Archive for February, 2009
UK – appeal cuts mobile termination rates
February 28th, 2009 | 
Author: The UK Competition Commission has ruled that Ofcom set maximum termination rates for mobile calls too high.
Termination rates are the charge mobile operators make for incoming phone calls
The ruling relates to a 2007 complaint by BT, who said that Ofcom calculated the figures for termination rates based on what the operators paid for 3G licenses, rather than what the licenses were actually worth.
The Competition Commission upheld BT?s complaint, and ruled that the average cost of terminating a mobile phone call should drop to 4.0p by 2010/11.
Ofcom had said the rate should be cut to 5.1p by 2010/11.
Industry experts estimate that the extra rate cuts will cost operators up to ?250 million over the next two years.
A statement from Ofcom said the group ?acknowledges? the Competition Commission?s ruling.
Meanwhile, the European commissioner for telecoms, Viviane Reding, is campaigning for terminate rates to be cut further.
Reding claims that high termination rates are unjustified, and result in inflated phone bills for consumers.
Posted in Communications | 
Tags: consumers, industry experts, Mobile, mobile phone | 
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USA – Supreme Courts rules in favour of AT&T on DSL markets
see also Pacific Bell Telephone Co. v. linkLine Communications, Inc.
The U.S. Supreme Court ruled in favor of an AT&T subsidiary in an antitrust lawsuit that accused the telecommunications company of trying to drive out competitors in the DSL market.
In a unanimous decision, the justices rejected the lawsuit of Internet service providers led by Linkline Communications that claimed AT&T’s Pacific Bell Telephone was being monopolistic by engaging in “price squeezing.” The ISPs purchase high-speed Internet service from AT&T and resell it to customers, but the complaint said AT&T was offering retail DSL services to consumers at a low price to undercut its rivals.
An antitrust lawsuit was first filed in California courts in 2003, under the claim that AT&T’s pricing allowed it to preserve and maintain a monopoly over the DSL market. The court ruled in favor of the plaintiffs, as did the 9th Circuit of Appeals in 2007.
But the nation’s top court disagreed, saying the plaintiffs were trying to bring a new form of antitrust liability. The Supreme Court drew from a 2004 ruling, Verizon (NYSE: VZ) v. Trinko, which stated that companies with no antitrust duties to their rivals were under no obligation to provide service to them.
“If AT&T had simply stopped providing DSL transport service to the plaintiffs, it would not have run afoul of the Sherman Act,” said Chief Justice John Roberts. “Under these circumstances, AT&T was not required to offer this service at the wholesale prices the plaintiffs would have preferred.”
The ruling will probably not put the issue to rest, as the other service providers will likely file another antitrust lawsuit in a lower court using different rationale.
“If AT&T can bankrupt the plaintiffs by refusing to deal altogether, the plaintiffs must demonstrate why the law prevents AT&T from putting them out of business by pricing them out of the market,” Roberts said.
Posted in Communications |
Tags: business, Communications, consumers, information, Internet |
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Recession – voluntary lay-offs at Nokia
Nokia Corp., which announced this month it was planning cut jobs, said Tuesday it will seek up to 1,000 voluntary resignations to further reduce costs amid the global economic downturn.
The world’s largest mobile phone maker said it will open a global voluntary resignation package on March 1, and plans to increase short-term unpaid leaves and sabbaticals.
It also appealed to employees to accept holiday time as payments, instead of cash, for overtime work in 2009.
Nokia described as “encouraging” the response from employees and unions in proposing ideas to help reduce personnel-related costs.
“We have considered these and are now announcing voluntary initiatives that could contribute to our efforts to adjust our cost base to the current market environment,” said Hallstein Moerk, head of the company’s human resources. “If successful, the voluntary initiatives will lessen the need for involuntary redundancies.”
Nokia said it will accept applications for the resignation package until May 31, or when 1,000 employees have applied.
Two weeks ago, Nokia said it will close a research center, ax up to 320 jobs and temporarily lay off 2,500 workers in Finland. It also announced some 90 layoffs in global support and new businesses departments.
The announcements came after the company last month warned of cost-cutting measures after its fourth-quarter net profit crashed 69 percent. It also lost market share – falling to 37 percent from 38 percent in the previous quarter.
Posted in Communications |
Tags: application, ash, business, Environment, Mobile, mobile phone, nokia, research, world |
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Deutsche Telecom – financial losses
Deutsche Telekom AG said Friday it narrowed its fourth quarter loss and posted a much-improved full-year profit, with U.S. cell phone customer numbers rising sharply even as Germans continued to turn away from traditional land-line connections.
The Bonn-based company said it lost euro730 million ($927 million) in the October-December period, less than the euro750 million net loss in the fourth quarter of 2007.
Overall revenue in the quarter was 2 percent higher, climbing to euro16 billion from euro15.8 billion. However, revenue in its domestic German market fell 5 percent to euro7.3 billion as a long-term customer exodus from land line subscriptions continued.
Over the whole of 2008, the company lost 2.5 million land lines, at the lower end of its guidance.
Full-year net profit soared, to euro1.48 billion from euro571 million in 2007, helped by bigger cash flows and a savings plan that shaved more than euro4 billion off costs. Telekom’s revenue for the year was 1.4 percent lower, at euro61.6 billion from euro62.5 billion.
Rene Obermann, the company’s chief executive, said earnings from 2008 and previous years were proof that Telekom is in good shape. “Our 2008 financial year is characterized by stable performance and sound financial figures,” he said.
In 2009, the company said it hopes to achieve an operating profit of around euro20 billion, the same level achieved for 2008.
The Deutsche Telekom share was the only gainer on Germany’s benchmark DAX market in Frankfurt morning trading. The stock was 2 percent higher at euro9.66.
The mobile communications division — which has become Telekom’s mainstay business — saw revenues in Europe and the U.S. grow 2.4 percent to euro37 billion in 2008, and 7.1 percent in the fourth quarter.
Mobile communications earnings before interest, taxes, depreciation and amortization (EBITDA) for the year grew by 6.2 percent to euro11 billion, and grew by nearly 13 percent in the fourth quarter.
Telekom said it gained more than 950,000 T-Mobile phone contract customers in Germany in 2008, while in the U.S. the number of customers increased by a stunning 4.1 million.
Telekom said 1.1 million of those customers were added through the acquisition of U.S. company SunCom in February 2008. At the end of 2008, the total number of T-Mobile customers in the U.S. was 32.8 million.
Telekom said eastern Europe also remained an important growth driver, with revenues increasing 10 percent to more than euro6 billion and EBITDA growing 14.3 percent for the year.
The company said Polish subsidiary PTC improved its customer base by more than 15 percent to 6.3 million subscribers.
Telekom said mobile business in Britain was negatively affected by fierce competition, with revenue falling 2 percent to 3.2 billion pounds ($4.5 billion) in 2008.
The company’s broadband and fixed network revenue declined by 6 percent to euro21 billion in 2008 and by 4 percent in the fourth quarter.
Despite the weaker earnings for the segment, Telekom said it was able to add 352,000 digital subscriber lines in Germany in the fourth quarter alone, making the company market leader. The total number of DSL lines now stands at 10.6 million in Germany.
Additionally, Telekom said that in 2008 half a million customers registered for broadband or fixed-network service, switching from competitors. For the first time, that figure was significantly higher than the number of customers Telekom lost to competitors, the company said.
Posted in Communications |
Tags: ash, business, Communications, Mobile, mobile phone, Network, SOA, t mobile |
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Recession – Silicon Valley
The co-owner of Sherwood Partners makes his living by helping the financial backers of start-up firms that fail file for bankruptcy and wind down their operations. This year, he’s helped shut down 30 firms — more than the total number in 2008.
“Business is booming. It’s exploding,” Pichinson told Reuters from his Silicon Valley offices. “It’s sad,” he added.
Venture capitalists and market experts expect the pace of firms that shutdown in the tech industry to accelerate this year, potentially rivaling the dot-com crash, as funding dries up. Mergers, acquisitions and IPOs are no longer a reliable exit strategy with capital markets tanking and buyers wary.
So as in 2000, investors are now putting pressure on their invested firms, forcing them to cut back and save, or just cashing out and cutting their losses. Others say they are hunkering down and awaiting a turnaround and a resumption in deal and IPO activity in 12 to 18 months.
Paul Deninger, vice chairman of investment bank Jefferies & Co. in Boston, reckons that about a 10th of the 500 to 1,000 start-ups his institution now tracks nationwide will fail.
“The mergers and acquisitions market is firing on four out of eight cylinders,” said Deninger, who runs a team that advises on deals. “Are we in a recession or depression? If 18 months from now we’re in the same situation as today, then we have a much more serious problem.”
To entice investment from a shrinking cash pool, startups now have to come up with fully realized business strategies.
Next week, many of Silicon Valley’s venture capitalists and chief executives gather near Palm Springs for Demo.Com, a conference showing off undeveloped new products and technology. But unlike in years past, organizers expect many products will be tied to fleshed out business plans and market strategies.
“Companies will present a solid business proposition with a clear path to revenues,” promised Chris Shipley, Demo’s producer.
Last year, many of the start-ups there hoped to “collect a lot of customers and then figure out how to create business value around them. That’s not working in the market today.”
Silicon Valley got a wake-up call in October, when a private slide-presentation put together by well-known VC Sequoia somehow got leaked onto the Internet.
Entitled “RIP Good Times”, it forced an already-nervous industry to mull over declarations like “it is different this time,” and “recovery will be long,” and “spend every dollar as if it were your last.”
Venture capital funding tanked 71 percent in the fourth quarter of 2008, but investment hasn’t completely vanished.
This week alone, Apparent Networks Inc of Massachusetts, which designs software to help firms access networks, raised $12 million from venture firms. Aveksa Inc, which tailor-makes security software for corporations, secured $10 million. And private equity investor Good Energies invested $20 million in SAGE Electrochromics Inc., a 20 year-old firm that makes glass-coverings to cut heating and lighting costs.
But investors are getting pickier, scrutinizing every firm as rigorously as they had in the bubble’s aftermath.
Michael Kwatinetz of San Francisco’s Azure Capital agreed that the era of “fluffy” investments was over — not a bad thing if healthier and more fiscally responsible companies emerge.
“Get your burn rate under control. Even the best companies are cutting their forward expense rate,” Deninger advised.
Posted in Communications |
Tags: ash, business, Design, Health, Internet, Network, Software, Technology |
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