Eurobites: MTS & Telco Comrades Get It On

News Analysis Paul Rainford, Assistant Editor, Europe 2/15/2016

Also in today's EMEA regional roundup: Maroc profits fall; 3 boss talks up O2 acquisition; Vodafone buffs up tax halo.

Russia's Mobile TeleSystems OJSC (MTS) (NYSE: MBT) has joined forces with some of the biggest names in European telecom -- BT Group plc (NYSE: BT; London: BTA), Deutsche Telekom AG (NYSE: DT) and Orange (NYSE: FTE) among them -- to create the Partnering Operator Alliance. Though details on the concrete aims of the alliance are sketchy, the release heralding its arrival talks of "exchanging best practices" and "partner scouting." The alliance says it has already established relationships with 30 partner businesses, including hotel-crushing app AirBnB and music service Spotify.

Maroc Telecom , the state-backed operator that was bought from Vivendi by Etisalat in 2014, saw its full-year net profit fall 4.3% to 5.59 billion Moroccan dirhams (US$577 million), reports Reuters. The slide was partly attributed to the cost of new African acquisitions made during the year. (See Etisalat Profits Lifted by Maroc Telecom Deal.)

The boss of UK mobile operator Three UK , David Dyson, is using the pages of the Financial Times (subscription required) to make the case for his company's £10.5 billion ($15.2 billion) acquisition of rival Telefónica UK Ltd. (O2). Dyson claims the proposed deal with correct an existing imbalance in the UK market, by offering more of a challenge to the newly combined BT/EE. UK regulator Ofcom has already stated its opposition to the deal, which is currently being scrutinized by European Union competition regulators. (See Hutchison Offers Major Concessions to Seal 3/O2 Deal, Telefónica Seals $15.2B O2 Sale to Hutchison and Hutchison Offers $13.9B for UK's O2.)

Vodafone Group plc (NYSE: VOD) is looking to deflect some of the ire being directed at those tech companies deemed to be shirking their tax responsibilities by publishing another detailed breakdown of the contribution it makes to public finances in the countries in which it operates. The figures cited relate to, among other things, taxes, money paid for spectrum licenses, capital expenditure and job creation. (See Euronews: Vodafone Talks Tough on Tax.)

Table 1: Vodafone's Total Contribution to Public
Finances by Country (£M)

India	2,034
Germany	1,232
UK	1,074
Turkey	926
Italy	853
Spain	578
South Africa	522
Remainder	2,092
Source: Vodafone

Belgian challenger Mobistar SA is launching a combined 70-channel pay-TV and 100Mbit/s broadband bundle on March 1, with prices starting at €39 a month. Initially, the offer will only be available in Brussels, Louvain, Alost, Mons, Ottignies-Louvain-la-Neuve and Wavre. It will be up against the wares of Proximus , which offers a similar combination but with fixed-line voice added for €63.95 a month.

— Paul Rainford, Assistant Editor, Europe, Light Reading