KPN offloads Belgian B2B, carrier assets

Dutch carrier KPN has entered into an agreement to sell its Belgian B2B and carrier business to local rival Mobistar for €65m.

The deal covers KPN’s Belgian fixed line assets, including its fibre network and signal the Dutch firm’s cessation of investment in the Belgian B2B market due to intense competition.

As a result of the transaction, KPN will be able to focus more on the sale of fixed and mobile services to consumers via its wholesale VoIP and broadband partnership with Mobistar and its subsidiary mobile operation, Base.

Base is the smallest player in the Belgian market with 2.9 million subscribers at the end of September. Belgacom is the market leader with five million customers, followed by Mobistar with 3.7 million.

In this case, however, it’s Belgium’s National Competition Council cast in the role of assassin. The NCC slapped Proximus with a fine of €66.3m on Tuesday this week, for what it alleges was “abuse of a dominant market position” during 2004 and 2005. Specifically, the accusation runs, Belgacom offered its business users on-net tariffs that were lower than the wholesale rates it was charging to other Belgian operators and MVNOs. Four other charges put forward by the public prosecutor’s office were rejected by the NCC.

The case stemmed from an original complaint made by Belgian underdog BASE three and a half years ago, in which the firm claimed that Proximus’ strategy had forced it out of the Belgian business market. Second placed Mobistar joined forces with BASE, as did a couple of MVNOs.

Proxmius’ response has been scornful indignation and a pledge to appeal. “You can’t just isolate a certain rate, [because] on­net rates form an integral part of the services that Proximus offers its customers,” the firm said in a statement. “The existence of on­net rates is a given in the market, not only in Belgium, but also in many other European countries. Such rates must therefore be considered within the context of the global mobile offering from which the customer benefits.”

Also in the Beneluxian bad books this week was Dutch carrier Telfort, which is being fined €5m by Dutch regulator Agentschap Telecom for not deploying a 3G network in the spectrum it won at auction in 2000 on grounds of hindering competition. A further €5m fine will be levied for every three months in which Telfort does not rectify this or, presumably, until it returns the mothballed spectrum.

Telfort was purchased by Dutch incumbent KPN in 2005, which now operates it as a no-frills sub-brand. There are three carriers in the Dutch market as well as a number of sub-brands and MVNOs and penetration in the country, which has a population of less than 17 million, is well in excess of 100 per cent. So exactly what room remains for further competition is up for debate. Perhaps the issue for the regulator is that 3G subscriptions count for only 20 per cent of the overall mobile market, and it wants to see this increase.

Needless to say, KPN is affronted by the accusation that, as an ex-PTT incumbent, it should be abusing its position (the firm only has half of the Dutch market by subscribers, after all) and it has pledged, like Proximus, to appeal.

You’d think that these two firms, close neighbours that find themselves in similar positions, would have reason to get together and share their woes. But then you’d remember that KPN owns BASE which, as we’ve seen, initiated the action that has resulted in Proximus’ current predicament. There’s some very successful compartmentalisation going on there.

If 3G is progressing too slowly for the Dutch regulator then it might want to take heart from a report by Swedish analyst Berg Insight, which stated this week that HSPA accounted for 11.6 per cent of broadband PC connections in Europe at the end of last year. The number of HSPA connected PC subscribers grew by 74 per cent year on year to reach 14.6 million at the close of 2008, a number that Berg expects to grow to 70 million by the end of 2013.

By then, of course, they’ll all be on LTE, certainly if the likes of Ericsson have anything to do with it. The Swedish vendor claimed this week to have deployed the world’s first “commercial” LTE site in partnership with TeliaSonera in Stockholm. The site isn’t really commercial, though, because nobody’s paying to use it. But the firms have said it will be part of TeliaSonera’s network when it eventually goes live next year.

Despite this open and frank admission that the site will not be in commercial use until next year, Ulf Ewaldsson, VP and head of product area radio at Ericsson, insisted on continuing the vendor trend of elasticizing time. “The unveiling of this site shows that LTE is no longer the story of the future, it is the story of today,” he said (the future, apparently, no longer including years – like 2010 – that have yet to happen).

Also happening ‘today’ by this estimation is AT&T’s 2011 deployment of LTE in the US of A. This week the firm announced plans to upgrade its 3G network with HSPA later on this year in preparation for the move to 4G.

It also said it plans to enhance its 3G coverage by almost doubling the amount of wireless spectrum dedicated to delivering mobile broadband in most metropolitan areas, which should beef up in-building reception. Backhaul will also be upgraded with fibre at thousands of cell sites, with AT&T claiming that the enhanced network platform could allow for theoretical peak rates of 7.2Mbps, although real world speeds are likely to be more pedestrian. Capital investment for these projects fits in 2009 fits within AT&T’s previously outlined targets of $17bn to $18bn.

Strong growth in mobile broadband has been partially stimulated by the burgeoning netbook – or ultra mobile PC -  market and vendors are all trying to predict the next form factor that will prove successful. US chip shop Qualcomm reckons it’s hit upon the answer, with a whole new category of device that falls between the high-end smartphone and the netbook.

It’s called the “smartbook”, which isn’t a very good start.

The smartbook, said senior vice president of marketing and product development at Qualcomm, Luis Pineda, promises “the smartphone experience in a larger form factor” which actually sounds like a disincentive to the Informer. Surely the point of these devices is that you cram in as much as possible into as small a space as is feasible. So what we’ve got in the smartbook is a device that has performance comparable to the performance of a device that has had its performance compromised in order to reduce its physical size, only it’s bigger? Huh?

In fact it all sounds a bit too much like Palm’s ill-fated Foleo strategy – which answered the question: “is it really necessary?” with a resounding “No!” A wide range of netbooks are available for under the $500 mark, many of which boast a fully fledged operating system like Linux or Windows XP, integrated wifi and 3G, and a highly portable form factor. So the opportunities for a smartbook look doubtful.

Nevertheless, Pineda said that around 15 companies are on board with the concept and there are around 30 such devices in development. The first of these will hit the shelves towards the end of 2009.

Qualcomm would not name names, but Acer, Compal, Inventec, Samsung, Asus, Foxconn, LG, Toshiba, C-motech, HTC, Quanta and Wistron are all known users of the Qualcomm Snapdragon chipset, which forms the foundation of the smartbook platform.

“Snapdragon is a key chipset for computing products,” said Pineda, “and we’re now looking at new devices beyond the cellphone, with a larger display, full keyboard, and an enhanced user experience.”

Snapdragon, as a single chip solution combining GPS, multimedia, the processor, wifi and 3G on one chip, promises to make smartbooks lighter, thinner, cheaper and give them a longer battery life. Pineda said voice was likely to be a feature of some of the new devices, and the focus would be on Linux-based operating systems, although the smartbook would be “different from the netbook as it uses the same software setup as smartphones in larger form factor,” he said.

And while the Informer’s in a grouchy mood, let’s look at the latest example of those entities that we’ll all be using our smartbooks to access when LTE coverage arrives sometime in the present. Yup, we’re talking about application stores.

Nokia, the world’s biggest handset vendor, joined the fray on Tuesday morning by opening the doors to its own app store, which is an extension of the firm’s Ovi services platform. The Ovi Store will be accessible to some 50 Nokia handset models, and will feature as a pre-installed service on the forthcoming flagship product, the N97. Nokia reckons that the targetable market of Nokia owners seeking out applications, games, videos, podcasts, productivity tools, and location based services will be in the region of 50 million at launch.

That’s if those users can get onto the site, that is. A flurry of complaints that appeared across the web immediately following the launch suggested that the store was having some teething problems. The majority of these claimed that the site was slow and clunky and appeared to be lacking in content. Attempts by the pale, crepuscular techie at Telecoms.com to access the site online have been abortive so far.

What he has seen seems to be pretty standard fare, although it definitely lacks the polish of the Apple App Store. US carrier AT&T, which was the first in the world to launch the iPhone, confirmed today that it would be making the Ovi Store accessible to its customers later this year. It should be noted, however, that Nokia has very weak market share in the US, which is likely to affect the app store’s uptake in that market.

You might be wondering why it is that the Informer seems to be in a glass half-empty kind of mood. Well, apart from the usual existential despair, there’s being on the receiving end of press releases like the following, which we’re using to inaugurate our new, occasional , possibly never-to-return feature: “daft press release of the week.”

Here is this week’s effort, in its entirety:

Hi,

Please find an announcement below from Vodafone UK. Unfortunately neither party are available for further comment.

++++++

Media Alert

28 May 2009, Major UK financial services company signs three year deal with Vodafone UK.

Lloyds Banking Group has signed a three year partnership with Vodafone for mobility services including voice, mobile email and data services.

++++++

All the best,

A.P.R.

Why bother? That’s the only question the Informer has. Why?

Anyway, let us away to places further flung; to India and Africa where special collaborative breeding programmes look set to create the world’s first elephant with middle-sized ears.

Besides this development, however, the news this week is that merger talks between India’s number one carrier Bharti Airtel and pan-regional MEA specialist MTN are back on after collapsing a year or so ago.

The announcement came in the wake of the carriers each announcing that they have broken the 100 million subscriber barrier. MTN, which also held abortive merger talks with India’s number two carrier Reliance last summer, has agreed to negotiate exclusively with Bharti until the end of July this year.

Bharti is the third largest single-market operator in the world, after China Mobile and China Unicom, while South Africa-headquartered MTN is one of the MEA region’s strongest players, with operations in 22 countries. Combined, the two carriers would rank third in the world in subscriber terms, behind China Mobile and Vodafone.

The proposed deal would see Bharti acquire 49 per cent of MTN and MTN acquire 36 per cent of Bharti, of which 25 per cent would be held by MTN with the remainder held directly by MTN shareholders, Bharti said in a statement.

MTN would pay some $2.9 billion in cash and newly issued shares for its stake in Bharti, while the Indian firm would acquire approximately 36 per cent of the currently issued share capital of MTN for ZAR 86.00 in cash plus 0.5 newly issued Bharti shares (per MTN share). This acquisition would push Bharti’s holding in MTN to 49 per cent.

It all sounds very nice but the deal is not yet done, and it is believed that last year’s talks collapsed over the question of control, a contentious issue that has derailed a number of high profile industry mergers in the past.

Nonetheless, emerging market players have long been expected to mount challenges on established mature market players, trading on the scale they have built in high growth territories. Analysts have pointed to Bharti’s investment in submarine cable as an indication that the firm has truly global ambitions and it is conceivable that the combined firm could make a play for a presence in developed markets.

Finally, we just have space for a classified ad this week.

For Sale: LG Nortel

Majority (50% + 1) stake in profitable, standalone business with strong balance sheet that has not filed for creditor protection. Buyer to collect. With competitive portfolio of wireless, wireline and enterprise solutions, firm is market leader in Korea and select international markets. South facing garden. Great opportunity for new owner to put their stamp on this lovely property. Reluctant sale, will take offers. Interested parties please contact M Zafirovski, or visit www.nortel.com. No timewasters.

Take care

The Informer

Ps – to get your name and your company’s name in BOLD in next week’s A Week in Wireless, simply be the first to respond this film trivia question, included to mark the 357^th edition of the news letter.

From which film comes the following line:

“A .357′s a good weapon, but I’ve seen .38s careen off windshields.”

Ad funded MVNO Blyk announced plans to expand into Belgium on Thursday, tapping Nokia Siemens Networks to host its core network.

Blyk, which launched its first services in the UK just over a year ago, is unusual no just in the fact that it has an ad funded business model, but also in that it owns a good portion of its own infrastructure despite being an MVNO.

As a result, the Finnish headquartered company has chosen Nokia Siemens Networks to host its core network as it expands into the Netherlands and Belgium. Under two turnkey service deals, NSN will provide the infrastructure, prepaid charging and messaging systems, software and operations to Blyk as a fully managed, hosted service to Belgium and the Netherlands.

Blyk piggybacks on Orange’s network in the UK, and in January revealed Vodafone as its Dutch partner. In Belgium, the company will team up with Mobistar, and recently confirmed plans to move into Spain and Germany.

Despite some scepticism, Blyk has made waves in the industry, last month announcing the doubling of its member base in the UK to 200,000 since autumn 2007. The company runs an advertising funded mobile service aimed at 16-24 year olds, providing free text messages and calls to subscribers who receive advertisements on their phones.

The company has also raised eyebrows over its claimed average advertising response rates of 29 per cent. Compared to other forms of mass market advertising this figure is phenomenal, stacked against a 0.5 per cent response rate for online advertising and 4.5 per cent from unprofiled SMS. ]]> http://www.telecoms.com/5022/blyk-brings-in-nsn-to-help-with-expansion/feed/ 0 http://www.telecoms.com/5715/iphone-gets-voip-operators-get-worried/?utm_source=rss&utm_medium=rss&utm_campaign=iphone-gets-voip-operators-get-worried http://www.telecoms.com/5715/iphone-gets-voip-operators-get-worried/#comments Thu, 04 Sep 2008 16:26:57 +0000 James Middleton http://www.telecoms.com/?p=5715

Apple iPhone users will be able to circumvent cellular networks to make calls thanks to a voice over internet protocol app supplied by Belgian phone firm Nomado Telecom.

The tech provider claims callers could make savings of up to 80 per cent connecting to the internet via the terminal’s wifi connection. Calls made via Nomado’s cellular VoIP service starts from just Euro0.025 per minute to other mobiles and are free between fellow Nomado users.

In an interview with Mobile Communications International Hugh Roberts, a senior strategist with Patni Telecoms Consulting warned that mobile operators need to embrace multi-platform services rather than seeing this as a competitive threat. “With the advent of multi-mode handsets, the combination of VoIP routed not by the cellular infrastructure but via wi-fi/wimax/etc access will be appealing to customers, notably those who already sit in cafes using VoIP on their PCs,” he said, adding: “This isn’t a VoIP issue per se, but 3rd party VoIP will be one of the services singled out by MNOs as a battleground in their fight to maintain outdated strategies and business models.”

This is already a battle VoIP provider Truphone, which also has an iPhone app out, has waded into.

Operators need not panic just yet over the perceived threat of VoIP. Nomado notes that VoIP technology isn’t ready to take over just yet. The VoIP providers are unable to offer a static cell phone number to their users claims the firm. That means that even if users switch to their service, their cell phone number will remain the same and if their provider charges them for receiving calls over their network, those charges will remain. Nomado’s VoIP app is already available on a range of Nokia, Samsung, HTC and other Smartphones.

The iPhone 3G will be available SIMlock free in Belgium on Friday, local operator Mobistar has revealed.

Belgium is one of those European countries where forced bundling and device exclusivity are outlawed on networks. As a result, consumers have to pay a hefty price for the hardware, but they can use it on any network.

T-Mobile Germany, one of the exclusive carriers of the original Apple device, ran into similar problems last year when Vodafone won a temporary injunction preventing T-Mo from SIMlocking the device. But the victory was short lived as a Hamburg court overturned the order and validated T-Mo’s right to exclusivity.

Nevertheless, Mobistar will be going ahead with sales of an unlocked iPhone 3G this week, but the 8GB model will set buyers back Eur525, while the 16GB version will weigh in at Eur615.

Tariff packages will be available on the Belgium network, ranging from Eur30 for 3 hours talktime or 300 texts, as well as 200MB of data, to Eur60 per month for 9 hours or 900 SMS and 1GB of data.

Mobistar is the exclusive carrier of the iPhone 3G in Belgium.