And Then There Were Three - Beyond Iliad's Odyssey

L'Express reported* that Xavier Niel (Iliad / Free) met with EU Competition Commissioner Margrethe Vestager, officially to check which crumbs could fall on his lap following the O2-3UK merger.

They probably talked a lot about another 4-to-3-player story, the purchase of Bouygues Telecom by Orange, which was collapsing at that very moment. Martin Bouygues precisely blamed Niel and Free for demanding too big a share of the Bouygtel pie expected to be splitted among Orange, Free, and SFR**.

Note that L'Express happens to belong to Altice and Patrick Drahi, who happens to own SFR, and, reportedly, to hate Niel's considerable guts ever since he took Michael Boukobza back from him. Note also that Drahi is making the news in both senses of the expression: his name appears in the Panama Papers, and that's unlikely to quiet the jitters about his burgeoning EUR 50 bn debt (for instance, to remain UK-wise, Drahi's Numericable paid a fortune to get the Premiere League rights for France, beating both Canal+ and BeIN Sport).

Now beyond Niel, Drahi, and Bouygues, who's France's key fourth player? France Telecom's Stephane Richard's not much of a divisive character.

Without naming names, Martin Bouygues mentions troubling positions from the government, and I wouldn't be surprised if there were conflict of interests between President Francois Hollande, who wants to run again in 2017, and his Minister Emmanuel Macron, who also nurtures plans for the presidential elections. 

There was a lot to gain politically from the new deal in the French mobile market, particularly since it involves key players in the media: Drahi bought L'Express-Roularta and BFMTV, Niel owns Le Monde, and Bouygues TF1 and LCI. And let's not forget Vincent Bollore: if his Vivendi sold SFR to Altice, he still calls most of the shots, and this time, he might not bet everything on Sarkozy...


mot-bile 2016

* "Angleterre: Xavier Niel a rencontré la commissaire européenne à la concurrence" (L'Express - 20160401)
** "Martin Bouygues : «Pourquoi je n'ai pas vendu Bouygues Telecom à Orange»" (Le Figaro - 20160403)

Star fees and Hutch

Hutchison Whampoa is selling its 51% participation in Partner Communications (to Scailex), which seems to make sense as far as geography and marketing are concerned :

- the Israeli operation carried the Orange brand

- the group operates in Europe and Asia-Pacific :
. via "3" : Austria, Croatia, Denmark, Ireland, Italy, Sweden, UK, and Australia (the new 50/50 Vodafone Hutchison Australia JV runs both Vodafone and "3" brands),
. via Hutchison Telecom International Limited / HTIL : Indonesia as "3", Sri Lanka and Thailand as "Hutch", and Vietnam as Vietnamobile
. via HTIL's spin off Hutchison HK Holdings / HTHKH : Hong-Kong & Macau as "3".

"Hutch" as a brand has been dead ever since the group sold its participation in India (see "3GSM 2007 - A brave new World ? A new and improved Vodafone ?/em>"). Lately, Sri Lanka and Thailand operations have been struggling in most unstable contexts. HWL shall either try to dump them or to switch to "3", as the hybrid logo in Thailand seem to tell. Without India (now Vodafone Essar), Sri Lanka has a relatively limited potential : 20 million inhabitants vs 63 for Thailand, 86 for Vietnam, and of course 237 for Indonesia.

Switching from CDMA to GSM in Vietnam costs a lot. Rolling out networks in emerging countries costs a lot. Competing in the handset arena, even with smart solutions*, costs a lot. Running operations in highly competitive, saturated markets in Europe as well as Hong Kong, costs a lot. And this conglomerate is not as ripe with cash as it used to be.

Rumor has it more dividends could be shed. Such a counterproductive heresy should be counterbalanced with counterproductive promises of productivity increases. Depending on a financial holding can be such a drag.


* Facebook, Skype, and now Twitter shortcuts : after the INQ1, the group announced the INQ Mini 3G, along with a INQ Chat 3G with a full keyboard

UK 1 down, France 1 up ?

All options on the table for T-Mobile UK ? France Telecom - Orange officially not interested, Vodafone and Telefonica - O2 considering the case, 3 below the radar.

Considering the value suggested by DTAG's own finance czars (less than the fees paid for their 3G license nine years ago), one way of optimizing the garage sale could be to sell chunks of spectrum to North Korean investors (insisting on potential health hazards), infrastructure to Myanmar, and customers to, say, one or two M-VNOs. Or even Three.

T-Mobile UK boasts 16.7 M customers, including Virgin Mobile UK. Virgin Mobile France is still officially hot for France's fourth license, along with partner Numericable-Completel*. I think that just like Iliad-Free, they're even hotter for any deep pocket investor with a MNO background (Orascom ?).

Whether France gets a fourth 3G MNO or not, UK will have to go down to a more reasonable level than the initial 5.

European incumbents will probably get a better ROI in India. Vodafone Essar didn't wait for the upcoming 3G auctions (more spectrum, more markets available), and invested with infrastructure partner Nokia in seven new regions.

You know the heyday of the Empire is over when a portion of India looks more exciting than UK as a whole.

* note that Numericable, a customer service laughing stock a few years ago, has been taking things seriously recently, particularly since Pierre Danon joined.

Aloha's long goodbye, Standards Wars Episode 4G and the phantom menace

Here's AT&T's farewell gift for Aloha Partner, a phantom company full of spectrum, meant from the start* as an empty shell for sale : $2.5bn.

Here's the ITU's gift for WiMAX promoters : OFDMA / 802.16 joins FDMA, TDMA and CDMA in the IMT-2000 3G family just on time for the IMT-advanced kick-off. The 3GSM crew already knew this promising rival would be casted for Standards Wars Episode 4G, but this means intel & Co are here to stay beyond a phantom menace.

Here's 3's gift for Qualcomm : the Skypephone uses the Brew platform. San Diego joins Cupertino in the hype zone. Up North, Redmond is just starting to scratch the surface - a third Halo and a phantomatic 1.6% of Facebook**.


* see "Hiwire - Aloha Partners, Goodbye Stranger" (20060502)
** see "Microsoft outpervasived by Facebook and RIM" (20071025)

TDTV and femtosales

TDTV seems to have gained a few steps since last year*. Vodafone, 3UK, O2 / Telefonica and Orange have been trying IPWireless's mobile TV solution in Bristol, and unlike for DVB-H, spectrum is available in many countries.
But IPW are facing an impressive bunch of haves and have-mores from Europe (Nokia / DVB-H), the US (Qualcomm / MediaFLO) or Asia (Korea Inc / DMB). Plus lobbying has never been their main asset. Yet Voda, 3, Telefonica and Orange do mean something in Europe. Especially when you need to speed up the delivery of handsets.
I remember the first 3G+ femtocells I ever saw working were IPWireless's UMTS-TDD dongles...
To be not seamlessly continued...

* see "TDtv and IP fews" (20060213)

La3 Live - Berlin or Bust - Aussie Yield Management

Remember when 3 snatched the mobile rights for the 2006 World Cup ? HWL's unit certainly didn't get all its money back but its PR teams make sure they made the most of it, even where they didn't pay. Some feed back from 3 World Cup participants : England, Italy and Australia.

• 3 UK claimed 3.6M viewings for its World Cup mobile TV channels during the competition. That's a 61% increase vs May and an average 106,000 per day but also, less impressively, the equivalent of one viewing per customer (3.5M overall). According to the operator, two programs proved quite successful : World Cup Highlights lured enough people everyday to fill Highbury (38,500 seats - make that one third of the total) and Berlin or Bust did 17.5% of the traffic.
  The most popular World Cup TV highlights were about England's glorious victories against the World's top 3 teams (Trinidad & Tobago, Paraguay and Equador), Zidane's infamous nod on Materazzi, and obviously the most important Becks-free game (Spain vs Ukraine - how many 3 handsets for the Rafael Benitez squad in Liverpool ?). The Berlin or Bust program was specifically designed for the event and users didn't have to pay anything to view it... well anything but 30 second ads for Canon, thanks to 3's marketing partner 4th Screen Advertising.
  In order to keep the show rolling and do better than the English team (no Berlin, just bust and crack some nuts), 3 offered through its Pilot Pitch unit a prize for the best mobile TV concept : TV producers can earn up to £50k for the funding of a pilot.
  -
  
• In Italia, Tre bet on DVB-H technology with the usual suspect (Nokia). La3 Live and its 9 channels were launched on June the 5th, right before the World Cup. The daily costs depends on the duration of the formula : 3 euros if by the day, 1.5 euros if by the week, 50c if by the semester. 3 expect 20% of the pop to use mobile TV by 2010 and targets 500,000 users for La3 Live by the end of the year. After 6 weeks of operation closely linked to the major sports event of the year, the cellco claims 110,000 users, and only give few insights about usage patterns (mostly outdoors, 40% of the time during office hours).
  -
• In Australia, 3 used the World Cup as a perfect yield management tool for its network : the games were played late at night and for AUS$ 8, you could have unlimited WC packages (videos, highlights and scores). On June 21st, 3 claimed 300,000 views after 12 days of competition and right before Australia-Croatia. Sessions lasted an average 6 mn, but some watched the whole game vs Japan... I hope none of these happy fews enjoyed a battery failure right before the Hiddink Boys' late come back.
  

Note that during the competition, 3 knotted a partnership with Yahoo!, who happens to be the FIFA's top internet partner.

Watcha sure, but who's gonna paya

Under the "Watcha - TV goes mobile" motto (but with a SGH-P900), debitel started their T-DMB service on time for the World Cup*. Fernsehen macht Spass but also money : €9.95 per month... I'd rather invest in a digital TV USB key or player (both are selling fine in Korea and advertising started in Europe).
In a quite sober press release, Samsung reminded their readers they also provided DVB-H handsets for the Italian market - it's not us vs them, after all. This small operation with a minor VNO is just a PR thing... we don't want to fight with European majors - nor leave them in the hands of Nokia.
If European big league MNOs are definitely interested in mobile TV, right now they're doing a lot of noise at the top of their voices. Actually, voice reached its top and time has come to slash roaming rates. The anti-Vodafone alliance reacted to Vodafone-and-3's announcements but once more, a not so impressive way : T-Mobile, Orange, Wind, Telecom Italia, Telenor and TeliaSonera proposed common goals for October (retail max €0.45 / mn) and next year (max €0.36 / mn), but Telefonica-O2 declined in order to salvage their golden goose beyond the 2006 summer season.

* Watcha : www.watcha.de and www.debitel.de/tv.

Play it again, Samsung ?

Mainland Chinese mobile TV operators ordered 500,000 Samsung DMB-T phones, but in Hong-Kong SAR / Xiang-gang, big figures don't necessarily mean good news :

1. Hutchison Whampoa sold a 10% stake in 3, but to Goldman Sachs and for a lousy 420 million euros. They keep delaying the IPO and see their deal with Skype fall in the shadow of Telefonica's "Plug'n Talk" VoIPo3G solution (even if, for the beginning, it is limited to laptops & PCs through USB & Memory Sticks).
   
2. PCCW Wireless added 310,000 new 3G subscribers in January, but without disclosing the cost of their welcome packs (six month of line rental fees, 10,000 mn of local calls per month, unlimited SMS, unlimited 3G browsing... why did only 310,000 take it ?).

The Chinese jackpot was just one part of Samsung's PRsenal in Barcelona : the kings of crossbar confirmed their ambitions for DMB-T in Europe (trials with TF1 - Bouygues Telecom starting later this month, SGH-P900 on time for the 2006 World Cup, undisclosed negociations with several MNOs...), but will also be ready for DVB-H (SGH-P910) and MediaFLO. Besides, Koreans (for a start) will enjoy an exciting SPH-B4100 which allows simultaneous T-DMB and S-DMB*. There's also fish to fry about Microsoft (i320 with Windows Mobile 5 and a keyboard), HSDPA (Z560) and naturally WiBro (a new device - M8000 - and a new deal : Telecom Italia will use Samsung Wibro solutions next year).

To celebrate in music, Samsung decided to showcase a supposedly customer-oriented (but MNO / CSP driven) SecureMMC application lyrically dubbed "Music download service supporting OMA v2 DRM & MMC with Beep Science"... Play it again, Sam ?

Another player put his cards on the table : Option exhibited GlobeTrotter FUSION+ HSDPA (a HSDPA/UMTS/EDGE / Wi-Fi / PEPPERONI / ANCHOVIES combo Data Card) and GlobeTrotter GT MAX (a tri-band HSDPA / 3G UMTS Data Card already snatched by Cingular GlobalConnect for a promising new plan : unlimited at home + 100Mb abroad). Down the corridor, CSI Wireless tried to plug their fixed wireless (GSM or TDMA) phones : Series 405 (basic) and Series 415 (speaker phone capability + internet access & email via PC).

As expected, HSDPA is getting mainstream (ie Intel working hand in hand with the GSMA to boost embedded HSDPA in laptops) and HSUPA starts making noise far beyond the darkest alleys.

As expected also, "mobile TV" is more often heard than "wireless data". But even if "mobile goes TV" looks strong in the charts, this is only 3GSM radio, and we soon will move back to the "TV goes mobile" tune**.

* 2 channels at the same time, in other words. On the same mini-screen ? Korean will soon outclass Japan in miniaturization. When you think Ninendo consider adding a mobile TV tuner to their DS Portable gaming systems...

** the Murdoch lads managed to sell once again their Sky By Mobile (skybymobile.com) concept. This BSkyB's mobile counterpart to Sky By Broadband leverages on the whole Sky machine : Sky TV by mobile, Sky News, Sky Bet, Sky Digital, Sky Sports (including the Baclays Premiership and UEFA Champions League)...

At the count of 3, Hutch disappears and FOMA turns 20

3 added one million subs between Oct. 7 and Jan. 7, reaching a grand total of 11M : +10% over last quarter, the sales department can be proud... but how about the CFO ?
Hutchison Whampoa Limited are giving up the lead in Hutchison Telecom International Limited : Orascom Telecom* took 19.3% of it, leaving HWL right under 50% (49.8%). They may want to strenghten their wireless activity, they obviously don't want to consolidate it anymore.
Especially after HWL and HTIL secured (two weeks ago) a 5.1 bn rupee loan supposed to "enable the companies' two indirect non-wholly owned units, JayKay Finholding (India) Pvt Ltd and Usha Martin Telematics Ltd, to acquire shares to be issued by Hutchison Essar Ltd (HEL) pursuant to a rights issue"...
Now liberated from the Orange brand, Hutch Essar (formerly known as Hutchison Max) claim 10M subs and push their own new brand : "Hutch", symbolized by an ugly drooling dog. The name definitely has something to do with HWL, but the logo doesn't look 3ish at all. Furthermore, the color switched from orange to pink. Now whenever T-Mobile wants to make it into India, they'll have to tame this pet from HEL.
Vodafone badly wanted to make it into India and that made sense : Arun Sarin wasn't born in Helsinki, India is all the rage for investors worrying about a reverse Chinese syndrom, and Master Voda just loves winners (see how they dumped ManU for McLaren ?). So after wolfing Telsim down, Vodafone take another small slice of another big cake (after China Mobile, 10% of Bharti Tele-Ventures).
NTT DoCoMo with they could rule over China and India as well as they rule over Japan : they reached the 20M FOMA users mark right after reaching the 50M subscribers plateau. As expected, they will soon take over KDDI as the 3G leader at home : their 40% migration rate** should be compared to KDDI's 95%+ (nevermind Vodafone KK's 15%).
What wasn't expected from the beginning was the time it took them to catch up : they lost about 6 months to glitches that could have been avoided. And there, I'm not talking about the baby steps. Oh, by the way... did you notice how DoCoMo now claim they launched FOMA in October 2001 instead of May 2001 ? Another example of revisionism this side of the "Sea of Korea"...

* The Egyptian operator is growing ambitions : 14.5M subs 12/2004 end of 2004, 17,5M on March the 31st, 30M end of 2005. They keep advertising on CNN International, target 50M subs end of 2006 and should open new joints after Egypt (MobiNil), Algeria (Djezzy), Pakistan (Mobilink), Iraq (IraQna), Bangladesh (Banglalink), Tunisia (Tunisiana) and Zimbabwe (Telecel Zimbabwe).
** Also : 45.4M i-mode subs (90% of all customers) of which 32.5M have i-appli enabled kentais (70% of i-mode customers).

BeautifulPhones, cheesecakes, greenfees

A few weeks after BT's BT Fusion, neuf cegetel are trying their WiFi - GSM handsets, dubbed BeautifulPhone. That's about 10 years after cegetel* tried dual mode homezone DECT - GSM handsets, but the continuity of the multimedia / office spheres could succeed where voice only failed to sell.
Swisscom should sell too, or at least be fully open to strategic partnerships : Switzerland are abandoning their 66.1% share of the cheesecake. TDC / easymobile could grab more than a few crumbs of this jewel airline, but why would Vodafone turn their own cheese into a gruyere ?
Elsewhere in Europe, H3G Italia will broadcast DVB-H next year (H2) after taking over Channel 7 and their digital TV frequencies. The only truly pure greenfield 3G player eventually understood profits would come from 3G voice and mobile TV wasn't a 3G application.

* then the no-yet-born long distance subsidiary of the no-yet-born Vivendi, but already with SFR

Li cashing : it's now or never

UMTS TDD Alliance members will hold a meeting around Nov. 9-11 and NFC Forum members around Nov. 7-11 but don't expect the latter to have twice as much fun. Sprint and T-Mobile's Czech unit, who recently joined the Alliance following their trials at home, must have appreciated the interesting way an other IPWireless customer, UK Broadband, found for cashing in from their 3.5GHz spectrum or, as Vodafone would put it, to "Make the most of now".
This PCCW Ltd subsidiary expects £100M from their competitor : UK Broadband rebranded Netvigator "now", a word at the core of Voda's new advertising campain.
The fact is "now" is the brand at the core of PCCW's new strategy : in Hong-Kong, Netvigator is the access service provider's brand and now TV the media / content brand. Almost 2/3 of all Netvigator customers subscribe to now and PCCW are thinking globally. They merged their international section with BtN Access, Inc, a wholy owned subsidiary (that's for Beyond the Network, which sums it up) in order to create a new vehicle, PCCW Global.
And right now, this vehicle takes only two roads outside of Hong-Kong : Asia through China Netcom or Unihub IT, and "Europe" through UK Broadband. Plus Victor Li's group re-entered mobility through Sunday and MobileOne.
But Victor has also been confirmed as Li Ka-shing's successor. UK Broadband looks so small compared to his dad's flamboyant Oranges and Threes. Beyond Trinity Time Investments Inc, you want to watch how Cheung Kong Holdings and Hutchison Whampoa could evolve in Europe. And we're not only talking about shopping at Marionnaud's.

Over the air

Easy does it again : a few weeks after the UK and T-Mobile (where they expect between 250 and 500,000 subs end of year 1, reaching the 1M mark within 2-3 years), easyMobile will land on Telfort's network in the Netherlands thanks to Stelios' Danish partner TDC. Opening new routes gets simpler by the day for M-VNO airlines. When will the big companies go for their own discount carriers ? Austria's One just said YESSS! : an orgasmic brand for a rather non sexy service which could crash the same way as KLM's buzz. The sky isn't fully crowded yet but CWH's new M-VNO (SIM-Only) starts cleaning it with very aggressive international rates (Mobile World cards charge 7p per minute for Europe, 5p for the US, even if the national rates remain as Fresh as 15p).
The war is on and many will fall but one player just found the perfect niche : 100,000 loyal subs and a lovely £2.9bn contract with the Home Office... TETRA is eventually making it in the UK. O2's Airwave O2 service will protect and serve The Police Information Technology Organisation (PITO) and thus the policemen and women of the whole United Kingdom.
And while O2 expose their bobbies, Tele2's Tango expose boobies over the air in Luxemburg : they've been broadcasting free TV over 3G for almost a month now, following the launch of radio over 3G (Sunshine Radio Luxembourg). Tango TV (TTV) is available through the T.TVMobile wap portal (wap.ttv.lu) and of course hosts an erotic channel.
Over the air again, different vibes, different game : the same day Samsung Electronics introduced their 3D game phones with vibration capability (SPH-G1000 & SCH-G100), 3 UK launched over the air real-time multiplayer gaming services. The games are sold between £3 and 7.50 but can also be rent 25p per day or 50p for up to 3 days. Three hope it will be as successful as their football services. This could actually become Chelski and Hutch's year : Hutchison's 3G squad (3 + HTIL) reached 8M subs end of T1, adding 1.7M within the last 3 months.

2005 : how about Europe ?

So 2004 is over, with WCDMA reaching the 16M user mark globally (up 60% since end of Q3), essentially thanks to three players : DoCoMo (migration speeding up in Japan), 3 (cheap voice sells and there's no better way of attracting stupid European men than displaying some soccer action) and Vodafone (at last at ease with marketing). As expected, the technology is starting to catch up with CDMA2000 (145M users end 2004, up from 100M in july, thanks to 107 operators covering 53 countries) : WCDMA just represents 10% of the total 3G customer base, but already 32% of Qualcomm's Q4 royalties (up from 12% one year earlier). And doc Jacobs is speeding up on HSDPA.
But Qualcomm are also investing in Europe, and a much clever way than they did with Dolphin (a genuine TETRAgedy). The cdma family is saved, Brew enjoys its own market like any Microsoft me-too product, and the battle may well move closer to the enduser. Look how Mr Q purchased Europe's Trigenix, a specialist in user interface. Look how they sell their mobile broadcasting MediaFLO techno in the US : it's all about user experience (no progress bar, less consumption, easy shuffle...), at a time when Orange marvel at the daily 25 mn their Orange Intense early adopters spend on live TV in France... but don't realise yet this may not be the best technology to perform this basic task.
Another interesting move, from Asia to America this time : the SK-Earthlink JV, a MVNO projecting 3M subs and a $2bn turnover by the end of 2009. Smart move from both players - a perfect match in a coopetitive world. The days of the merger with Mindspring long gone, Earthlink claims about 5M subs and its wireless MVNO experience shows a strong focus on business and data services. SKT has it all, plus the wireless expertise, the consumer focus and the entertainment touch. Wireless internet services represented 20% of their 2004 ARPU, almost 24% during Q4 (24%, that's about the percentage of the mobile users who had some mobile multimedia experience beyond sms in France !). Yet if they want to implement all their success stories in the US, SKT should expect some resistance from powerful lobbies (ie banks vs Moneta, music majors vs MelOn...). But they survived portability and managed to gain more than 400K customers last year. And succeeding in the US is a strong commitment.
How about Europe ? There was a time when its players ruled 2G. Before the 3G licensing madness, a few did have some vision but much too early and with the wrong priorities (remember Telefonica ?). So forget about an aggressive agenda in Asia or in the Americas. But who knows ? Sometimes it pays not to be the first to blow a bubble.