Displaying items by tag: merger

Consumer watchdog blasts proposed merger of US operators

Written on Thursday, 07 February 2019 10:17

A leading US consumer watchdog has voiced their concerns regarding the details of the proposed merger agreement between mobile operators T-Mobile US and Sprint.

Published in Telecom Operators

US operator suffers drop in its revenue as it prepares for 5G

Written on Tuesday, 05 February 2019 08:13

US telecommunications operator Sprint has posted a disappointing performance in its financial returns for Q4 in 2018.

Published in Telecom Operators

The US government has confirmed that the proposed merger deal between telecommunication operators T-Mobile US and Sprint will undergo a forensic examination in an effort to determine whether or not the deal represents the best interests of consumers.

Published in Telecom Operators

The parent company of Discovery Channel and Animal Planet, Discovery Communications, is forking out $14.6 billion, or $90 per share, based on Discovery’s Friday, July 21 closing price, to purchase Scripps Networks, the parent company of the Food Network and Travel Channel. The deal will combine two major US television companies, further consolidating the media industry. The transaction is expected to close by early 2018.

Discovery and Scripps combined share an estimated 20 percent of ad-supported television viewership in the United States. The benefit of combining, the companies said, is that it would allow them to compete better against online options, such as Netflix and Amazon, which are quickly gaining popularity.

Additionally, the combined company will be home to five of the top pay-TV networks for women and will account for over 20% share of women watching primetime pay-TV in the U.S. Discovery sees strong opportunities to strengthen its existing global female networks with select content from Food Network, HGTV and all the Scripps brands.

Cable television companies face falling subscriber numbers, and to compete with platforms like Netflix, are releasing their own online platforms, and also cheaper television packages with fewer channels, to entice viewership.

“This is an exciting new chapter for Discovery. Scripps is one of the best run media companies in the world with terrific assets, strong brands and popular talent and formats.  Our business is about great storytelling, authentic characters and passionate super fans,” said David Zaslav, President and CEO, Discovery Communications.

“We believe that by coming together with Scripps, we will create a stronger, more flexible and more dynamic media company with a global content engine that can be fully optimized and monetized across our combined networks, products and services in every country around the world,” Zaslav added.

Kenneth W. Lowe, Chairman, President & CEO, Scripps Networks Interactive, said, “Through the passion and dedication of our incredible employees, and with the support of the Scripps family, we have built a lifestyle content company that touches the lives of consumers every single day. This agreement with Discovery presents an unmatched opportunity for Scripps to grow its leading lifestyle brands across the world and on new and emerging channels including short-form, direct-to-consumer and streaming platforms.”

The combination will extend Scripps’ brands, programming and talent to a broader international audience through Discovery’s global distribution, sales and languaging infrastructure.  Scripps also has a strong position in key international growth markets, including the U.K. and Poland, and will help fuel Discovery’s existing content pipeline in growth areas like Discovery’s Home and Health network in Latin America.

Discovery’s added scale, content engine and multiple brand offerings will present a compelling opportunity for new digital distribution partners, including mobile, OTT, and direct-to-consumer platforms and offerings.

Moffett Nathanson analysts told the BBC there could be advantages for Discovery following the merger, but the long-term issues faced by the companies probably won’t go away: "While there will likely be ample cost synergies, international revenue opportunities and improved relative scale, we don't think this merger will fundamentally alter the long-term prospects of these companies."

There was talk of the two companies combining in 2014, and more recently when Scripps fielded interest from Viacom, the owner of MTV, Comedy Central and the Paramount film studio. But after considering the options, Scripps decided the best option was to merge with Discovery.

Published in Finance

US telecom giant AT&T made several executive appointments in late July in preparation for completing its acquisition of Time Warner Inc., the global media and entertainment leader with HBO, Turner, and Warner Bros. The transaction is currently under review by the United States Department of Justice and competition authorities in certain foreign countries.  

Effective August 1, new executives will assume new positions and will continue to report to AT&T Inc. Chairman and CEO Randall Stephenson. “We look forward to completing the deal and delivering for customers the many benefits of this merger,” said Stephenson.

John Stankey, previously CEO of AT&T Entertainment Group, will assume the lead of AT&T’s Time Warner Merger Integration Planning Team. He will work closely with Time Warner Inc. Chairman and CEO Jeff Bewkes to plan for a smooth leadership transition to Stankey as CEO of AT&T’s media company once the merger is complete.

Previously Chief Strategy Officer and Group President of AT&T Technology Operations, John Donovan was named CEO of AT&T Communications, once the merger is complete, which includes AT&T’s Business Solutions, Entertainment Group, and Technology & Operations groups.

In addition, Lori Lee, who previously led AT&T’s Time Warner Merger Integration Team, will assume leadership with AT&T International, and maintain her responsibilities as Global Marketing Officer.

AT&T provides mobile, broadband and video services to US-based consumers and serves nearly 3.5 million businesses, from the smallest companies to nearly all the Fortune 1000. The company provides mobile services to more than 13 million consumers and businesses in Mexico, and pay-TV service to more than 13 million subscribers across 11 countries and territories in Latin America and the Caribbean.  

Published in Telecom Operators

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."

Published in Telecom Operators

The European Commission has approved the acquisition of de facto control over Telecom Italia by Vivendi. The decision is conditional on the divestment of Telecom Italia's stake in Persidera.

Telecom Italia is an Italian company, which provides voice and data services through mobile and fixed technologies, digital content services and IT services to enterprises. It is also active, through its subsidiary Persidera (a joint venture with Gruppo Editoriale L'Espresso), in the market for the wholesale access to digital terrestrial networks for the broadcast of TV channels.

Vivendi is a French company, which controls a group of companies active in the music, TV, cinema, video sharing and games businesses. Vivendi's affiliate company, Havas, is active in the advertising industry in Italy. Vivendi holds a significant minority stake in Mediaset, which is also active in the market for the wholesale access to digital terrestrial networks for the broadcast of TV channels.

The Commission found that, post-transaction, Vivendi would have had an incentive to raise prices charged to TV channels in the market for wholesale access to digital terrestrial television networks, where Persidera and Mediaset each hold a significant share.

The benefits of such a strategy would be obtained either directly through Persidera or indirectly via the minority shareholding in Mediaset, since other players active in the market do not represent a viable alternative for TV channels. As a result, TV channels would have found it more expensive to reach their audiences in Italy.

The Commission also investigated whether the relationship between Vivendi's activities in Italy in advertising, music, TV and mobile gaming and Telecom Italia's activities in fixed and mobile telecommunications raised competition concerns. In this respect, the Commission concluded that Vivendi would not have the ability or incentive to shut out other competitors from the relevant markets.

In order to address the competition concerns identified by the Commission, Vivendi committed to divest Telecom Italia's stake in Persidera. In view of the remedies proposed, the Commission concluded that the proposed transaction, as modified, would not significantly reduce competition in the European Economic Area (EEA) or any substantial part of it, including Italy. The Commission's decision is conditional upon full compliance with the commitments.

The Commission has exclusive jurisdiction to assess the impact of the proposed transaction on competition in the various markets affected within the EEA. However, the EU Merger Regulation recognizes that Member States may take appropriate measures, including prohibiting proposed transactions, to protect other legitimate interests, such as media plurality. A media plurality assessment typically looks at wider concerns about whether the number, range and variety of persons with control of media enterprises are sufficiently diverse.

In a decision issued on 18 April 2017, the Italian Communications Authority (Autorità per le Garanzie nelle Comunicazioni, 'AGCOM') found that Vivendi's position in the Italian markets for media and content is in violation of Italian media plurality rules.

As the Commission's investigation and findings concern solely the competition aspects of the proposed transaction, the Commission’s conditional clearance decision is without prejudice to the Italian media plurality review process.

Published in Government

ZTE Corporation, a major international provider of telecommunications, enterprise and consumer technology solutions for the Mobile Internet, announced an agreement with Digicel Group to expand 4G LTE networks across its 26 markets in the Caribbean and Central America.

Digicel is deploying ZTE’s world-class 4G LTE solutions to deliver the highest-performance mobile broadband services to consumers and businesses across the region.

ZTE’s innovative 4G LTE solutions including Uni-RAN help Digicel upgrade and optimize its infrastructure as part of an ongoing network transformation program, providing subscribers with superior mobile internet connectivity and coverage. ZTE Uni-RAN solutions will support network evolution at Digicel by enabling deployment of next-generation digital services and business innovations.

Deployed by mobile carriers around the world, ZTEs Uni-RAN solution increases the network operation efficiency by prolonging the lifecycle of devices through network upgrades and smooth evolution. Based on ZTE’s SDR (Software Defined Radio) technology, Uni-RAN protects operator’s investment and dramatically reduces network costs and increases the stability and reliability of network operation.

Digicel recently announced its Digicel 2030 global transformation program, promising customers a completely new communications and entertainment experience made possible by a more agile, customer-centric application of resources and investment. 

Published in Telecom Vendors

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.

Published in Telecom Operators

The New Zealand Commerce Commission has rejected a multi-billion dollar merger deal between Vodafone New Zealand and pay-TV operator Sky, over concerns that the combined companies would have too much market power in the country.

Vodafone New Zealand and Sky Network Television announced plans to merge in June last year, a deal between the country’s largest subscription television service and its second largest telecommunications provider. The deal was estimated to be worth NZ$3.44 billion (US$2.47 billion).

Reports suggest that Sky – which has no connection with the European broadcaster of the same name – was eager to fight back against the rise of streaming services such as Netflix. However, New Zealand’s watch dog expressed concerns that Vodafone would have an unfair advantage if it had access to Sky’s exclusive sporting content, such as All Blacks’ rugby tests and the Olympics.

“Given the merged entity’s ability to leverage its premium live sports content, we cannot rule out the real chance that demand for its offers would attract a large number of non-Vodafone customers,” said the New Zealand Commerce Commission, adding that it could inhibit competitors, reduce investment in the telecom sector, and, over time, allow the market’s dominant player to drive up prices.

Following the rejection announcement, Sky’s shares dropped 17 percent to NZ$3.60 while Vodafone’s biggest rival Spark saw its shares go up 1.72 percent at NZ$3.55. Sky chief executive John Fellet expressed his disappointment saying, “This is a very disappointing conclusion to a merger we saw as enhancing New Zealand’s communications and media landscape.”

Published in Telecom Operators
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