Europe’s operators invest through the pain barrier

They may rail against an unfriendly investment environment, but Europe’s network operators keep digging deeper to pay for the likes of 4G and superfast broadband. A recent report from the European Commission said EU telecoms revenue declined in 2013 yet investment grew.

Even arch-critics of Europe’s regulators – Cesar Alierta and Vittorio Colao, the respective chief executives of Telefonica and Vodafone Group – have sanctioned enormous increases in network spending. (more…)

M&A may look tempting, but dangers lurk

First published on Mobile World Live, 4 November 2013

More M&A involving mobile operators looks on the cards. According to Ernst & Young’s recently-published H1 2013 report on the M&A sector, 35 per cent of company executives surveyed – from all industry sectors, not just telecoms – said they were likely to pursue acquisitions. That compares with just 25 per cent who thought the same a year ago.

The consulting firm further found that 65 per cent of executives expected the global economy to improve over the coming year, up from a miserly 22 per cent a year ago. Growing confidence in the economic outlook should make boardrooms less reticent about taking the M&A plunge.

Softening M&A attitudes will auger well for some mobile operators. It’s often said M&A is one of the few areas of human activity where it pays to be victim. Deep-pocketed predators (or at least ones that can get their hands on plenty of debt financing) invariably boost the share price of their intended target when word gets out. (more…)

EU roaming: a race to the bottom?

First published on Mobile World Live, 4 October 2013

Getting rid of EU premium roaming charges sounds great for the consumer, but is it good for the mobile industry? European travellers, bruised by ‘bill shock’, are unlikely to care about that. If they can pay the same rates abroad as they do at home, what is there not to like?

There’s an argument, though, that the EU digital chief’s roaming proposals will slow down investment in the region’s mobile networks – the very thing Kroes wants to avoid. (more…)

India not for the faint-hearted

India’s mobile sector got a share-price bounce recently. Bharti Airtel and Vodafone India, the country’s two biggest operators, reported encouraging top-line numbers for the quarter ended June. With voice and data revenue climbing, is it possible that the Indian mobile market – so long plagued by razor-thin margins and a volatile investment climate – has turned a corner?

The short answer is no. While increases in service revenue are welcome, helped by a growing 3G subscriber base, there are still too many market uncertainties to say with any conviction that India’s operators – many of which are carrying heavy debt – are out of the woods. (more…)

Four’s a crowd?

Europe’s national regulators tend to like having at least four mobile network operators (MNOs). The more infrastructure competition there is, they reason, the more consumers are likely to benefit from lower prices and service innovation.

Ofcom, the UK telecoms regulator, bent over backwards to make sure 4G spectrum auction rules would result in at least four MNOs each having enough wireless frequencies to offer what it believes would be a “viable” high-speed data service nationwide. Other European Union (EU) national regulators have been equally assiduous in setting aside 4G spectrum for a fourth player. There are signs, however, that regulatory attitudes – both at a national and European level – are softening. (more…)

Kroes stirs up net neutrality debate – part II

Neelie Kroes, EU digital commissioner, may well be an operator nemesis when it comes to slashing EU roaming rates. On the subject of net neutrality, however, she appears to be taking a pragmatic approach that maybe – just maybe – has appeal to both operators and consumers alike.

After saying at the end of May she was keen on “guaranteeing” net neutrality – which no doubt sent shivers up the spines of many in the mobile industry – Kroes added more detail in a later speech (4 June) on where she thinks legislation could usefully apply to preserving the ‘open internet’. (more…)

Kroes stirs up net neutrality debate – part I

In her most recent call for a single European telecoms market, Neelie Kroes, Europe’s digital commissioner, enthused about getting rid of premium roaming rates. Nothing new there, perhaps, but she also talked about “guaranteeing net neutrality”.

It seems a big shift from her previous stance on the “open internet”, where the emphasis was on making operators’ traffic management policies more transparent. The prospect of EU-wide net neutrality legislation is sure to agitate operators fearful of so-called OTT competition. It will also raise the hackles of EU sovereign states that don’t take kindly to directives from Brussels. This is going to be hard for Kroes to pull off. (more…)

Spectrum: the great industry divider

First published on Mobile World Live, 23 April 2013

Spectrum allocation is one of the most divisive issues in the mobile industry. Regulators – armed with proposals on how wireless frequencies should be auctioned, re-assigned or re-farmed – invariably get flak from some quarter.

Hardly surprising. Rules about how a finite resource should be divvied up are unlikely to please everyone. In some ways, regulators – dare I say it – are easy targets. Their job is made tougher when there’s pressure from national government to squeeze out as much cash as possible from selling spectrum. (more…)

Operators cry wolf over investment?

A report by the Financial Times says large telecom groups in Europe feel burdened by EU regulation. So much so, claim the region’s big guns, it is hampering network investment. There is a general feeling among them that current regulatory practices, because of their unpredictability and bias towards resellers, is doing a rather fine job of discouraging investment.

In particular, telcos want regulators to stop lowering prices on wholesale copper access. Constant price tinkering, they say, is making them think twice about investing in high-speed fibre-optic access. How can they have clear visibility of the broadband business case if regulators can butt in whenever they feel like it? (more…)

Indian hope trick

I have some sympathy for Telenor’s plight in India. After the decision of the country’s supreme court to cancel the 122 2G licences that were illegally awarded in 2008, the Norwegian telco, along with some other foreign players, has been left high and dry.

Of course, some might say it serves them right. Overlooking the obvious risks, foreign firms rushed into joint venture agreements with local companies that had acquired their 2G licences through the shady practice of first-come-first-served. Huge sums of money exchanged hands. The thinking seems to have been that, with growth prospects so high in India’s mobile market, the gamble was well worth it. (more…)