20070213

3GSM 2007 - A brave new World ? A new and improved Vodafone ?

This week, Vodafone decided to send a few messages to the market :
- Purchase of Hutchison Essar ($11.7bn for a 67% controlling stake... provided Essar doesn't launch a counterattack tainted with economic patriotism*) : I intend to remain in the World's top 3 operators for subscribers and I'm gonna post exciting growth rates for the years to come. Certainly not for ARPU but I'm investing for the long term. And by the way : I'm still able to invest for higher purposes than the loyalty of my shareholders.
- Another deal with Orange on 3G network sharing : I prefer to invest on CAPEX in India where it will make a difference. I'm bracing for a fiercer competition in mature markets, where I will focus on service.
- An impressive collection of old and new partnerships with almost all major web players (Google for mapping, Yahoo! and Microsoft for IM, YouTube, eBay, MySpace...) : you think these newcomers are smarter and swifter, and you believe they will get the bulk of the value but look ! everybody wants to work with me and I'm certainly not begging for partners. They know who's ruling the game and you don't want to miss this train or else...

At last the big red machine decides to move. But I cannot see much disruption out there. It actually looks like their last smart move in Turkey, only at a bigger scale. I'd like to have more movements in the home / office spheres. Beyond WCDMA900, that is (Nokia providing UMTS900 for SFR after Portugal and Finland). To be continued...

Otherwise, 2007 doesn't look like a year for new paradygms :
- Qualcomm still wants to be the King of the Universe, but its Universal Broadcast Modem (UBM) combines MediaFLO technology, DVB-H and 1seg / ISDB-T without caring much for DMB... a slap on the wrist for those naughty koreans who want to kick it out of their country.
- Quadplays are getting mainstream. The Virgin-NTL combo, Virgin Media, charges £20 for 2, £30 for 3 and £40 for the first no-frills quads (the 125 pound gorilla offers unlimited calls in the fixed arena and 500 mn of mobile babbling plus a monthly data package including £60 in airtime and 1,000 SMS, along with the hardware - handset and PVR). Virgin Mobile will also strengthten its controlled distribution.

- Either terrified by Viviane Reding or cornered by an ever tougher competition, O2 extends My Europe to 31 countries. For £10 per month or £60 per year, business subscribers to My Europe Extra won't be charged for incoming calls whatever the network on which they are roaming. Intraeuropean calls will cost 25p per mn flat.

That could be the best news for 2007 (but for MNO shareholders) : the landline / mobile gap in calling rates is bound to decrease even before VoIP gets fully mobile. The competition goes beyond mobility and furthermore, from the customer's point of view, that's the minimum you could expect from convergence in a broadband world.



* Voda downsizes its participation in Bharti but still keeps a few toes in the venture.



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