Also in today's EMEA regional roundup: Safaricom comes on strong; Sweden approves Tele2/Com Hem deal; Spotify shares slump on margin-shaving plans; inventor of web says 'careful now.'
UK telecom regulator Ofcom has launched a consultation on proposals to allow greater access to the ducts and poles of BT Group plc (NYSE: BT; London: BTA)'s quasi-autonomous network access arm, Openreach . The plan is that any type of telecom service, be it high-speed leased lines for large businesses or networks carrying data for mobile operators, will be able to piggyback on Openreach's infrastructure. In geographic areas where competition in this market is low, Ofcom is proposing price caps on BT, though lighter regulation will apply in areas where stronger competition is more likely. The consultation closes on January 18. (See BT, Ofcom & the Battle of Britain.)
Kenyan market leader Safaricom Ltd. reported another strong fiscal half year to the end of September, with significant increases in revenues and earnings plus a further bump to its customer base, which stood at nearly 30 million at the end of September (in a country with a total population of about 50 million). The operator, which is now investing in FTTH infrastructure as well as expanding its 3G and 4G coverage, reported earnings before interest and tax (EBIT) of 44.6 billion Kenyan shillings ($439 million), while net income was up by more than 20% to KES31.5 billion ($310 million) on revenues of KES122.84 billion ($1.21 billion). Its share price gained more than 4.2% in morning trading on the Nairobi exchange. (See Safaricom Reports Strong Growth in Fiscal First Half.)
The Swedish regulatory authorities have approved the merger between Tele2 AB (Nasdaq: TLTO) and Com Hem AB . The deal is valued at about US$3.3 billion and Tele2's hope is that it will make it better able to offer a full range of fixed and mobile services to its customers, thereby providing a serious challenge to market leader Telia . The deal was given the green light by the European Commission last month. (See Sweden's Tele2 to Swallow Com Hem in $3.3B Deal.)
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Shares in Sweden's Spotify fell by almost 10% on Thursday when the popular music-streaming service indicated it would seek to reduce its operating margins "for the foreseeable future." As Reuters reports, Spotify basically beat itself up for not spending enough on hiring more engineers. The company generated €1.35 billion ($1.54 billion) of revenue in the third quarter, just beating the €1.33 billion ($1.52 billion) estimate.
Tim Berners-Lee, who many view as the man who "invented" the web, has warned that there is a "danger of concentration," with the likes of Google and Amazon having far too much power in the online world. As if! But Berners-Lee also told Reuters that technological innovation may end up cutting down the current online giants down to size anyway, so we might all be worrying about nothing.