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Eurobites: Liberty Global Shrivels in Q2

Iain Morris
8/8/2019

  • Shrinking cable operator Liberty Global saw revenues from its continuing operations slide 6% year-on-year in the second quarter, to about $2.85 billion, after witnessing declines in every one of its remaining markets. The operator, which has just sold businesses in the Czech Republic, Germany, Hungary and Romania to Vodafone, blamed the upset partly on foreign exchange effects but acknowledged there had also been "organic revenue contraction." The company was hit by the loss of so-called "revenue-generating units" in most countries where it still operates, including the UK, where Virgin Media, now its largest subsidiary, recorded 5,000 such losses. Operating income fell 43.7%, to $148.7 million, compared with the year-earlier period. Despite the disappointments, CEO Mike Fries said the business was making "substantial progress" on strategic and operating priorities, including the launch of cash tender offers and investment in "gigabit" broadband services in the UK.

  • In a troubling signal for European operators pooling network assets, the European Commission lashed out at Czech mobile operators O2 and T-Mobile -- subsidiaries of Spain's Telefónica and Germany's Deutsche Telekom respectively -- over their network-sharing agreement, arguing that it restricts competition in breach of EU antitrust rules. In a statement, authorities said they had concerns over this specific deal because the Czech mobile market is "highly concentrated," with just three operators (the other being Vodafone), and because O2 and T-Mobile are the two largest service providers, with about three-quarters of all customers. "Operators sharing networks generally benefits consumers in terms of faster rollout, cost savings and coverage in rural areas," said EU Commissioner Margrethe Vestager, in a statement. "In the present case, we have concerns that the network-sharing agreement between the two major operators in Czechia [Ed: does anyone seriously call it Czechia?] reduces competition in the more densely populated areas of the country." An investigation is underway.

  • Finnish equipment maker Nokia said it had bagged a 5G contract with Vodafone New Zealand and that services would be launched on its equipment later this year in Auckland, Wellington, Christchurch and Queenstown. The deal was no great surprise: Nokia has a long-standing network relationship with Vodafone New Zealand and may have faced limited competition during a 5G tender. Last year, rival operator Spark was told by government authorities not to use 5G equipment provided by Huawei, a ruling that must have deterred other service providers from considering the controversial Chinese vendor as a potential supplier. The deal with Nokia includes radio access and core network products.

  • Pan-African telecom giant MTN reported 10% year-on-year growth in both service revenues and earnings (before interest, tax, depreciation and amortization) for the first half of the year and said it was on track to hit medium-term guidance. Service revenues hit 67.9 billion South African rand ($4.5 billion), while earnings rose to ZAR31.2 billion ($2.1 billion). CEO Rob Shuter said the performance came against the backdrop of "difficult trading conditions," including a weak South African economy. The operator, which runs networks in various African markets, was boosted by the listing of its Nigerian business on the Nigerian Stock Exchange, said Schuter. It also listed Jumia, an ecommerce venture, in New York. "The asset realization program delivered ZAR2.1 billion [$140 million] to the group in the second quarter," said the CEO in prepared remarks. MTN is under pressure to cut debts, which have risen to ZAR70.9 billion ($4.7 billion) from ZAR63.5 billion ($4.2 billion) at the end of last year, due mainly to higher borrowing in Nigeria. Despite the May listing in that country, MTN Nigeria is reportedly mired in a dispute with Nigerian authorities, which it says has delayed a sale of further shares.

  • Amdocs, one of the big guns in the operational support systems area, reeled off a list of new customer agreements including a multi-year managed services deal with Sky Italia. Under the contract, Amdocs said it would modernize various IT systems using technologies that feature artificial intelligence capabilities. Gabriele Scarponi, Sky Italia's CIO, said the upgrade should support expansion into the fixed broadband market and boost customer service across the business.

    — Iain Morris, International Editor, Light Reading

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