Deutsche Telekom has submitted what it says is a final offer for US operator MetroPCS

German operator group Deutsche Telekom has submitted what it says is a final offer for US operator MetroPCS. The firm hopes to persuade a number of MetroPCS’s shareholders that voiced objections to the terms of the initial bid.

The two operators announced plans to merge in October last year with Deutsche Telekom, through its subsidiary T-Mobile USA, owning 74 per cent and MetroPCS left with the remaining 26 per cent. MetroPCS’s board of directors had accepted the initial bid, which would see its shareholders receiving $1.5bn in cash for the stake.

However, some shareholders opposed the merger, including hedge fund Paulson & Co, which owns 9.9 per cent of MetroPCS. The opposition stemmed from the terms of the initial bid, which stated that T-Mobile USA would form part of the combined company with shareholder loans totalling $15bn.

“While we believe in the strategic merits of the proposed combination, Paulson believes the pro forma company has too much debt at too high an interest rate to be competitive in the well capitalised US wireless industry,” the hedge fund wrote in a letter to the MetroPCS board.

As a result, the US operator postponed its shareholder meeting to approve or reject the offer to later this month, prompting Deutsche Telekom to improve its offer. In its revised offer Deutsche Telekom has reduced the shareholder loans by $3.8b to $11.2bn. The German firm said that this move significantly increases the equity value of the combined company.

“Deutsche Telekom will also reduce the interest rate on the $11.2bn of shareholder loans by 50 basis points,” the operator group said in a statement. “This lower rate reflects the new capital structure of the combined company, the improved capital markets environment in recent months, and the interest rate level of MetroPCS newly issued $3.5bn of bonds priced in March.”

The merger was approved by the US Federal Communications Commission (FCC) last month, and MetroPCS has rescheduled its shareholder meeting to April 24.

The Galaxy SIII: How much is it really worth?

US operator T-Mobile has revamped its retail offering, abolishing handset subsidies for premium devices in favour of an interest-free scheme that separates the cost of the device from the cost of network service. Annual  service contracts have also been withdrawn. The pricing overhaul is expected to be one of a number of announcements made by T-Mobile at a press event later on Tuesday, although the changes have already been made on the operator’s online retail portal.

Customers who want to buy Samsung’s flagship SIII smartphone will have to make a downpayment of $69.99 and 24 subsequent $20.00 payments. They can also opt to pay $549.99 for the device up front. On Verizon Wireless the SIII is available for $199.99 on a two-year contract, although Verizon’s online store suggests that price has been cut from $599.99.

Financing plans for devices are popular in a number of emerging markets, where consumers may have comparatively limited spending power. But in recent years there has been a trend towards financing plans in mature markets as well. Informa Telecoms & Media has identified 140 operators using such plans around the world.

Handset subsidy has long been viewed by operators in these markets as a cycle of dependency that needs to be broken. Historically operators have been wary of changing their stance for fear of losing customers to competitors that retain subsidies. But  an increasingly challenging economic environment coupled with regulatory pressure on longer-term contracts that allow subsidies to be recouped now seems to be changing the picture.

The gamble for operators is that cutting annual contracts, as T-Mobile has, might encourage greater churn among the crucial high-spending segment; the upside of device subsidy was greater operator control over the customer.

The FCC has approved the potential merger between operators T-Mobile USA and MetroPCS

The US Federal Communications Commission (FCC) has approved the potential merger between operators T-Mobile USA and MetroPCS.

T-Mobile parent company Deutsche Telekom announced details of the merger in October 2012. It will own 74 per cent of the combined company and MetroPCS the remaining 26 per cent. The deal now hinges on MetroPCS’ shareholders approving it, who will be holding a vote on the matter on April 2012, 2013.

FCC Commissioner Mignon L. Clyburn said that she believes that the merger would not likely result in competitive harm to wireless consumers.

“It also appears that this transaction could lead to benefits such as greater deployment of advanced Long Term Evolution (LTE) services, the expansion of the MetroPCS brand into new geographical markets, and the development of a more robust, nationwide network,” she said.

Clyburn noted that some, such as Communications Workers of America, raised concerns regarding whether the new company would pursue non-network synergies and efficiencies that could lead to significant job losses, a reduction in employment standards, and an adverse impact on customer service.

“In this regard, T-Mobile and MetroPCS made a statement that they have no plans to move call centers offshore or to reduce employment levels at T-Mobile call centers,” commented Clyburn. “They also stated that, over the last six months, the company has hired more than 3,600 employees in its 17 domestic call centers, and plans to continue hiring in those call centers, increasing the number of overall US positions, to support its customers.  I hope that the new company, in fact, pursues a course that increases employment opportunities.”

Mike Roberts, principal analyst at Informa Telecoms and Media said that the deal could spark a final wave of consolidation in the US mobile market, which has been in limbo on the M&A front since regulators blocked AT&T’s bid for T-Mobile USA last year.

“Sprint also reportedly moved to acquire MetroPCS earlier this year but was blocked by its board, and it now appears too late for Sprint to make a counter-offer for MetroPCS. So it may turn its attention to Leap Wireless and/or US Cellular, the next-largest operators in the US after MetroPCS – both have near 6 million subscribers compared to MetroPCS with 9 million, and like MetroPCS they use the same CDMA technology as Sprint,” he said.

“However these smaller deals could complicate any potential merger between T-Mobile USA and Sprint, which has long been rumoured as it would put the combined group on relatively level footing with AT&T and Verizon Wireless.”

T-Mobile is using Interactive Intelligence's cloud-based call centre solution

T-Mobile Austria, a subsidiary of Deutsche Telekom, has moved its contact centre solution to the cloud. The operator has selected Interactive Intelligence’s Customer Interaction Center (CIC) IP communications software suite to support its 500 agents across two sites.

Interactive said that T-Mobile will see its customers benefit from increased efficiencies as a result of sing the technology, which the vendor claimed is critical to the success of its service channels and outsourced call center partners.

The solution will also help support T-Mobile’s recently re-launched “European Routing Platform Customer Service” (ERPCS) project, which was initially designed to boost flexibility, integrate outbound campaigns, cut costs, and add non-voice routing capabilities.

“CIC’s flexibility, cloud deployment option, and value for the money were key in winning us over,” said Werner Weiss, T-Mobile’s project manager. “However, the deciding factors were our very positive impressions based on customer reference site visits, and Interactive’s exemplary approach to project planning.”

The CIC deployment is expected to go live in the summer of 2013.

Deutsche Telekom incurred a €7.4bn charge in Q3 resulting from the merger of its US operations with MetroPCS

Despite seeing flat revenues year on year, German operator group Deutsche Telekom posted a net loss of €6.9bn ($8.8bn) in 3Q12. The loss was attributable to charges incurred by T-Mobile USA.

The firm was forced to make an accounting writedown €7.4bn resulting from the merger of its US operations with MetroPCS. It recorded a net profit of €1.07bn in the same period last year and group revenue stood at €14.7bn for the quarter.

“We made a forward-looking decision for our US business in full awareness of the accounting consequences,” said René Obermann, CEO of Deutsche Telekom. “Anyone seeing only the clear net loss is overlooking the fact that our operating business is completely on track. Unlike many of our competitors, we offer reliability.”

In Germany, revenue totalled €5.7bn; 1.3 per cent down compared with 3Q11. Adjusted EBITDA declined 2.5 per cent to €2.4bn. Throughout the rest of Europe, reduction in mobile termination rates in 9 out of 13 countries had a negative impact on revenue development quarter-on-quarter, the firm said. The negative impact on revenue in the third quarter amounted to more than €100m.

T-Mobile USA recorded 160,000 net additions in the third quarter, however, revenue in the third quarter decreased by 5.9 per cent year-on-year to $4.9bn.

EE will switch on its LTE network on October 30, 2012

The network is the backbone of our company.

It’s been our core product for over 20 years. It began in the 90s with 2G and the first steps toward a digital revolution for mobile. 2G was great for making phone calls and sending texts. At the time, it was revolutionary, but very quickly it became a basic expectation for the people of the western world.

When 3G was introduced early on in the new millennium it promised a lot. It delivered a lot. But as the digital revolution picked up pace in the homes and offices of the UK, customer’s expectations of what they could do with their mobiles changed too. People wanted the internet on the move. Beyond voice and text, having access to the internet on the move just came something people expected

To keep up with these expectations we have invested more than £15bn since 2000 on improving and upgrading our 3G network – helping people realise the full personal, social and economic benefits of the digital revolution.

And we have continued to invest and build. Never more so than over the last year.  In January this year we began a £1.5bn infrastructure investment programme to improve and modernise our network and prepare for 4G – a pioneering way to access whatever you want, wherever you are. A way to keep in touch with the people, places and things you want, on your own terms.

On September 11, 2012 we announced a new company, a new network, and a new brand: EE, which will be the first brand in the UK to offer customers a superfast 4G experience, and will launch on the October 30, 2012.

Focusing on the backbone of our company

Creating a network to match the 250 per cent growth in data consumption in the UK, and meet the UK’s 4G ambitions has required a bold and decisive approach. Nowhere has that been more evident than in the merger of Orange and T-Mobile’s networks – the building blocks of the EE network.

In July 2010, we set out to build the Everything Everywhere network, with the ambition of providing the broadest coverage and greatest capacity of any network in the UK, allowing the combined customer base of more than 27 million to do everything they want with their mobile, everywhere in the country.

To make this ambition a reality EE had to oversee one of the world’s biggest network integration projects – bringing together the two networks to create the largest network in the UK and laying the foundations for next-generation 4G connectivity in the country. This was a major project that has taken nearly two years to fully realise.

The integration

In October 2010, Everything Everywhere began “The Big Switch On” by enabling Orange and T-Mobile customers to share 2G signal for calls and texts. A year later, 3G signal sharing was added and is a service that is now used by more than 9 million customers. As a result, 190 million calls and more than 300 million megabytes of data have been carried by customers’ non-home network, giving T-Mobile and Orange customers access to the widest 3G coverage in the UK.

In May 2011, engineers completed the third phase of the project: Smart Signal Share. With Smart Signal Share, when a customer’s 3G signal starts to fade, signal from the other network will automatically be prioritised if it is stronger.

Alongside this project, EE is upgrading its mobile backhaul infrastructure to Gigabit Ethernet, boosting capacity in the part of the network that connects the radio masts to the core internet infrastructure.

Our signal sharing has made the funnel into the network wider, but crucially our investment in the backhaul has made our fat pipes even fatter, to ensure bottlenecks do not result at times of high demand.

Overcoming the challenges of integration

Bringing together the T-Mobile and Orange networks was not a simple task and EE’s engineers had to overcome a number of challenges to get us to the position we are today.

Interoperability: Customers on the T-Mobile and Orange networks needed to be able to roam freely between the two networks without interruption.

In order to do this, approximately 28,000 masts across the two networks had to be upgraded in the same way that masts are upgraded to allow for international roaming between home and foreign networks. The software upgrade took 16 weeks to deploy (following three months of trials) and was completed in September 2011.

Our engineers also ensured interoperability by making remote upgrades to customers’ mobile phones. All active SIM cards are now programmed to roam across the T-Mobile and Orange networks.

Overcoming capacity issues

Mobile operators running a single network can easily predict how many people are likely to use a radio cell at a given time, and ensure there is enough capacity to support all call and data sessions.  However, following the integration, the EE network had to be prepared to support  27 million customers in the UK roaming across T-Mobile and Orange – and ensure that we had sufficient capacity to give them a great experience.

This project took over six months to complete, and involved a detailed analysis of pinch points across the country, and optimisation of capacity to deliver a consistently high level of customer experience for up to 50 million subscribers roaming on the network.  EE now has the most advanced backhaul in the UK, with a national Ethernet footprint that has a higher throughput capacity than any of our competitors.

The next generation of mobile connectivity

EE is continuing to invest in upgrading its network and has rolled out HSPA+ (3.5G) across its network, a move that provides customers with the fastest network speeds in the UK – about 50 per cent faster than the speeds currently available. The rollout has seen 12,000 sites upgraded to deliver coverage to 95 per cent of EE’s customers.

This is just the start, however. While upgrading its 2G network, which runs on the 1800MGHZ spectrum, EE’s engineers have put in place the required technology to get the UK’s first 4G network up and running. 4G is the most advanced mobile network standard seen to date. It is specifically built to handle mobile internet and data more efficiently, allowing faster and more reliable mobile connectivity.

The impact 4G will have on consumers and business in the UK cannot be overstated. 4G will enable mobile devices to work more powerfully, allowing greater flexibility over how and where people work and play. It will also provide a major boon to the UK’s creative and media industries as well as the developers of apps and games. In order to thrive, those industries need a network which opens up new possibilities of speed and responsiveness.

Recent research into the potential of 4G for the UK economy by Capital Economics demonstrates just how great the impact on businesses will be. The company estimates that the UK’s adoption of the new technology could unlock £5.5bn of direct private investment, and found that 4G could support 125,000 jobs and ultimately provide a 0.5 per cent boost to GDP.

All of this hard work and investment has led to the launch of the UK’s first superfast 4G mobile network on October 30, offering mobile speeds that leave even your average home broadband service in the dust and a service fit for a digitally literate nation, with digitally liberated expectations.

David Salam, Director of Network Strategy, Architecture and Design, EE

The UK is finally set to see LTE services launched in the coming weeks

UK regulator Ofcom has said that there is nothing stopping EE’s rivals, such as Vodafone and O2, from putting in an application to alter their 900MHz spectrum licence for LTE usage. A ruling in early 2011 meant that all operators are now free to use their 2G spectrum for 3G services, so extension of that same ruling to encompass 4G would be a small amend.

Potentially, this means that Everything Everywhere, the firm that owns the Orange, T-Mobile and new EE brand in the UK, could have its one-year monopoly on LTE in the market cut short. Its rivals would no longer have to wait for the UK LTE auction, scheduled for early next year, to launch competing 4G services.

At the launch of EE, CEO Olaf Swantee countered claims that the 900MHz LTE ecosystem was not as strong by identifying that three of the five LTE devices to launch on EE’s network are also available with LTE900 connectivity. To be fair, that statement does confirm that the LTE900 ecosystem is indeed weaker, 40 per cent weaker to be exact, but it does highlight the fact that an ecosystem does exist.

However, Bengt Nordström, co-founder and CEO of consultancy firm Northstream, believes that while Vodafone and O2 should be given the option to refarm their 900MHz spectrum for 4G, freeing enough of it up to launch LTE would be a challenge.  This is because operators in the UK are still selling GSM phones and a large chunk of the user base is reliant on GSM900 spectrum.

“My perception is that when you are on HSPA, you tend to use 2100MHz, but the coverage isn’t that great, so all operators are really dependent on the fallback to GSM/EDGE,” he said.

He added that launching LTE only really makes sense if operators can allocate at least 10MHz to 20MHz, which would be tough for them to do.

“I’m not sure how viable it really is for them to effectively free up enough 900MHz spectrum without really creating congestion in the GSM band,” Nordström added.

Despite that, he argued that Ofcom must still take steps to repair the damage it has done to the market, by allowing one operator a monopoly on LTE. EE has sunk a significant amount, £1.5bn into LTE already, but  Nordström  advised EE’s rivals that investing more in HSPA may be the best route forward.

“1800MHz is the best spectrum for LTE, so if I was in O2 or Vodafone’s shoes, I would be thinking: How could I offer comparable service? I think that would mean I deploy HSPA more extensively than I had planned to. If they deploy HSPA or HSPA+ more extensively, from a user perspective, there would probably not be a huge difference between that and LTE,” he said.

“Then I would really have an open and honest discussion with the regulator and say they have given one player a tremendous advantage and to maintain their competition, what can you do for us?”

Despite all these arguments, Ofcom stands by its decree that there are only benefits to be reaped by consumers with EE being given a supposed ‘head start’, with no detrimental effects to competition in the long term.

Ofcom has also dismissed the idea that EE could gain from its exclusivity deal with Apple as the next generation iPhone is only available as an LTE1800 device. In a recent report, the watchdog found that O2 UK gained no benefits from its exclusivity deal with Apple for the first generation iPhone. In fact, the deal cost the operator a fortune in unsubsidised handset costs and caused much embarrassment when the operator’s network subsequently fell over under the weight of demand for data services.

Olaf Swantee, CEO at EE, on stage at the LTE launch event in London

At a press conference in London, Everything Everywhere – the company formed by the merger of the Orange and T-Mobile brands in the UK – has announced that it will be launching an LTE service by the end of 2012.

The move follows the decision by UK regulator Ofcom to allow the operator to re-farm 1800MHz spectrum for LTE services.

A new brand will be introduced, EE, to market the high speed data offering, with the existing brands expected to settle into less advanced segments.

The company has pledged to bring 4G services to 16 cities covering a third of the population in the coming weeks. Handsets available on the service will include Samsung’s Galaxy S III LTE, HTC’s One XL, the Huawei Ascend P1 LTE, Nokia’s Lumia 820 and its Lumia 920 device, which will be exclusive to the operator. The company added that there will be more handsets available soon, with universal anticipation that Apple’s iPhone 5, to be launched tomorrow, will be on the network.

Telecoms.com is currently at the event and will be providing more details and analysis later today.

Verizon Wireless' proposed spectrum purchase deals have been approved by the FCC

US carrier Verizon Wireless has secured approval for its purchase of 122 AWS spectrum licences from cable companies Comcast, Time Warner Cable and Bright House Networks for $3.6bn.

It will also complete transactions with Leap Wireless, Savary Island Wireless and T-Mobile, after the US Federal Communications Commission (FCC), approved the deals.

Verizon Wireless said that by buying the AWS spectrum, it can bring even better 4G LTE products and services to its customers.

The US Department of Justice (DoJ) had given qualified approval to the operator’s plan to purchase the spectrum  from the cable operators, but stated that the terms of the agreements to offer one another’s services must change. The DoJ said that the plan as hatched “would have harmed competition by diminishing the companies’ incentive to compete.”

Now that the amended deal has been given final approval, Verizon Wireless will move forward with its previously announced plan to sell its 700 MHz lower A and B block spectrum licenses.

“We expect a very robust sales process as more than 65 parties have requested and received information about the spectrum we are selling,” said Dan Mead, president and chief executive officer of Verizon Wireless. “Selling the A and B licenses will allow this spectrum to be used to the benefit of other carriers and their customers.”

Everything Everywhere gets approval to launch LTE services from September 2012

UK operator Everything Everywhere, which operates the T-Mobile and Orange brands in the UK, has been cleared by regulator Ofcom to offer LTE services in its existing 1800MHz spectrum. Ofcom has ruled that the operator will be allowed to launch LTE at any point from September 11, 2012.

EE would not be drawn on the exact date it plans to launch its service, but a spokesperson told Telecoms.com that the operator is currently drawing up plans to launch in “certain key locations in the UK by the end of this year”.

Ofcom’s permitted launch date is well ahead of the earliest opportunity that the operator’s rivals will be able to launch their own 4G services. Vodafone, O2, 3UK and any new entrant to the market will not be able to bid for LTE spectrum until early 2013. They are expected to start rolling out 4G networks using the auctioned spectrum from the middle of 2013, and begin offering 4G services to consumers later that year.

According to Ofcom, allowing Everything Everywhere, to launch LTE will deliver significant benefits to consumers.

“There is no material risk that those benefits will be outweighed by a distortion of competition. Delaying doing so would therefore be to the detriment of consumer,” the regulator said in a statement.

Two US operators have launched shared data price plans, but are they the future of data pricing for operators?

As operators in mature markets take steps to move away from low margin or loss making all-you-can-eat data pricing models,US carriers are pioneering a model that enables families to draw data for each member’s personal device from a single monthly allocation. AT&T this week became the latest carrier to introduce the play.

AT&T’s plan starts at 1GB for $40, with a $45 fee for each smartphone attached to the plan. Current customers are not required to switch to the new plans, but can choose to do so without having to extend their contract. The new plans will also be available for business customers, and the operator expects the plan to become even more useful to consumers when M2M services grow in usage and popularity.

Verizon launched its shared data plan in June. It is offering customers unlimited voice calls and text messaging and a single data allowance for up to ten devices, beginning at 1 GB for $50, with an additional charge of $40 for each smartphone on the plan.

Jan Dawson, chief telecoms analyst at Ovum, said that although Verizon had the opportunity to benefit from a first mover advantage when it launched its shared data service, it made several key mistakes from which AT&T appears to have learned. He explained that AT&T is giving customers more options and a simpler charging structure.

“AT&T’s offering has almost identical pricing but some really important differences in the detail,” said Dawson. “Most importantly, AT&T isn’t forcing customers into the new plans, which is really important because they’re not the best deal for all customers. There are some subtle differences in the pricing too, but they won’t make a significant difference to most customers.”

Mike Roberts, principal analyst and head of Americas at Informa Telecoms and Media warned that, when operators introduced family plans for voice services, voice usage went up quite significantly. Operators do not want to encourage similar behaviour with data because of capacity issues.

“The art for the carriers is to sell the appeal of shared plans as being more convenient and easier to manage. The head of the household could manage the one bill and have everyone on it and keep control without having to worry about multiple bills,” explained Roberts.

Not all US operators are convinced, however, and Sprint has no plans to move to shared data pricing. Stephen Bye, CTO at Sprint, told Telecoms.com that while the cost of provision is rising faster than the revenues being derived from data, unlimited data plans are simply more convenient for the consumer. He said  convenience is the key to customer retention and, when operators start to price data based on usage, it creates a very complex situation for a customer.

“With unlimited data price plans, customers clearly do not have to worry about their data consumption. But if operators introduce usage-based price plans customers have a new set of problems to think about, such as whether a software update is counted against their plan or the extent to which background applications are running and using up their data allowance without their knowledge.”

Controversially, though, Bye suggested that unlimited data can also be more cost-effective for the operator.

“A lot of operators are focused on the network cost but one needs to look at the overall end-to-end cost: what is the service related cost, how many calls are coming in to customer care teams? So we look at the end-to-end business model and we continue to believe that unlimited is the best value proposition for our customers, it provides the best experience, and that’s something we continue to support,” he said.

And T-Mobile USA has also suggested that consumers will not benefit from the shared contract model. The firm claimed that AT&T and Verizon’s shared family plans are costly, as the operators are charging more for what consumers want by raising rates on data, while promoting unlimited talk and text, even though today many consumers use less of these services.

T-Mobile added in a statement on July 19th that shared data plans are also complicated, as individual users don’t know how much of the shared allocation of data they are using, making it difficult to stay within their limit.

“Conversely, at T-Mobile we believe that customers who pay more, should get more,” said Harry Thomas, director of product marketing at T-Mobile USA. He added that data should be worry-free, with no surprise data cap or bill shock, and also flexible and affordable.

“Rather than having to account for each device on a shared family data plan, T-Mobile customers can use their existing data plan to power multiple devices, while still saving hundreds of dollars annually.”

T-Mobile is to cut 900 more jobs

Deutsche Telecom’s US mobile operation, T-Mobile USA, is to cut a further 900 jobs, following the unit’s failed $39bn purchase by AT&T late last year. The latest cuts come on top of around 1,900 job losses announced earlier this year.

Last week T-Mobile USA said it has seen revenue and profit deteriorate over the past year, and is now stepping up its efforts in the market, bolstered by the rollout of an LTE network.

Revenue for the US operation during the first quarter of 2012 increased two per cent year-on-year to reach €3.8bn, while adjusted EBITDA grew 12.9 per cent to €1bn. However, this was in part due to exchange rate gains made by the US dollar. In local currency, revenue decreased by 2.3 per cent, although adjusted EBITDA increased by eight per cent.

“Relaunching the T-Mobile brand on the US market and significantly enlarging the sales network in the country are important steps in implementing the strategy,” the firm said in its statement. “In addition, initiatives for cutting costs and reducing churn are having a positive impact. There was a 0.1 percentage point improvement year-on-year in branded contract customer churn, representing a 0.5 per cent improvement on the fourth quarter.”

So it looks like the cost cutting initiatives are set to continue. Most of the recently announced job cuts are to come from the closure and consolidation of call centres.

“We are restructuring the organization and optimizing operations so that we can make critical decisions better and faster in response to market and customer demands. Further, by reducing our cost structure and streamlining operations, T-Mobile will be able to invest in areas where we anticipate the strongest return: modernizing our 4G network; aggressively pursuing the B2B segment; and re-launching our brand,” the company said.

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Everything Everywhere says that service revenues would have grown were it not for the impact of MTR cuts in the UK

Everything Everywhere, the company formed by the merger of Orange and T-Mobile in the UK, has posted a drop in service revenue of 2.5 per cent to fall to £1.5bn in its first quarter earnings statement.

The firm blamed the drop on the impact of regulated mobile termination rate (MTR) cuts. Last year, the UK’s Competition Commission decided to increase the speed at which mobile termination rates must fall, from 4 pence per minute to just 0.65 pence per minute by 1 April 2014. It said that, excluding the impact of these cuts, revenue would have grown by 2.9 per cent.

Nonetheless, CEO Olaf Swantee was buoyed by the performance, and described its current churn rate, which stands at 1.2 per cent as “industry-leading”.

“We are seeing improved underlying service revenues, driven by rapid data revenue growth, as we successfully upgrade customers to smartphones and higher value postpaid agreements,” he said.

He added that the firm expects to make “major strides” improving its network experience, such as better signal sharing and faster 3G data services, when it launches its LTE services, which it is hoping to bring to market by the end of this year by refarming its 1800MHz, pending approval from regulator Ofcom.

“We continue to make progress in reducing costs and simplifying the business.  In the first quarter we initiated our network optimisation programme to streamline the number of network masts.

During the quarter, Everything Everywhere also completed on a series of other business integration projects including restructuring its head offic, the consolidation of the Orange and T-Mobile warehouses and handset supply chain and improved product availability. The firm plans to reduce its head office space by 38 per cent and Swantree said the operator remains on track to achieve its targeted £3.5bn  net present value (NPV) in cost savings by 2014.

LTE services have now been launched in Hungary

T-Mobile’s Hungarian subsidiary and the wireless operation of Magyar Telekom has become the first operator to offer a 4G-LTE mobile broadband service in the country.

The service was launched across ten districts of Budapest after the operator carried out a three-month extended network testing phase, involving over a hundred personal and business users. T-Mobile said that it will continue to develop its network in 2012 to provide the service to more customers in Hungary.

The operator said that it has invested heavily in the technology, and the number of 4G-LTE stations roughly tripled over the course of 2011. As of January 1, the new broadband mobile technology is available to 40 per cent of Budapest citizens, including for indoor use. T-Mobile intends to expand coverage to the whole area of Budapest in 2012.

Customers in Budapest hoping to use the service require a Magyar Telekom Net&Roll 4G mobile internet package and also an LTE-enabled T-Mobile internet dongle.

Everything Everywhere is investing £1.5bn over three years

UK communications firm Everything Everywhere, which owns and operates the British Orange and T-Mobile brands, has announced that it is to invest £1.5bn ($2.4bn) in a three-year network evolution programme. The project will accelerate the integration of the Orange and T-Mobile networks and ready them for LTE through the “implementation of 4G-ready technology following successful trials,” the firm said.

The plan represents double digit growth in network investment from 2011 to 2012. T-Mobile’s 3G network has already been merged with that of UK competitor Three, as part of the two firms’ network management joint venture, MBNL.  Orange and T-Mobile have allowed each others’ users to roam across both 3G networks since October, with 2G roaming in place since 2010.

CEO Olaf Swantee said: “With mobile data increasing 250 per cent over the past two years, we are making these investments so we can deliver on our ambition to provide the UK’s most reliable, biggest and best mobile data network.  We believe that the UK requires a 21st century infrastructure and are committed to rolling out 4G as soon as possible to support growing data use, connect parts of the country with little or no mobile broadband, and drive economic growth.”

The firm said that sometime during the first half of 2012, customer devices will automatically select the strongest available signal from the two networks.

An LTE trial conducted in partnership with BT launched in September this year. Everything Everywhere said that the trial, which focused on the delivery of mobile broadband services to rural areas, has delivered “satisfaction rates of over 90 per cent.”

The UK is lagging comparable European markets in LTE deployment. While regulator Ofcom has said that it expects LTE availability before 2013, it is expected that nationwide coverage will not be available until 2017.

AT&T has been told it may have to undergo an administrative hearing before its T-Mobile USA merger could get the go-ahead

The US Federal Communications Commission (FCC) has said that AT&T must face an extra review next year, putting a significant hurdle in the way of its planned merger with T-Mobile USA.

FCC chairman Julius Genachowski told reporters in the US that letting AT&T acquire T-Mobile USA is “not in the public interest” and that if approved, “thousands of jobs will be lost in the aftermath”.

He has therefore proposed an administrative hearing take place, which would require AT&T to present its case before an administrative law judge. The FCC would also present its own findings at the hearing.

The call for an extra hearing is unusual – it is its first such move in nine years, and a review is still pending approval by other FCC commissioners. However, if the administrative hearing takes place, it could delay the proposed $39bn merger by months.

Larry Solomon, senior vice president of corporate communications at AT&T, responded to the FCC’s action today, saying that it is disappointing.

“It is yet another example of a government agency acting to prevent billions in new investment and the creation of many thousands of new jobs at a time when the US economy desperately needs both,” he said, adding: “At this time, we are reviewing all options.”

Verizon's CFO Fran Shammo has said the carrier has no objections against the propsed merger of AT&T and T-Mobile

Leading US Carrier Verizon Wireless has no concerns over the proposed merger of AT&T and T-Mobile USA, as long as it does not result in increased industry regulation. The company’s CFO Fran Shammo made the revelation to a Morgan Stanley conference in Spain last week, according to a report by Rethink-Wireless.

Shammo admitted that he did feel that the US wireless carrier industry did need consolidation, but not at the expense of increased interference from US regulator the FCC.

The FCC is currently debating the proposed $39bn merger, and has raised the ire of other players in the market such as number three US carrier Sprint Nextel, and also the US Department of Justice, which claimed that the deal would “substantially lessen competition”.

For its part AT&T has said that if the merger goes through it would create 5,000 jobs, though Sprint has countered with a report that claimed that this was unfounded.

AT&T wants to merge with the struggling T-Mobile USA, owned by Deutsche Telecom, in order to gain access to its wireless spectrum and improve its LTE spectrum coverage. The move would make it the largest player in the US market.

Verizon Wireless currently offers LTE in 179 cities markets, covering a population of 186 million, compared to just 15 markets for AT&T. It said it plans to cover 70 million people with LTE by the end of the year.

At the conference Shammo also said that Verizon wants to see changes in the device eco-system, no doubt as a response to the growing power of the device OS manufactures, namely Apple and Google. This would mean welcoming a third player in the market, most likely Nokia’s Windows Phone powered devices, with RIM’s Blackberry struggling to retain market share.

15 US politicians have sent a letter to Obama urging him to approve merger

US President Barack Obama has received a letter from 15 US politicians calling for his administration to approve the merger between AT&T and T-Mobile.

The letter, put forward by member of congress Heath Shuler and 14 other Democrats, said that the proposed merger of AT&T and T-Mobile USA would help solve America’s job crisis by reducing unemployment, encouraging private investment and promoting new and innovative technologies that will drive job creation.

“AT&T has announced plans to repatriate 5,000 jobs that are currently being performed overseas.  In addition, a recent SITE study has shown that the merger will create somewhere between 55,000 and 96,000 new jobs to integrate the two networks and upgrade facilities,” the letter read.

It added that the merger will encourage new private investment to deploy wireless high speed internet access services to 97 per cent of the US population. Coverage of this magnitude will necessitate an additional $8bn investment from AT&T over and above its current industry leading capital investments, the politicians argued.

“Finally, the deployment of next generation, wireless broadband is the type of investment in new and innovative technology that will drive job creation for years to come,” the letter continued, adding: ”A recent study by Deloitte predicts that next generation wireless broadband buildout by the wireless industry will create 371,000 to 771,000 jobs and GDP growth between $73bn and $151bn by 2016.  AT&T’s proposed merger commitment to make available this new technology to 98 per cent of the nation’s population will be a key component of the industry buildout.”

However, Public Knowledge, a Washington-based public interest advocacy organisation, said that the deal would be bad for the US economy, consumers and technological innovation.

“We thought the issues of job creation and investment had long been settled.  It is perfectly clear that AT&T’s history has been to destroy jobs, not to create them.  The company has shed 10,000 jobs a year for the past ten years.  There is no reason to believe that the takeover of T-Mobile will do anything to change that dynamic,” said Gigi B. Sohn, president and co-founder of the organisation.

“To the contrary, T-Mobile has created jobs at the same time AT&T has cut them.  And by removing T-Mobile’s investment, the amount of money spent on improving the wireless networks will be less, not more.”

The Dutch MVNO market remains dynamic

Almost one third of mobile subscribers in the Netherlands are customers of virtual operators, according to a report published this week by Dutch analyst house Telecom Paper. The total number of MVNO subs in the market has now hit 6.6 million, or 32.8 per cent of the total subscriber base, the analyst said.

More than half of the virtual brand customers—56.4 per cent—are on MVNOs owned by the market’s mobile operators, which are gaining share. Telecom Paper said that 13.7 per cent of the total Dutch mobile market are customers of independent MVNOs, down 1.3 per cent on Q3 2010.

At the end of the first quarter of 2011 there were 56 MVNOs operating in the Netherlands, although 11 of these control the majority of the market. This number has remained the same since Q3 last year, although there remains movement in the market, with several players exiting and others taking their place since that point.

“Hi and Telfort are the leaders of the operator-owned brands and Lebara and Lycamobile of the independent MVNO brands,” the analyst firm said in a statement. “In terms of network operator usage, KPN continues to lead, although it has lost some share. Both Vodafone and T-Mobile increased market share, with T-Mobile growing the most due to its acquisition of Simpel and growth at Ben.”

Telecom Paper said that new entrants will need to innovate on service proposition and by finding niche markets, such as immigrant populations. “New players will have to differentiate themselves by offering real value-added services, and not just plain voice and SMS services, in order to survive,’’ said Alejandra van de Roer, senior analyst at Telecompaper and co-author of the report.