Displaying items by tag: Telecommunications
Italian telecommunications incumbent Telecom Italia has appointed a new general manager – in a move that sees its largest shareholder tighten its grip on the operator. Vivendi’s Amos Genish will now run the company’s day-to-day operations.
Vivendi has a 24% stake in Telecom Italia, and the new appointment comes just days after CEO Flavio Cattaneo departed the company after just sixteen months at the helm, following a number of clashes with the French shareholder.
The new general manager has enjoyed a decorated career, he was CCO at Vivendi, and he formerly headed the Brazilian subsidiary of Spanish operator Telefonica, and also founded GVT, a leading Brazilian mobile operator. Genish, a 57 year-old former Israeli captain will now oversee all of the company’s operations and will be based in Rome.
Cattaneo is the second CEO to leave Telecom Italia in less than just two years after he repeatedly locked horns with the French group which is led by billionaire Vincent Bollore. He has previously expressed an ambition to establish a southern European media powerhouse. Vivendi CEO, Arnaud de Puyfontaine who also acts as Telecom Italia’s executive chairman - will assume the responsibilities of CEO on a temporary basis.
In addition to this, it was also disclosed that further announcements on governance will be made in September. Analysts have claimed that many investment funds that have shares in Telecom Italia, remain unflustered by the latest leadership reshuffle, and are confident that Genish can reinvigorate the operator with a number of deals, which may include a possible sale of the Brazilian unit to a spin-off of the Italian fixed-line network.
De Puyfontaine has admitted that he plans to establish a joint-venture between Telecom Italia and Vivendi’s pay TV unit Canal+, which would play into the French company’s vision of expanding its content distribution across platforms. The Italian operator’s only asset abroad remains its Brazilian unit, and de Puyfontaine said it was doing a good job, but remained coy in relation to a potential sale.
The idea of TIM exiting Brazil has been gaining traction among investors since Vivendi became a top shareholder, because the French group sold its own Brazilian operations before investing in Italy.
The CEO of Telecom Italia is set to accept a severance package rumored to be worth around €30m to pave the way for his imminent departure from the organization. Speculation has been rife for a number of months in relation to unrest between the CEO of the Italian incumbent Flavio Catteneo and its largest shareholder Vivendi.
It has emerged that Catteneo is expected to leave the Italian operator by mutual consent after negotiating the terms of the severance package. Vivendi which controls the operators board has been at loggerheads with the CEO for the past number of months, and a source close to Telecom Italia said the situation had become untenable for both parties, claiming ‘something had to give’.
Some shareholders have expressed their criticism to the amount the outgoing CEO will receive for his severance pay-off. However, the CEO was quick to defend the sum pointing out the list of successes he had delivered for the telecommunications colossus.
It has also been reported that Telecom Italia will hold a meeting of its Nomination of Remuneration Committee with only one item listed on the agenda, which is the examination of a proposal of mutual termination of the relationship of the company and Mr. Flavio Catteneo.
However, it was only a few weeks ago, a defiant Catteneo announced his intentions to remain on as CEO until the end of 2020, dispelling rumors he was set to quit the operator. Reports circulated that Vivendi had already lined-up a three-pronged leadership team to replace the CEO.
Tensions continued to soar, but the relationship completely broke down when it emerged that Vivendi planned to appoint its CCO Amos Genish as Telecom Italia’s new Managing Director in order to work alongside Catteneo.
The latest high-profile departure represents a recurring and worrying trend at Telecom Italia. Catteneo’s imminent exit means that the Italian telecommunications colossus will now have its third CEO in just two years. Marco Patuano left the firm in March, 2016, amidst reports of clashes with Vivendi. The French company which is the operator’s largest shareholder is increasingly attempting to extend its control on the operator.
Vivendi now is total control of both the Telecom Italia board and installed its own CEO Arnaud de Puyfontaine as the chairman of the operator earlier this year. In addition, the company gained permission from the European commission to assume control of the operator in May 2017.
However, the company’s progress has not gone unnoticed by Italy’s authorities. Italian regulator Agcom ordered Vivendi to cut its stake in either Telecom Italia or broadcast firm Mediatek in April, to meet stringent Italian media ownership rules. Vivendi is contesting the decision.
Irish telecommunications incumbent Eir has announced that it will ‘retire’ its mobile phone brand Meteor in September. Meteor has been a huge success since its inception in 2001, and has been particularly popular with the young generation of mobile phone users.
However, the mobile phone network will now be rebranded as ‘Eir’, which will see it join an existing mobile phone service provided by the company under the Eir name. Meteor has over 750,000 customers but the new merger will see Eir now have around 1.1 million mobile customers.
A spokesman for the Dublin-based telecommunications firm said that customers would benefit significantly from the rebranding, and assured customers that the transition from Meteor to Eir will be ‘seamless’. Eir, CEO, Richard Moat declared that the new merger decision would enable customers to explore a ‘world of possibilities’.
In a statement, the CEO said, "Meteor customers will continue using their mobiles exactly as before - with the added benefit of a world of possibilities. By focusing on a single mobile brand and reducing the duplication of supporting two brands, we can offer better value and increased innovation."
In addition to this, Meteor customers have received assurances that there will be no change to their current contract and data plans during the transition and rebranding process, whilst the current customer care lines will also remain intact.
Eir formerly known as Eircom acquired Meteor in 2005. It adopted an aggressive approach to marketing and advertising and a significant investment into both areas was subsequently made. Meteor sponsored a number of commercial events, including the Meteor Choice Awards.
The company is reported to be spending around €3m and €4m on its 'Let's make it possible' campaign and believes that the mobile phone business would be better served by benefiting from the lift provided by this campaign than separate marketing investment in Meteor.
It has also been claimed that Eir will begin to communicate the change to customers from this week onwards. The group has 84 retail units nationwide which is comprised of Eir, Meteor and dual branded stores that will all become part of the Eir franchise in the forthcoming months ahead.
Spokesman for Eir, Paul Bradley, said the decision to merge services clearly highlights and indicates the organization’s confidence in Eir. He said, "We have adopted a single brand strategy. You can get your bundle from Eir, your broadband from Eir, your TV from Eir and mobile from Eir. What it reflects is our growing confidence in the Eir brand. We are almost two years in from when the company launched the brand and there has been work to evolve the Meteor brand over the last couple of years because initially it was a youth brand and a pre-pay focused brand. But now it is a much healthier mix of prepay and bill pay."
The telecommunications sector in the Czech Republic has announced that two incumbents alongside two new industry players is dividing the spoils of the country’s 5G spectrum band. Existing operators O2 Czech Republic and Vodafone Czech Republic each gained a block of 40MHz in the auction of the 3.7GHz band which was conducted by the Czech Telecommunications Office.
New entrant to the Czech telecommunications industry PODA, also acquired 40GHz, whilst the other new telco player Nordic Telecom 5G received 80MHz of spectrum. However, there was disappointment for Suntel Net and T-Mobile Czech Republic who despite participating in the auction failed to acquire any of the available spectrum. Current operators faced a purchase limit of 40MHz, while new entrants could acquire up to 80MHz.
Reports emerging from the Czech Republic claim the government netted €39 million from the sale, with each block sold for seven times that of the reserve price. Chairman of the Council of the CTU, Jaromir Novak called the auction a success, which represented that the telecommunication market is geared towards the provision of data. He said, “The result of this successful tender indicates that the telecommunication market is oriented towards the provision of data services which are the core of functional data economy."
Industry analysts have stated that the 3.7GHz band is one of several that has been identified to be a ‘pioneer’ band for 5G in Europe, although there is much less availability of this band in the US and China. It’s been reported that the majority of operators both in Europe and globally are currently testing 5G technology in mmWave bands between 30GHz and 300GHz, which benefits include high bandwidth with lower coverage.
The GSMA has previously stated that it’s hopeful that the EU adopts an ambitious approach in relation to 5G policymaking. They said legislators should support proposals to make spectrum trading, sharing and leasing easier and asked for consistency among Member States in approaching the awarding of spectrum.
Ericsson is set to reduce more staff following the disclosure of its financial results for Q2 in 2017. The company has confirmed it will axe staff, although it didn’t speculate how many jobs were at risk, in addition to this it will also reduce its real estate footprint as part of its efforts to make $1.2 billion in cuts.
Ericsson remains in the red following the publication of its Q2 financial performance, and alarmingly indicates a 164% year-on-year decline in net income. However, Ericsson CFO, Carl Mellander, has claimed that the latest round of cuts is part of its strategy to make ‘real efficiency gains’ adding that the savings will enable them to address ‘underperforming parts of the business’.
Ericsson CFO also declined to identify which locations are likely to be effected by the cutbacks, but conceded that it was highly likely that the changes proposed will be implemented and executed internally in a quick fashion. The financial spreadsheet makes grim reading for the Swedish telco, net sales are down 8% year-on-year to SEK 49.9 billion, and its bottom line swung from a SEK1.6 billion profit in Q2 in 2016, to a loss of SEK1 billion for the same period this year.
Ericsson highlighted a number of contributory factors as to why it had endured such a poor financial performance, but stressed that the biggest issue was the faster than expected decline of the overall RAN (Radio Access Network) led by the reduction in demand from China and India. Industry analysts are predicted that the decline in the RAN market will accelerate even more in 2017.
Ericsson has made a number of decisions in recent years in an attempt to halt its slide, but none of these measures introduced have been unable to have the desired effect required. Following its Q1 results earlier this year, the firm pointed to ongoing restructuring programs as a reason for losses.
Ericsson’s new strategy includes focusing on the company’s core telecommunications sector, whilst also attempting to reduce the impact of under-performing units and reviewing long-running unprofitable contracts. Mellander has claimed that he doesn’t expect to see a tangible impact from its rollout of 5G technologies and services to its bottom line until 2019, citing that LTE still had a ‘lot to give’ as operators are faced with the continually requirements to increase capacity on their network.
The CFO said, “There are huge sections of the population not covered by 4G, so I think a lot will happen there. The 4G technology being brought in now is geared towards 5G evolution. Short-term I don’t want to be overly optimistic – we are seeing a decline in the market which is a bit larger than we thought – but longer-term we want to double our profitability beyond 2018.”
A group which represents a number of major US technology firms has appealed to the Federal Communications Commission (FCC) to retract its proposed plans to reverse a landmark decision taken in 2015 which prohibited internet service providers from blocking or slowing consumer access to online content.
The Internet Association which represents companies such as Facebook, Google, Twitter, Netflix and Microsoft has filed a complaint to the FCC in relation to the reversal on the decision made in 2015. It cited that the dismantling of the established net neutrality rules would create significant uncertainty in the market and disrupt a careful balance that has led to the current circle of innovation in the broadband ecosystem.
In May, Republican FCC Chairman Ajit Pai expressed his opposition to the order implemented by the Obama administration in 2015. The FCC voted 2-1 to advance the chairman’s plans to reverse the order which would reclassify internet service providers as if they were utilities. Pai has previously enquired if the FCC has authority or should keep its rules barring internet companies from blocking, throttling or giving ‘fast lanes’ to some websites, known as ‘paid prioritization’.
The FCC chairman has claimed that the order by the Obama administration is unnecessary and harms jobs and investment, and whilst he hasn’t committee to retaining any rules, he has stated that he would prefer an ‘open internet’. However, representatives on the Internet Association said that there is no reliable evidence whatsoever to reinforce Pai’s claim that ‘provider investment’ had fallen.
It has been disclosed that over 8.3m public comments have been filed on the proposal, and Pai will face questions at a US Senate hearing later this week. US telecommunications entities such as AT&T, Verizon Communications and Comcast Corp all vehemently opposed the order in 2015, saying that the order discouraged investment and innovation.
Telecommunication providers have insisted that they strongly support open internet rules and will not block or throttle legal website without legal requirements. However, they have conceded that ‘paid prioritization’ makes sense at times, citing self-driving cars and healthcare information. Internet firms say opening the door to prioritization could enable providers to "destroy the open nature of the internet that allows new or smaller streaming video providers to compete with larger or better-funded edge providers."
Internet providers have expressed their desire to see Congress resolve the long-running dispute over net neutrality and open internet protections. The Internet Association said it was open to alternative legal bases for the rules, either via legislative action codifying the existing net neutrality rules or via sound legal theories offered by the commission.
India’s newest 4G telecommunications operator Reliance Jio has launched an investigation amidst claims that the personal data of over 100 million of its customers has been leaked on to a website. If the claims are found to be true, it would represent the largest ever data breach at an Indian telecommunications operator.
Mexico’s leading telecommunications operator has expressed its anger at rules introduced by the country’s telecommunication regulatory authority. America Movil, which is the world’s fourth largest mobile operators in terms of mobile equity subscribers, and is spearheaded by Mexican billionaire Carlos Slim.
However, Slim has vehemently voiced his opposition to the changes in regulatory policy which he believes are unfair towards his organization, and that it has subsequently led to a loss of its business rights. It’s the last chapter in what has been a complicated process in terms of reshaping the telecommunications industry in Mexico.
Reports are suggesting that the Supreme Court are considering whether to undo parts of an overhaul that blatantly tilted the playing field against the dominant force in Mexican telecommunications which is America Movil. The regulatory changes has led to a steep drop in prices in what Mexican citizens pay for cell phone services and internet access, which has rather inevitably been welcomed by Mexicans.
Legal representation for Slim have described the rule changes as ‘asymmetrical’ and ‘unfair’ which prohibit American Movil from charging other carriers for connecting their calls made to customers on their network, but let those same companies charge America Movil for connecting its calls to their customers.
In a statement released to the press, American Movil described this practice which has been applied to America Movil as the ‘zero-tariff’ - and has undermined the power of the sector’s regulator IFT as well as the rights of America Movil units Telmex and Telcel under past concessions awarded to them by the government.
In addition to this, the Mexican operator claims that it has been harmed by the loss of its rights to cost recovery, economic stability, and financial balance granted by the concessions. "Asymmetrical (rules) does not mean free," the company said in the statement.
Figures released from the telco sector in Mexico indicate that America Movil holds over two-thirds of the country’s mobile subscriptions. However, political commentators have described the landmark telecommunications reform as a huge political victory for Mexican President Enrique Pena Nieto. The Supreme Court has not disclosed when it might rule on the case.
The European Commission confirmed that on 25 April, 2017, its officials carried out unannounced inspections at the premises of companies active in the mobile telecommunications sector in Sweden.
The Commission has concerns that Swedish mobile network operators may have engaged in anti-competitive conduct preventing entry into the consumer segment of the Swedish mobile telecommunications market, in breach of EU antitrust rules (Articles 101 and 102 of the Treaty on the Functioning of the European Union).
The Commission officials were accompanied by their counterparts from the Swedish Competition Authority (Konkurrensverket).
Unannounced inspections are a preliminary step in investigating suspected anti-competitive practices. The fact that the Commission carries out such inspections does not mean that the companies are guilty of anti-competitive behavior nor does it prejudge the outcome of the investigation. The Commission respects the rights of defense, in particular the right of companies to be heard in antitrust proceedings.
There is no legal deadline to complete inquiries into anti-competitive conduct. Their duration depends on a number of factors, including the complexity of each case, the extent to which the companies concerned co-operate and the exercise of the rights of defense.
British telecommunications giant Vodafone has given the green light to its Indian unit to merge with Idea Cellular in order to create India’s largest telecoms operator. The merger has been made out of necessity following the emergence of 4G newcomer Reliance Jio.
Reliance Jio has disrupted the competitive Indian telecommunications market since it entered the sector in September, 2016. The company which is owned by India’s richest man, Mukesh Ambani - announced its arrival in emphatic fashion by offering vastly cheaper data packages and free voice calls for life. That subsequently led Norwegian operator Telenor to see its operations in India to Bharti Airtel.
The merger between Vodafone India and Idea Cellular has been touted for a number of months now – but it was officially confirmed by both organizations in a joint statement which was released to the Bombay Stock Exchange (BSE). The statement read, “Vodafone Group Plc and Idea Cellular today announced that they have reached an agreement to combine their operations in India. The combined company would become the leading communications provider in India with almost 400 million customers, 35 percent customer market share and 41 percent revenue market share.”
Following the merger, shares prices In Idea have rose by almost 4% in Mumbai – the partnership between Idea and Vodafone will now ensure it overtakes Bharti Airtel as India’s largest telecoms operator. It’s believed that Vodafone will hold 45.1% of the merged entity – while Idea will have 26%.
According to reports from Bloomberg the merger will be worth around $23.2 billion based on the combined enterprise value of both organizations. It has also been disclosed that both companies will nominate three directors each in order to form a board.
Global brokerage firm CLSA has estimated that the Vodafone-Idea tie-up would command a revenue market share of 43 percent by the start of the 2019 financial year ahead of Airtel on 33 percent. Jio would have 13 percent.
The combination of Vodafone India and Idea will create a new champion of Digital India founded with a long-term commitment and vision to bring world class 4G networks to villages, towns and cities across India," Vodafone Group chief executive Vittorio Colao said in the statement.