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Euronews: Telcos Must Get Radical on Cuts, Finds Study

Paul Rainford

Also in today's EMEA regional roundup: Vodafone gets together with MoneyGram; Lenovo looks to Africa; Nokia goes Android?

  • European operators need to cut as much as €100 billion (US$136.6 billion) from their costs if the sector is to become sustainable, according to a study by AlixPartners, a business consultancy. A report (subscription required) in the Financial Times says the study found that around 60% of executives asked admitted that they would like to adopt "radical" approaches to cost-cutting but that their companies' strategy on trimming expenditure had changed little over the last five years: They have, in effect, become "paralyzed" by the challenges facing them, concludes the study. (See Euronews: No Respite for Europe's Telcos .)

  • Vodafone Group plc (NYSE: VOD) has entered into an agreement with MoneyGram, the money transfer company, to allow MoneyGram customers to transfer funds directly to M-Pesa, Vodafone's mobile payment service that is used widely in Africa and India. As well as carrying out the transfers via MoneyGram agents, MoneyGram customers will also be able to transers to M-Pesa users online, through the MoneyGram website or an app that is available on iPhone, Android, and Windows 8 phones. For more details, see this press release.

  • Speaking of Vodafone, the group's CEO, Vittorio Colao, has been warning US operators that making money in Europe might not as easy as they think. "I don't think there is a huge amount of teaching that can be done to the Europeans," the Daily Telegraph reports him as saying. According to Colao, it is only the number of regulatory hoops that European operators have to jump through that has them lagging behind on the rollout of 4G. Vodafone's sale of its 45% stake in Verizon Wireless is expected to make it a more attractive takeover target for US operators casting a covetous eye across the Atlantic. (See Euronews: Vodafone in M&A Rumor Frenzy.)

  • Lenovo Group Ltd. (Hong Kong: 992), which last month agreed to buy Google (Nasdaq: GOOG)'s Motorola Mobility handsets unit, is planning to expand its smartphone business in West Africa with product launches lined up for Nigeria, Ghana, and Ivory Coast, reports Bloomberg. As PC sales dwindle worldwide, Lenovo is shifting its focus away from its traditional business and towards smartphones. (See Asia Strengthens Its Grip on Smartphone Market.)

  • Is Nokia Corp. (NYSE: NOK) about to unveil a new Android phone? That is what's being reported on Reuters, citing the Wall Street Journal. According to those in the know, the phone will be aimed at emerging markets and will feature a stripped-down version of the all-conquering operating system.

    — Paul Rainford, Assistant Editor, Europe, Light Reading

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    User Rank: Light Sabre
    2/11/2014 | 2:06:03 PM
    Re: Nokia
    Project normandy or nokia x started back in the time when nokia was experimenting android and deciding on which way to go. If I were Nokia, with the hw quality it can produce, and I could go with 2 oses, I wouldn't go with an entry level phone without play store as a first approach. It is giving the phone no weapons to compete. At least start with a flagship Hw. A lot of people wanted a Nokia with Android on it, but now it is too late. And msft can't afford diverging the attention on its OS.
    User Rank: Blogger
    2/11/2014 | 11:31:19 AM
    Re: Nokia
    Not only that, but I'd be surprised to see it now given the Microsoft tie-up. Isn't it better to go big on Windows Phone versus try to do both?
    User Rank: Blogger
    2/11/2014 | 10:38:08 AM
    Operator cuts
    Avoiding radical changes when you already understand they need to be made? It sounds like the first cuts needed at these operators need to come at the top of the org chart.
    User Rank: Light Sabre
    2/11/2014 | 9:03:36 AM
    Nokia(or MSFT i'd say), you are years late!
    User Rank: Light Sabre
    2/11/2014 | 8:13:58 AM
    Chasing Away Competitors?
    Vodaphone's warning to U.S. operators of the stiff learning curve in Europe seems more of a bluff than anything. It would only serve their interests to keep the market as least competitive as possible. On the other hand, Nokia tries to enter the bare bones device market, seemingly a brave move to compete in a market that might not support another competitor even if they try near loss-leading pricing levels.
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