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Eurobites: Will EC's New Broom Sweep Away Regulation?

Paul Rainford
10/24/2014

Also in today's EMEA regional roundup: Ericsson's Q3; BT shares down following Morgan Stanley downgrade; Deutsche Telekom's M2M drive; royal tweeting.

  • Are Europe's telcos in for an easier ride from Brussels now that Neelie Kroes has left the building? That's what some might infer from the suggestion by Kroes's replacement as digital economy commissioner, Guenther Oettinger, that European regulators should take a more hands-off approach when it comes to policing telcos. As Reuters reports, Oettinger told German newspaper Handelsblatt: "So far, we have ensured that consumers benefit from the liberalisation of telecoms markets. From now on our actions must be more geared more toward allowing companies to make fair profits." (See Kroes Decries Divided Europe.)

  • Ericsson AB (Nasdaq: ERIC) reported an increase in third quarter revenues despite a year-on-year sales decline in North America, it's largest single region. China, India and the Middle East helped the Swedish giant hit total revenues of 57.6 billion Swedish kronor (US$7.93 billion), an increase of 9% year-on-year. Investors weren't thrilled, though, as currency exchange fluctuations hit the value of some major contracts, and Ericsson's stock dipped more than 3.2% to SEK82.75 on the Stockholm Exchange. (See Global Reach Helps Ericsson Grow in Q3.)

  • BT Group plc (NYSE: BT; London: BTA) shares fell 2.7% in early London trading following Morgan Stanley 's decision to downgrade the carrier from "equalweight" to "underweight," reports Reuters. Among other reasons given for the move, Morgan Stanley suggested that BT may need to increase its bid for rights to the UK's soccer Premier League coverage to nearly ₤1 billion ($1.6 billion), a fourfold increase on its most recent bid. (See Confirmed: BT's Got Euroballs and BT's Got Balls.)

  • Deutsche Telekom AG (NYSE: DT) has launched a European M2M partner program, aimed at the 15 machine-to-machine technology firms that have an existing relationship with the carrier. DT will support the partners with training and distribution. Providers from Poland, the Netherlands, Slovakia, the Czech Republic and Hungary have signed up to the program.

  • Underlying third-quarter revenues at Belgacom SA (Euronext: BELG) slipped 1% year-on-year to €1.48 billion ($1.87 billion), though underlying EBITDA (earnings before interest, tax, depreciation and amortization) rose 1.5% to €431 million ($546 million), prompting Belgacom to raise its full-year EBITDA outlook to "slightly positive." Steady there, fellers…

  • And finally… Britain's Queen has taken to Twitter, sending her first ever tweet to mark the launch of a technology exhibition at London's Science Museum. Using 135 characters, she said: "It is a pleasure to open the Information Age exhibition today at the @ScienceMuseum and I hope people will enjoy visiting. Elizabeth R." Just don't let your gaffe-prone husband near the account, for gawd's sake, ma'am.

    — Paul Rainford, Assistant Editor, Europe, Light Reading

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    kq4ym
    kq4ym
    10/27/2014 | 3:03:18 PM
    Re: Consumers Vs. Profits
    "So far, we have ensured that consumers benefit from the liberalisation of telecoms markets." they say. Whether the future of profits will therefore be assured is really a stab in the dark. There are so many variable of customer bases, costs and expenses, technology change that it really is going to be a wait and see question. And probably there's going to be the inevitable changes in policy as time moves forward.
    smkinoshita
    smkinoshita
    10/25/2014 | 3:07:29 PM
    Re: Consumers Vs. Profits
    That was my point; they got used to being the only player and let everything slide, so when it came time to have to actually compete they were completely lost and had already built up a lot of resentment amongst their customer base.
    SachinEE
    SachinEE
    10/25/2014 | 2:37:33 PM
    Re: Consumers Vs. Profits
    "In Canada, when Bell lost its monopoly not only did it find itself losing a lot of customers to its main competitor, but it was also completely unprepared to deal with the situation having had years to develop poor customer service habits.  This was a case where regulation helped a company survive, thrive and then become complacent and unable to fend for itself in the wild."

    Bell Canada for one is a HUGE company. For the losing customers, they have other subsidiaries like Bell Mobility and Bell Aliant helping them out in terms of crisis. You are right that proper regulation can ensure minimum consumer loss, however that comes if consumers manage to build confidence in the company over the years, which was not the case because of bad services.
    SachinEE
    SachinEE
    10/25/2014 | 2:33:41 PM
    Re: Consumers Vs. Profits
    Since a telecom company or an IT sector company serves a huge population base, losing a part of its consumers wouldn't be much of a problem for them. What really must be asked if the companies are willing to change for the consumers. Although business ethics lies down the rule "the decision which is found out to be the best for the greatest number of people should be the decision implemented", this is hardly followed as we are stepping into the age of context marketing, we really don't know what we need and therefore are washed down the marketing ladders of companies.
    nasimson
    nasimson
    10/24/2014 | 9:14:36 PM
    Re: Eastern front
    @mendyk:

    > Does this mean German Ms will be displaced by lower-cost Ms from Poland, Slovakia, et al?

    What do you mean by "Ms"? The German Ms? The lower-cost Ms?
    nasimson
    nasimson
    10/24/2014 | 9:13:08 PM
    Re: Consumers Vs. Profits
    > Companies need to make decent profits or there's no reason for them to be in business,
    > but they'll also take advantage of consumers when/while they can since their purpose is
    > to create profit.

    @smkinoshita:

    Companies should make a lot of profit to exist. But companies should not exist to make just profits. Companies should have a purpose.

    Same applies for Telcos.
    mendyk
    mendyk
    10/24/2014 | 11:14:51 AM
    Eastern front
    Re DT's M2M outreach to East Euro partners: Does this mean German Ms will be displaced by lower-cost Ms from Poland, Slovakia, et al?
    smkinoshita
    smkinoshita
    10/24/2014 | 11:03:17 AM
    Consumers Vs. Profits
    "From now on our actions must be more geared more toward allowing companies to make fair profits."

    That's going to be an ongoing balancing act.  Companies need to make decent profits or there's no reason for them to be in business, but they'll also take advantage of consumers when/while they can since their purpose is to create profit.

    In Canada, when Bell lost its monopoly not only did it find itself losing a lot of customers to its main competitor, but it was also completely unprepared to deal with the situation having had years to develop poor customer service habits.  This was a case where regulation helped a company survive, thrive and then become complacent and unable to fend for itself in the wild.

    I think this is a 'wait-and-see' situation.
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