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Eurobites: Telefónica Looks to Offload China StakeEurobites: Telefónica Looks to Offload China Stake

Also in today's EMEA regional roundup: Vodafone under pressure from activist hedge fund; Germany's termination fees plan face EC scrutiny; BT in broadband marketing offensive.

Paul Rainford

November 10, 2014

3 Min Read
Eurobites: Telefónica Looks to Offload China Stake

Also in today's EMEA regional roundup: Vodafone under pressure from activist hedge fund; Germany's termination fees plan face EC scrutiny; BT in broadband marketing offensive.

Telefónica SA (NYSE: TEF) is looking to raise up to $875 million through the sale of its stake in China Unicom Ltd. (NYSE: CHU), according to Bloomberg. Telefónica established a presence in China in 2005, when it bought nearly 3% of China Netcom Group (Hong Kong), which was later swallowed by China Unicom. Nearer to its home base, meanwhile, Telefónica Deutschland GmbH 's increased marketing spend took its toll on third-quarter earnings, according to a Reuters report. Less than a month after announcing it was to cut almost a fifth of its workforce following its takeover of E-Plus, the operator posted core earnings down 15% year-on-year to €248 million ($309.4 million). Revenues, however, remained stable at €1.22 billion ($1.52 billion), which is no mean feat in itself in the current super-competitive German market. And, to complete today's Telefónica news triptych, the carrier has joined a consortium of digital heavy-hitters that is aiming to set up ODINE, a network of open data startups in the European Union. (See Telefónica Helps Form Open Data Group, Eurobites: Telefónica Deutschland to Slash Jobs and Eurobites: Telefónica Gets EC Green Light on E-Plus Deal.) Vodafone Group plc (NYSE: VOD) has had a complaint filed against it in the German courts by activist hedge fund Elliott Management Corp., which claims that the operator should have paid €250 a share -- roughly three times more than it actually paid -- for Kabel Deutschland GmbH , the cable operator Vodafone acquired earlier this year. As Bloomberg reports, Elliott claims that Vodafone may be required to pay more than €8 billion ($10 billion) to make amends for its "under-payment," though Vodafone dismisses the claim, saying "nobody should take this seriously." (See Euronews: Vodafone Strikes €7.7B Kabel Deal.)Neelie Kroes may have hung up her boots as the European Commission's telecom enforcer-in-chief, but that doesn't mean Brussels is getting noticeably more relaxed about the sector: The EU telecom regulator has started an investigation into Germany's plans to allow termination fees that are three times the EU average, reports Reuters. (See Kroes Decries Divided Europe) BT Group plc (NYSE: BT; London: BTA) has unveiled an aggressive marketing campaign to attract more broadband and TV customers with the launch of a services bundle that includes its Infinity broadband, BT TV, Netflix and a small YouView set-top box for just £5.99 per ($9.52) month for the first six months, after which it will be £20.99 ($33.37). There are also installation, activation and delivery charges too of potentially more than £55 ($87), and broadband usage thresholds, so while the headline offer looks attractive, the devil is always in the detail when it comes to broadband packages of any type (and from any service provider). The pre-Christmas timing is interesting, though, and BT looks likely to put pressure on rivals such as TalkTalk with this new offer. The plot thickens over Portugal Telecom. Isabel dos Santos, the daughter of Angola's president, has made a €1.20 billion ($1.49 billion) bid for Portugal Telecom SGPS SA, the holding company that owns a slice of the combined Portugal Telecom/Oi operation, reports Bloomberg. Oi, based in Brazil, is currently weighing up a €7 billion bid for its Portuguese assets from France's Altice.— Paul Rainford, Assistant Editor, Europe, Light Reading

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About the Author(s)

Paul Rainford

Assistant Editor, Europe, Light Reading

Based on the Isle of Wight, a rocky outcrop off the English coast that is home only to a colony of technology journalists and several thousand puffins, Paul has worked as a copy editor and sometime writer since the age of William Caxton, covering the design industry, D-list celebs, tourism and much, much more.

During the nougthies he took time out from his page proofs and marker pens to run a small hotel with his other half in the wilds of Exmoor. There he developed a range of skills including carrying cooked breakfasts, lying to unwanted guests and stopping leaks with old towels.

Now back, slightly befuddled, in the world of online journalism, Paul is thoroughly engaged with the modern world, regularly firing up his VHS video recorder and sending text messages to strangers using a chipped Nokia feature phone.

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