Displaying items by tag: Spain

Embattled Chinese telecommunication vendors Huawei and ZTE have received a welcome reprieve following the news that two Spanish operators are planning on using them for forthcoming 5G pilots.

Published in Telecom Vendors

Spain could increase its GDP by $48.5 billion, an additional 3.6 percent, by 2021, according to a report by Mobile World Capital Barcelona and Accenture Strategy called ‘Opportunity of the Digital Economy in Spain: How digitalization can speed up the Spanish economy’.

Findings of the study, which analyzed the state of digital transformation in Spain and its opportunities for improvement, was presented at the 31st Meeting of Telecommunications and Digital Economy held in the Spanish city of Santander, on September 6.

The report’s analysis was based on the results of an index measuring the digital economy opportunity (DEO) established jointly by Accenture and Oxford Economics. The methodology is based on the assessment of three main influencers under which the digital transformation process is developed: digital talent, digital technologies and digital accelerators.

Digital talent measures the degree of digitalization of work and the skills and knowledge required to carry out specific jobs; while digital technologies refers to the production assets available to tackle the digital transformation processes; and digital accelerators refers to measuring the behavior of a series of factors in the environment that contribute towards the development of the digital economy.

Analysis of the three areas places the United States and United Kingdom economies as digital leaders, whereas Spain stands below the digitalization average in relation to its European competitors. This position, however, reflects the country’s future growth and improvement potential, as well as the aspects on which greater emphasis must be placed to speed up the economy’s transformation process.

The major impact of the 2008 crisis, which had a direct effect on the three indicators analyzed in the report, is one of the many reasons that have led to the slowing down of the digitalization index of the Spanish economy, which has grown below the remaining economies analyzed during the same period. The report highlights the reasons for this delay through the three influences forming the analytical framework of the digital economy.

The scarcity of digital talent is one of the main causes of the delay in terms of digital skills, the report says. The digital transformation process requires a high density of digital talent, although the supply at present in Spain does not meet the current demand for this knowledge. The traditionally low salaries of the ITC sector, youth unemployment (leading to low penetration of millennials in the employment market) and low demographic mobility are just some of the reasons for this lack of talent.

In terms of digital technologies, the lack of digital strategy and the uncertainty with regard to the profitability of new technologies and the operational complexity of Spanish businesses are restricting digital transformation, the report says. What’s more, investment in innovation and the technology transfer capacity from research centers and universities to the market is lower than those of other European economies.

The regulatory framework and the limited access to funding are other factors that have helped in the delay of Spanish digitalization in terms of the last influence of the DEO index: digital accelerators. The study, however, includes a series of recommendations to optimize the distribution of efforts over the three areas of the digital economy in order to maximize the impact and financial return on the country’s economy.

Spain is faced with a great opportunity for the growth of its economy, which includes defining an ambitious, large-scale digital strategy, according to the report. Changes in training include the rapid growth of professional re-qualification, new work models and new talent. In terms of technological resources, the focus is placed on investment in infrastructures, the deployment of high-impact technologies such as 5G, the promoting of private R&D through public policies and the encouragement of new forms of collaboration, including startups, SMEs and major corporations such as Corporate Venturing.

Lastly, the report indicates initiatives required to face the growth opportunity of GDP, such as tax incentive policies, adaptation of regulations to decrease barriers to access technologies, an increase in data security and protection, adaptation of schools in terms of infrastructures and curriculum, and the surge of innovation centers.

Published in Finance

Ride-sharing app service Uber has responded to a one-month ban in the Philippines by appealing to authorities on August 15. The company resumed services as it waited for a decision, Reuters reported. The suspension is one of many issues the Californian firm has faced recently, including controversy surrounding its former CEO Travis Kalanick.

Uber’s services in the Philippines were halted on August 14 by the Land Transportation Franchising and Regulatory Board (LTFRB) because the company ignored an order to stop accepting new driver applications. Despite the ban, Uber maintains a strong following in the country. Citizens lashed out at authorities on social media calling for Uber to continue its services.

The Philippines lacks in areas of reliable and competitive public transport, hence Uber’s popularity on the island nation. The company said it had the right to due process in its appeal to the LTFRB, and wanted a stay of implementation of the suspension.

Uber posted on Facebook, “This means that Uber’s operations will continue until the motion is resolved.” It added: “Over the course of this morning, tens of thousands of riders were left stranded, causing needless inconvenience, while drivers were unable to access the earning opportunities they rely on.”

Uber, one of the world’s most affluent startups valued at upwards of $60 billion, has faced a number of controversies over the past year. Taiwan banned the service for two months at the beginning of 2017, and Uber was only granted permission to continue serving the capital city Taipei by using licensed commercial drivers, rather than its usual private drivers.

A statement on Uber’s website in April it said would now be “partnering with licensed rental car companies to resume serving riders in Taipei… after constructive talks with transportation authorities.” Uber Taiwan’s General Manager, Likai Gu, said the company wants to “partner with more legal transportation service partners in weeks and months to come.”

Uber’s controversy in Taiwan began in 2016 after authorities claimed it was operating unlawfully. Taxi companies are legally required to be domestically owned and operated under Taiwanese law. The company was then forced to suspend its services, after police spent months cracking down on Uber drivers in Taipei.

In the Philippines, the LTFRB stopped accepting and processing applications for all ride-sharing services in 2016, including Uber, to study further how to regulate the industry. Controversy ignited when Uber admitted it was still accepting new driver applications because of strong demand, despite not processing them.

LTFRB responded by suspending Uber’s services, due to the “irresponsible” behavior of Uber in “unduly challenging the limit of fair regulation” by ignoring the LTFRB’s instructions and continuing to accept driver applications.

In Uber’s defense, Grace Poe, a senator and strong advocate for improving transport services in the Philippines, said the LTFRB’s suspension of Uber was “cruel and absurd.” She claimed that suspending the service “further exacerbates the problem of having an utter lack of safe, reliable and convenient transportation options” for the people of the Philippines.

Uber also faced backlash in Europe recently, when Madrid authorities in Spain asked the anti-trust watchdog to investigate whether the company’s new cheap airport transfer service had broken competition rules.

The competition regulator, CNMC, called for the government to lift a ban on Uber last year. But Uber’s new airport service reignited scrutiny, since it offers a tariff of 15-19 euros for a ride between Madrid’s Barajas international airport and the city center, which is cheaper than the standard fixed taxi rate of 30 euros. 

“[Uber Airport] could violate several articles of the Law of Unfair Competition and consumer rights, if it is proven that the service is being operated at prices below operational costs with the sole intention of gaining customers through unfair competition,” said the Madrid City Council in a statement.

In Spain, taxi drivers have gone on strike three times this year, according to reports, arguing that ride-hailing apps like Uber, which are regulated under VTC licenses (an authorization to rent vehicles with driver), often used for private chauffer services, constitute unfair competition because they do not meet the current regulations and pay less tax than taxi services. 

There are currently more than 2,000 VTC-licensed taxis in Madrid, the only Spanish city where Uber is currently active, and about 15,000 traditional taxis, according to figures from the Ministry of Public Works. The European Court of Justice recently ruled that Uber should be defined as a transport service rather than an app.

Internally, Uber’s stability has been rocked by the sensational resignation former chief executive, Travis Kalanick. The co-founder stepped down in late June under increased pressure from investors who raised concerns about his leadership. A growing momentum of voices demanded changes at the helm, and it was the call from investors that ultimately forced Kalanick to concede that his position was untenable. 

One of Uber’s early investors, venture capital firm Benchmark Capital, has accused Kalanick of conspiring to return to his role as CEO. The firm gave Uber and Kalanick a month to review its recommendations on August 14 before filing a lawsuit the week before to force Kalanick off the company’s board and remove the ability for him to return, Reuters said. Kalanick fired back in defense claiming he’s working with the board to place a new chief executive.

“I am disappointed and baffled by Benchmark's hostile actions, which clearly are not in the best interests of Uber and its employees on whose behalf they claim to be acting,” Kalanick said in a statement.

Benchmark Capital, which owns 13 percent of Uber and controls 20 percent of the voting power, claimed in the lawsuit, “Indeed, it has appeared at times as if the search [for a new CEO] was being manipulated to deter candidates and create a power vacuum in which Travis could return.”

Founded in 2009, Uber has been a pioneer in the sharing economy. But the company has also been the subject of various protests and legal actions, and was even subject to an investigation of a former employee accused of engaging in sexual harassment. Some analysts claim the organization embodies many of co-founder Kalanick’s pugnacious personality traits. 

Published in Featured

Spanish telecom giant Telefónica posted its Q2 results for 2017 showing strength in its South American subsidiaries and declines in Europe. The company showed “a general acceleration in growth in main financial and operational terms” as it moves to organically reduce its €48.5 billion debt pile rather than sell off assets.

The operator posted revenue of around €13 billion, an increase of 1.9 percent from the same quarter in 2016. Net profit for Telefónica reached €821 million, an increase of 18.4 percent from the same period in 2016. The company’s key revenue drives, it said, was mobile data revenue.

Telefónica was able to reduce its debt by €3.7 billion year-on-year, which will increase once the company completes the sale of its 40 percent stake in tower unit Telxius, which it’s selling for €1.3 billion. Telefónica moved to sell its O2 unit in the UK to help reduce its debt after it felt pressure from investors, but the company is now attempting to reduce its debt organically by improving cash flow.

“The strength and better business trends in the first half of the year, as well as being well-positioned to continue capturing sustainable growth in the coming quarters, allow us to upgrade our guidance for 2017,” commented José María Álvarez-Pallete, Executive Chairman of Telefónica.

Published in Finance

Orange returns to profit in France for first time since 2009

Written on Thursday, 03 August 2017 10:50

France’s Orange Group confirmed profits of more than that achieved in 2016 on a comparable basis in its Q2 2017 financial results. It was the first time the company has returned to profit in France since 2009. Orange said the strong results were driven by strong commercial momentum by investment and continuing efforts on the transformation of the cost structure.

“The acceleration seen in the Group’s growth was confirmed by the first-half results, and in particular the performance in the second quarter, driven by France, Europe and Africa and the Middle East,” said Orange Group Chairman and CEO Stephane Richard. “In France, we returned to growth for the first time since 2009.”

Richard added that Orange’s performance in Spain, and more generally across Europe, was “excellent” with strong revenue growth underpinned by a significant increase in high-speed broadband customers.

“The strategy that we have been following for several quarters, which centered on giving customers an unbeatable experience through convergence around the home and a quality network, is now yielding results,” he said.

“We have converted more than half of our revenue increase into EBITDA, demonstrating a good balance of growth and profitability. This has enabled us to reaffirm our objective of delivering growth in adjusted EBITDA for the full year 2017,” Richard added.

The company also strengthened its content offering in the first half of the year through the creation of Orange Content and the signing of a number of agreements with prestigious partners such as Canal+, its historic partner, and HBO. Richard said the company remains convinced that content is an effective tool for improving its offerings and keeping customers loyal while protecting value.

Orange’s revenues were 20.276 billion euros in the first half of 2017, an increase of 1.1% (+222 million euros) following an increase of 0.9% in the 2nd half of 2016 (+188 million euros).

The improved trend in the 2nd quarter was principally tied to the recovery in the Africa & Middle East segment, a continued strong performance in Spain and the return to growth in France for the first time since 2009.

The Group had operating income of 2.434 billion euros in the 1st half of 2017, an increase of 293 million euros compared with the 1st half of 2016. Operating income from the telecom activities was 2.462 billion euros, an increase of 321 million euros.

Net income was 830 million euros in the 1st half of 2017, compared with 3.323 billion euros in the 1st half of 2016. The decrease of 2.493 billion euros between the two periods was mainly linked to the impact of the sale of EE in January 2016. Net income from continuing operations declined 244 million euros. Excluding the impact of a charge related to the shareholding held in the BT Group (-349 million euros), net income from continuing operations improved 105 million euros.

Published in Finance

Uber has come under fire in Spain by Madrid authorities that have asked the anti-trust watchdog to investigate whether the ride-hailing app’s new cheap airport transfer service has broken competition rules, Reuters reported.

The competition regulator, CNMC, last year called for the government to lift a ban on Uber. But the app’s new Uber Airport service has brought Uber back under scrutiny, since it offers a tariff of 15-19 euros for a ride between Madrid’s Barajas international airport and the city center, which is much cheaper than the standard fixed taxi rate of 30 euros.

“[Uber Airport] could violate several articles of the Law of Unfair Competition and consumer rights, if it is proven that the service is being operated at prices below operational costs with the sole intention of gaining customers through unfair competition,” said the Madrid City Council in a statement.

Uber has faced similar condemnation around Europe, where it expanded into from the US six years ago, due to the fact that it is not bound by the strict licensing and safety rules that apply to some of its competitors.

In Spain, taxi drivers have gone on strike three times this year, arguing that ride-hailing apps like Uber, which are regulated under VTC licenses, often used for private chauffer services, constitute unfair competition because they do not meet the current regulations and pay less tax than taxi services.

There are currently more than 2,000 VTC-licensed taxis in Madrid, the only Spanish city where Uber is currently active, and about 15,000 traditional taxis, according to figures from the Ministry of Public Works.

The European Court of Justice recently ruled that Uber should be defined as a transport service rather than an app.

Published in Apps

Telefónica doubles use of renewable electricity

Written on Tuesday, 06 June 2017 05:36

44% of Telefónica's electricity consumption is already renewable, which is equivalent to the average annual consumption of 203,749 households. This means that the company has doubled its use of renewable electric energy from 21% one year ago. Telefónica is accelerating the fulfillment of its goals to help support the Paris Agreement: to reach 50% renewable energy by 2020 and 100% by 2030, combined with a reduction in energy consumption.

In order to make its commitment public, Telefónica has joined  RE100, a global and collaborative initiative involving influential businesses committed to achieving 100% renewable electricity in order to massively increase the demand for renewable energy.  

“Our Renewable Energy Plan helps us to improve our competitiveness, reduce our operational costs and to make growth compatible with a sustainable strategy. Our goal is to have the best network, one that not only allows us to offer excellent connectivity in technological terms, but also one that is the most efficient and clean in the sector in terms of energy and carbon,” explains Enrique Blanco, Telefónica’s Global CTO.

Sam Kimmins, Head of RE100, The Climate Group says: “By joining RE100 and progressing its renewable electricity goals, Telefónica is demonstrating that climate leadership and business leadership go hand in hand. Going 100% renewable means Telefónica is saving on energy costs while preventing CO2 emissions – that’s a smart business decision. The company is one of the largest multinationals in Spain with a large electricity footprint and even larger global reach. How it chooses to source its energy matters in driving market change and delivering on global climate goals.”

Telefónica’s Renewable Energy Plan includes four action areas, depending on the markets in which the company operates and the regulations in force in each one: acquisition of renewable electricity with a guarantee of origin, long-term power purchase agreements (PPA), shorter bilateral agreements and self-production. The company estimates that plan will allow Telefónica to save 6% in energy costs by 2030.

The progress achieved this year through the plan is mostly due to purchasing renewable electricity with guarantees of origin in Spain, which represents 79% of Telefónica’s energy consumption in the country, as well as the commitment of the operations in the United Kingdom and Germany, which are already 100% renewable.

In addition, in other countries such as Costa Rica and Uruguay, the electricity consumed by the company is renewable by more than 90%, thanks to the high development of these technologies in these countries.

PPAs are the preferred course of action in Latin America, where Telefónica Mexico’s power agreement is especially noteworthy: it will have two photovoltaic solar power plants that will be operational by the end of 2017 and will supply the operation for 15 years. This represents 50% of its annual electrical energy consumption.

In 2017 and 2018, new PPAs will be signed in other markets where the regulation allows this, such as Chile, Argentina and Colombia.

Bilateral agreements are available in various countries. For example, Telefónica acquired renewable energy in Brazil, where it is the company with the largest number of buildings in the free electric market. These are short to medium-term contracts, which provide savings of more than 15 million euros a year. Other national branches, such as Chile, Peru and Colombia have also undertaken projects for the purchase of clean energy.

Finally, Telefónica is self-generating renewable energy and innovating to increase its use in the network. Currently, the company has 4,200 mobile telephone base stations that self-generate clean electricity, while in Uruguay 16 photovoltaic solar power plants are being installed in rural areas. With a power of 24kWp, they generate almost 600MWh of renewable energy each year, equivalent to the average consumption of 172 households. In addition, in the company’s Madrid business complex, Distrito Telefónica, solar panels generate more than 3GWh/year. 

In addition, in the last 2 years the company has invested 1.4 million dollars in photovoltaic generation systems in Colombia, which has allowed for the replacement of equipment that used to consume diesel fuel 24 hours a day. In doing so, the emission of 474 tCO2 were avoided, the equivalent to the annual absorption of 91 hectares of forest, with approximate annual savings of almost 500,000 dollars.

Given the success in Colombia, Telefónica has decided to reduce annual diesel consumption by 4% worldwide by implementing the project in other operations.

Published in Telecom Operators

Spanish and Brazilian government officials have confirmed that a proposed fiber optic submarine cable between the two countries has been given the go-ahead.

The 9,200 km-long (5,700 mile) Ella-Link, previously known as Eula-Link, will connect to data centers in Madrid, Lisbon and São Paulo, as well as connecting to Fortazela, the archipelagoes of Madeira, Spain’s Canary Islands and Africa’s Cape Verde. A 72Tbps cable, it will be the first fiber optic submarine cable between Europe and Brazil, with the only existing direct link being a 20Gb copper cable laid in 1999.

Ella-Link, a partnership between Spanish submarine cable operator Isla-Link and Brazilian telecoms provider Telebras, will be operator neutral. Alcatel Submarine Networks will be responsible for the project.

The European Commission provided €25 million ($27.2m) in financial support for the cable, as part of its Building Europe Link to Latin America (BELLA) initiative. Current cost estimates were not provided, but when a version of Ella Link was announced by then-Brazilian President Dilma Rousseff in 2014, it was pegged at $185 million.

During the event to launch the underwater Ella-Link telecommunications cable that took place in the city of Sao Paulo, Brazil, the Spain’s Prime Minister Mariano Rajoy, explained that the new connection will reduce the time to transmit data by 40%, as well as improve the quality, reliability and confidentiality of communications between Ibero-America and Europe.

Rajoy commented that the new cable is “a necessary connection between Europe and Ibero-America” and “an example of public-private cooperation”, in which the European Union has also played a “very important” role, with a contribution of 25 million euros.

Rajoy also pointed out that the new underwater cable, which connects the cities of Fortaleza and Lisbon – to then connect with Madrid – is “a modern connection” with a very high capacity of “no less than 72 terabytes per second”.

According to Rajoy, the new connection between Latin America and Europe “will reduce the time to transmit data between the two continents by 40% and will also help us to improve quality, reliability and confidentiality.”

Confidentiality was previously touted as a key reason for the cable, with communications between Brazil and the EU currently routed through North America, despite the fact that the Iberian Peninsula is roughly 60 kilometers (37mi) closer to Fortaleza than to Miami.

The question of United States’ dominance in matters of Atlantic Ocean submarine cable affairs came to the fore in 2013, after a series of damaging revelations by whistleblower Edward Snowden, a former NSA contractor, brought to light the extent of the agency’s surveillance operations.

Rousseff, who in 2013 postponed a state visit to Washington after it was revealed the NSA spied on her email account and phone records, said in 2014 when announcing the cable: “We have to respect privacy, human rights and the sovereignty of nations. We don’t want businesses to be spied upon.”

She continued: “The internet is one of the best things man has ever invented. So we agreed for the need to guarantee … the neutrality of the network, a democratic area where we can protect freedom of expression.”

Published in Infrastructure

The Chairman and CEO of Telefónica, José María Álvarez-Pallete, and the President of Real Madrid C.F., Florentino Pérez, announced their collaboration and sponsorship agreement through which Movistar, a major telecommunications brand owned by Telefónica, operating in Spain and in many Hispanic American countries, becomes a “Connecting Partner” of the white club for the remainder of the 2016-2017 season, and the following 2017-2018 season.

The scope of the agreement includes Telefónica’s most relevant business areas: Spain, Germany, United Kingdom, and Latin America.

In this way, Movistar will accompany and ‘connect’ more than 500 million Real Madrid football and basketball aficionados and fans with the day-to-day activities of the club through different activities. In this first phase the agreement considers marketing, advertising, and hospitality actions, events with players, and image rights.

Movistar will also be part of Real Madrid’s social network actions before, during, and after each match with the #RMMovistar hashtag, and joint contents will be created for sharing among the followers of both brands.

In addition, Telefónica will provide Real Madrid with its technological capabilities applied to sport, as it has already done in other activities, such as cycling and winter sports, as a result of the big data analysis conducted within Telefónica, in the unit known as LUCA.

In his intervention, Álvarez-Pallete took the opportunity to detail the new focus of the company’s sponsorships which will now be focused on the benefits for Movistar customers in Spain.

Telefónica is one of the largest telecommunications companies in the world by market capitalization and number of customers with a comprehensive offering and quality of connectivity that is delivered over world class fixed, mobile and broadband networks.

With a significant presence in 21 countries and 350 million accesses around the world, Telefónica focuses an important part of its growth strategy in Spain, Europe and Latin America.

Published in Telecom Operators

Spanish telecoms giant Telefónica confirmed it will be selling up to 40 percent of its infrastructure unit Telxius to US investment fund KKR for 1.27 billion euros ($1.35 billion). The company, which is burdened by heavy debt, failed last September to float the unit after not being able to attract enough demand for the share sale.

Telefónica said it will keep a majority stake and operational control of Telxius, which operates telecommunications towers and subsea fiber optic cables, and would continue to consolidate it into its accounts. The subsidiary manages 16,000 telecoms towers in five countries as well as 65,000 kilometers (40,000 miles) of submarine fiber optic cables.

Telefónica, under the agreement, will sell a 24.8 percent stake of Telxius to KKR for 790 million euros. KKR will then have the option to purchase an additional 15.2 percent stake in Telxius for at least 485 million euros. The transaction values Telxius at 3.2 billion euros or 12.75 euros per share.

KKR’s head of Spain, Jesus Olmos, said in a Telefónica statement: “The combination of Telefónica’s industrial expertise and KKR’s financial and operations support will help Telxius as it continues to scale and grow.”

Telefónica had asked for 12-15 euros per share for Telxius when it tried to float the unit last year but the offers it received were too low. The move seems to be the “most logical outcome given the great difficulties in finding investors for the subsidiary in the past, combined with Telefónica’s refusal to sell it at any price,” said Bankinter, a Spanish bank, in a research note.

Telefónica’s debt was at 49.9 billion euros at the end of October last year, according to an AFP report. Therefore, the company is eager for cash, hence the sale of its infrastructure subsidiary, and is also considering a possible listing of its British unit 02, after the European Commission blocked its sale to Hong Kong group Hutchison.

Published in Finance
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