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Latest News
July 2009
Mobile companies feel the effects of global recession
July 2009
C&W sticks to full-year guidance
Mid Europa completes UPC Slovenia acquisition
July 17, 2009
Private equity group Mid Europa Partners has completed the acquisition of cable operator UPC Slovenia from Liberty Global for an undisclosed amount.
Slovenia is UPC's smallest market in Europe, with 158,500 customers at the end of March. The company estimates it currently serves 40 percent of pay-TV households in Slovenia. Mid Europa is already active in the region with an investment in Serbian pay-TV and broadband provider SBB. Dragan Solak, head of SBB, will become chairman of the newly-acquired asset. On 31 March of this year UPC Slovenia had 158,500 TV customers including 14,200 digital TV customers, 57,200 broadband customers and 29,000 telephony customers.
C&W sticks to full-year guidance
July 17, 2009
Cable & Wireless said on Friday revenues were under pressure in the Caribbean as fewer tourists visited the region, but it would make further cost cuts to protect its full-year profits guidance.
The statement came ahead of a controversial vote at the UK telecommunications company’s annual meeting later on Friday over a shake-up of its executive pay policy, which could increase rewards for its management.
Shares in the group opened up 1 per cent at 132p.
“The downturn in the Carribean is intensifying in several of the local economies,” said Richard Lapthorne, chairman. “In the first quarter we have seen domestic fixed line minutes fall by 9 per cent compared to the same quarter last year, which is putting pressure on fixed line revenue,” he said.
Mobile market share and customer numbers were holding up, although average revenue per customer was down 8 per cent compared with a year ago on lower usage and competitive pricing, he added.
However, C&W reiterated its guidance for the full year of earnings before interest, tax, depreciation and amortisation of £1.025bn, with its international division up 6 per cent to about $935m and its worldwide division, which provides telecoms services to large companies and organisations, rising 32 per cent to £430m.
Planned cost-cutting measures include sharing mobile towers in Jamaica.
C&W is proposing to extend the pay-out period for its long-term incentive plan, which could increase the cash going to its managers, led by John Pluthero, head of the company’s UK business.
However, some shareholders are against the move. The Association of British Insurers, whose members account for almost 20 per cent of investments in the UK stock market, has made its strongest possible objection by issuing a “red top” alert.
C&W is not expected to provide concessions to investors and said the proposals had secured “widespread support from major shareholders” following consultation. Newton, C&W’s biggest shareholder, is backing the changes.
The private equity-style scheme has attracted controversy since its creation in 2006, because of the potentially large rewards. It is based on total shareholder return, and C&W said in 2006 the scheme might provide managers with £216m.
The cash-based scheme was supposed to pay out in full next year. But in May C&W said it wanted to extend the pay-out period to 2011 because of “unprecedented turmoil in the credit and equity markets”, which was causing a delay “in our value realisation timetable”.
C&W said the sales at its worldwide division were ahead of expectations while guidance for capital expenditure of about £477m also remained unchanged.
Mobile companies feel the effects of global recession
July 17, 2009
TWO of the world’s leading cellphone manufactures have projected that the effects of the global recession will continue to plague the players in the industry for some time.
Nokia and Sony Ericsson, which released their results for the first second quarter of 2009 on Thursday, where they revealed losses in income and drop in volumes shipped, expect the setback to continue in the current quarter.
“Nokia continues to expect 2009 industry mobile device volumes to decline approximately 10 percent from 2008 levels.
Nokia now expects its market share in mobile devices to be approximately flat in 2009, compared with 2008. This is an update to Nokia’s earlier target to increase its market share in mobile devices in 2009,’ the company says in a statement.
The sentiment comes after Nokia released a set of results that showed the company, which is the world’s biggest manufacturer of mobile phones, said net sales in the second half of 2009, net sales of EUR 9.9 billion were down 25 percent year on year while it shipped 103.2 million in the period, a 15 percent decline from the corresponding the year.
On the other hand, its rival, Sony Ericsson, said units shipped in the quarter were 13.8 million, a decrease of 43 percent
year-on-year and a sequential decrease of 5 percent. Sales for the quarter were Euro 1,684 million, a year-on-year decrease of 40 percent.
The company attributed this to challenging market conditions, which it forecasted to persist in the current year.
“Sony Ericsson maintains its forecast that the global handset market for 2009 will continue to contract by at least 10 percent from around 1,190 million units in 2008.”
Mobile phone companies have not been spared the effects of the global economic recession as consumers cut on their spending.
Egypt regulator rejects France Telecom's new ECMS bid
July 16, 2009
Undisclosed offer is lates twist in dispute between ECMS owners France Telecom and Orascom.
The Egyptian stockmarket regulator Thursday rejected France Telecom's third bid to buy all of the shares it doesn't yet control in Egyptian Company for Mobile Services, just hours after France Telecom filed its latest offer.
In a statement, the Egyptian Financial Supervisory Authority, or EFSA, said it rejected the offer because it "breached the equal opportunity principle between shareholders." A spokesman for the regulator declined to comment further.
France Telecom's new offer, the value of which neither it nor the regulator disclosed, was a fresh attempt to resolve a complicated and protracted row with Orascom Telecom Holding SAE over their joint ownership in ECMS's parent company, Mobinil, as the French group tries to cement its position in a potentially high-growth market.
Mobinil is Egypt's largest mobile phone operator by subscribers.
The dispute with Orascom has involved the Egytian market regulator, which already rejected two France Telecom offers to take over all of ECMS, and an international arbitration court, which has ordered Orascom to cede its shares in Mobinil to its French partner.
Mobinil, which is also the ECMS trade name, owns 51% of ECMS. France Telecom owns 71.25% of Mobinil and Orascom holds the remaining 28.75% that the international arbitration court in March ordered the Egyptians to sell to France Telecom. But Orascom has yet to comply with the court's ruling.
According to Dow Jones calculations, France Telecom currently holds about 36% of ECMS. Orascom also has a 20% direct stake in ECMS and the remaining 29% is in free float.
Orascom claims the French telecom group should extend a 100% mandatory tender offer for ECMS at EGP273.26 a share, a demand France Telecom has rejected.
A spokeswoman for Orascom Telecom Thursday declined to comment on the new offer.
France Telecom wasn't immediately available to comment after its bid was rejected.
Earlier Thursday, a spokeswoman for the group said France Telecom's third bid follows the group's announcement May 31 that it had secured the commitment from a number of ECMS shareholders to sell their entire shareholdings at a price of EGP230, or US$44.4 a share.
At 1455 GMT, France Telecom shares were up 1.6% to EUR16.27, while the CAC-40 was up 1.3%.
Spain approves telecoms tax
July 16, 2009
New law will see a 0.9% tax on operator's gross revenues.
Spain's parliament Thursday approved a tax the Spanish government proposed earlier this year on telecommunications companies and television stations to help fund the phasing out of advertising at the country's state-owned television station RTVE.
The new law, which still requires approval in the senate, will tax telecommunications operators 0.9% of their gross revenue from the previous year and 3% in the case of free to air television stations, the parliament said in a press release. Pay television stations will pay 1.5% of their gross revenues.
Spain's government had originally drafted a law that would have levied a 1.5% tax on telecommunications companies, but the parliament voted to reduce the rate to 0.9%.
The parliament said the senate was likely to debate and approve the law later this month.
Telefonica SA, Vodafone PLC and France Telecom SA are Spain's biggest telecom operators and will likely be most severely affected by the tax.
The television stations affected are Gestevision Telecinco, Antena 3 de Television, Promotora de Informaciones SA Cuatro and La Sexta.
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