2012 - Total Telecom

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Busines s analysis for telecoms profes sionals
Special edition
Welcome to 2012
looking ahead to the coming year in telecoms
Introducing...
2 Day Conference
12 – 13 June 2012, London
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www.totaltele.com/wireless
timeline
A round-up of the major stories
in telecoms in 2011, as reported
in our daily news service
www.totaltele.com
JANUARY-MARCH
Page takes Google helm
Google co-founder Larry Page
replaced Eric Schmidt as CEO
of Google. Schmidt became
executive chairman of the
company.
ALU signals base station end
plan in late December; AT&T will
pay a $4 billion break-up fee to
Deutsche Telekom.
Alcatel-Lucent launched
lightRadio, a small-scale mobile
base station that uses virtualised
components.
Sweden auctions 4G spectrum
Mobile number portability came
into force nationwide in India
after repeated delays.
Nokia announced plans to use
Microsoft’s Windows Phone 7
platform as the main operating
system for its smartphone
portfolio. The first devices went
on sale in November.
Sweden raised 2.05 billion
kronor (US$324 million) from
the sale of spectrum suitable
for 4G services. HI3G Access,
TeliaSonera and Net4Mobility - a
joint venture between Tele2 and
Telenor - all acquired spectrum
in the 800-MHz band.
PT in $5bn Brazil deal
Telstra uses 1800 for LTE
France Teleocm in Iraq buy
Portugal Telecom inked a deal to
take a minority stake in Brazil’s
Oi for 8.32 billion reias (US$5
billion). Oi has since simplified
its ownership structure and
appointed a new CEO, Francisco
Valim.
At Mobile World Congress 2011
Australia’s Telstra shared plans to
roll out LTE services in its 1800MHz spectrum.
A joint venture between France
Telecom and logistics company
Agility agreed to plough new
capital into Iraq’s third mobile
operator Korek Telecom in return
for a 44% stake.
MNP in India
iPhone for Verizon
After years of speculation Verizon
Wireless revealed it would offer
a CDMA version of the Apple
iPhone to its customers.
Raja arrested in India
India’s former telecoms minister
Andimuthu Raja was arrested
as the Central Bureau of
Investigation probed allegations
of corruption in the allocation of
mobile spectrum in 2008 that may
have cost the government billions
of dollars in lost revenues. The
investigation was still going on at
the end of 2011.
Kleisterlee takes Voda chair
Gerard Kleisterlee, chief
executive of Philips Electronics
was named as the successor
to John Bond as chairman of
Vodafone.
Nokia picks Windows OS
AT&T bids for T-Mobile USA
AT&T announced it had offered
US$39 billion to acquire rival
T-Mobile USA. Lawsuits from the
Department of Justice and other
opponents ensued, and the FCC
also came out against the deal.
The companies abandoned the
Tragedy in Japan
While Japan struggled to come
to terms with the human cost
of the tsunami and resulting
floods that hit the country in
March, telecoms companies were
Spectrum fragmentation by % of LTE connections
800/1800 MHz
2600 MHz
3%
2100 MHz
8%
2015
13%
11%
n 1700-1900 MHz
67%
700 MHz
6% 10%
2500 MHz
Clearwire CEO quits
Bill Morrow resigned as
CEO of Clearwire as the US
WiMAX operator reshuffled its
management. Chief operating
officer Erik Prusch was appointed
to the post in August.
Voda takes over Indian unit
Vodafone paid around $5.46
billion to buy out its joint venture
partner in India. The deal closed
in July.
Voda sells SFR stake
Vivendi agreed to pay €7.95
billion for Vodafone’s 44% stake
in SFR, giving it total control of
the French mobile operator.
New Pakistan minister
n 2100-2600 MHz
Source: Wireless Intelligence
There will be 38 different spectrum frequency combinations used in LTE
deployments worldwide by 2015, as ongoing spectrum auctions, licence
renewals and refarming initiatives contribute to fragmentation, according to
Wireless Intelligence. This lack of harmonisation could hurt roaming, since device
makers will have to support many disparate frequencies; this means a ‘world’ LTE
device is unlikely to emerge in the near future.
December 2011/January 2012 www.totaltele.com
Etisalat pulled out of its planned
acquisition of a 46% stake in
Kuwait-based Zain, having made
an offer worth around $11.7
billion in September 2010. The
UAE incumbent cited the results
of due diligence and political
turmoil in the region among its
reasons for backing away.
APRIL-JUNE
16%
11%
n 700-900 MHz
Etisalat scraps $12bn Zain buy
2011
5%
1700/2100 MHz
also counting the cost as subsea
networks were severed and the
threat of component shortages
loomed. By the end of 2011, many
areas of the industry were still
feeling the effects of the disaster.
Pakistan appointed Zaheeruddin
Babar Awan to the vacant telecom
and IT minister position.
KPN gets new CEO
Eelco Blok took over as chief
3
timeline
executive of KPN, replacing
Ad Scheepbower. Almost
immediately the Dutch
incumbent issued a full-year
profit warning and said jobs
would go in its home market.
billion to roll out fibre-based
broadband to 5 million premises
in rural areas of the UK over the
next 3-5 years. It is working with
Virgin Media, TalkTalk Telecom
and Cisco.
Level 3 buys Global Crossing
DT and FT form JV
Level 3 Communications agreed
to acquire Global Crossing in
an all-stock deal worth around
$1.9 billion. The deal to combine
the two international network
operators closed in October,
when Global Crossing CEO John
Legere left the company.
Deutsche Telekom and France
Telekom created a joint venture
company through which to
acquire network equipment.
The telcos aim to book savings
of €1.3 billion a year as a result.
The venture, known as Buyin,
launched in October.
CenturyLink in M&A market
Syria ices licence auction
US telcos CentryLink and Qwest
completed their merger deal on 1
April after FCC approval enabled
the $22 billion tie-up to go
ahead. Later that month, Qwest
announced it would acquire
cloud services provider Savvis for
around $2.5 billion. That deal
closed in July.
The sale of a third mobile licence
in Syria was postponed due to
political turmoil in the country.
Qatar’s Qtel and Saudi Telecom
were the only operators still in
the running for the licence.
Cisco restructures
Cisco moved to refocus on its
core networking equipment
business, exiting certain
consumer operations, such as
video camera Flip. In July the
company revealed plans to
reduce its global workforce by
around 6,500–incurring charges
of $1.3 billion–in a bid to reduce
operating costs by $1 billion in
its next fiscal year
Fujitsu enters UK fibre fray
Japan’s Fujitsu said it will invest
between £1.5 billion and £2
4
portfolio. The deal included the
transfer of 2,600 staff.
More phones than people
TeliaSonera fibre plan
The number of fixed and mobile
phone connections worldwide
reached 6.92 billion in May,
according to The Mobile World.
The US Census Bureau estimated
the population of the world at
slightly under 6.92 billion.
TeliaSonera said it will invest
over 8 billion kronor (US$1.3
billion) in fibre networks by
2014. SEK5 billion of the total
will be spent in Sweden.
DT ups stake in OTE
Deutsche Telekom acquired an
additional 10% stake in Greek
incumbent OTE for around €400
million, raising its holding to
40% plus one share.
Netherlands net neutrality
The Dutch government pushed
through a new telecoms law
that forces telcos and ISPs to
ensure equal access to all types of
content on their networks.
Microsoft in $8.5bn Skype buy
Microsoft said it would pay $8.5
billion in cash to a Silver Lakeled investor group for Internet
telephony specialist Skype.
Analysts questioned the sum, but
noted that Microsoft could reap
the benefits of owning Skype in
the longer term.
Apple launches iCloud
Apple introduced iCloud, a Webbased offer that enable users to
store data and content–including
music–in the cloud. The move
put it in direct competition with
the likes of Amazon and Google.
Telstra, govt in NBN deal
Telefonica Brazil restructure
In a move designed to
consolidate its Brazilian assets
following its 2010 takeover of
Vivo, Telefonica unveiled a new
unified structure in Brazil.
Israel awards 3G licences
Mirs Communications and
Xfone 018 secured spectrum for
3G services in Israel with bids
of just over $200 million each.
Their licence payments will be
returned to them if they each
manage to carve out a 7% share
of the market within five years.
aims to complete the transition
by the end of 2012.
TI happy in LatAm
Telecom Italia ruled out further
expansion in Latin America,
saying it will instead focus on
expanding its businesses in Brazil
and Argentina.
The Australian government
and incumbent Telstra signed
agreements worth A$11 billion
that will see the telco transfer
its fixed lines to NBN Co, the
company set up to roll out the
country’s nationwide highspeed broadband network.
In December Telstra released
its latest structural separation
plan; the ACCC has requested
comments by 13 January.
Ericsson buys Telcordia
Nokia ditches Ovi
Nokia revealed plans to abandon
its Ovi brand name, instead
bringing all of its mobile services
under its core ‘Nokia’ name. It
Sweden’s Ericsson brokered a
$1.15 billion all-cash deal to
acquire Telcordia. It hopes the
deal will boost its position in the
OSS/BSS space and fill gaps in its
UK telcos tackle m-commerce
Everything Everywhere, O2 and
Vodafone UK created a mobile
payments joint venture, a move
that enraged rival player 3, which
was left out of the project. But
by the end of the year the telcos
were in talks to potentially allow
3 into the venture, codenamed
Project Oscar.
Nigeria cancels telecoms sale
The latest attempt to privatise
Nigerian incumbent Nitel ended
in failure after both the preferred
and reserve bidders did not pay
the initial sums required of them.
Google+ comes to market
Google made a new attempt to
conquer the social networking
space with the launch of
Google+. The move came
just days after the Internet
giant pulled the plug on its
PowerMeter and Health services,
citing disappointing uptake.
Ericsson, NBN in TD-LTE deal
Ericsson announced it has won
a A$1 billion contract from
Australia’s NBN Co to roll out
a TD-LTE networks to provide
coverage to rural households.
Bharti, Huawei Africa deal
India’s Bharti Airtel outsourced
the expansion and management
of its mobile networks in Africa
to China’s Huawei. The deal is
reportedly worth $400 million.
New CEO at 3UK
Kevin Russell stepped down as
www.totaltele.com December 2011/January 2012
timeline
chief executive of UK mobile
operator 3 to be replaced by
COO David Dyson.
mobile operator’s shareholders,
offloading its 24.39% stake
through the deal.
Virgin closes in Qatar
Kroes tackles roaming rip off
Qatar’s telecoms regulator
ordered incumbent Qtel to close
down its Virgin Mobile-branded
service. Rival operators had
claimed the service constituted
an MVNO.
European commissioner Neelie
Kroes proposed a series of
measures to reduce the cost of
roaming in Europe, including
allowing consumers to sign
dedicated roaming contracts. She
also proposed a data roaming cap
of €0.50 per megabyte.
AT&T gets Indonesia licences
AT&T became the first foreign
telecoms operator to be granted
a licence to operate in Indonesia.
The licence allows it to provide
services direct to customers in
the country, without using a local
third party.
Rogers opens LTE network
Rogers Communications in July
became the first Canadian mobile
operator to launch LTE services
when it switched on its network
in Ottawa.
Globalive gets go-ahead
M2M moves
A Canadian appeals court backed
the government in its decision
to allow Globalive to continue
operating in Canada, despite the
fact the regulator had earlier
moved to block it. The telco,
which offers services as Wind
Mobile, was at the centre of a
foreign ownership row.
TeliaSonera in July joined the
machine-to-machine (M2M)
communications alliance
established by France Telecom
and Deutsche Telekom earlier in
the year. Meanwhile, Telekom
Austria announced the creation
of a new subsidiary to focus on
the M2M space.
Telecom won spectrum suitable
for offering 4G services in Spain
via a licensing process that raised
€1.65 billion for the government.
Earlier in the year France
Telecom and TeliaSonera won
the country’s first 4G spectrum
auction, agreeing to pay €168
million.
JULYSEPTEMBER
Nortel patents sold for $4.5bn
A consortium made up of some
of the world’s largest technology
firms won Nortel Networks’
patent portfolio with a bid of
$4.5 billion. The group, which
included Apple, RIM, Microsoft
and Ericsson, beat competition
from Google; the Internet giant
had acted as a stalking horse with
an initial $900 million offer.
Polkomtel sold for $5bn-plus
Polish businessman Zygmunt
Solorz-Zak agreed to buy
Polkomtel for 15.1 billion
zlotys ($5.43 billion) in cash.
Vodafone was one of the Polish
Colombia sells 1900 MHz
France concludes 4G sale
The Colombian government
raised $79.9 million by selling
25 MHz of spectrum in the 1900
MHz band. Telefonica took the
lion’s share with 15 MHz.
France Telecom, Bouygues
Telecom, SFR and Iliad all
acquired blocks of spectrum in
the 2.6-GHz band, generating
€936 million for government
coffers.
DoCoMo invests in Vietnam
NTT DoCoMo acquired a stake
of around 25% in Vietnamese
mobile content provider VMG
Media worth around €12 million.
Google agreed to pay $12.5
billion in cash to acquire
Motorola Mobility. The Internet
giant made it clear that it is
primarily interested in Moto’s
patent portfolio, which will
help it to protect its Android
operating system from litigation.
Management changes at EvEv
Bharti to invest in Nigeria
Olaf Swantee replaced Tom
Alexander as the CEO of UK
mobile operator Everything
Everywhere. Swantee
then named a new, leaner
management team, appointed
a new CTO and cut 22 middle
managers. Later the company
announced a further 550 job cuts.
India’s Bharti Airtel added
hundreds of millions of dollars to
its investment plan in Nigeria. It
earmarked $1 billion for network
and facilities spend in 2011 alone.
Telefonica, Vodafone and France
December 2011/January 2012 www.totaltele.com
Saudi LTE launches
Mobile industry body the GSMA
announced the appointment
of Anne Bouverot, formerly
of Orange, as its new director
general. She replaced Rob
Conway.
Rupert Murdoch’s News Corp
backed away from a planned
takeover of UK satellite TV and
broadband operator BSkyB amid
a phone-hacking scandal that
brought down UK newspaper the
News of the World.
Spain awards 4G spectrum
Wireless chip maker Broadcom
acquired rival NetLogic
Microsystems in a $3.7 billion
deal designed to bolster
its position in the network
processor market.
Saudi Arabia’s three main
mobile operators all claimed
to be first to market with LTE
in September. Saudi Telecom
Company (STC) launched under
the Quicknet banner, Zain and
Vodafone’s local units also
introduced services.
New GSMA head
Google buys Moto Mobility
No BSkyB for News Corp
Broadcom buys NetLogic
Yahoo fires Bartz
Carol Bartz was removed from
her position as Yahoo CEO
after two and a half years. CFO
Timothy Morse stepped into the
role on an interim basis.
Google opens Wallet
Google Wallet launched in the
US in September. The Internet
giant partnered with Sprint
Nextel, Citi, Mastercard and
First Data to bring the mobile
payment system to market.
Another new HP CEO
HP appointed Meg Whitman
as its new CEO, replacing Leo
Apotheker who had been in the
job for less than a year. Whitman
initially backed her predecessor’s
strategy, but in October revealed
that HP would hang on to its
PC unit; Apotheker had said
the company was looking at a
possible sale or spin-off.
OCTOBERDECEMBER
Kroes on copper
European Commission VP for
the digital agenda Neelie Kroes
proposed a reduction in copper
5
timeline
access prices in a bid to encourage
investment in fibre networks. She
also shared plans to make a €9.2
billion fund available to support
investment in new networks and
services.
Industry and IT statistics. The
country also became the world’s
biggest smartphone market in
Q3, when unit shipments reached
24 million, according to Strategy
Analytics.
BlackBerry bungle
BT accelerates fibre plan
A difficult year for RIM was
exacerbated by a network outage
in October that affected millions
of BlackBerry users worldwide.
The outage was caused by the
failure of a core switch at a
European facility. Earlier in the
year the Canadian company
cut 2,000 jobs and announced
the retirement of COO Dan
Morrison.
BT said it will complete the
rollout of its fibre network to
two thirds of UK premises by
the end of 2014, a year earlier
than originally planned. The
UK incumbent will bring
forward £300 million of planned
investment and recruit 250
engineers for the project.
Voda pulls plug on 360
Vodafone announced it
would close its 360 cloud
synchronisation and back-up
service by the end of the year.
Qualcomm gets India licence
India granted Qualcomm an
operating licence for the four
areas in which it won broadband
wireless access spectrum in 2010,
paying over $1 billion. Qualcomm
was under threat of losing
the licences due to regulatory
complications.
ALU sells Genesys for $1.5bn
Private equity firm Permira
agreed to pay $1.5 billion in cash
for Alcatel-Lucent’s call centre
services unit Genesys.
India’s 100m Internet surfers
The number of Internet users
in India rose to 112 million
by September, making it the
third biggest market globally,
according to the Internet and
Mobile Association of India.
India is adding 5 million-7
million users per month. It is
poised to overtake the US within
two years.
Ericsson’s $650m Iraq deal
Zain awarded Ericsson a $650
million contract to manage its IT
operations and mobile network
in Iraq.
SK signs Hynix deal
NZ Telecom splits
SK Telecom agreed to
purchase a 21% stake in Hynix
Semiconductor for more than
US$3 billion.
New Zealand’s Telecom Corp
and infrastructure arm Chorus
officially became two separate
businesses in December. The
move was a key requirement
of Chorus being awarded the
contract to roll out much of the
country’s planned national fibre
network.
Greece sells licences
Greece made €380.5 million from
extending the 900-MHz and
1800-MHz licences belonging
to the country’s existing mobile
operators.
Swedish m-commerce deal
Telia, Telenor, Tele2 and 3
formed a joint venture to build
a unified m-payments platform.
They are seeking a CEO for the
venture.
Google Music launches
Google unveiled its digital music
service Google Music in the US.
Relief for Clearwire
Clearwire signed a four-year, $1.6
billion deal with Sprint Nextel
to give the latter access to its
WiMAX–and forthcoming LTE–
network. The funding will enable
Clearwire to invest in its own
LTE infrastructure. Clearwire
also announced it is seeking an
additional $300 million via an
equity offering.
RIM backs away from BBX
BT ordered to block site
NSN slashes jobs, refocuses
A UK court instructed BT to
block access to Newzbin2 and any
other IP addresses or Webpages
used by the operators of the
pirate site.
Nokia Siemens Networks
announced plans to cut 17,000
jobs as part of a reorganisation
that will see it pull out of all
businesses not connected with
mobile broadband. The vendor
sold its microwave transport
business to DragonWave and its
WiMAX business to NewNet
Communication Technologies
There are more divestments to
come.
100m 3G users in China
The number of 3G mobile phone
users in China reached 102
million by the end of September,
up from 34.99 million a year
earlier, according to Ministry of
6
RIM renamed its new operating
system BlackBerry 10 after its
use of the BBX monicker was
challenged in court. US software
company Basis International
said it had trademarked the BBX
name.
LTE launch in Uruguay
Antel declared itself the first
LTE operator in Latin American
when it launched its network in
December.
LOSS OF JOBS
The telecoms industry and
the wider world mourned the
passing of Apple co-founder
and former CEO Steve Jobs
in October, just two months
after he stepped down from
leading the company and two
days after Apple unveiled its
newest iPhone. Jobs, 56, died
after a battle with pancreatic
cancer dating back to 2004;
he took medical leave from
work in 2009, when he underwent a liver transplant, and
again in the first half 2011.
Former COO Tim Cook, who
deputised for Jobs during his
absences, became Apple’s
new chief executive in August.
Despite the loss of the visionary Jobs, demand for the
iPhone 4S was strong; the device sold 4 million units across
seven markets around the
world in the first three days of
availability, a new company
record. Apple introduced Siri,
a voice-activated digital assistant, as part of the iPhone 4S,
a move viewed by some as
the company’s entrance into
the search business. Indeed,
Google chairman Eric Schmidt
admitted that he views Siri
as a competitor to Google’s
core search business. Jobs
in March unveiled the iPad
2, an updated version of
Apple’s market-defining tablet
device. And in his last public
presentation, Jobs took to the
stage at Apple’s Silicon Valley
headquarters in June to take
the wraps off iCloud, a range
of Web-based services that
allow users to store and access their data, and synchronise their iTunes music collections, as well as calendar
entries and contacts, across
any Apple device. The move
stepped up the pressure on
consumer cloud service rivals
Google and Amazon.
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BUSINESS & FINANCE
REVIEW OF THE YEAR
DEAL BREAKERS
AT&T pulls the plug on its $39 billion merger plan, but the TMT sector will continue to
account for a hefty portion of global M&A activity going forward. By Mary Lennighan
G
lobal mergers and acquisitions in
the year to Q3 2011 were valued
at €1.7 trillion and the technology, media and telecoms sector accounted
for a significant 14% of that, according to
M&A research firm Mergermarket.
Despite the troubled global economic
climate, the 150 European deal makers
interviewed by the firm during the third
quarter predict the total deal value to
swell by 14.5% next year, and 30% of
respondents named the TMT sector as
one of the areas that will see the most
M&A activity next year.
According to one unnamed corporate
deal maker from a U.K.-listed technology
group, M&A activity will accelerate next
year as companies increasingly sell up or
merge with rivals. “The macroeconomic
environment is deteriorating and in this
type of business climate you get troubled
companies that need to consolidate to
survive,” she is quoted as saying. Indeed,
45% of survey respondents expect consolidation to be one of the largest deal
drivers in 2012.
The desire to consolidate assets–mobile
spectrum in particular–was a key driver
for what was almost the biggest deal in
the telecoms space in 2011. But as the year
drew to a close it emerged that, lacking
regulatory support, the deal would not go
ahead.
In late December AT&T pulled the
plug on its planned US$39 billion tie-up
with T-Mobile USA, some nine months
and much legal wrangling after it first
announced the deal. There was much
opposition from the start, and ultimately
the companies’ failure to gain the support
of the Department of Justice (DoJ) and
Federal Communications Commission
(FCC) led to the breakdown of the deal.
Deutsche Telekom will receive the US$4
billion break-up fee due to it from
AT&T–a quarter of which will come in
the form of $1 billion worth of mobile
spectrum–and the pair will work together
via a seven-year roaming agreement.
8
“The actions by the FCC and the DoJ to
block this transaction do not change the
realities of the US wireless industry. It is
one of the most fiercely competitive
industries in the world, with a mounting
need for more spectrum that has not
diminished and must be addressed immediately, “ AT&T said as it announced the
death of the deal.
Thomas Wehmeier, principal analyst at
Informa Telecoms & Media, also
commented on the wider implications of
the news on the US mobile market. “Much
has been made of the need for in-market
consolidation within the intensely
competitive mobile industry, having to
potentially navigate around seemingly
insurmountable regulatory hurdles is
likely to shake the confidence of wouldbe investors to the core,” he warns.
AT&T insisted from the start that a
merged AT&T/T-Mobile USA would be
beneficial for US consumers and the
country as a whole, not least because it
would have enabled the telco to accelerate its LTE rollout. It stands by that
assertion, describing the merger as an
“interim solution” to the spectrum shortage, without which “customers will be
harmed and needed investment will be
stifled.” However, the fact remains that
the merged company would have regained
Global M&A by value (Q410-Q311)
Leisure 2%
Transportation 4%
Real Estate 3%
Construction 2%
Others 1%
Business
Services 4%
Energy &
Resources
24%
Consumer
8%
Pharma,
Medical &
Biotech 9%
TMT
14%
Industrial &
Chemicals
16%
Financial
Services
14%
Source: Mergermarket
the lead from Verizon Wireless in terms
of subscribers and the deal would have
reduced the number of main players in
the market from four to three.
But while that proved unacceptable to
US regulators, the situation is different in
Europe, where Vodafone has the support
of rival players for its bid to reduce the
Greek mobile market from three players
to just two. However, the drivers behind
its plan are not dissimilar from those of
AT&T and T-Mobile USA.
Vodafone has been holding talks with
Wind Hellas about merging their Greek
mobile operations since August; together
they would hold around half of the
market, with current leader Cosmote
claiming the other half.
“We believe that there is a good case to
go there, Vodafone Europe CEO Michel
Combes told Total Telecom recently. The
economic situation in Greece is very
specific, he said. In addition, the country
requires investment to support the migration to 4G, which is made more complex
by its geography. “It makes sense to have
two rather than three networks in order
to focus investments on coverage,”
Combes said.
“A two-player market would be more
competitive, would provide better service
and more choice to the customers,” he
added. And incumbent operator OTE,
parent of Cosmote, agrees; in November
the telco said it believes regulators will
approve the deal, describing it as a healthy
move for the market.
Big deals in 2011
But aside from what almost happened and
what looks set to happen in the near
future, 2011 was a year in which multibillion-dollar transactions in the industry
were signed on the dotted line, and
Vodafone was right in the thick of it.
In June the operator finalised the sale
of its 44% stake in French mobile operator SFR to its partner Vivendi for €7.95
billion. And that same month it offloaded
www.totaltele.com December 2011/January 2012
BUSINESS & FINANCE
Selected 2011 deals at a glance
JANUARYPortugal Telecom inks deal for minority stake in Oi
FEBRUARYCisco acquires Inlet Technologies
MARCH AT&T announces $39 billion acquisition of T-Mobile USA.
France Telecom, Agility buy into Iraq’s Korek Telecom
Vodafone pays $5 billion to buy Essar Group out of Indian unit
APRIL Vivendi takes sole control of SFR with €7.95 billion Vodafone deal
Level 3 to pay $1.9 billion for Global Crossing
CenturyLink agrees to pay $2.5 billion for Savvis
MAY Microsoft confirms $8.5 billion acquisition of Skype
JUNE Deutsche Telekom acquires an additional 10% stake in Greece’s OTE
Ericsson announces $1.15 billion Telcordia purchase
Cable & Wireless Worldwide rejects bid for its overseas assets
JULY Technology consortium agrees to pay $4.5 billion for Nortel’s patents
Polkomtel shareholders sell to businessman for $5.4 billion
News Corp pulls out of plan to take full control of BSkyB
Nokia, Siemens reveal they will not sell Nokia Siemens Networks
France Telecom confirms talks to acquire Congo Chine Telecom
AUGUST HP announces plan to acquire UK software company Autonomy
Motorola Solutions sells Orthogon and Canopy units to Vector Capital
Google announces $12.5 billion Motorola Mobility buy
SEPTEMBER Broadcom to pay $3.7 billion for rival mobile chip maker NetLogic
OCTOBER Alcatel-Lucent gets $1.5bn binding offer for Genesys
Ericsson sells out of Sony Ericsson mobile handset business
NOVEMBER
SK Telekom to acquire Hynix stake for $3 billion.
DECEMBERAT&T and T-Mobile USA abandon merger plan.
its 24.39% stake in Polkomtel; the Polish
mobile operator’s shareholders together
raised 15.1 billion zlotys ($4.76 billion) in
cash from the sale of their shares to businessman Zygmunt Solorz-Zak.
In addition, Vodafone agreed to pay
$5.46 billion to buy India’s Essar Group
out of Indian mobile operator Vodafone
Essar. And Vodafone’s 45% stake in
Verizon Wireless finally paid dividends;
it is due to receive £2.8 billion from the
US operator in January.
More surprising was the announcement in May that Microsoft had agreed to
pay $8.5 billion for Skype. While Skype
had been tipped as a takeover target for
some time, Microsoft was not thought to
be in the frame. In addition, the price tag
raised some eyebrows, given Skype’s
struggles to monetise its business: in 2010
the Internet telephony specialist posted a
net loss of $7 million on revenues of $860
million and its paying customer base
stood at just 8.8 million.
Google’s move to take over Motorola
Mobility was also unexpected; it agreed
to pay around $12.5 billion in cash in
August. It immediately became apparent
that the big draw was Motorola’s 17,000strong patents portfolio, which Google
December 2011/January 2012 www.totaltele.com
said would allow it to “protect” its
Android operating system from future
patent litigation, another topic that dominated the telecoms space in 2011.
Google insists that owning one of its
customers for the Android platform will
not hurt its position with rival handset
makers and went to great lengths to
demonstrate that its various hardware
partners support the deal. Nonetheless, it
seems unlikely that Google will want to
make phones in the long run; we could
see a divestment in the not-too-distant
future. In the meantime, the deal is facing
regulatory scrutiny; the DoJ and European
Commission have both requested more
information as part of their respective
antitrust reviews.
Returning to patents, the intellectual
property wars intensified this year, in the
mobile space in particular, where Apple,
Samsung, Nokia, Motorola and others
did battle over various handset designs
and features. Furthermore, the value that
telecoms companies now place on owning
patents was exemplified by the sizeable
sum Nortel Networks netted for its patent
portfolio in July. A group comprising
Apple, Microsoft, RIM, EMC, Ericsson
and Sony agreed to pay a whopping $4.5
billion for the 6,000 patents, significantly
more than the $900 million stalking horse
offer submitted by Google in April.
Vendor consolidation
There were no multi-billion-dollar valuations in what was arguably the year’s
biggest M&A-related story though. In
November Nokia Siemens Networks
revealed it plans to focus solely on the
mobile broadband space and will pull out
of all businesses not considered core to
that. The change in strategy will bring
with it 17,000 job losses as the vendor
aims for €1 billion in cost-savings in the
next two years.
So far, Nokia Siemens has been reluctant to disclose exactly which businesses
are on the block. It had already agreed to
sell its microwave transport business to
DragonWave at the time the announcement was made, and news that NewNet
Communication Technologies would buy
its WiMAX business, and Adtran would
buy its fixed-line broadband access operations quickly followed; NSN did not
disclose the value of any of those deals.
Nokia Siemens’ retrenchment was not
the only big news on the vendor side. In
June Ericsson detailed its $1.15 billion
acquisition of Telcordia. The Swedish
vendor pointed out that in addition to
driving forward its OSS/BSS business, the
integration of the US company would
help it to fill gaps in its portfolio. 2,600
Telcordia staff will transfer to Ericsson
under the deal, including CEO Mark
Greenquist.
And finally...Level 3 in April revealed
that it would pay around $1.9 billion in an
all-stock deal to acquire Global Crossing.
The two international network operators
closed the deal in October, at which point
the Global Crossing name disappeared
from the global telecoms landscape. In
September mobile chip maker Broadcom
agreed to acquire rival NetLogic
Microsystems in a $3.7 billion deal;
Alcatel-Lucent received a $1.5 billion
offer for its Genesys call centre services
unit from private-equity firm Permira in
October; and in November South Korea’s
SK Telecom said it would pay over US$3
billion for Hynix Semiconductor. n
9
TELECOMS 2012
T O TA L T E L E C O M P R E D I C T I O N S
CALLING IT
We expect European mobile consolidation, a new owner for Nokia Siemens Networks
and an LTE iPhone in 2012. By Total Telecom staff
BUSINESS &
FINANCE
More M&A
l Nokia Siemens Networks
will be acquired, probably by
a private equity player. NSN
failed to tempt private equity
investment in 2011. However,
now it is selling–or managing
for value–anything that is not
mobile broadband, it will prove
a more attractive prospect.
l Vodafone and Wind Hellas
will get the nod to merge in
Greece, leading more European
mobile operators to look at
in-market consolidation as the
economic crisis further hits
consumer spending power.
Or not
l AT&T and T-Mobile USA will
extend the roaming agreement
they announced in December
into a full network-sharing pact.
Meanwhile, Deutsche Telekom
will seek a way of exiting the US
altogether. Verizon Wireless,
which spent much of 2011
buying up spectrum assets, will
go back to differentiating on the
quality of its network while its
rivals get busy integrating theirs.
l Debate over consolidation
in India will turn out to be
little more than talk. The
new telecoms policy will not
materialise before 2012. Tight
credit markets and the ongoing
spectrum scandal will dissuade
operators from making any big
acquisitions. Strong likelihood
of an IPO from Vodafone
though.
10
On the stock market
l Facebook will press ahead
with its IPO, which will value it
in the region of the $100 billion
that observers have been talking
about, and the world will finally
know how much revenue it
generates, and its monetisation
strategy.
start to go awry and targets will
be pushed back. Local councils
run the risk of missing the
February deadline to submit
proposals for a slice of the £530
million in funds being put up
by BDUK (Broadband Delivery
UK). Miscalculations may result
in projects being delayed or
running over budget.
Intellectual property
l Patent litigation will be
less high-profile than in 2011.
However, companies will focus
more on their intellectual
property for revenue-generation.
Data centre opportunity
l Google will be a strong
contender to buy patents
company InterDigital, pushing
up the company’s price.
However, it will be beaten to the
punch by another technology
heavyweight or a consortium.
MOBILITY
NETWORKS
No entry
l Huawei and ZTE will continue
in their respective campaigns
to enter the US, only to find
themselves thwarted by the
government on national security
grounds. Both companies will
continue to appoint Westerners
to senior roles as part of ongoing
public image campaigns.
l Investors flock to the data
centre space as a safe haven in a
difficult economic climate.
Long-Term Excitement
l A flurry of LTE
announcements will grab
headlines worldwide. By the end
of the year we’ll be talking about
LTE launches in India and China.
l Industry hypesters will quickly
tire of talking about LTE and
move on to speculating about the
arrival of LTE-Advanced. There
will be numerous trials of the
technology, but little chance of
commercial services before 2013.
l 3G licensing in Thailand will
remain a long-term dream as the
country again fails to meet its
deadline of Q1 2012.
Fibre fun
Machines rule the world
l Although the various
parties involved in Australia’s
national broadband network
rollout appear to have reached
agreement, things will not be
plain-sailing for NBN Co in 2012.
l Everyone will (still) be talking
about M2M in 2012. There will
be more partnerships in the
space as mobile operators admit
they are unsure how to proceed
alone.
l The UK government’s
“superfast broadband” plan will
Device developments
l Google will hive off and sell
Motorola Mobility's devices
business.
l 2012 will be make or break
for RIM. BlackBerry 10-powered
phones will have to uphold RIM’s
reputation among enterprise
users for security and reliability,
and also come with enough
bells and whistles to keep the
consumer segment entertained,
and attract app developers.
l Probably not something a
Jobs-era Apple would have
done, but the company will
finally unveil an LTE iPhone,
the iPhone 4GS. By the second
half of 2012 the addressable LTE
markets in the US, Asia-Pacific,
and parts of Europe will be big
enough to warrant Apple making
its move.
l Nokia will launch a Windowspowered tablet in 2012, but not
until the end of the year, giving
Microsoft enough time to get the
OS right.
AND FINALLY...
l The industry will grow weary
of the term ‘storm clouds’
being used in headlines for
articles about the intensifying
competition between cloud
services providers.
l With any luck the term
“multi-SIM price plan” will enter
the mobile industry vernacular
in 2012.
l Apple will get so carried away
with its litigation spree that it
accidentally sues itself for patent
infringement. n
www.totaltele.com December 2011/January 2012
Asia Communication
Awards 2012
Celebrating the success of Asian telecoms, globally
ENTER NOW!
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ENTRY DEADLINE 16 March 2012
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Grand Hyatt, Singapore
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DEVICE STRATEGIES
MOBILE DEVICE DEVELOPMENTS
PHONEY WAR
Nokia leapt from its burning platform in 2011, while Apple and Android went from
strength to strength; non-iPad tablets received a cool reception. By Nick Wood
C
ompetition between mobile operating systems stretched warfare
and racing metaphors to breaking point during 2011, as players battled it
out across multiple fronts in order to keep
pace with their rivals.
This year was viewed largely as a twohorse race between Android and iOS,
with the former dominating the smartphone sector in volume terms and the
latter consistently topping the hype
charts and maintaining a commanding
lead in the tablet market while rivals
floundered or launched products that
were coolly received by end users.
Mobile operators have expressed
concern that compelling alternatives
have not been forthcoming and consequently a duopoly has emerged (see Total
Telecom+ December/January). However,
Yankee Group predicted in December
that there will still be room in years to
come for rival operating systems to find a
niche (see charts).
For instance, despite the growing prevalence of bring-your-own-device (BYOD)
policies opening the corporate door to
Android and iOS, the analyst firm expects
RIM to maintain a double-digit share of
the enterprise market over the next four
years.
Yankee also predicts Windows Phone
will find greater traction with consumers
than with enterprises between now and
2015, although it sees the popularity of
Microsoft’s platform peaking in 2013
with a 7% share of the consumer segment
before coming under renewed competitive pressure.
“Our data says app developers can reach
nearly three times as many users in the
US by targeting BlackBerry apps than
they would if they targeted Microsoft
ones,” noted the analyst firm.
Whatever happens, 2011 will be seen as
the year when the smartphone war
claimed its first high-profile victim in
Symbian, and effectively finished off
another in webOS.
Nokia-owned Symbian had been
languishing since the second half of 2009,
when investors began to ask with more
urgency when the Finnish handset maker
would produce a device that could
compete with the iPhone and fend off
Android.
It didn’t happen, and by the first quarter
of this year Android had emerged as the
clear frontrunner in the smartphone
race, taking a 36% share of global smartphone sales to end users–representing a
seven-fold increase in unit sales from a
year earlier–according to Gartner.
Second-placed Symbian’s market share
Consumer smartphone users
33.1%
47.6%
0.0%
5.9%
0.3%
1.6%
1.3%
6.8%
0.5%
1.1%
21.4%
23.0%
2.4%
7.0%
0.5%
0.8%
27.3%
13.6%
9.0%
22.1%
2011
8.8%
27.1%
2012
12
Enterprise smartphone users
16.0%
11.1%
3.4%
6.9%
0.5%
0.6%
4.4%
6.6%
0.5%
0.5%
31.8%
35.2%
8.3%
7.8%
30.6%
33.0%
2013
n Don’t have n Other n Windows Mobile n Symbian
n Palm OS n iPhone n Blackberry n Android
tumbled to 27.4% from 44.2% as consumers continued to shun Nokia-made
smartphones, while Apple maintained
approximately the same market share but
crucially saw unit sales double on-year.
Nokia CEO Stephen Elop wasted no
time in identifying where he thought the
company was going wrong, stating during
a quarterly results call in January, when
he had only been in the job for a few
months, that Nokia must “build, catalyse
and/or join a competitor’s ecosystem”.
This was followed by February’s now
infamous ‘burning platform’ memo, in
which Elop compared Nokia to a man
standing on a North Sea oil platform
engulfed in flames, who has to decide
whether to let himself burn or take the
risk of jumping into unfamiliar waters.
“He decided to jump. It was unexpected.
In ordinary circumstances, the man
would never consider plunging into icy
waters. But these were not ordinary
times,” said Elop.
It was not the most subtle indication of
what Nokia was about to do, and three
days later the former Microsoft executive
was joined by his old boss Steve Ballmer
to tell the world that Nokia was going to
leap from its burning platform, swim for
the relative safety of Windows Phone–a
rescue
craft
of
questionable
2014
7.2%
34.6%
2015
Source: Yankee Group
58.1%
51.7%
46.0%
41.0%
0.4%
3.4%
0.7%
0.5%
0.4%
3.7%
0.7%
0.5%
19.5%
22.0%
65.0%
1.0%
2.0%
1.0%
1.0%
8.0%
0.8%
2.7%
0.9%
0.5%
12.9%
0.6%
3.1%
0.7%
0.5%
16.5%
12.9%
12.3%
12.5%
12.1%
14.7%
16.9%
18.8%
2012
2013
2014
2015
12.0%
12.2%
9.0%
2011
n Don’t have n Other n Windows Mobile n Symbian
n Palm OS n iPhone n Blackberry n Android
Source: Yankee Group
www.totaltele.com December 2011/January 2012
DEVICE STRATEGIES
seaworthiness–and let Symbian and
MeeGo go up in smoke.
It was a move that has changed Nokia
forever. Restructuring and massive job
cuts followed with various divisions
wound up or outsourced, as the company
transformed itself over the course of 2011
from a waning Finnish phone giant to a
Windows Phone evangelist infused with
a jumbo-sized helping of US culture. It
was evident at September’s Nokia World
in London that Elop spent some of 2011
bringing in friends from across the pond
with low inhibitions and a penchant for
strong coffee.
It’s too early to say whether Elop has
rescued Nokia. In November the company
said sales of its Windows-powered Lumia
phones are off to a strong start in the UK,
but some of the old guard are probably
still getting used to the idea of Nokia’s
smartphone future being at least partially
in the hands of Microsoft.
Turbulent times
HP attempted to keep the webOS dream
alive by unveiling two smartphones and a
tablet, called the TouchPad, in February.
However, the devices did not achieve
anywhere near the penetration needed to
stay relevant with app developers or end
users. In August, less than two months
after it went on sale, HP announced it was
axing the TouchPad. A subsequent $400
price cut caused a feeding frenzy, and the
company responded with one final
production run. Somewhat perversely,
research firm NPD Group revealed in
November that the TouchPad had the
highest share of non-Apple tablet sales in
the US during the first 10 months of 2011,
edging out Samsung by a single percentage point.
It was also a turbulent year for Research
In Motion, which has had to weather
competitive headwinds punctuated by
guidance cuts, a high-profile network
outage and a lukewarm reception to its
first tablet. RIM’s share of the overall
handset market has remained flat at
around 3%, according to Gartner, while
its share of the smartphone market is
shrinking, falling to 11% in Q3, from
15.4% a year earlier.
December 2011/January 2012 www.totaltele.com
Key smartphone, tablet launches in 2011
JANUARY
Motorola unveils the Xoom, its first tablet
FEBRUARY
HP shows off its latest webOS devices
Sony Ericsson updates Android-based Xperia range
MARCHApple reveals iPad 2
Samsung takes the wraps off its Galaxy Tab 10.1 tablet
APRIL
BlackBerry PlayBook goes on sale
Samsung launches Galaxy S2
MAY
Vodafone launches €90 Android phone, built by Huawei
JUNE
Huawei unveils high-end Android tablet
Nokia launches first and only MeeGo phone
JULYChina’s Lenovo unveils Windows, Android tablets
AUGUST
RIM launches BlackBerry 7 phones
SEPTEMBER
Amazon unveils its first tablet, the Kindle Fire
OCTOBERApple launches iPhone 4S
Motorola resurrects Razr brand with Droid Razr LTE smartphone
RIM launches BBX operating system (later renamed BlackBerry 10)
Nokia launches Windows-powered Lumia phones
NOVEMBER
Barnes & Noble launches Nook Tablet
DECEMBER
ZTE details plans to launch high-end US smartphone in mid-2012.
In April RIM’s first tablet, the
BlackBerry PlayBook, finally went on sale
in the US. Reviewers disliked its diminutive screen, lack of native email and
calendar, and the dearth of apps running
on its QNX operating system. Promotions
and price cuts were needed to keep sales
ticking over, and in early December RIM
announced it would book a $485 million
charge on its PlayBook inventory.
Given the furore over October’s
network failure and criticism from shareholders over its strategy, RIM will likely
be glad to see the back of 2011 so it can
focus on giving its upcoming range of
BlackBerry 10 (known as BBX until a
lawsuit forced RIM to change the name)
smartphones a fighting chance of clawing
back lost market share.
Android may have consolidated its
position as the most widely-used smartphone OS in the world in 2011, with
Gartner putting its Q3 market share at
52.5%, but Android phone makers have
by no means enjoyed an equal share of
the spoils.
Samsung, HTC and Motorola, along
with rising Chinese stars Huawei and
ZTE all enjoyed steady year-on-year
growth in quarterly unit sales, while Sony
Ericsson and LG experienced the opposite, proving that riding on the coattails
of a popular OS is far from a panacea.
Rather, it seems branding, price, operator
support, and hardware specification and
design all still have a significant influence over whether or not a phone sells.
Even those Android players that have
performed well this year have had to
contend with Apple on the legal warpath,
filing patent infringement claims and
calling for sales bans in markets across
the world, with varying degrees of
success. Its spat with Samsung was particularly bitter; Apple claims its South
Korean rival’s Galaxy Tab “slavishly
copies” the iPad’s design. The extent of
late Apple chairman Steve Jobs’ loathing
for Android became clear in extracts of
his posthumously-published biography,
in which he declared that Android’s existence amounts to “grand theft” of Apple’s
intellectual property, and that he was
willing to “spend every penny of Apple’s
$40 billion in the bank” to right what he
saw as a clear wrong.
The mobile device market was so litigious in 2011 that Google openly said that
bulking up its patent portfolio was the
primary motivation for its $12.5 billion
acquisition of Motorola Mobility in
August.
Other highlights of the year included
Ericsson selling out of its handset joint
venture with Sony; Sprint and Verizon
being invited to the iPhone party; and
China’s emergence as the world’s biggest
smartphone market. n
13
Breakfast
with
Join in our series of mini-conferences connecting buyers
and sellers of telecom products and services in a focused,
cost-effective and engaged environment.
What we’re talking about in 2012
LTE Opportunities
14 March 2012, 76 Portland Place, London
Spectrum allocation for high speed mobile data services
has a massive impact on mobile operators’ business
models. We will look at the current scenario, examine the
case studies, and how operators can exploit the revenue
opportunities of new data services.
Emerging Markets - Another BRIC in the Wall?
Breakfast
with
10 April 2012, 76 Portland Place, London
For operators looking to exploit options outside their
domestic market, BRIC (Brazil, Russia, India and China) are
not the only emerging markets to watch. We will examine
the hottest markets and regions, and how opportunities vary
by location.
Cloud Security
3 May 2012, 76 Portland Place, London
Cloud has become one of the hottest topics in telecoms,
but the biggest concern is security. Hear from leading
proponents in this area, and discuss with those who are
actually addressing the issues.
Olympics – A Gold Medal Effort?
Breakfast
13 September 2012, 76 Portland Place, London
The games are over, so how did communications fair? Was
it a gold medal effort, or did telecoms fall at the first hurdle?
M2M
9 October 2012, 76 Portland Place, London
From remote monitoring to healthcare, advertising, and fleet
management, the scope of M2M is extensive and according
to Machina Research will increase 12-fold in the next
decade. We discuss why this is and how mobile operators
can take their fair share.
Content – Location Based Services
29 November 2012, 76 Portland Place, London
Operators have the relationship with the customer and a
multitude of unique data assets. Join us to examine the
opportunities surrounding Location Based Services and
discuss how to monetise the opportunity, rather than it
becoming another part of the content discussion where
operators are bit-part players.
Breakfa
Wholesale Market Update
4 July 2012, 76 Portland Place, London
The business is changing from just selling capacity to
offering countless services to enable the entire telecoms
market. We will bring together leading carriers, emerging
players and wholesale thought leaders, to look at what is
happening in this fast moving sector.
with
For more information or to book your
place contact: [email protected]
www.totaltele.com/breakfast
MOBILITY
analyst predictions
THE WIRELESS FUTURE
Some of the industry’s leading mobile analyst companies share their predictions for
2012 and beyond.
OPERATORS
Consolidation ahead
l China Mobile will trigger
a wave of consolidation after
an ill-fated attempt to acquire
Deutsche Telekom prompts a
merger between the German
incumbent and France Telecom.
This will spark a flurry of M&A
activity as the likes of Telefonica,
Telecom Italia and Scandinavian
operators scramble for scale.
Divestitures made to satisfy
regulators will be snapped up by
China Mobile. (CCS Insight)
l The recession will have an
adverse impact on smartphone
and tablet sales, particularly
when it comes to unsubsidised
devices. A prolonged downturn
could have a serious negative
impact on sales of dedicated
e-readers. ( Juniper Research)
l The compatibility of Windows
8 with both mobile devices and
traditional PCs will create a vast
ecosystem of products for app
developers to target, driving in
uptick in Microsoft’s OS market
share and spurring a revival at
Nokia. ( Juniper Research)
Show me the money
Service split
l Belt-tightening by consumers
in Western Europe will drive
mobile operators’ churn rates
from 2.3% per month to 2.4% by
the end of 2012, representing an
extra 7 million people switching
provider. (Yankee Group)
l RIM will restructure into
two divisions, one focusing on
hardware and another focusing
on BlackBerry services and
infrastructure. (CCS Insight)
l Some operators may see data
revenues exceed voice revenues
by the end of 2012, as compelling
data tariffs correct the undercharging that has been inherent
to the industry in recent years,
reverse top-line revenue decline,
and offset falling voice and SMS
revenues. (Northstream)
DEVICES
New products on the market
l In a bid to counter the
competitive threat of Apple and
Amazon, Google will leverage
its Motorola Mobility assets and
develop a cheap Nexus-branded
tablet that relies on advertising
to offset the subsidised price tag.
(CCS Insight)
Clouds gather
l SIMs will disappear into the
cloud driven by Apple, Google,
and the growing need for overthe-air (OTA) subscription
provisioning. (Northstream)
l Amazon’s success in the
tablet segment makes it the
target of several patent lawsuits.
To defends its position in the
connected devices market
Amazon is obliged to buy
companies with relevant
intellectual property assets. (CCS
Insight)
NETWORKS
circuit switch fall back (CSFB)
will inhibit LTE uptake in 2012.
(Northstream)
l Price pressure on mobile
infrastructure will ease off as the
market matures. Nokia Siemens
Networks, Alcatel-Lucent
and ZTE are under sufficient
financial pressure that they will
not be prepared to undercut
one another in order to win
market share and peg back
leaders Ericsson and Huawei.
(Northstream)
Addressing data usage
l Operators will worry less
about pricing and instead will
focus on finding a vendor
partner that will help them plan
and optimise their networks
as mobile data consumption
continues to rise. (Northstream)
ENTERTAINMENT
The pull of video
l Google will acquire Netflix
by 2013 in a bid to augment
YouTube’s ad-funded distribution
model that is focused on short,
home-made clips with a richer
content distribution platform.
(CCS Insight)
l Video consumption on tablets
will more than double in the first
six months of 2012, driven by
the launch of operator-backed
TV everywhere services and
authenticated content models
that include streaming video to
tablets. (Yankee Group)
Hardware issues
l The lack of carrier-grade
voice support for LTE networks
and the subsequent reliance on
December 2011/January 2012 www.totaltele.com
Remote controls
l Apple iOS products will
emerge as the primary hardware
controllers for home automation
products. Meanwhile Facebook
will become the online control
panel for many connected
homes. (CCS Insight)
Bubble breaker
l The investment bubble
for consumer-focused social
networks will burst in 2013 on
the realisation that opportunities
to differentiate in a market where
players with overlapping features
compete for a finite audience
have been and gone. (Gartner)
FURTHER AHEAD
2013...
l Android’s share of the
smartphone OS market will
fall for the first time in 2013 as
licensees look to lower their
dependency on the Googleowned platform to offer a more
balanced portfolio, and tap
into consumer interest in other
operating systems. In addition,
litigation could drive up the cost
of using the Android OS. (CCS
Insight)
...and beyond
l Mobile application
development projects aimed at
smartphones and tablets will
outnumber native PC projects
by a four-to-one ratio by 2015.
(Gartner)
l By 2016 at least 50% of
enterprise email users will rely
primarily on a browser, tablet, or
mobile client instead of a desktop
client. Market opportunities
for mobile device management
platform vendors will soar.
(Gartner) n
15
PEOPLE
EXECUTIVE INS AND OUTS
THE FEMALE OF THE SPECIES
There were a number of high-profile executive changes in 2011; the women in the industry in particular made their presence felt. By Mary Lennighan
I
t was good to see the relatively few
women in high places in the telecoms
industry making their presence felt
in 2011. But while some are squaring up to
make their mark on the industry in 2012
and beyond, we may not see much of
others going forward.
“I’ve just been fired over the phone,”
erstwhile Yahoo CEO Carol Bartz
famously declared in September,
announcing her departure from the troubled Internet company in her own
inimitable style. Indeed, Bartz wasted no
time in unleashing her particular brand
of fury on the media, remarking to
attributes” from its leader.
Whitman initially said she supported
Apotheker’s controversial strategy, which
included a possible PC unit spin-off and
exploring its options regarding its webOS
mobile platform. However, within weeks
it became clear that Whitman–the former
CEO of eBay–had plans of her own and in
October she revealed that HP would hang
on to its PC business. “HP and [PC unit]
PSG are better together,” she said.
A decision on the future of webOS is
expected early in the new year.
Meanwhile, Europe’s first lady of telecoms Neelie Kroes is continuing where
We are proposing a long-term structural
solution to get to the root cause of roaming
rip-offs Neelie Kroes, July 2011
Fortune that she was “f***ed over” by the
company’s board, potentially putting her
$10 million severance package under
threat in the process.
Bartz took the helm at Yahoo in January
2009 and won praise during her first 12
months for cost-cutting, a re-focus on
display advertising, establishing a partnership with Microsoft and revitalising
the brand. However, the honeymoon did
not last and lacklustre results coupled
with investors demanding to see where
growth would come from hammered the
nails firmly in Bartz’ coffin.
Yahoo appointed CFO Timothy Morse
to act as interim chief executive and said
it would engage a headhunter to source a
permanent replacement; as we head into
2012 Morse is still in the hot seat.
2012 will be a demanding year for new
HP chief executive Meg Whitman, who
in September was tasked with the job of
running the company more effectively
than her predecessor; Leo Apotheker was
let go by HP less than a year after he took
on the CEO role, with the board saying it
was now looking for “additional
16
her predecessor Viviane Reding left off
by making moves to reshape the EU
roaming market. In mid-2011 she
proposed a radical shake-up of the sector
in a bid to address “roaming rip-offs”.
Her proposals include the creation of
dedicated roaming providers to enable
end users to bypass their regular operator for roaming calls. She aims to have
the new rules adopted by June 2012, with
structural changes to have been implemented by 2016; in the meantime, she
proposes a series of retail roaming price
caps–such as €0.50 per megabyte for
data–as a “safety net”.
In addition, industry body the GSMA
named Anne Bouverot as its new director
general in August, replacing long-time
CEO Rob Conway; most recently Bouverot
served as executive vice president of
Orange’s Mobile Services business and
represented the French incumbent on the
GSMA’s board. And in the UK, BT named
Olivia Garfield as the new CEO of its
Openreach network arm.
Of course, it wasn’t all about the ladies
in 2011; as always, there were many high-
profile executive changes within the
industry, some of which we saw coming,
others we didn’t.
January brought an unexpected reshuffle at Google, which moved co-founder
Larry Page into the CEO seat while Eric
Schmidt became executive chairman. As
the year progressed, it became clear that
the personnel shift had little bearing on
the company’s strategy.
Embattled US mobile operator
Clearwire announced the resignation of
chief executive Bill Morrow in March and
named then COO Erik Prusch as its new
president and CEO in August.
Francisco Valim became chief executive of Brazil’s Oi in September, a critical
time for the telco which unveiled plans to
simplify its ownership structure earlier
this year and is working in partnership
with shareholder Portugal Telecom.
China’s Huawei boosted its executive
workforce in various global markets. In
May it hired Mark Mitchinson as its UK
and Ireland vice president as part of its
bid to establish itself as a consumerfacing brand, and appointed Simon
Culmer as its vice president of enterprise
for the same market. And in June it
created a board of directors for its
Australian arm as it looks to win a role in
the rollout of Australia’s national highspeed network. NBN Co appointed its
first COO, Ralph Steffens, in November.
Cable & Wireless Worldwide appointed
former Vodafone executive Gavin Darby
as its new CEO in November to replace
interim chief exec John Pluthero; previous CEO Jim Marsh left in June following
the company’s third profit warning in 12
months.
Elsewhere, Vimpelcom CEO Alexander
Izosimov stepped down in May, to be
replaced by chairman Jo Lunder; Inmarsat
announced that Rupert Pearce will take
over as its chief executive in 2012; and
France Telecom added the role of chairman to CEO Stephane Richard’s
responsibilities. n
www.totaltele.com December 2011/January 2012
ADVERTORIAL
prime numbers
contacts
1 billion
ASIA AHEAD ON TABLETS
Asia-Pacific will account for 38.5% of the predicted
100.6 million global tablet device sales in 2012,
according to Yankee Group, which urges tablet
manufacturers to aggressively pursue distribution in
the region if they want to emerge as credible
competitors to Apple and its iPad. Tablet sales will
total 20 million in the Asia-Pacific this year,
compared with 17 million and 15 million in the US
and Europe respectively. Next year the gap will
widen, and rapid growth in the region is set to
continue; by 2015, sales of tablets in China alone
will exceed those in the US, Yankee Group predicts.
tablet sales in 2012 by region
USA
24,916,276
24.8%%
Asia- Pacific
38,696,659
38.5%
Total 2012
tablet units
100,636,3370
Europe
26,535,653
26.4%
The Rest
10,487,782
10.4%
Source: Yankee Group
Mobile financial services
users in Latin America by
2015. There are around 18
million at present.
(Pyramid Research)
SEMICONDUCTOR
STATISTICS
Worldwide semiconductor
revenue will reach $309 billion
in 2012, up 2.2% on 2011,
according to Gartner, which
has revised down an earlier
growth forecast of 4.6%,
citing global economic forces,
inventory correction, manufacturing oversupply and
natural disasters. The analyst
firm has cut its prediction for
growth in the PC production
unit segment to 5% from
10.1%, the market having been
hit by both the economy and
the hard disk drive shortage
resulting from the floods in
Thailand earlier in the year.
However, it has raised its view
on mobile phone production
to 7.5% growth from 7%.
18
LTE DEVELOPMENTS
Global consumer and enterprise
revenues from LTE services will
reach $265 billion by 2016, according to Juniper Research. That figure
will represent more than 26% of all
mobile service revenues. The vast
majority, or 84%, of those revenues
will be generated in the developed
markets of Western Europe, North
America, and the Far East & China.
Indeed, Yankee Group predicts that
in 2012 emerging market operators
will invest more in HSPA+ than in
LTE. Meanwhile, according to the
Global mobile Suppliers Association
(GSA), there will be at least 103
commercial LTE networks in
service by the end of 2012.
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TOTAL TELECOM
Mary Lennighan
Editor
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Marketing Executive
EVENTS
The global carrier Ethernet equipment market will be worth
$40.2 billion by 2015, according to Infonetics Research,
which recently increased its long-term forecast on the back
of rapid growth in the segment; it had previously predicted
$37.5 billion by that date. The market will reach $32 billion by
the end of 2011, up 15.7% on 2010, the firm predicts,
following growth of 30.5% last year. Routers, carrier Ethernet
switches (CES) and optical gear together make up two thirds
of the carrier Ethernet market, with the CES segment
showing particularly rapid growth, Infonetics notes. It
calculates that Cisco has a healthy lead in the switches
segment, claiming 45% of the market.
carrier ethernet equipment revenue
45
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Worldwide IT spending
in 2012, an increase of
6.9% on 2011. (IDC)
CARRIER ETHERNET KIT GROWTH
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Total Telecom World
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Global Revenues
in $US billions
140 million
The number of HTML5 phones
to be sold worldwide in 2013, up
from 336 million in 2011.
(Strategy Analytics)
EDITORIAL
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