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Mobile services

Eurobites: Q1 Core Profits Down at Telefónica

Also in today's EMEA regional roundup: Telefónica upgrades metro networks with Huawei; Telenor execs cleared over Uzbekgate; MTS offers towers for rent.

  • Telefónica saw its first-quarter core profits fall 6.7% year-on-year to €3.37 billion ($3.85 billion), reports Reuters, as currency fluctuations and other factors offset a 3.4% growth in underlying revenues. In a statement, José María Álvarez-Pallete, Telefónica's executive chairman, maintained that "in a context of intense technological disruption and transformation," the results represented a "strengthening of the business across the board." In the light of Three UK 's proposed acquisition of O2, Telefónica UK Ltd. (which trades under the O2 brand) was included in this set of results as a discontinued operation, though it is looking increasingly unlikely that this deal will be given the go-ahead by the European Commission. (See Eurobites: O2/3 Deal Facing EU Veto and Telefónica Eyes Alternative Buyers for UK Biz – Report.)

  • Meanwhile, on the Spanish giant's home turf, Telefónica and Huawei Technologies Co. Ltd. have jointly announced a ten-year metro networks upgrade program, using Huawei's metro OTN technology to provide 100G/200G bandwidth as well as paving the way for 400G. The ability to cope with the demands of new content and video services is cited by the pair as the main driver for the upgrade program.

  • A Deloitte report has exonerated Telenor Group (Nasdaq: TELN) employees of any involvement in any corrupt activity in relation to Telenor's ownership of VimpelCom Ltd. (NYSE: VIP), but it does point the finger at weaknesses in organizational structure and leadership. VimpelCom, which does most of its business in Russia, was forced to pay $795 million in fines to US and Dutch authorities for bribing a government official in Uzbekistan to win licenses to operate there. So-called (by us, at any rate) "Uzbekgate" claimed the scalp of former Telenor CEO Jon Fredrik Baksaas, who made way for Sigve Brekke. (See Deloitte Reports on Telenor's VimpelCom Saga , Eurobites: 'Uzbekgate' Costs VimpelCom $795M, Eurobites: 'Uzbekgate' Claims More Victims at Telenor and Eurobites: Norway Dumps Telenor Chairman.)

  • Another Russian operator, Mobile TeleSystems OJSC (MTS) (NYSE: MBT), has entered the tower infrastructure market, inviting potential partners to apply to rent space on its towers and antenna support structures. MTS is initially offering space at around 5,500 of its existing towers, though it says it may add to these, depending on demand.

  • Deutsche Telekom AG (NYSE: DT) is set to unveil a new upgrade to its IPTV service on May 2, company executives announced at a press conference in Hanover, Thursday. The Entertain TV service will include a new HD set-top box, the MR 400, and new functionality, including a content navigation and search function, according to this report from German IT news service Golem.de.

  • Tomorrow (Saturday) sees the start of the next phase in the gradual removal of mobile roaming charges in the European Union: Until June 14, 2017, operators will only be able to charge those roaming the same per-minute price as the domestic price plus five cents, while text messages can be charged at the domestic price plus two cents. And then, next June, comes the big change for European operators and their customers -- using the mobile abroad will cost the same as it does at home.

    Table 1: Maximum Regulated Retail Roaming Charges (in euros, excluding VAT)

    Today From tomorrow until 14 June 2017 From 15 June 2017
    A minute of call made 0.19 Domestic price + up to 0.05 surcharge Using mobile abroad = the same price as at home
    A text message sent 0.06 Domestic price + up to 0.02 surcharge Using mobile abroad = the same price as at home
    A megabyte of data used 0.2 Domestic price + up to 0.05 surcharge Using mobile abroad = the same price as at home
    A text message received Free Free Using mobile abroad = the same price as at home
    A minute of call received 0.05 Should not exceed an average maximum wholesale mobile termination rate set across the EU* Should not exceed an average maximum wholesale mobile termination rate set across the EU*
    *A transitory regime until the Commission addresses this outstanding issue. Mobile termination rate is a wholesale tariff charged by the operator of a called party to the operator of the calling party's network.

  • UK operator O2 has launched what it says is the world's first smartphone with a DAB radio tuner built in. The LG Stylus 2 features a special hybrid version of the Radioplayer app, which allows customers to stream radio stations via the Internet then switch to over-the-air DAB radio should they want to carry on listening without using up their data allowance while out and about. DAB, which stands for digital audio broadcasting, is a technology used in several countries across Europe and Asia-Pacific.

    Eurobites is taking its May Day break on Monday, so will return, refreshed, on Tuesday (May 3).

    — Paul Rainford, Assistant Editor, Europe, Light Reading

  • jbtombes 4/29/2016 | 6:24:48 PM
    Re: Bravo! There's a CEO with a bright (not to say 'huge') political future ahead.
    Mitch Wagner 4/29/2016 | 1:05:50 PM
    Bravo! I have to admire the chutzpah of a CEO who says a revenue decline is actually a sign of strengthening core business. 
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