaints over requirements. 180 billion yen ($2.3 billion). network quality. As a result, Microsoft tablet Surfaces Brazil’s mobile net additions Tech Mahindra buys Comviva EE launches in UK Software giant Microsoft moved slumped to just 280,000 in July. India’s Tech Mahindra agreed UK mobile operator EE launched into mobile hardware, unveiling to buy a 51% stake in Comviva its LTE network in 11 major a family of tablets under the Chilean ops win LTE spectrum Technologies from Bharti Group cities at the end of October. brand name Surface. The Claro, Entel and Movistar all and other shareholders for 2.6 devices, which run Windows won 2.6-GHz spectrum in Chile’s billion rupees (US$50 million). LTE launches elsewhere 8, hit the shelves in October. LTE auction, which raised a total The merged entity will be Tango Telecom launched Meanwhile, Google revealed its of just over US$12 million. Entel renamed Mahindra Comviva. Luxembourg’s first LTE service Nexus 7 tablet, developed with paid the most for block B with an Earlier BT sold a 14.1% stake in having rolled out its network to Asustek Computer, that started $8.8 million bid. Tech Mahindra for £158.6 million 60% of the country. Vodacom shipping in mid-July. and offloaded its remaining 9.1% switched on its LTE network in Third 3G network in Tunisia holding in December. Johannesburg, with more South BT scores footy rights Qtel-owned Tunisiana launched African cities set to follow suit. UK incumbent BT won the right 3G services in Tunisia. Its Yahoo offloads Alibaba And Telecom Italia also lighted to show live English Premier network covers 48% of the China’s Alibaba Group its LTE network. League football matches, paying population; it aims to increase completed an initial share £738 million for 38 games that to 87% early next year. repurchase of half of Yahoo’s Qtel takes control starting in the 2013 season. 40% stake for $7.6 billion. Qatar’s Qtel in October increased Italian network moves its stake in Kuwaiti operator YouView goes live Fastweb revealed it will invest BT’s new Global Services CEO Wataniya to 92.1% from 52.5% UK TV and video-on-demand €400 million in its fibre-optic BT announced that company at a cost of $1.8 billion. It service YouView–backed by network in Italy. The telco insider Luiz Alvarez will head previously announced plans to the country’s major free-to-air also signed a memorandum up its IT services division from 1 spend close to $1.5 billion to broadcasters, BT and TalkTalk– of understanding with rival October. He replaces Jeff Kelly, increase its stake in Iraq’s Asiacell launched in July. Telecom Italia to jointly develop who is returning to the US after to 60% from 30%. the country’s fibre infrastructure. almost three years at the helm of KPN ends Base sale Global Services. Voda buys TelstraClear Dutch incumbent KPN EU OKs UK JV Vodafone completed the NZ$840 abandoned plans to sell Belgian The European Commission NZ Telecom new CEO million acquisition of New unit Base saying the bids it gave the go-ahead to a planned Simon Moutter took over as Zealand’s TelstraClear, marking received were not satisfactory. UK m-commerce joint venture the new chief executive of New former owner Telstra’s exit from between Everything Everywhere, Zealand’s Telecom Corp. the country. M2M alliance Vodafone and O2, ruling that it Seven telecoms operators teamed poses no threat to competition. OCTOBER- O2 Germany IPO up to gain scale in the machine- DECEMBER Telefonica will receive around to-machine (M2M) market. The Telkomsel goes bankrupt €1.45 billion from the flotation of alliance comprises Telefonica, A Jakarta court declared US mobile merger 23.17% of its German business, KPN, NTT DoCoMo, Telstra, Indonesian mobile operator T-Mobile USA in October which has started trading in Vimpelcom, SingTel and Rogers. Telkomsel bankrupt, despite a announced it will merge with Frankfurt. healthy balance sheet, following MetroPCS in a $1.5 billion deal. Viettel furthers expansion a petition from self-proclaimed Deutsche Telekom, parent of the Telenor’s new India partner Vietnam’s Viettel secured 900- creditor Prima Jaya Informatika. former, will hold a 74% stake India’s Lakshdeep Investments MHz spectrum in Peru, where it in the new entity and T-Mobile & Finance agreed to buy a stake holds the country’s fourth mobile Argentina spectrum move USA CEO John Legere–in the in Telenor’s new Indian unit licence and announced plans to Argentina cancelled its planned role since September–will lead it. Telewings Communications.

4 www.totaltele.com December 2012/January 2013 timeline

Telenor earlier bought out KPN sells towers DNA will be its first operator former partner Unitech. Netherlands-based KPN sold partner. off a portion of its domestic Millicom names CEO towers portfolio to Indonesia’s H-P claims fraud Millicom International Cellular Protelindo for €75 million. Hewlett-Packard accused the named Hans-Holger Albrecht as former management of 2011 its new CEO as of 31 October. He BCE’s new deal acquisition Autonomy of replaces Mikael Grahne. Canadian telco BCE in fraud and took an $8.8 billion November reworked its plan writedown on the value of the MIC acquires Paraguay unit to take over broadcaster Astral asset. Argentina’s Grupo Clarin Media. A previous iteration completed the sale of its of the deal was blocked by Cisco buys Meraki Cablevision Paraguay business to regulators. Cisco Systems agreed to pay $1.2 FRENCH Millicom International Cellular billion for cloud-controlled WiFi REVOLUTION The launch of Free in January for $150 million. Romania spectrum sale specialist Meraki. changed the landscape of the Cosmote, Orange, RCS&RDS, French mobile market, in no MTS’ Uzbekistan battle Vodafone and 2K Telecom won MegaFon lists in London small part due to the influence Uzbekistan’s court of appeal spectrum in the 800-MHz, 900- Russian operator MegaFon raised of Xavier Niel, founder, majority shareholder and in November overturned MHz, 1800-MHz and 2.6-GHz $1.7 billion from its London IPO chief strategy officer of Iliad, the nationalisation of MTS’ bands in Romania, paying a in late November. which owns the Free brand. Uzdunrobita, but ordered the combined €682.14 million. Iliad added Free Mobile into its portfolio of broadband, Russian telco to pay various fines Partner deal done voice and IPTV services as totalling $600 million. Voda India tax threat lifts Israel’s Saban Capital agreed to a low-priced mobile offering, An Indian government pay 250 million shekels ($65m) immediately putting longer- Huawei, ZTE threat to US committee recommended against and assume $300 million worth established rivals under pressure. France Telecom’s A year-long congressional the retroactive application of of debt for a controlling stake Orange, Bouygues Telecom investigation in the US ruled that new tax legislation, a move that in mobile operator Partner and SFR were forced to cut China’s Huawei and ZTE could looks likely to lift the threat of Communications. A deal that prices to keep pace with the be a threat to US security due to Vodafone receiving a multi- would have seen former owner newcomer. And demand for Free’s service was so their links with Beijing. billion-dollar bill linked to its Hutchison Whampoa buy into strong that Orange, which 2007 acquisition of Hutchison the telco was called off in August. signed a highly lucrative NSN sells itself Essar. roaming deal with the telco In October Accenture acquired Batelco buys into Monaco (worth well in excess of €1 billion, according to Niel), in Nokia Siemens Networks’ IPTV Telecom Italia readies spinoff Cable & Wireless March threatened to block assets in a deal of undisclosed Telecom Italia in November Communications (CWC) agreed Free’s users, noting that value. And in December NSN revealed it has appointed advisors to sell its Monaco and Islands heavy usage was causing its sold its BSS business to Redknee to help with the spinoff of its division to Bahrain’s Batelco for network to become clogged, impacting on service for its for €40 million and offloaded fixed-line network. $680 million. CWC is still in own customers. Despite the its optical networking assets to talks with Citic Telecom over the three incumbents’ efforts to Marlin Equity. India reauctions licences possible sale of its Macau unit. manage churn, Free is signing up more than its fair share of Bharti Airtel, Idea Cellular, new customers; it reported Thailand auctions 3G licences Vodafone, Videocon and Hutch bulks up in Austria 805,000 mobile net additions After years in the planning, Telenor’s Telewings won Hutchison 3G Austria in in Q3, which it estimates Thailand raised 41.63 billion baht spectrum in India’s 1800-MHz February agreed to acquire local accounts for 60% of the total. As a result, its mobile base (US$1.35 billion) from the sale auction. The process raised just rival Orange for €1.3 billion. It stands at around 4.5 million of 45 MHz of 2.1 GHz spectrum 94.07 billion rupees ($1.7bn), well finally won the approval of EU customers, which is a share to existing operators AIS, DTAC short of the government’s 280 regulators in December. of just over 6% of France’s 72 and True. billion rupees target. million mobile subscribers, according to Arcep. The DT €30bn capex plan latest sign that Free is making Bangladesh gets 3G Sailfish swims free Deutsche Telekom cut its its presence felt in France State-owned Teletalk launched Jolla introduced Sailfish, the new dividends for the next two years came in late November when Bangladesh’s first 3G service. smartphone operating system in order to invest €30 billion over Vivendi’s SFR said it will cut as many as 856 jobs as part The country aims to auction 3G created from Nokia’s former three years, much of which will of a cost-cutting plan to stay spectrum to private operators in MeeGo OS, in late November be ploughed into its networks in competitive. the near future. and announced that Finland’s Germany and the US.

December 2011/January 2012 www.totaltele.com 5 BUSINESS & FINANCE

REVIEW OF THE YEAR GAINING WEIGHT 2012 featured some major acquisitions, partnerships and alliances as telecoms opera- tors looked to bulk up their businesses By Mary Lennighan

he start of a new year more often slated to close in mid-2013. Market leader There could be more consolidation in than not brings with it a desire AT&T voiced its opinion, even before the US next year (‘Looking ahead’, p.8). Tfor self improvement, and–in the the extent of Sprint’s desire to control developed world, at least–that often Clearwire was known, but chose its words Changing landscape manifests itself in the form of a diet, as carefully. “Softbank’s acquisition of European operators also made moves to people either look to completely overhaul Sprint and the control it gains over build scale in 2012. As the year drew to a their lifestyles or simply shed a few extra Clearwire will give one of Japan’s largest close, Hutchison 3G Austria finally pounds gained during the festive season. wireless companies control of signifi- received EU approval for its €1.3 billion If you’re a telecoms operator though, cantly more US wireless spectrum than takeover over of Orange’s Austrian unit, a the story is slightly different. The telcos any other company,” said AT&T vice deal it announced back in February. The are no stranger to shedding flab, some- president Brad Burns. AT&T expects telco faced an uphill battle to get the thing they have been working hard to do regulators to examine the deal fully, in go-ahead for the acquisition, with EU in the past year through extensive cost- the context of the “dynamic and competi- Competition Commissioner Joaquin cutting programmes. But many have been tive” US mobile market, he added, leading Almunia repeatedly questioning the actively seeking to gain weight, with industry-watchers to draw various conclu- impact it would have on competition in various mergers, acquisitions and alli- sions as to the telco’s real intentions. the market. Hutch made a number of ances being the major headline-hitters of AT&T might simply be seeking to block pledges to the EU, including agreeing to 2012. And with the operating environ- the tie-up, since it will boost number sell some of Orange’s spectrum, but what ment likely to continue to be challenging, three US mobile operator Sprint’s eventually swung it was its commitment the trend of bulking up will prevail as we competitive position in the market. to allow MVNOs to use up to 30% of its move into 2013. Equally, AT&T could be making a point network capacity at favourable rates and The past year was relatively quiet in to the regulator about its need for more subsequent deal with UPC. terms of telco M&A until October, when spectrum. The telco in August agreed a The merger reduces the number of a number of deals were announced that $600 million deal for Nextwave Wireless, mobile network operators in Austria to will change the landscape of the industry ostensibly to get hold of the latter’s three from four, creating a stronger if and when they close next year. The 2.3-GHz spectrum; the FCC in October competitor from the two smallest players. biggest of the bunch was Softbank’s $20.1 approved new rules that will enable it to The fact that regulators passed such a billion agreement to acquire a 70% stake use that spectrum for LTE. Finally, deal could encourage similar consolida- in US operator Sprint Nextel, the largest AT&T’s reminder to the regulators to tion moves in other markets. ever foreign acquisition by a Japanese take into account the dynamic and We could also see the Spanish mobile company. Just weeks earlier Softbank had competitive nature of the US market market reduced to three players if made its growth ambitions known, could indicate that it is not actually TeliaSonera sells its Yoigo business. The announcing a $2.3 billion stock swap deal objecting to the deal at all. After its failed Nordic telco insists it is in no rush to exit for smaller domestic rival eAccess. bid to take over fourth-placed rival Spain and will only sell at the right price. The Softbank announcement came just T-Mobile USA–the deal was blocked by Spain’s three biggest mobile operators days before Sprint revealed plans to the FCC in late 2011–it is conceivable that are the most likely buyers, with Orange increase its stake in wireless broadband the telco is still considering ways to put top of the list as the third-largest player operator Clearwire–which boasts signifi- on some additional weight itself. in the market; the company admitted it is cant spectrum holdings in the US, albeit T-Mobile USA, meanwhile, added to its interested in the asset, and that it is moni- in the 2.5-GHz band–and in December own waistline this year, announcing a toring other major European markets for Sprint confirmed that it will take sole $1.5 billion merger with smaller rival potential acquisitions. control of Clearwire in a deal that will MetroPCS. If the deal goes ahead, Although it has denied having an cost it around $2.1 billion in cash. And in T-Mobile parent Deutsche Telekom will immediate interest, America Movil was November Sprint agreed to pay $480 own 74% of the merged entity, which will naturally named as a potential acquirer of million for 585,000 customers and spec- be led by new T-Mobile USA CEO John Yoigo, in light of its foray into Europe in trum licences in certain US markets from Legere (see ‘People’ p.20). Amongst other 2012. The Mexican operator bought stakes seventh-largest operator US Cellular. things, MetroPCS will bring T-Mobile of 27.7% in Dutch incumbent KPN and Pending the usual regulatory and other USA additional spectrum to boost its 22.76% in Telekom Austria, and was approvals, the Softbank/Sprint deal is LTE rollout. linked with potential wider European

6 www.totaltele.com December 2012/January 2013 BUSINESS & FINANCE

New kids on the block they will save over £1 billion by 2015. Vodafone also teamed up with 3 Ireland 2012 was not all about established market players seeking to strengthen their existing in July, creating another 50/50 JV to businesses. There were also some newcomers in certain markets. manage 2,000 shared cell sites and trans- The new entrant that made its presence felt the most this year was Free Mobile, the new low-cost mobile subsidiary of France’s Iliad, which came to market in January. Free mission networks. triggered a price war among France’s established players, leaving them seeking new ways Network-sharing deals also extended to cut cost out of their businesses. to other markets. In June Telefonica and China Telecom had less of an impact when it launched its MVNO in the UK in May under Iusacell said they will share mobile infra- the brand name CTExcelbiz. It is targeting the 600,000 Chinese ex-pats based in the UK, as well as tourists to the country and students. The telco plans to replicate this model in structure in Mexico in a bid to compete France next year and extend it to other European markets before the end of 2014. One more effectively with America Movil. company, although not strictly a newcomer, did make a big splash in the UK this year though. And in March TeliaSonera and Telenor Everything Everywhere renamed itself as EE in September and in late October launched the country’s first LTE service. Or rather, its first LTE service based on the FDD variant of the received approval to merge their radio technology. PCCW-owned UK Broadband switched on its TD-LTE infrastructure in London access networks in Denmark. in February; initially it said it would offer wholesale services only, but added a retail service, There is more to come. In November under the brand name Now Broadband, in October. KPN revealed that it is considering a Other new launches saw Virgin Mobile take its successful MVNO service to Poland, where it runs on the networks of Orange and Play, and commit to expanding elsewhere in Eastern network-sharing deal with Telefonica in Europe. Mozambique welcomed its third mobile operator in the shape of Movitel, a joint Germany in a bid to cut costs. And the venture between Vietnam’s Viettel and the country’s ruling Frelimo party. And Argentina laid EU is keen for telecoms operators to the groundwork for the arrival of a new state-owned operator into the mobile market, by partner up. In September digital agenda handing 3G spectrum to Arsat, which is now seeking partners to build out and operate its network. The company is also likely to have 4G spectrum reserved for it. commissioner Neelie Kroes urged regu- latory regimes to foster more efficient expansion. The complementary European Meanwhile, in Canada BCE sought to use of mobile spectrum and clarify regu- footprints of KPN and Telekom Austria beef up its operations by acquiring Astral latory frameworks to enable mobile gave rise to some merger talk, although Media for C$3 billion. The broadcast operators to share that scarce resource. national interests would doubtless put regulator blocked the deal in October on Fixed network operators also came paid to such a move, but their common competition grounds but BCE has since together in 2012 to share the cost of shareholder will see the pair explore submitted a new deal for its scrutiny. Also deploying next-generation network infra- synergies between their businesses. in October BCE and a group of investors structure. To name a few, Orange in Consolidation also looms in Russia, completed the C$1.1 billion acquisition of January agreed to let Bouyges Telecom where Tele2 has found itself in an unten- data centre operator Q9 Networks. share its fibre-to-the-home (FTTH) able position as the fourth player in the network in France; Telecom Italia and mobile market and has been linked with a Sharing the wealth Fastweb signed an agreement to cooper- number of suitors. It is an obvious fit for M&A is not the only option for telcos ate on the rollout of fibre; and BT Rostelecom, which has a small mobile who need to reduce costs to maintain introduced the concept of fibre-to-the- presence alongside its fixed-line business. profitability, something that has been premises (FTTP) On Demand, through There have been reports of talks between particularly prevalent in Europe over the which its Openreach unit will enable the two throughout 2012. Meanwhile, past 12 months as the sector struggles service provider customers to “assist” mobile operator MegaFon, which raised against declining revenues. with the cost of deployment. Progress $1.7 billion from its London IPO in The European mobile industry could was also made in the development of non- November, is also reported to be consid- save €20 billion-€40 billion annually over fibre technologies, such as vectoring, that ering a bid for parts of Tele2 Russia. the next five years, with big telcos saving enable telcos to get the most out of their 2012 saw Vodafone bulk up via a couple as much as €2 billion each per year, by existing copper. of key deals. In July it closed the £1.04 establishing network-sharing deals, Booz An announcement from Deutsche billion acquisition of Cable & Wireless & Company claimed in November. Telekom in mid-December summed up Worldwide, adding C&W’s UK fibre Network-sharing was high on the agenda the situation for much of the industry. network, global fixed networks assets and for Vodafone in 2012. The UK units of The telco said it will invest €30 billion in business customers to its portfolio. Vodafone and Telefonica in June networks in Germany and the US over Vodafone also brokered a similar deal in announced plans to combine their mobile three years, including rolling out fibre- New Zealand. It became the country’s infrastructure to create a single 2G and to-the-cabinet (FTTC), vectoring, and second largest telco in October when it 3G network, with a view to adding LTE in LTE. But as always, it’s a balancing act. In completed the NZ$840 million (€535 future. They got regulatory approval in order to finance the investment, Deutsche million) acquisition of TelstraClear, again October and said they will set up a 50/50 Telekom cut dividends for the next two gaining network assets and corporate joint venture, Cornerstone Telecomm- years, a move Fitch estimates will save it clients. unications Infrastructure. Ovum predicts €850 million per year. n

December 2012/January 2013 www.totaltele.com 7 LOOKING AHEAD

TELECOMS IN 2013 WHAT’S in STORE? Next year we predict more consolidation in the US, disappointing spectrum sales, warring equipment makers, and a big data overload. By Total Telecom staff

BUSINESS & l More consolidation will take l Network quality will come makers and their Chinese rivals FINANCE place in the US. The T-Mobile under scrutiny once again in will become increasingly frosty. USA/MetroPCS and Softbank/ Brazil as operators gear up to Expect more accusations of European unions Sprint deals will receive launch LTE. unfair state aid. Meanwhile, the l There will be more regulatory approval next year, likes of Huawei and ZTE will cooperation among European leaving other players looking l India will be disappointed make little progress in their incumbents. Full-scale mergers for acquisitions of their own. with its second attempt quest to win fans in the US. may be out of the question due Leap Wireless will find itself the to auction off 1800-MHz to government interests, but target for one of the big players. spectrum. Despite the growth l More telcos will come round national telcos will look for opportunities in the market, to the idea of network-sharing other ways to build scale and Patent predicament the newcomers who had their in both developed and emerging ease cost pressures. l Google will seek to acquire licences suspended at the start markets. more patents. It learnt the of 2012 had largely failed to l We will hear more from hard way that Motorola establish themselves, leaving l The last bastion of network ambitious Mexican operator Mobility’s patent portfolio others wary of taking the differentiation falls as telcos America Movil as it makes its lacks the weapons it needs to plunge. accept they will need to share presence felt at both KPN and win the patent war. Its unlikely small cells sites in order to Telecom Austria, and considers partnership with Apple to make Don’t cry for me manage cost and complexity. other acquisitions outside its a $500 million bid for Kodak’s l Controversy will surround Many mobile operators will still home region. imaging patents is an indication Argentina’s 4G auction as insist that they can differentiate of the lengths it will go to. the government reserves a on the network though. l TeliaSonera will sell Spanish significant amount of spectrum business Yoigo to one of MOBILITY for state firm Arsat. And finally... Spain’s other mobile network operators, but not before the Steve and Steve l The UK LTE auction will l By the end of 2013 it will be aforementioned America Movil l Microsoft will consider raise less than the £3.5 billion physically impossible for any is strongly tipped to get its making a move for Nokia. the government is hoping for. speaker at a telecoms conference wallet out. Admittedly, while an acquisition Reports of a prospective new to deliver a presentation without is not out of the question, entrant, such as BT, will come using the expression “big data”. Da svidaniya provided the price is right, to nothing and the process will l There will be consolidation there are a number of potential be less fiercely contested than it l Marissa Mayer will be the first in Russia that results in the obstacles that could prevent it. could have been. EE is already Yahoo CEO in recent memory disappearance of Tele2. Both One way or another though, running LTE at 1800-MHz to last more than a few months Rostelecom and MegaFon are hardware will be higher on the spectrum; no doubt it will seek in the job, despite the US press reported to be interested in agenda for Microsoft next year to bolster its spectrum holdings, continuing to give her a hard acquiring some or all of the as its seeks to create a more but it won’t break the bank. time about being a working Russian mobile market’s fourth- integrated experience. mother. Relief all round when largest player. NETWORKS the next heir to the throne in BRICs on the brink the UK is born, shifting the US of M&A l China Mobile will regain l We will see a number of media’s attention. l Clearwire will disappear from some lost ground in the China commercial deployments of the US market. Sprint is keen to 3G race. The world’s largest system-level vectoring in Europe l Attendees at Mobile World bolster its spectrum holdings to mobile operator signed up as operators seek to augment Congress in February will mount a proper attack on AT&T proportionately fewer 3G their less-than-comprehensive complain bitterly about the and Verizon, and in December customers than rivals China fibre-to-the-home (FTTH) new Barcelona venue, but that launched a bid for the 49% of Unicom and China Telecom in rollouts. won’t stop the vast majority Clearwire it doesn’t already own. 2012, but the arrival of a TD- booking their accommodation If it goes ahead, the Clearwire SCDMA iPhone in 1H 2013 will l Relations between cash- for the 2014 show 11 months in brand will disappear. reverse that trend. strapped European equipment advance.

8 www.totaltele.com December 2012/January 2013

MOBILITY

OPERATING SYSTEMS WINDOWS OF OPPORTUNITY Android dominated the tumultuous smartphone market in unit volume terms in 2012, but some are adamant its reign is only temporary. By Nick Wood

n the face of it, 2012 should go competitive products,” warns Bengt Strategy Analytics claimed that the down as the year when the title Nordstrom, CEO of consultancy Samsung Galaxy S3, first unveiled in May, Oof undisputed smartphone OS Northstream. “It will take another year overtook Apple’s iPhone 4S to become champion of the world was awarded to and a generation before they can poten- the world’s single biggest-selling smart- Android. However, new competitors and tially challenge.” He expects Microsoft’s phone model in Q3, shipping 18 million the fact that few handset vendors are OS market share to grow in 2013 as units. The research firm’s executive actually profiting from Android suggest Windows Phone 8 “bridges the gap in director Neil Mawston predicts the the contest is far from over. terms of major functionalities” between iPhone 5 will regain top spot for Apple in “There is a definite threat to Android itself and rivals Google and Apple. Q4–he estimates the device sold 6 million from Microsoft,” claims Richard Windsor, “Furthermore, if Microsoft is able to units in the last nine days of September– founder of Radio Free Mobile. The former leverage its strong position in services but there is no denying Samsung’s S3 has Nomura analyst concedes that Microsoft’s such as Office and unified communica- proven “wildly popular” in North Windows Phone has got off to a “disap- tions, several enterprises will choose America, Europe and Asia. pointingly slow start” in terms of Microsoft, even when it comes to mobile Meanwhile, none of Samsung’s rival shipments, but he insists it offers a more solutions,” he predicts. Android players came close to matching complete experience than Android. While there is no denying Android its financial performance in 2012. “Microsoft can offer an Apple-like dominated 2012 in unit volume terms, it HTC, which four years ago developed experience at a much lower price,” he became clear over the course of the year the first ever Android handset, the G1, says. “Android looks good on paper, but that not every Android hardware maker eked out small quarterly operating profits in practice it doesn’t work that well. Apple benefited equally from its success. In fact, this year, ranging from a high of $282 offers a much more genuinely integrated it could be argued that Samsung was the million in Q2 down to $168 million in Q3. experience...and Microsoft will as well.” only handset vendor to make meaningful Between February and August, amid Microsoft took big steps this year money from Android sales. revenue warnings over intensifying towards realising this vision. In June CEO The Korean electronics giant saw competition, writedowns and a slumping Steve Ballmer unveiled Microsoft’s first revenue at its IT and mobile communica- bottom line, it was reported that 47 of the foray into tablet hardware, the Surface, tions division–which as well as its handset Taiwan-based company’s foreign institu- and in October launched Windows 8, the arm also includes its infrastructure and tional investors had completely sold off operating system he hopes will deliver a IT solutions operations–steadily grow their holdings, while a third-quarter coherent user experience across tablets, throughout the year to $24.3 billion by profit warning saw more than $1 billion PCs and smartphones. Q3 from $17.5 billion in Q1. Operating wiped off its market capitalisation in just However, Windows Phone failed to profit grew to $5.2 billion from $4 billion two days. To make matters worse, in carve itself a meaningful share of the over the same period. Samsung consist- November HTC agreed to pay unspeci- smartphone market in 2012. ently attributed its performance to robust fied licensing fees to Apple as part of a According to IDC, three out of every smartphone shipments. patent settlement. It is not alone on that four smartphones shipped in the third score though. In August Samsung was quarter were running on Android. To Smartphone OS trends 2012 ordered to pay Apple $1.05 billion in express it another way, of the 181.1 million damages for violating design patents. n Android n iOS n Windows Phone smartphones shipped worldwide in the n Blackberry n Symbian Still, HTC is a success story compared three months ended 30 September, only 80 n Linux n Other to the likes of Motorola, LG and Sony, 45.1 million were not based on Google’s 70 which throughout 2012 regularly reported mobile OS. Second-placed Apple saw iOS 60 more or less flat revenues and operating device shipments reach 26.9 million in 50 losses. Notable recent launches from Q3, followed by also-rans RIM and 40 these companies include the HTC One Symbian with 7.7 million and 4.1 million 30 Series, Motorola’s RAZRi, the LG

respectively. Windows Phone shipments (%) Market share 20 Optimus G and Sony’s Xperia T. reached 3.6 million. “If you’re an Android maker, life is 10 “I think that the new [Windows- quite difficult because it’s a question of 0 powered Nokia] Lumias, when all the 1Q 2Q 3Q ‘how do I differentiate?’,” says Windsor. hype and dust has settled, are not Source: IDC As far as Nordstrom is concerned, it

10 www.totaltele.com December 2012/January 2013 MOBILITY

Connected with your world requires being at least on a par with the If that is the case then RIM had better competition in almost all handset get a move on, because 2012 saw some features, and then going further to offer new players arrive to tap into emerging something unique. “In the case of smartphone markets. Mozilla Foundation, Samsung, the ‘something more’ was the maker of the Firefox Web browser, in July design factor, the technical specs, and the revealed its HTML5-based smartphone integration of services,” he says. platform, Firefox OS. The first devices And what of RIM? The Canadian will be made by TCL Communication BlackBerry maker has had another diffi- and ZTE, and will debut in Brazil on cult year under new CEO Thorsten Heins Telefonica-owned Vivo’s network. as it seeks to reverse its ailing fortunes In the same month a new company set and effectively reboot its smartphone up by former Nokia employees emerged proposition with its new OS, BB10, which with plans to revive the Finnish handset is slated for launch on 30 January 2013. maker’s moribund MeeGo OS. Called Until this year, RIM was a staunch Jolla, it has renamed the platform Sailfish advocate of vertical integration. Much OS, and is establishing R&D facilities in like Apple, the company insisted it was Hong Kong with a view to tapping into the best way to ensure end users got the China’s fast-growing mobile market. best out of its hardware, software, and Despite the focus on China, it announced services. However, rumours emerged in November that its first operator during the first half of 2012 that RIM was partner will be Finland’s DNA. changing its tune, and planned to license That is no bad thing, says Windsor. BB10 to other manufacturers. This drastic Focusing on China is a “dangerous game”, change of direction was effectively he says. “It is brutally competitive and confirmed by Heins in August, but no horrendously cut-throat.” Windsor insists licensing deals have been announced. there remains enough growth in Europe And sales are sluggish. According to and North America to sustain a company ■ Wide-reaching international Gartner, which measures device sales to like Jolla. “The [smartphone] market is coverage featuring end users, RIM sold 26.9 million big enough for multiple players. Jolla is a innovative IP, Fiber, Ethernet BlackBerrys in the first nine months of small company...it doesn’t need a lot of & Satellite solutions 2012. By comparison, Samsung sold 20 volume,” he says. million-23 million phones per quarter. So what does 2013 have in store for the ■ Robust solutions RIM should “sell itself to the highest smartphone OS market? connecting the Middle East, bidder”, advises Windsor. “It doesn’t have “Apple and Samsung will have to prove the momentum, it doesn’t have the finan- that they can continue leading the Africa and other emerging cial resources, and it doesn’t have the market,” says Nordstrom, while “Google markets developer support to be competitive.” and Microsoft will have to prove they can Full resilient network design Heins would doubtless disagree. BB10 is do more than services.” He expects ■ based on the QNX operating system Google to push its Nexus line of products and dedicated service developed by a RIM subsidiary of the more aggressively, and Microsoft to management same name. “BB10 is not just a smart- develop more of its own hardware. phone OS, it’s a new, revolutionary mobile But Windsor disagrees with this last computing platform,” said Heins at BB10’s point. “Surface was more of a demonstra- Contact us unveiling in May. “This takes us into a tion product,” he claims. “It’s more of a Tel: +33 (0)1 84 88 05 88 whole new area of mobile computing, way message to Microsoft’s hardware part- [email protected] beyond smartphones and tablets.” ners, rather than Microsoft saying ‘we RIM’s traditional stronghold was the are going to be more like Apple’.” enterprise segment, but Nordstrom, Instead, Microsoft is likely to pitch notes that in the US it has lost “signifi- itself as an alternative for struggling cant ground” to Apple, while Microsoft Android players. “Microsoft is keen for “is coming up strong” with its own enter- the other [vendors] to step up commit- www.pccwglobal.com prise services offering. “The best area to ment and so is unlikely to make it hard focus on for RIM is developing coun- for them to make Microsoft phones,” says tries,” he says. Windsor. n

December 2012/January 2013 www.totaltele.com 11 BEST BRAND CAMPAIGN BEST NEW SERVICE: ENTERPRISE THE ALIREZA MAHMOODSHAHI Idea Cellular Limited Singapore Telecommunications TECHNOLOGY FORESIGHT AWARD Limited Ciena BEST CLOUD SERVICE World Communication Awards 2012... Orange Business Services BEST OPERATOR IN A THE GREEN AWARD DEVELOPING MARKET Vipnet d.oo BEST CONTENT SERVICE Unitel Türk Telekom BEST PLACE TO WORK BEST SERVICE PROVIDER Zain Jordan BEST CUSTOMER CARE Virtela Technology Services Inc ...The Winners Roshan CEO OF THE YEAR BEST WHOLESALE CARRIER Vittorio Colao: Vodafone BEST GLOBAL OPERATOR TeliaSonera International Carrier Orange Business Services USER’S CHOICE PROJECT OF THE YEAR Orange Business Services Congratulations to all the winners, BEST MOBILE OPERATOR Telstra Telstra Corporation Limited KLJKO\FRPPHQGHGDQGÀQDOLVWV SOCIAL CONTRIBUTION AWARD BEST NEW SERVICE: CONSUMER Etisalat Comviva And a big thank you to our sponsors.

World Communication Awards To view the full list please visit www.worldcommsawards.com For global communications providers 13th November 2012 2012 Lancaster Hotel, London

www.worldcommsawards.com

Sponsors: Strategic Partner: Drinks Reception Sponsor: Media Partners: Organised by: BEST BRAND CAMPAIGN BEST NEW SERVICE: ENTERPRISE THE ALIREZA MAHMOODSHAHI Idea Cellular Limited Singapore Telecommunications TECHNOLOGY FORESIGHT AWARD Limited Ciena BEST CLOUD SERVICE World Communication Awards 2012... Orange Business Services BEST OPERATOR IN A THE GREEN AWARD DEVELOPING MARKET Vipnet d.oo BEST CONTENT SERVICE Unitel Türk Telekom BEST PLACE TO WORK BEST SERVICE PROVIDER Zain Jordan BEST CUSTOMER CARE Virtela Technology Services Inc ...The Winners Roshan CEO OF THE YEAR BEST WHOLESALE CARRIER Vittorio Colao: Vodafone BEST GLOBAL OPERATOR TeliaSonera International Carrier Orange Business Services USER’S CHOICE PROJECT OF THE YEAR Orange Business Services Congratulations to all the winners, BEST MOBILE OPERATOR Telstra Telstra Corporation Limited KLJKO\FRPPHQGHGDQGÀQDOLVWV SOCIAL CONTRIBUTION AWARD BEST NEW SERVICE: CONSUMER Etisalat Comviva And a big thank you to our sponsors.

World Communication Awards To view the full list please visit www.worldcommsawards.com For global communications providers 13th November 2012 2012 Lancaster Hotel, London www.worldcommsawards.com

Sponsors: Strategic Partner: Drinks Reception Sponsor: Media Partners: Organised by: 2 – 3 July 2013 ETC Venues St Paul’s, London

Profiting through the network

2 day strategic conference and exhibition with senior decision makers from the largest telecoms brands.

Find out how to get involved at: www.totaltele.com/network ANALYST VIEWPOINT

TELCO BUSINESS MODELS MYTH BUSTERS Trying to make future business models work along the lines of those seen in the past could amount to telcos shooting themselves in the foot.

ll business faces disruption at various certainly not achieved by coding into interna- times–it’s a fact of life. The telecommuni- tional treaty arrangements that reflect the legacy Acations sector is no different although behaviour of the telecom sector, when the reality that’s not always the impression industry observ- of the open Internet value chain is that telcos are ers would have on looking at some of the rhetoric just a part (albeit a key part) of the story. of recent months, especially around the open The myths start with the notion that demand is Internet and over-the-top (OTT) players. bad. In most circumstances this stance would be There is no doubt the telco sector has its prob- viewed as nonsensical (other than for exceptional lems and this is most visible in its financial results. temporary situations). The reality is that demand It’s inevitable that evidence of macro-economic is good. Demand reflects the desire of consumers trends appears, mostly in the form of a lack of to consume and it supports revenue growth and Tony Lavender revenue growth. New business models and modes network investment. The real issue here is that the CEO of service delivery also have profound implica- parameters are different from what telcos have Plum Consulting tions for future revenue as usage of legacy products been used to in the past. declines. Some players have the encumbrance of a The next myth is that it costs too much and that legacy of debt to service and reduce and, to a large costs driven by data growth are increasing. Again, extent, the maintenance of sector profitability has this is not wholly true: fixed access costs are been achieved through improving the efficiency declining on a unit cost basis and for mobile while of operations, mostly through cutting costs. costs are higher they also will decline on a unit This is fine in as far as it goes but it does not deal cost basis. The real issue here relates to the invest- with the disruption to telco business models trig- ment profile for broadband access networks and gered by the growing digital economy and the the time to extract value, not unit costs. strategic response required. Investment in broad- Another myth concerns application and content providers causing traffic. This is patently not true Demand is good. Demand as consumers create demand based on the attrac- tiveness of the applications and content available supports revenue growth to them. The open Internet coupled with technol- ogy and software innovation has lowered barriers and network investment to entry enabling demand. Hand in hand with this is the “free ride” myth–the perception that content band access (fixed and mobile) and the networks and application providers get their services for that sit upstream is a key part of the required tran- free. Again this is not true for the serious provid- sition. Regulatory certainty is central to making ers of content who invest in infrastructure, substantial new capital investments and there are purchase network services and are incentivised to live debates worldwide on how it can be achieved. seek out bandwidth efficient solutions. The other half of the story is in many ways the Lastly there is the debate on who should pay. A harder part as it daily bumps against legacy culture chorus of voices insists that charging application inside telcos. Items here include new models for providers is the way forward. In reality application pricing structures (retail and wholesale), product and content providers do invest and pay in the development, go-to-market strategies, changing context of the end-to-end value chain. Creating a margin expectations and so on. regime where they are required to pay more might In the context of the open Internet there are disincentivise the development of content and myths around the end-to-end value chain that applications. often pervade thinking in the telecom sector. A The reality is that the world has moved on from good example is some of the input to and the the structures and flows of money telcos enjoyed public rhetoric around the ITU World Conference historically. Trying to make future business on International Telecommunications (WCIT-12). models work along the lines of those seen in the At the root of the problem is how telcos get what past may well amount to telcos shooting them- they see as their share of the Internet pie. This is selves in the foot. n

December 2012/January 2013 www.totaltele.com 15 FUTUROLOGY

ANALYST PREDICTIONS ONES TO WATCH Key industry analysts look into their crystal balls to predict what’s in store for the world of telecoms in 2013 and beyond.

OPERATORS l 2013 will mark the beginning a risk of less open standards. resolved and we will start to see of the end for roaming. Operators and infrastructure the first deployments. (Machina M&A OK Services that allow users to vendors need to watch out: if Research) l In 2013 European regulators avoid roaming charges already they don’t take charge of the will increasingly accept operator exist for voice and data. Some wider industry open interface ENTERPRISE consolidation. This will be operators, who do not have a R&D and standardisation the catalyst to revitalise the lot of roaming margin to lose, efforts someone else will. The business end European market, boost network may attack and offer their (Northstream) l Enterprise software vendors investments moving forward and own multi-IMSI services. The will continue to step up their allow regained competitiveness conventions that govern how Marriage and divorce app transformations with social and sustainability. roaming is handled are already l Amazon partners with technology acquisitions. Look (Northstream) starting to fall apart. (Coleago HTC to produce a range of for Microsoft to beef up its Consulting) smartphones by the end of CRM/customer experience Monetising data 2013. The online retailer selects offerings by acquiring a l The UK will be the first Mapping it out HTC as a strategic partner and community management Western European country l Some operators may go all takes a stake in the Taiwanese platform like GetSatisfaction or to generate more revenue the way and break the link company to secure long-term Lithium. (IDC) from mobile data than voice between the mobile number commitment. (CCS Insight) in early 2013. The pattern will and geography. We are likely l The impact of the full- be repeated across Europe in to see offerings from mobile l Device manufacturers will use scale rollout of unified the following two years. (CCS operators where the national the same hardware for different communications-as-a-service Insight) number can in effect be used operating systems. In 2013 the (UCaaS) will begin to be felt in across the whole EU as if the selection of platform will be 2013. (Ovum) NETWORKS customer was in the home made by operators and major country. (Coleago Consulting) channel distribution partners, l Tier-two players will bid for Got it covered but by 2015 consumers will be smaller IT service deals with l Despite discussion to the Top dog able to select their preferred enterprises, meaning tier-one contrary, LTE rollout will l Ericsson will be the most software at the point of sale. operators will need to position actually result in operators successful traditional network Chinese manufacturers will be themselves accordingly. (Ovum) requiring fewer small cells than infrastructure vendor due to the first to offer this approach. before. The combination of sub- its mobile radio access network (CCS Insight) ENTERTAINMENT 1 GHz spectrum with higher (RAN) and core portfolio, as bands enables better delivery well as its growing software and Dressing up Leisure time of mobile broadband indoors. services offerings. (Ovum) l 2013 will be the launch year l Microsoft will buy Tivo However, operators will turn to for wearable devices, with device by mid-2014 and integrate WiFi to fill in gaps in coverage. DEVICES announcements and launches its technology in the next (Northstream) expected from key players generation Xbox. The Power play such as Apple and Microsoft, acquisition is fuelled by Beginning of the end l China’s ZTE will compete for following in Google’s footsteps. Microsoft’s desire to increase l It will take a long time before a position among the world’s (Juniper Research) its presence in the living room. we see the end of 2G, but 2012 top three smartphone makers (CCS Insight) was the starting point, with based on its phenomenal Keep it SIMple AT&T (2017) and Verizon (2021) growth rate and strong position l Most importantly for M2M, l Expect a surge in activity announcing the switch off of in emerging markets. (IDC) but with potentially massive within social gaming throughout GSM and CDMA networks ramifications for the rest of the 2013, both in terms of real respectively. The move to l Apple and Samsung have mobile industry, 2013 will be money plays and greater refarming will continue in 2013 the power to drive and the year of the reprogrammable gambling app integration as operators look to reduce their finance innovation, R&D and SIM. Many of the issues relating with social network platforms. cost per bit. (Machina Research) standardisation efforts, bringing to standardisation will be (Juniper Research)

16 www.totaltele.com December 2012/January 2013 Asia Communication Awards 2013 Celebrating the success of Asian telecoms, globally

20 June 2013 • Conrad Centennial, Singapore

Talk to us about sponsorship opportunities today! Call Oliver Chandler on +44 (0) 207 608 7023 www.asiacommsawards.com

Sponsored by:

 

  

awards

A To tal Te l ecom Production Coming soon! The all new Themed monthly issues, starting with ‘LTE’ in February 2013 Business analysis for telecoms professionals, now optimised for reading on a tablet or smartphone News and trend-driven analysis of major industry developments

Infographic-style snapshots of key global telecoms markets Industry Editorial events comment calendar

If you’re not receiving your copy of Total Telecom+ each month please email [email protected] to ensure you’re on our mailing list sponsoresectiond vie hweapointder

NETWORK SERVICES CAN WE TALK ABOUT VOICE? The death of voice has been greatly exaggerated, but the telecoms industry still needs to move with the times, according to IDT.

or many years, the telecommunication best delivers more than they could separately. For industry has been obsessed with bytes and IDT that means providing the global reach, rates Fbandwidth. It seems that data has been the and quality that our partners rely on to always focus of strategy, investment and analysis almost deliver on promises made to their customers. IDT since the sending of the first SMS over 20 years also has its own large retail business enabling it to ago. At best, voice appears to be unfashionable, or bring even more benefit to its partners as we can at worst, in terminal decline. provide a direct and successful primary source of Yet despite this commonly held outlook, voice minutes from large consumer markets. still makes up a huge proportion, and usually the The voice market is often characterized by a vast majority, of operators’ revenues across the trade-off between price and quality. IDT eases world. As Steve Jobs said, “the killer app is making this quandary by offering four service levels: Nick Ford calls!” Moreover, the voice market is still growing, Platinum, Gold, Silver and Bronze. This empowers President, carrier albeit in different and slower ways than it has operators with the control to choose the level of services historically. Yes, still growing despite the global service that is right for their business. Platinum IDT economic climate, the maturity of the market and offers only tier-1 quality termination, utilizing frequent market entry of disruptive players. our over 500 direct routes. Our online self-manage- IDT continues to be a leader, innovator and ment portal IDT Express gives partners choice partner of choice in the voice market. We carry and control over their wholesale business in a over 30 billion of international minutes per year. quick, convenient and customized way. Our network has private IP, public IP and TDM While the rumours of the death of voice have connectivity with the ability to carry over 450,000 been greatly exaggerated, like any business with a simultaneous calls. Our voice business has grown long record of success, IDT is not oblivious to the in both minutes and revenues in the last 12 months. need to uncover new revenue for itself and for its customers. By applying our understanding and The voice market can expertise in marketing to foreign-born communi- ties across the world (a market of over 200 million provide a robust revenue people) we’re applying innovation for commercial success. Our marketing-leading IMTU service stream across the globe enables those living and working abroad to top up the prepaid mobiles of their loved one back home. Regions such as South America, Africa and Asia This enables them to reach their world better and are proving especially dynamic for both wholesale allows domestic networks to expand their brand voice and our newer portfolio of products such as and revenues into markets they may have consid- International Mobile Top Up (IMTU). ered beyond their grasp. Our increasing number We’ve been an over-the-top (OTT) operator for of banking licences allows us to offer an expand- over 20 years, ever since we launched the first ing range of bill payment and gift cards that bridge commercially available VoIP services through our distances in the global village. Net2Phone subsidiary. We continue to build on Our white label portfolio IDT Beyond enables our innovative VoIP heritage. VoiceLine allows our partners to uncover revenue using IDT’s our partners to expand their broadband services expertise, products and platforms with the to include residential and small business VoIP. strength of their own brand. Together we uncover They can also offer a full suite of unified commu- new revenue at home and abroad from a wide nications services by adding our SIP trunking range of services, including VoIP, IMTU and, of services to their portfolio. course, international long distance services. Our history shows that by taking a partnership The voice market can provide a robust, growing approach, operators can uncover opportunities revenue stream across the globe and lead into the and grow the market for everyone’s benefit. uncovering of many new opportunities, new Sustainable partnerships deliver benefits for all markets and new revenue. If you or your company parties. Each partner focusing on what they do disagrees, let IDT talk to you about it. n

December 2012/January 2013 www.totaltele.com 19 PEOPLE

EXECUTIVE CHANGES REVOLVING DOOR A round-up of the major management changes in the telecoms industry in 2012, start- ing with Yahoo, where executives continued to come and go. By Mary Lennighan

here is one job in the telecoms its declining revenues and display adver- ousted, reportedly because he disagreed industry that noone seems to be tising market share. She has already with the company’s strategy. Stephane Table to hold on to: Yahoo CEO. begun to stamp her influence on the Roussel became SFR’s new CEO. The current holder of the post Marissa company, with a number of top execu- Vodafone, meanwhile, split Combes’ Mayer has been in place since July when tives having left since she arrived, role in two, with Philipp Humm taking she became the US-based Internet compa- including Levinsohn and CFO Tim responsibility for Northern and Central ny’s sixth CEO in five years. Mayer joined Morse, who also filled the acting CEO Europe and Paolo Bertoluzzo for Southern Yahoo from rival Google, where she spent post for a time. Europe. The mobile operator also made a 13 years, most recently looking after its Yahoo was not the only company to number of management changes follow- local, maps and location services busi- shuffle its top management in 2012. Next ing its £1.04 billion acquisition of Cable & ness. She replaced interim CEO Ross year all eyes will be on John Legere, who Wireless Worldwide. In July it named Levinsohn, who stepped into the breach was named as T-Mobile USA’s new CEO Vodafone Global Enterprise CEO Nick following the sudden departure of Scott in September after Philipp Humm Jeffery to the post of C&W chief execu- Thompson earlier in the year. defected to Vodafone. His appointment tive, replacing Gavin Darby, and brought Thompson was appointed to the top came just weeks before the telco in a number of its own people to the CFO job in January, bringing with him the announced plans to merge with rival and CTO roles, amongst others. There was a new CEO for Vodafone Germany this year in Jens Schulte- One of the really important things for Yahoo’s Bockum; Luiz Alvarez became CEO of strategy moving forward is mobile BT Global Services; and Svein Aaser took over as Telenor chairman, the Norwegian Marissa Mayer, November 2012 (interview with CNN) government expressing a lack of confi- dence in his predecessor Harald Norvik. promise of some stability for Yahoo after MetroPCS; presuming the tie-up receives Further afield, a number of new CEOs a turbulent period under Carol Bartz. But the required regulatory approvals, former took up their posts, including Hans- not everyone was optimistic about his Global Crossing CEO Legere will head Holger Albrecht at Millicom International chances of success, with many industry- up the combined entity. In addition to Cellular, Carl Grivner at Pacnet, Simon watchers pointing out that he lacked overseeing the integration of two telcos, Moutter at New Zealand’s Telecom Corp, experience in display advertising. At the Legere is charged with making T-Mobile Tarek Aboualam at Telecom Egypt, and same time Yahoo announced the depar- USA a stronger competitor against giants Andrea Mangoni at Telecom Italia’s South ture of co-founder Jerry Yang, a move AT&T and Verizon. It is no easy task. American business. many believed would lead to the company Neither is it a simple manoeuvre to There were also changes for the being sold. launch a new mobile operator in the US, vendors. The year opened with the news That did not happen, and neither did as former LightSquared CEO Sanjiv Ahuja that Thorsten Heins would become the Thompson prove to be the firm hand on found out to his cost this year. Ahuja left new leader of Canada’s RIM, replacing the tiller that Yahoo needed. Just four his job in February after the FCC blocked co-CEOs Mike Lazaridis and Jim Balsillie; months into his tenure Thompson was LightSquared’s plans to launch a whole- Lazaridis became vice chairman of the forced out as it was discovered that Yahoo sale LTE network. Douglas Smith is now board, while Balsillie left the company. had misrepresented his academic creden- the company’s chairman and CEO. Sony named insider Kazuo Hirai as its tials in its SEC filings. Yahoo insisted it High-profile executive changes in new president and CEO, and later was simply a mistake, but the pressure on Europe were few and far between this appointed Kunimasa Suzuki as chief Thompson mounted and, amid vocal year, but there are a couple of names executive of Sony Mobile, replacing Bert criticism of the company’s management worth mentioning. Frank Esser stepped Nordberg. In July the industry mourned from activist investor Third Point, he down as CEO of French mobile operator the passing of Tellabs CEO Rob Pullen; became the latest to experience the Yahoo SFR in March. He was due to be replaced Daniel Kelly has since taken on the role revolving door. by former Vodafone Europe head Michel on a permanent basis. And in November And so, enter Marissa Mayer, who will Combes, but Combes apparently walked it emerged that Matt Bross had left his have to leverage all her years of experi- away after Jean-Bernard Levy, CEO of role as CTO at Huawei. We expect to see ence at Google to help Yahoo turn around SFR’s parent company Vivendi, was him reappear in the industry in 2013. n

20 www.totaltele.com December 2012/January 2013 WINNER’S STATEMENT THE GREEN AWARD: Vipnet

THIS YEAR THE recipient of The Green not possible to generate energy from wind awareness of energy efficiency issues, as Award is Croatian telecommunication or sun and if the batteries for energy storage well as promoting clean energy and social operator Vipnet, a leading innovator and are empty, the installation uses hydrogen as responsibility in an effort to bring Vipnet’s complete communication services provider in an auxiliary source that, by leaving no by- modern telecommunication services closer the country. products other than water, is proposed as a to customers. Vipnet is part of the Telekom Austria Group, green alternative to the internal combustion “I’m thrilled with this recognition as it shows and is a strategic partner of Vodafone. Vipnet’s engine. Vipnet is leading the way with the sustainable hybrid base station (commercially known The initiative for the hybrid system came technologies we are implementing. This as KONCAR Hybrid Box) is powered by an from Vipnet and was further developed into is further encouragement to continue our autonomous energy supply system using a prototype in cooperation with experts from investment in green business, and for renewable sources that, besides sun and the KONCAR Electrical Engineering Institute investing in innovations in general,” said wind, for the first time also include fuel cells. in only 10 months. The first hybrid base Mladen Pejkovic, Vipnet CEO This power system autonomously produces station in the whole of Southeast Europe was Environmental protection has always been 99.9% useable energy. When the station is announced and set up in the Croation region an important component of sustainable of Slavonia in late June 2011. The system development for Vipnet and this hybrid base consists of 3 separate components which station is a real example of a solution for can be modularly arranged according to the both energy and business efficiency. Seeing conditions and the needs of a given location. business through a “green” perspective An advanced control system ensures optimal enables Vipnet to predict future trends and utilisation of each renewable energy source develop adequate business models as well depending on its current availability, so this as to enhance its brand values. The awarded base station is proved useful on remote and eco-friendly base station is the proof of Vipnet’s inaccessible areas and can be considered social and environmental responsibility and a 100% clean energy source that improved trust in domestic scientists’ and engineers’ the efficiency, reliability and sustainability of expertise. In 2013 Vipnet’s goal is to further Vipnet’s network. Additional value comes develop the project and erect new hybrid from raising both general public and industry base stations all over Croatia.

WWW.VIPNET.HR prime numbers contacts

EDITORIAL REVENUE POTENTIAL IN MENA ‘Merry 4th Floor, Welken House, Telecoms revenue in the Middle East and North Africa (MENA) 10-11 Charterhouse Square, London EC1M 6EH +44 (0)20 7608 7030; [email protected] will grow by 27% between 2012 and 2017 to US$96.4 billion, Christmas’ according to Analysys Mason. However, operators in the region The text of the first SMS TOTAL TELECOM message sent 20 years Mary Lennighan [email protected] are under pressure to increase the average revenue per user Editor +44 (0)20 7608 7069 (ARPU) of their high-value customers as new customer ago, in December 1992 Nick Wood [email protected] Assistant Editor +44 (0)20 7608 7046 additions will come primarily from lower-income groups. They Michelle Young [email protected] will seek to do this by encouraging greater mobile data usage, Art Editor the analyst firm predicts. ARPU in the MENA region will continue MOBILE GROWTH to decline, but will level off during the forecast period; ARPU will IN AFRICA advertising slip to $11 and $10.9 per month in 2016 and 2017 respectively, Head office, london Mobile penetration in Jessica Gillies [email protected] down from $12.5 in 2011 and $15.3 two years earlier. Mobile will Africa is set to exceed Sales Manager +44 (0)20 7608 7027 increase its dominance of the voice market; 91% of voice 80% in the first quarter of Oliver Chandler [email protected] Events Manager +44 (0)20 7608 7041 connections in 2017 will be mobile, up from 86% last year. 2013, up from 76.4% in Meanwhile, 87% of voice traffic will originate on a mobile the third quarter of this United States and Canada connection by 2017, up from 79% in 2011. KCS International year, ABI Research T +1 717 397 7100 F +1 717 397 7800 TELECOMS RETAIL REVENUE BY SERVICE predicts. However, there Karen C Smith-Kernc – East [email protected] Alan Kernc – West & Canada [email protected] CATEGORY, MIDDLE EAST AND NORTH AFRICA is still growth potential in the market, given that Japan 100 n Mobile voice n Messaging n Mobile broadband many people own Hiroko Kujime [email protected] n Handset data n Fixed voice n Fixed broadband Pacific Business T +81-3-3661-6138 F n Dial-up n Business network services multiple prepaid SIM +81-3-3661-6139 cards, the analyst firm 80 points out. Mobile production/ subscription/ subscriptions in the customer services continent will grow to Please forward all advertising material directly to: 60 [email protected] 1.12 billion by 2017, up Aleisha Bryant [email protected] from 821 million in Q3 Customer Services Executive +44 (0) 7608 7042 or subscribe free at: www.subscription.co.uk/totaltelecom 40 2012.

marketing Retail revenue (US$ billions) Retail revenue 20 Tally Judge [email protected] Marketing Manager +44 (0)20 7608 7076 $2.1 trillion Ruth Clark [email protected] Worldwide IT Marketing Executive +44 (0)20 7608 7047 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 spending in 2013, up 5.7% from 2012 EVENTS Source: Analysys Mason 2012 Matthew Secker [email protected] (IDC) Conference Director +44 (0)20 7608 7039 Charles Georgiou [email protected] Project Manager +44 (0)20 7608 7071 114 million IPTV CHASING SATELLITE, CABLE The number of global pay TV customers will reach 719 MANAGEMENT active LTE connections Rob Chambers [email protected] globally by the end of 2013, million this year, up 6% on last year, according to Infonetics Publisher +44 (0)20 7608 7077 rising to 258 million by Research. While cable still takes the lion’s share – over 60% Greg Hitchen [email protected] Chief Executive Officer end-2014. of all subscriptions in the first half of 2012 – growth is (Yankee Group) strongest in the telco IPTV sector, which rose by 19% sequentially in 1H 2012. The market, including cable, satellite OTHER PUBLICATIONS Online: www.totaltele.com and IPTV, totalled $137 billion in 1H, up 9.4% year-on-year. Television: www.totaltele.tv EUROPEAN CONTENT Verizon and AT&T are neck-and-neck for revenue share in REVENUES TO REACH the telco IPTV market, followed by France Telecom and Total Telecom Events €10 BILLION Deutsche Telekom in Europe, and NTT and CTC in Asia, the World Communication Awards Increasing numbers of analyst firm said. www.worldcommsawards.com people in Europe are willing Asia Communication Awards PAY TV SERVICES TO BRING IN $371BN WORLDWIDE BY 2016 www.asiacommsawards.com to pay for online content Total Telecom World $400 n Telco IPTV www.totaltele.com/world services like music, games Total Telecom Finance Summit n Satellite video and news, and as a result www.totaltele.com/financesummit n Cable video revenue from paid content Network Management Show www.totaltele.com/network will grow €10.2 billion by 2017, up 65% on the €6.2 billion figure for 2012, Total Telecom+ is published by according to Forrester Research. The analyst firm

predicts that by 2017 20% of Revenue in US$ billions the region’s tablet users will © 2012. All rights reserved. pay for news, while 60% of 0 Terrapinn Holdings Ltd registered office: video purchasing will be 2012 2016 4th Floor Welken House, 10-11 Charterhouse digital. Source: Infonetics Research Square, London EC1M 6EH

22 www.totaltele.com December 2012/January 2013