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Eurobites: Rankings & Rumors

Light Reading
News Analysis
Light Reading
4/28/2005

Goddag, and velkommen to the latest news morsels from that multitude of disparate nations collectively known, to some, as Yoorup.

As usual there's no shortage of M&A tittle-tattle, but that's not the only topic taxing the minds of the continent's telecom folk. We have an authoritarian European Union getting heavy with its members, a global ranking of e-readiness that's flattering to the Scandinavians, and the latest on Huawei Technologies Co. Ltd.'s growing European presence.

But never mind about that: let's talk livestock… E-Ready, Willing, and Able
Did you know there are four times as many pigs in Denmark as there are people? That's the world's highest swine-to-human ratio, for those who like rankings. And that's not the only table the Danish currently top.

According to the Economist Intelligence Unit, Denmark is, for the second year running, the most "e-ready" country in the world, with a score of 8.74 out of 10, just pipping the good old US of A (8.73) into second place.

The Europeans, and especially the Scandinavians, dominated the top 10, while some of the countries with very high broadband penetration, such as South Korea (18th) and Taiwan (22nd), were further down the table.

Table 1: Economist Intelligence Unit E-Readiness Rankings, 2005

2005 e-readiness rank 2004 rank Country 2005 score 2004 score
1 1 Denmark 8.74 8.28
2 6 US 8.73 8.04
3 3 Sweden 8.64 8.25
4 10 Switzerland 8.62 7.96
5 2 UK 8.54 8.27
6 tie 9 Hong Kong 8.32 7.97
6 tie 5 Finland 8.32 8.08
8 8 Netherlands 8.28 8
9 4 Norway 8.27 8.11
10 12 Australia 8.22 7.88
Source: The Economist Intelligence Unit




Not all the Europeans did well, though. France came 19th, while Spain came 23rd and Italy 24th.

How do you measure such a thing? Using a methodology based on six categories refined during the past five years, of course. The six categories (and their weight in the model) are: connectivity and technology infrastructure (25%); business environment (20%), using the 70 indicators covered by the Economist Intelligence Unit's business environment rankings; consumer and business adoption (20%); social and cultural environment (15%); legal and policy environment (15%); and supporting e-services (5%).

And for those of you wondering, that's 23 million pigs to 5.3 million people.

The Great Dane Rumor Mill
Denmark's also been at the heart of some recent M&A rumors, too. Having been named as a potential acquirer of pan-European operator Colt Telecom Group plc (Nasdaq: COLT; London: CTM.L) -- a rumor since denied by Colt -- Danish incumbent TDC A/S (Copenhagen: TDC) is now the subject of takeover talk (see Eurobites: Wind, Reign & Sunny Spells).

Local newspaper Jyllands-Posten reported that former TDC executives had been contacted by unnamed investment funds that are planning a swoop. The carrier, which isn't commenting on the tittle-tattle, recently abandoned its stock ownership limit, leading to suggestions by analysts that bids might be entertained.

TDC has been busy lately, having strengthened its Scandinavian business by acquiring Song and cutting costs by chopping back its headcount (see TDC Buys Song, Reports Q3 and TDC Reports 2004, Cuts Jobs).

Europe's Bad Boys
What is the European Commission to do? It makes all these lovely rules and regulations about telecom, or electronic communications, and then nearly half of the EU countries ignore them!

The latest transgressors are Germany, Italy, Latvia, Malta, the Netherlands, Austria, Poland, Portugal, Slovakia and Finland, and in a scary news release the EC noted that it had started legal proceedings against the countries (see EU Acts Against Rule Breakers).

But the EC's bark is worse than its bite. It has been down this road before, having initiated "infringement proceedings" against nine countries back in December 2003 (see EC Acts Against Laggards).

And everyone knows that the pan-European legal process can get snarled up in lawyers' offices and courtroom delays for years. The end result? Member countries know they're unlikely to ever be severely penalized for dragging their heels, and the power-wielding incumbent operators can easily continue with anti-competitive practices long after they're supposed to have engineered a level playing field for competition.

Huawei Makes Inroads in Iberia
Having landed itself a DSLAM deal with French broadband challenger Neuf Telecom, Chinese vendor Huawei now seems to have had success further south in Spain with another triple-play hopeful, Jazztel plc (see Neuf: Time Is Right for IPTV).

The operator is making a big push into the broadband sector, and is aiming to sign up nearly 200,000 DSL subscribers this year. To do that it is unbundling the local loop and, apparently, installing Huawei DSLAMs into Telefónica SA's local exchanges.

Huawei is acting all shy about its Spanish deployment, though, and hasn't responded to requests for further information. It's also keeping quiet about reported plans to set up a regional headquarters in Hungary.

Best of Friends
Just what is a partnership worth these days? Take Alcatel (NYSE: ALA; Paris: CGEP:PA) and Microsoft Corp. (Nasdaq: MSFT). They're supposed to be best buddies in the world of telco TV these days (see Alcatel, Microsoft Confirm IPTV Deal).

But when Alcatel announced today that European incumbent Swisscom AG (NYSE: SCM) was using its multiservice access gear, or Intelligent Services Access Manager (ISAM), to deliver IPTV services, there wasn't a mention of its dear friend Microsoft (see Vendors Claim DSLAM Breakthrough).

An oversight, perhaps? Or maybe Swisscom decided against deploying the Microsoft middleware following its, er, difficulties? (See Swiss IPTV Trial Hits 'Glitches').

Alcatel says this is just about the infrastructure, but couldn't say which middleware system was being integrated. That was left to the Microsoft team, which confirmed its IPTV Edition was still the ensconced in the Alps. Nice to see they're getting on.

Other European news of note:

— Ray Le Maistre, International News Editor, Light Reading

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