Things that make you go Humm

You can’t deny a spectacular comeback when you see one, especially one as fast as Philipp Humm’s. After two less than fortunate years at the helm of T-Mobile USA, where he was responsible for engineering the failed merger with AT&T (although he did score $4bn in break up fees), Humm stepped down from his role, and less than 24 hours later was revealed as the new chief of Vodafone’s Northern & Central European operations.

June 29, 2012

9 Min Read
Things that make you go Humm

By The Informer

You can’t deny a spectacular comeback when you see one, especially one as fast as Philipp Humm’s. After two less than fortunate years at the helm of T-Mobile USA, where he was responsible for engineering the failed merger with AT&T (although he did score $4bn in break up fees), Humm stepped down from his role, and less than 24 hours later was revealed as the new chief of Vodafone’s Northern & Central European operations.

Vodafone likes reorganising its portfolio and this week has executed its own vision of the Eurozone break up. Humm, who’s a bit of a veteran, having also held positions at Amazon, Procter & Gamble and McKinsey, will join Vodafone on October 1st, and will take control of Germany; UK; the Netherlands; Turkey; Ireland; Hungary; the Czech Republic; and Romania.

But pity his counterpart Paolo Bertoluzzo, who will step into the CEO role for Southern Europe on August 1st. Bertoluzzo will maintaining his existing leadership of Vodafone Italy and will have to look after a few donkeys in his portfolio, which includes Spain; Portugal; Greece; Albania; and Malta.

Emeka Obiodu, senior telecoms strategy analyst at Ovum, believes Humm’s appointment will bring much needed mature European market expertise to Vodafone’s northern European markets: “Over the past three years, differing market developments have led to a divergence in the performance of Vodafone’s operations in northern and southern Europe. A poor economic outlook is weighing down operations in southern Europe whereas, in relative terms, the markets in northern Europe are doing ok. Humm’s appeal is not so much for what he did or did not do during his time at T-Mobile USA, rather it is about getting someone who understands Vodafone’s northern European markets well, and someone who can hit the ground running from the start.”

With Humm still in the hot seat in the US however, T-Mobile USA and Verizon Wireless were swapping spectrum like Panini football stickers. While schoolboys across the world are busy finding a friend who will swap their extra Ronaldo sticker to complete their Portugal team, T-Mo and Verizon are playing the same game with AWS spectrum.

T-Mobile USA needs spectrum in certain areas to complete its coverage and Verizon needs spectrum in other areas for its coverage, so the two have decided to trade. In fact T-Mobile wants Verizon Wireless’ spectrum so badly that it has even agreed to pay a cash sum on top of its own spectrum, around $120m according to analyst estimates, and has even said that it no longer opposes Verizon’s pending spectrum deal with a host of US cable companies.

Desperate times call for desperate measures and for Research In Motion (RIM), last month’s warning of a “significant” number of job cuts was this week given a value of 5,000. In a double whammy of doom, the firm also said that its forthcoming flagship BlackBerry 10 operating system, its one shining hope, will now be delayed until 2013 after revenue dropped through the floor and the company turned in a significant loss for its last quarter.

Google of course was enjoying momentum in the opposite direction at its annual developer conference this week, where it “opened the playground” with a glimpse of what the future holds for the Android ecosystem. Jelly Bean – the next version of the flagship OS – was on display alongside the first Google-branded tablet and a confusingly positioned home entertainment unit that hints at the firm’s foray into hardware.

The first Google-branded tablet, the Nexus 7, was put up for pre-order, in an announcement sure to ruffle a few feathers, most notably its other OEM Android partners who also have 7” Android tablets in market. Still, in combination with a number of applications optimised for the Nexus 7, including Youtube, and some bundled content out-of-the-box, the introductory $199 price point it is sure to bring a welcome shot in the arm for the Android platform in its effort to crack the tablet space.  By also using this set of differentiators, notably price point and screen size, the Nexus 7 has positioned itself far enough away from the Apple iPad that it can grow volume in the segment and carve out significant market share, whilst also hopefully pulling its OEM partners along with it.”

With a nod to its own designs on the hardware space, Google also unveiled a sphere – the Nexus Q – which combines Android and the Google Play market to stream music and video in your home by plugging into a speakers and TV in the house. The Informer doesn’t understand it and wonders why the media sharing feature at the heart of Google Q has not been pushed into Google TV, which coincidentally, landed on European shores two years after it launched in the USA. Starting this week, Google TV devices will be available for pre-order in the UK through a partnership with Sony, which is integrating the application with its Internet Player hardware.

As Google TV was turning two, the iPhone was celebrating its fifth birthday, and the Informer thought it fitting to pay tribute to that small rectangular, glass and metal piece of kit that has shaped the industry and indeed our lives, perhaps more than any other invention in the last decade.

In the pre-iPhone era, if you wanted to listen to music on your phone, rather than on a dedicated MP3 player, you were advised to buy a Sony Walkman phone. If you wanted to play games, Snake on Nokia handsets was about the most compelling option. There’s many would argue that of all the smartphones that have entered our lives over the past five years, the iPhone is still the best. The proof is in the pudding; according to the latest research from Strategy Analytics, Apple has generated $150bn of cumulative revenues for its iPhone family in the first five years since launch in June 2007, and a quarter of a billion iPhones have been shipped cumulatively worldwide.

As one thing grows, so another shrinks, and O2 UK has revealed that it expects to run out of spectrum on its macro cell layer around 2014. The firm’s chief radio engineer Robert Joyce explained: “As we see it, with the increasing demand from tablets and smartphones the macro cell will not be able to cope. We can take the macro cell grid to eight times its current capacity and then we’ll run out of spectrum.”

Joyce said that this crunch would occur even taking into account the spectrum acquisitions it hopes to gain from the digital dividend auction in 2013. To deal with this spectrum crunch Joyce said that, along with spectrum acquisition, refarming 2G to 3G, and moving to LTE, small cells would be the answer. “At this point we will have to break the grid. We will have to talk about small cells – not just femtocells but wall-mounted, telegraph pole small cells.”

Across the sea in France, domestic incumbent Orange has begun offering NFC-enabled SIM cards nationwide in preparation for what it calls the “mass deployment” of mobile contactless services. The UpTeq NFC SIM cards are supplied by Gemalto and are the first SIMs on the market to offer the same security level as chip-based payment or smart cards, the firms said.

Orange, which claims to be the first European operator to roll out this technology on a national scale, said it plans to rent slots on the SIMs to service providers, including banks, retailers and transport providers, which is in line with the GSMA’s suggested model of NFC service operation.

Sticking with France and the Informer was sad to note the passing of Minitel, one of those potentially game changing innovations that never made it beyond its home market, like Teletext or Ceefax. In fact, this pre-internet, internet-like idea fell foul of the same development – the World Wide Web, most probably because the WWW had proper naughty pictures and not just paragraphs of saucy text.

There were two shadows hanging over Europe this week, one belonging to billionaire businessman Carlos Slim, owner of Latin American operator group América Móvil, which acquired yet more shares in Dutch operator KPN, taking its stake in the company to 23.43 per cent.

The Mexico-based operator announced its intention to take its stake up to 28 per cent in May, but KPN told its shareholders not to accept the unsolicited $3.25bn bid for shares, which valued each share at €8, claiming that the offer was too low. However, Slim got lucky and eventually bought its shares at an average of just over €7.50.

In the same month, América Móvil picked up a 21 per cent stake in Telekom Austria, taking its stake in the Austrian firm to approximately 23 per cent in total. In Latin America, the cash-rich telecoms group has a history of buying troubled operators at good prices to turn them into profitable companies, by exploiting synergies and developing efficient operations. And while it’s true that other large operators, such as Vodafone or Telefonica, have failed to make similar non-controlling investments work, there’s no doubt that the tie-up between America Movil and KPN and Telekom Austria will have a significant impact in the Dutch and Austrian markets, but will also produce important benefits for the core Latin American operations. Watch this space.

The other shadow belongs to the beast of European roaming regulation, with new rates coming into play on Sunday, July 1.

One of The Informer’s colleagues with a face for radio was on the airwaves this week talking about the impact of new rules on operator’s roaming revenues. It’s clear the cash cow has been milked dry and with fundamental changes in place, the carriers are offering new packages, which The Informer suspects will see some of them running roaming at a loss.

Moreover, from 2014 customers should for the first time be able to separate roaming services from their contract, allowing them to pre-select a cheaper roaming package from a roaming ‘marketplace’ which could see MVNOs and roaming specialists come into play.  But until then the now-familiar retail prices caps will remain, although they will now fall further and have also been extended to include data.

Matthew Howett, Ovum’s lead regulatory analyst, believes although a structural solution deals with the underlying problem, it is not without challenges: “The new regulation attempts to structurally address the underlying problem, which is essentially a lack of competition. Customers are currently reliant on how well their host operator has negotiated with its partners in other countries.

So no more cosy cross-border agreements, although the success of the structural solution will ultimately depend on getting the regulated wholesale pricing right, making it easy for customers to understand and cheap for operators to implement.

So about now would be a good time to go holidaying in Europe, maybe help boost the economies of our friends in the south and put a smile on Mr Bertoluzzo’s face?

Take care

The Informer

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