Eurobites: Operators Brief Against OTT Crowd

News Analysis Paul Rainford, Assistant Editor, Europe 6/17/2015

Also in today's EMEA regional roundup: Ericsson eschews M&A; AlcaLu's G.fast gateway; Now TV's Sky slot.

Top European operators are putting renewed pressure on the European Commission to create a more level playing field in the telecom market, calling for measures that will address what they perceive as the "asymmetries" between how they and OTT players such as WhatsApp are regulated. The Financial Times reports (subscription required) that Deutsche Telekom AG (NYSE: DT), KPN Telecom NV (NYSE: KPN), Orange (NYSE: FTE) and Telefónica SA (NYSE: TEF) are among those to have put their names to a letter sent to Donald Tusk, president of the European Council, calling for a "profound and sustainable overhaul of the current telecoms rules."

After conducting a management review, Ericsson AB (Nasdaq: ERIC) has decided that future expansion will probably not depend on major acquisitions in the short term, reports Reuters. There had been press speculation that Ericsson might look to counter the threat of a combined Nokia Corp. (NYSE: NOK) and Alcatel-Lucent (NYSE: ALU) by acquiring Ciena Corp. (NYSE: CIEN) or Juniper Networks Inc. (NYSE: JNPR). (See Will Ericsson Join the M&A Arms Race? and Ericsson Not Planning Big M&A Response to Nokia/AlcaLu.)

Elsewhere on Planet Ericsson, the vendor has landed a five-year 4G managed services contract with Smile Communications, which offers mobile services in Nigeria, Tanzania, Uganda and Democratic Republic of Congo.

Alcatel-Lucent has launched a G.fast residential gateway which, it says, can be installed on the customer's premises without the need for an engineer's visit. Once the device is plugged in, consumers will be able to receive G.fast service with download speeds of up to 750 Mbit/s and beyond over copper, according to AlcaLu, though of course that is very dependent on the proximity of any G.fast network equipment to the end user. (See A Guide to G.fast.)

Sky has been revealing some insights into the element of its customer base which eschews a monthly contract with the satellite broadcaster and instead opts for its Now TV pay-as-you-go option, which is delivered over the Internet. According to Sky's Stephen van Rooyen, there is little crossover between the two customer subsets -- more than 90% of Now TV customers had never considered committing to a standard Sky contract before signing up. Also, almost 40% of Now TV customers also subscribe to Netflix and around 20% of them use it alongside Amazon Prime's streaming service. A new report from IHS, cited by Broadband TV News, claims that without Now TV, Sky's subscriber base declined 52,000 in the first quarter of 2015 compared with the same period a year earlier.

Members of Telco, the soon-to-be-dissolved investor group controlling more than a fifth of shares in Telecom Italia (TIM) , have been told they will be able to sell those shares as from next week, reports Reuters. Telefonica is one of the four Telco investors.

— Paul Rainford, Assistant Editor, Europe, Light Reading