Mobile services

Eurobites: EE Deal Pays Dividends for DT, Orange

Also in today's EMEA regional roundup: TalkTalk's latest security scare; Tele2 profits slip in fourth quarter; Nokia pushes "pop-up" network.

  • Both Deutsche Telekom AG (NYSE: DT) and Orange (NYSE: FTE) are to receive a farewell dividend of 263 million (US$376 million) when the 12.5 billion ($17.9 billion) sale of their EE mobile joint venture to BT Group plc (NYSE: BT; London: BTA) is completed on Friday, reports the Financial Times (subscription required). Once the deal goes through, both Deutsche Telekom and Orange will become stakeholders in the newly enlarged BT, with the German incumbent holding 12% -- making it BT's largest shareholder -- and Orange holding a 4% stake. Earlier this month BT received the green light for the EE acquisition from the UK's Competition and Markets Authority, a decision that failed to impress rivals such as TalkTalk. European Commission approval of the takeover was not required. (See BT Gets Final Go-Ahead for $17.9B EE Takeover.)

  • And talking of TalkTalk , the landline and broadband provider -- which raised its profile in a bad way when it was the subject of a large-scale cyber attack last October -- has become embroiled in yet more security-related shenanigans, reports the BBC. Three workers at its Wipro Ltd. (NYSE: WIT)-run contact center in Calcutta, India have been arrested following a security review. In a statement on the matter, TalkTalk said it was now "reviewing its relationship" with Wipro.

  • Nordic operator Tele2 AB (Nasdaq: TLTO) saw EBITDA slide 5.3% year-on-year in its fourth quarter to 1.33 billion Swedish kronor ($155 million), on sales that inched up by 0.97%. In a statement, CEO Allison Kirkby blamed the EBITDA decline on an "accelerated launch" of a 4G network in the Netherlands and currency exchange rate fluctuations in Kazakhstan. Tele2 has now received regulatory approvals for its proposed joint venture with KazakhTelecom , and it hopes to close the deal in the current quarter.

  • Nokia Corp. (NYSE: NOK) has introduced a "pop-up" network service for large-scale events, whereby the operator just pays for the capacity required during the event, and Nokia supplies temporary basestations coordinated by Nokia's centralized RAN.

  • Italtel SpA , the Milan-based network services provider, is entering the Internet of Things market, with a range of offerings aimed at the sector. The new IoT platform will be demonstrated at next month's Mobile World Congress. (See Tele2 Earnings Suffer on Dutch 4G Costs.)

  • Ericsson AB (Nasdaq: ERIC) is opening a 20,000 square meter R&D center in Rosersberg, Sweden. The vendor will use the facility to emulate an operator's mobile network and test new products in a realistic setting. It also plans to open a similar facility in Montreal, Canada in the second quarter of 2016.

  • The BBC reports that Margrethe Vestager, the European Commission's tough-talking Competition Commissioner, has said she is prepared to investigate Google (Nasdaq: GOOG)'s so-called "sweetheart deal" with the UK tax authorities if someone makes an official complaint to her department about the matter. Last week Google agreed to pay the UK tax authorities 130 million ($185 million) in back taxes covering a ten-year period -- a payment some have said equates to a less-than-punitive tax rate of 3% on profits. In a separate move, the European Commission has published a series of new initiatives which it hopes will tackle corporate tax avoidance in the EU, including legally binding measures to block the most common methods used by companies to avoid paying tax.

    Paul Rainford, Assistant Editor, Europe, Light Reading

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