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Showing posts with label MNO. Show all posts
Showing posts with label MNO. Show all posts

Friday, August 25, 2017

Austrian MNOs Oppose Government Plan to Register SIMs

The Austrian government’s draft security package is facing criticism from mobile operators, according to a report. Under the package, starting on 1 January 2018 all prepaid users will have to be registered. The Association of Alternative Telecommunications Operators (VAT)—whose members include Colt, Hutchison Drei Austria, T-Mobile Austria, Tele2 and UPC Austria—argues that the new rule would negatively affect the sale of smartphones in supermarkets, the availability of top-up channels and operators’ revenues. The association also claims that the security regulation would make it impossible to sell SIMs through ATMs.

In Austria, it is currently allowable to purchase a SIM card in a supermarket and make calls anonymously, without registering any personal details with the operator. At present, of the 5.1 million SIM cards in circulation in the country, 3.5 million are non-registered. The obligation to register would not apply to these, on the grounds that it would be unfeasible. Only new cards would have to be registered.


In an increasingly security-conscious world, with terrorist attacks grabbing headlines and governments feeling pressure to respond, it is hardly surprising that a move to get rid of anonymous SIMs would be proposed.

Rather than arguing that privacy concerns trump security concerns, critics of the Austrian government plan say that registering SIMs does not actually prevent crimes, because the registration process is not sufficiently secure. They point out that SIMs can be registered using false documents, or else legitimately registered and then passed to someone else whose identity is not recorded. These arguments are not without merit. They further point out that in at least some of the countries that have implemented a registration obligation, no decrease in the number of crimes has been observed, and some countries, such as the U.K., Romania or the Czech Republic, have discontinued the requirement to register prepaid SIM cards.

Another reason to oppose SIM registration is privacy. Concerns over privacy and confidentiality issues continue to grow among consumers, across a broad swath of demographics. Of course most buyers of anonymous SIM cards are not doing so for nefarious purposes, and those can be counted upon to be resentful of a regulation that they give their identities. Conversely, they will likely be appreciative of an MNO’s effort to protect their privacy or to advocate for it, even if unsuccessfully. And even those who do not themselves want unregistered SIMs may well feel less favorably disposed toward an operator if that operator gives the appearance of giving in to this government regulation without a fight. So publicly opposing the new rule could positively affect operators, even if the effort ultimately fails, in ways that go beyond the concerns about mobile service revenue, smartphone sales and SIM points of sale.

On the other hand, the public is also increasingly concerned about security and crime prevention, especially when it comes to terrorism. So it is conceivable that operators could get an image boost from taking the government’s side in this matter and being proactive about registering SIMs—though not, we feel, very likely.



Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance. 


To learn more about Tarifica, please visit www.tarifica.com 

Thursday, June 29, 2017

Vodafone Italia Appears Set to Launch Budget MVNO


Vodafone Italia is preparing to launch a low-cost MVNO brand later this year to compete with Telecom Italia’s recent debut of its Kena Mobile MVNO and the imminent entry of France’s Iliad as the country’s fourth mobile network operator, according to a news report. Back on 8 March, Vodafone created a company called Vei SRL and informed competitors that it holds a general license for full MVNO activities.
 
The new entity would serve as the vehicle for the new MVNO brand, which could begin providing mobile number portability services as early as this September, said the report. While Vodafone sources indicated to journalists that no final decision has been taken and that the company is still evaluating its options, the creation of a new brand and the existence of a detailed roadmap point to the imminent launch of a budget service.
 
Italy’s MVNO war looks set to heat up, with some help from a foreign power, so to speak. Two months ago, TIM (Telecom Italia) began offering Kena Mobile MVNO plans. In addition, French operator Iliad (which provides mobile service under the brand Free) plans to launch as an MNO in Italy sometime between November 2017 and January 2018.
 
In this market climate, it makes a great deal of sense for Vodafone Italia to take decisive action and create its own budget-minded service to compete. The famously disruptive Iliad is known for its aggressive offers and says it is planning to grab 10 percent of the Italian mobile market quickly. Vodafone sees the need to respond in kind. At an industry conference last November, Vittorio Colao, the CEO of Vodafone, when asked about Free’s launch in Italy, said, “When you have a big warship and the pirates are approaching, it makes sense to send out the commandos in the speed boats,” referring to tactics such as price cuts and more generous data bundles.
 
Now that the time to deploy the commandos has arrived, the operator has apparently chosen the MVNO type of speed boat. The logic of that seems to be that by breaking out its budget service into a separate brand, Vodafone can more effectively and directly market itself as an alternative to Free (as well as to TIM’s MVNO), both to existing and prospective customers.
 
As for TIM, its new Kena Mobile MVNO is offering the choice of a voice-only bundle of 1,000 minutes or a bundle of 4 GB of 3G data for €3.99 (US $4.45) per month, with the cost rising to €9.99 (US $11.14) per month for 600 voice minutes, 100 SMS and 6 GB of data. We would expect Vodafone’s prospective MVNO, if it indeed comes to the market, to at least equal that.






Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance. 

To learn more about Tarifica, please visit www.tarifica.com 

Wednesday, May 17, 2017

Google to Add Android Infotainment OS to Volvo, Audi Cars

Google has announced deals with Audi and Volvo to add its Android in-car infotainment system to their next generation of vehicles. In a short statement, Google said that the official licensing agreements mean that Audi and Volvo car owners will eventually be able to use the automotive version of Android to control their air conditioning, sunroof and windows, to find nearby restaurants with Google Maps, listen to Spotify and other entertainment content, and ask Google Assistant for help. The company added that a preview of the Audi and Volvo systems will be on display at the Google I/O developer conference in San Francisco beginning on 17 May.

In a separate statement, Volvo said that it plans to launch its version of the Android OS on new models within two years, adding that the large catalogue of popular Android apps developed by Google, Volvo or third-party app developers will offer connected and predictive services in and around the car. Audi said the Android OS will be included in the new Audi Q8 Sport concept technology platform, with the new functions running on the large MMI touch display on the dashboard. The information will also be visible in the Audi virtual cockpit in the driver’s direct field of view, marking the first time the new services have been fully integrated into Audi’s brand-specific infotainment system.

With these agreements, Google is moving to provide a fully integrated Android mobile operating system for motor vehicles. That is a significant step forward, in that existing built-in Android solutions (provided by Honda and Hyundai in some of their car models) have been implemented without the full participation of Google and therefore use old versions of the operating system. Google’s current product, called Android Auto, is not integrated with cars’ on-board computers and needs for there to be a smartphone in the vehicle.

While the full details and functionality of Google’s new Android solutions for Volvo and Audi will become clear after they are demonstrated at the San Francisco conference this week, it is likely that it will be superior to the existing solutions, and that it will give seamless access to selected infotainment content from providers with which Google has partnerships.

In this respect, we see both opportunities and challenges for mobile operators. Of course, while the connectivity for the on-board infotainment system will not come through a smartphone, we imagine that in most cases it would come via the networks of local MNOs. If this type of service sees significant uptake in the marketplace—which would depend on it expanding beyond just these two auto-makers—MNOs would be seeing a new revenue stream. There would need to be mobile service contracts and plans, independent of existing smartphone plans. Or in-car service could be a new plan element to be added to the contracts of existing customers.

However, as we have frequently observed, operators do not want to be relegated to the role of “dumb pipes” in any sector of the mobile market, so in this case they may want to see what they provide to drivers in the way of special, relevant content. The challenge lies in the fact that in a sense, Google will have beaten them to it, by signing deals with Spotify and other content providers, as well as making its own content particularly easy to access. Nonetheless, we believe that MNOs can offer special access to information and entertainment content, as well, and that the best way to do this would be to target the content locally. Operators will be able to make deals of their own with content providers in the home regions of the customers, so that navigation aids, shopping aids, and even entertainment products could be tailored to the specific tastes and needs of the operator’s customers. And mobile operators do have privileged insight into their own customers’ preferences. 



Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance.



To learn more about Tarifica, please visit www.tarifica.com 

Tuesday, April 25, 2017

3 Italia's Teen-Oriented Mobile Offering

Italian operator 3 Italia launched a time-limited mobile offering during the Easter season, targeted at teenage users. The operator’s All-In Teen Limited Edition bundle came with 10 GB of data, 1,000 minutes of calls and 100 SMS for €5.00 (US $5.32) a month. There was a one-off activation fee of  €9.00 (US $9.57), and the offer was only available to users who port their numbers from TIM or MVNOs by 19 April.
 
We have written on several occasions about the strength of the youth market and the importance for mobile operators to cultivate it. We generally understand “youth” to refer to young adults, who are digital natives and are still forming their spending habits and brand loyalties. But we should be aware that the age at which people become users of mobile technology is getting lower and lower, especially in affluent markets. As a result of this trend, operators can benefit from getting hold of potential long-term customers as early as possible.
 
Pushing the definition of the mobile youth market downward in terms of age is going to be increasingly prevalent, we believe. 3 Italia’s move, although a short-term promotional one with limited eligibility, is indicative of the direction in which MNOs might choose to go. The All-In Teen Limited Edition bundle seems appropriately designed, in that it includes a fairly generous data allotment to accommodate teens’ desire for streaming entertainment content and games, as well as a good number of voice minutes but not many SMS, reflecting young users’ preference for OTT messaging apps.
 
The extremely low monthly rate is also a thought-provoking idea, in that it suggests that the teens are be paying for this plan themselves, rather than their parents. What this means is that the operator clearly wants the teens to be making brand choice, so that they can be cultivated for future, and indeed long-term, loyalty. For MNOs, the argument that the earlier you can get them, the longer you can keep them is likely to be increasingly persuasive.






Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance.


To learn more about Tarifica, please visit www.tarifica.com 

Wednesday, April 5, 2017

Ooredoo Oman, Halliburton Sign Agreement to Bring Connectivity

Ooredoo Oman has signed an agreement with energy-industry service provider Halliburton to bolster the company’s communications and connectivity for its operations in Oman’s oil fields. To meet the challenge of keeping Halliburton’s operatives connected and in touch 24/7, both on site and between remote locations, Ooredoo will employ its cutting-edge auto-tracking VSAT (very small aperture terminal) technology. The operator has been providing Halliburton with connectivity solutions since 2010, including point-to-point and leased line links, voice primary rate interface (PRI) and customized mobile technology. Ooredoo has connected Halliburton’s Adam base with a 10-kilometer fiber link from its core network.
 
As revenue growth from traditional services declines, telecom operators are searching for new sources of revenue, often in the realm of consumer services. These value-added services, which include entertainment, mobile money, and IoT applications and which have been pursued quite aggressively by MNOs recently, depend on standard mobile communications networks for data and sometimes voice/SMS connectivity. Ooredoo Oman, on the other hand, with this Halliburton initiative, is showing how an operator that has invested in advanced technology beyond the usual can profit from that investment and diversify itself.
 
Responsive to its market’s distinctive geographical and business environment, Ooredoo has focused resources on creating VSAT-powered communications that are effective in remote areas where terrestrial networks currently do not or cannot work. VSAT is a satellite technology that offers broadband data and voice, which are of course essential to the field operations of an oil company such as Halliburton. The kind of relationship that Ooredoo is entering into via this agreement transcends the simple service provider–customer relationship; it constitutes a purpose-built, site-specific all-encompassing communications solution.
 
We believe that it would be an excellent idea for operators to follow Ooredoo’s example and cultivate such partnerships by investing in cutting-edge technologies that go beyond the traditional mobile services and offer new types of connectivity in challenging environments.




Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance.

To learn more about Tarifica, please visit www.tarifica.com 


Wednesday, March 8, 2017

Facebook Launches Low-Cost WiFi in Kenya


Facebook has activated low-cost internet access in Nairobi, Kenya’s capital, according to a report. The launch, which is part of the U.S.-based internet giant’s “Express Wi-Fi” program, is a joint project with Surf, a Kenyan ISP, and went live about three weeks ago.

The service is currently available in Nairobi and surrounding areas. Express Wi-Fi offers a 10-day package in which users get 100 MB free per day, after which they need to top up through recharge agents. Daily internet bundles cost KES 10.00 (US $0.10) for 40 MB and KES 20.00 (US $0.19) for 100 MB, while weekly Express Wi-Fi bundles cost KES 50.00 (US $0.48) for 300 MB and KES 100.00 (US $0.96) for 500 MB. Monthly bundles cost KES 200.00 (US $1.93) for 1.25 GB and KES 500.00 (US $4.81) for 3 GB. Surf Kenya CEO Mark Summer said that the prices are subject to change subsequent to the launch.


Express Wi-Fi is Facebook’s latest attempt—under its Internet.org initiative—to spread internet access in developing countries, the intent, of course, being to add users to Facebook. Before Kenya, it recently launched in Uganda, Nigeria and India. A previous program, called Free Basics, ran into trouble because by offering zero-rated access to Facebook and selected other sites, it ran afoul of net neutrality principles and was banned by India’s national regulator in February 2016. Express Wi-Fi is different in that it will not zero-rate and there will be no free connectivity.

The question is, will Express Wi-Fi be a genuine threat to mobile operators in Kenya? Its data is certainly much cheaper than that offered by the MNOs: Safaricom sells a 65 MB daily internet bundle for KES 50.00 (US $0.48), and Airtel and Orange charge the same amount for even less data, 50 MB and 40 MB, respectively. However, it is by no means clear what quality level Facebook and Surf will be able to deliver, what the actual footprint of the service will look like and how many hotspots there will be.

Even if Express Wi-Fi delivers on its promises, we believe that there are things the MNOs in Kenya can offer potential customers that Facebook cannot, at least at this point. Beyond the idea of cellular data versus Wi-Fi, operators in the African markets have discovered the power of mobile money services—notably Safaricom’s M-Pesa—as a way of attracting and keeping customers, and from all the evidence we can see, access to mobile money is going to continue to be a very important priority for users in this region. Stand-alone, non-MNO data services, since they lack this incentive, may have a hard time catching on despite the low initial pricing.



Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance.


To learn more about Tarifica, please visit www.tarifica.com 

Wednesday, November 30, 2016

California Cities Mull Tax on Streaming Content Services



About 40 municipalities in the state of California are considering imposing a tax on internet-based content services such as Netflix, Hulu, Amazon Video and HBO, according to news reports. In doing so, they would be following the lead of the city of Pasadena, which has already announced that effective 1 January 2017 there will be a 9.4 percent tax on each of these services. The stated purpose of the tax is to replace revenue lost to “cord cutting.” Currently cable TV services are taxed on the municipal level in California, whereas internet video content streaming is not, so when people terminate their cable subscriptions in favor of OTT providers, the given city loses a tax stream. The so-called “Netflix tax” is provoking opposition from at least one industry group, the Internet Association, whose spokesman, Noah Theran, said, “Websites and apps are not utilities and it defies logic to tax them like electricity, water or gas.”

 
We agree with Mr. Theran that streaming content services are not utilities. In fact, it has been precisely the fear of being demoted to utility status that has been motivating mobile operators to partner with streaming content services and even to create their own. While the Pasadena tax initiative appears to target only broadband access to these services, it could conceivably open the door to taxation of mobile streaming, as well. Such taxes, by increasing the total cost of services, could end up driving away some subscribers and therefore are a potential threat not only to the entertainment content providers but also to MNOs. And if MNOs (or, for that matter, fixed line operators) were to mount a legal challenge against a “Netflix tax,” we believe it would not be difficult to argue that such a tax, by discriminating with regard to certain kinds internet traffic, violates U.S. federal net neutrality rules. 



Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance.

To learn more about Tarifica, please visit www.tarifica.com 

Wednesday, November 16, 2016

WhatsApp to Roll out Video Calling


WhatsApp said it will be introducing a new video calling service to its over 1 billion users worldwide on iOS, Android and Windows Phone. The OTT provider stated that the service is meant for every type of phone, from the most expensive to the least expensive. The service will be rolled out to all users over the next few days. According to reports, during a video call, users will be able to switch between the forward-facing and rear-facing cameras, mute the call or press the red button to hang up. WhatsApp, which currently offers messaging and voice calling, says that video calling has been one of the most-requested features from users.
 
As we have noted frequently in these pages, free or nearly-free OTT services that compete with the offerings of MNOs have been proliferating over the past several years, posing a challenge to the mobile operators. Along with Skype, Facebook-owned WhatsApp has been one of the most vigorous challengers, fueled by its huge worldwide base of subscribers. First with text messaging, then with voice calling, it offered services that closely paralleled or duplicated those of mobile operators. The expansion of high-speed LTE networks (built with the investment of the MNOs) and the increasing availability of budget smartphones have made video calling a possibility for a vast number of users worldwide, so the time is right for WhatsApp to offer it. In this case, however, we do not see it being as significant a competitor to MNOs as with its earlier offerings. While some mobile operators have created native video calling services, for the most part consumers rely on third-party apps for video calling. Probably the company that will be most threatened by WhatsApp’s new offering is Apple, whose FaceTime feature enjoys great popularity. WhatsApp video calling is platform-agnostic, and therefore users no longer have to buy an iPhone to make video calls. The question will be how high the quality of the calls will be, and that will have a great effect on the uptake rate for WhatsApp’s video calling service.



Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance.

To learn more about Tarifica, please visit www.tarifica.com 

Wednesday, November 2, 2016

Tele2 Netherlands Starts Business Plans With Up to 4 TB of Data

Starting on 2 November, Tele2 Netherlands is introducing new business subscriptions and Company Bundles for employees to share. The plans are offered as SIM-only or with handsets. All subscriptions come with unlimited calls, while the data bundles vary from 1 to 24 GB per employee. Subscriptions of 100 minutes/100 SMS and a data-only plans are also available. The Company Bundles offer shared data allowances of 20, 50, 100 or 500 GB, or 1, 2 or 4 TB.  

 
We have written previously in these pages about the trend toward increased flexibility in mobile plan offerings, driven mainly by consumer demand. Consumers, motivated by budgets and by diversity and changeability of usage habits, have been demanding more options from their mobile operators. However, this growing need for flexibility is apparently affecting the business sector, as well, as exemplified by this slate of offerings from Tele2 Netherlands. Appreciating the fact that businesses’ plans for employees need to cater to a diversity of needs in terms of data and voice use, the Dutch MNO is allowing companies to purchase subscriptions so that employees need not all have the same allowances. Handset and SIM-only options address the fact that some employees are on a BYOD basis while others are not. Finally, the huge bundles of data at the top of the slate reflect the fast-growing hunger for data even among business clients, who may not be streaming massive amounts of entertainment content but may be performing job functions that consume a great deal of data. In short, offering flexibility in its plans for business customers as well as for consumers is a smart move for MNOs today.



Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance.

To learn more about Tarifica, please visit www.tarifica.com 

Tuesday, June 23, 2015

Telenor Norway to End 3G Service Ahead of 2G Service

In a recent statement, Bjørn Amundsen, Telenor Norway’s director of coverage, said that within five years the operator’s 4G/LTE network will match its 2G network in terms of coverage. Telenor Norway has already deployed 4G/LTE service in 42 of 87 municipalities in the country’s key northern territories and is on target to cover all municipalities in northern Norway by the end of 2016. Currently, subscribers can only access data on Telenor’s 4G/LTE network, but the operator plans to launch VoLTE before the end of the year. Amundsen also said that the MNO will phase out its 2G network within a decade and will end 3G service sooner than that. It will maintain its 2G network longer than its 3G network due to device compatibility issues and the growing number of M2M services.

Telenor Norway’s prediction that it will end 3G service ahead of 2G service comes as no surprise, as we have seen other operators, such as those in the U.K., state the same thing. In New York, U.S. mobile operator Verizon Wireless has shut off 20 MHz of spectrum that was once allocated for 3G service and is running 4G in its place. The operator is doing the same on its network in Cleveland, OH. Lastly, as we have previously reported, in India, where adoption of 3G networks has been slow, some operators may go directly to 4G from 2G networks, bypassing 3G service altogether. Requiring operators to maintain three networks is very expensive, so it is critical that they choose how to repurpose spectrum based on return of their investment. For most operators, 2G networks are still an important source of revenue, particularly in rural areas, where the return on investment for 4G infrastructure upgrades will not be enough to make it very profitable. In addition, 2G service uses a low frequency, which results in reduced operating costs for MNOs. On the other hand, 3G competes more closely with 4G in that it is data-focused, and with 4G service, operators may be able to upsell users to larger data packages due to the faster speeds it offers. As Telenor Norway begins to refarm its spectrum, 3G service may well be the first to go, mainly to ensure that there will not be any loss of coverage in hard-to-serve areas and to ensure that users with older handsets still receive service. Once its 4G/LTE network can support VoLTE across the country and more users have 4G-enabled smartphones, we may still not see the total elimination of 2G service, because 2G is particularly useful for M2M connectivity, which is in growing demand.



The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. Contact Tarifica for a subscription to the Tarifica Alert. 
Tarifica is the leader in monitoring and analyzing telecom pricing, covering hundreds of operators in every region of the globe. Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance. Click here to contact a Tarifica Analyst.



Tuesday, July 8, 2014

America Móvil Considers Structural Changes as Regulatory Pressure Mounts

Mexico’s leading MNO, America Móvil, has formed a committee of senior leaders charged with evaluating the “various structural, commercial, technological and other options available to it, as well as the opportunities offered by the new Mexican regulatory framework,” according to a company release. America Móvil currently controls an estimated 70 percent of the Mexican mobile market, and its landline unit, Telmex, has 80 percent of the country’s fixed line subscribers. Studies from the OECD have estimated that this position costs the Mexican economy as much as US $25 billion per year (2 percent of the country’s GDP). The Federal Telecommunications Institute found America Móvil to be dominant last year; the company is contesting this finding in court. Politicians, including Mexican president Enrique Peña Nieto, have spoken out against the company and won approval in the legislature for harsher penalties for dominant companies.

The formation of this committee likely serves a twofold purpose. First, it is a publicity-generating play (virtually all of the senior leadership from both America Móvil and Telmex are represented on the committee) aimed at reassuring skittish investors. America Móvil has seen its shares fall 15 percent in the year since the company was declared dominant. By forming the committee, America Móvil gives stakeholders the impression that it is taking its fate into its own hands. This announcement was paired with a larger move aimed at assuaging investors when the company’s chairman and chief executive, Carlos Slim, used his holding vehicle to purchase AT&T’s 8.3 percent stake in the company for US $5.7 billion, signaling faith in the company’s future and avoiding a dilution of company value on the market.
Second, it is almost a certainty that America Móvil will lose its appeal of the dominant ruling, and it appears to be only a matter of time before Mexican authorities impose further strictures on the company, extending as far as forcing a breakup. To preempt such an outcome, we expect America Móvil to try and spin off some of the less profitable elements of its business—particularly those that serve rural and poorer areas—to reduce the company’s market share to below 50 percent without significantly affecting revenues. Telmex attempted a similar measure in 2011 with Telmex Social, but the move was rejected by regulators. America Móvil is likely considering whether it can include the right package of concessions to make a reprise palatable to mobile regulators in the near future.
 
“The ultimate consequences of America Móvil will echo far beyond Mexico: the company has extensive
operations across Latin America and has been expanding in Europe. If it is squeezed in Mexico, which in 2013 accounted for almost half of the company’s profits, expect America Móvil to aggressively pursue expansion opportunities in other areas of the world.”
Will Watts, Program Manager at Tarifica

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx

Thursday, July 3, 2014

Operators Offer Ramadan-Oriented SMS Services


On the occasion of Ramadan, the holy month in which Muslims fast from sunrise to sunset, two mobile operators are launching SMS services designed to serve the needs of believers. Uzbekistan MNO Ucell has introduced its Ramadan Calendar, a text-based information service listing the prayer and fasting schedule for the coming five days. It is available free to all subscribers and can be activated via USSD. In Tajikistan, operator Megafon is offering an SMS service called Takvimi Ruza that provides fasting and prayer schedules, sourcing the information from the Central Mosque of the country’s capital city, Dushanbe. It, too, can be activated free of charge through a USSD menu.
As we have observed on a number of occasions, services that are tightly targeted based on a true understanding of the culture and needs of one’s customers are an excellent way for an operator to build loyalty and promote retention. Unlike the premium SMS services discussed above, Ramadan SMS services are free and have genuine utility for the mobile subscribers in question. 
The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes two noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week :  http://www.tarifica.com/storyoftheweek.aspx  

Tuesday, June 10, 2014

Reliance Takes Over Network18

Reliance Industries Ltd. (RIL), an Indian conglomerate that is the parent of Indian MNO Reliance Jio Infocomm, has announced its takeover of one of the country’s largest media companies, Network18 Media and Investments Ltd. Through its investment arm, Independent Media Trust (IMT), RIL will spend INR 40 billion (US $674.75 million) to acquire a stake of 78 percent in Network18 and a 9 percent stake in its subsidiary TV18 Broadcast. In 2012 RIL had already invested an undisclosed amount in Network18 and its subsidiaries.

In October 2013, Reliance Jio won a unified telecom license in India, becoming the only operator that can provide 4G services across all of the country’s 22 circles. The operator is expected to launch commercial 4G services in November 2014. The acquisition of Network18 assumes great significance for the MNO and the Indian market in this context, and it fits right into RIL’s playbook. The conglomerate started out with textiles and pursued a strategy of backward vertical integration until it controlled every segment of the energy and materials value chain, from oil and gas exploration and production to petroleum refining and marketing to petrochemicals including plastics, fiber intermediates and polyester. With this latest acquisition, Reliance Jio will have the ability to differentiate its 4G services by bundling access to content without having to rely on a third party. Network18 has holdings in broadcasting, film, digital media, e-commerce, publishing, mobile content and allied businesses. Its subsidiary TV18 operates some of India’s biggest news and entertainment channels, such as CNBC-TV18, CNN-IBN, CNBC-Awaaz and general entertainment, music and children’s TV stations through a joint venture with U.S. media conglomerate Viacom. 
The access to content may prove to be a significant advantage. According to statistics from the Telecom Regulatory Authority of India (TRAI), the total number of mobile subscribers stood at 904.51 million as of 31 March 2014. Of this, 371.78 million (or 41.1 percent) of mobile subscribers live in rural areas. With the penetration of fixed line services, conventional media and PCs being low in rural India, the population there is increasingly reliant on mobile phones, particularly for accessing media content. This is a key growth driver for this market. Considering that rural teledensity (the number of telephone connections per 100 individuals living in an area) for mobile subscribers was 43.27, as against the urban teledensity of 139.86 as of 31 March 2014, there is massive potential in this market. By being able to provide access to exclusive or premium content and explore other synergies, Reliance is moving into a strong position ahead of its 4G launch.

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx

Wednesday, May 7, 2014

New York City Seeks to Replace Payphones with Free WiFi

New York City’s Department of Information Technology and Telecommunications (DoITT) has issued a request for proposals to build a citywide network of free WiFi hotspots. The public communication points will provide free calls to the emergency number 911 and the city information number 311. The winner will install, operate and maintain up to 10,000 public communication points distributed across the city’s five boroughs. These structures will replace and supplement the roughly 7,300 current public payphone installations. The hotspots must be set up within the next four years and will be funded mainly through digital advertising. The plan is projected to bring in US $17.5 million in guaranteed annual revenue for the City of New York through June 2026.

In terms of usage patterns and functionality, WiFi hotspots are the natural successor to the old-fashioned public phone, so this plan makes sense on that level. What is interesting here, though, is that they will be funded through advertising, unlike payphones, which are funded by direct payment from the user. The City of New York is taking a page from the public WiFi solutions being offered to commercial establishments such as malls and restaurants, which are ad-funded. Of course free access to 911 is a public good. Beyond that, though, it remains to be seen whether the city will allow data sharing to benefit businesses that want to target potential customers based on their usage patterns.


The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes two noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week :  http://www.tarifica.com/storyoftheweek.aspx

Friday, May 2, 2014

Spanish Consumers Unite to Lower Rates for Mobile Services


Spain’s Organization of Consumers and Users (OCU) has set in motion a collective purchasing initiative by encouraging consumers to unite in order to negotiate lower rates for mobile services. Consumers can sign up for the auction, to be held on 22 May, through a website set up for the purpose. Consumers will have to provide details of their usage of voice and data services, which will then be used to create 25 profiles for operators to bid on. The consumers will be grouped into two profiles—high-usage and low-usage—and the best average rates for the high and low profiles will be calculated to determine the winning operators. Following the auction, consumers will receive the winning offer that best suits their profile and will have the option to accept the offer or keep their existing plans. The contracts will be for one year, and consumers will have the option to terminate their contracts with no penalty before the year is over. The offers will only be for standard mobile services and will not include roaming, international or premium services. Fixed line services (voice or broadband) will not be included.

Spain, one of the largest mobile markets in Europe, has recently been experiencing massive changes in retail offerings due to the extensive impact of the economic recession. With one in four people unemployed in 2013, Spanish consumers in record numbers preferred to give up their mobile phones or switch to cheaper options offered by smaller players such as Yoigo and Simyo. These players made game-changing moves such as offering unlocked smartphones, while others such as MVNOs Ono and Jazztel introduced converged offers which made the most of customers’ desire to save. Prompted by the aggressive moves of their smaller rivals as well as pressure on their own margins, Movistar, Vodafone and Orange eliminated subsidies on handsets while introducing installment plans for new smartphones and buy-back options for old phones. Orange and Movistar even offer unlocked smartphones. Prices also declined; for example, the average monthly bill for mobile services in Q3 2013 was 10 percent lower than in Q3 2012. Despite these moves, according to a study, 19 percent of Spanish mobile subscribers claimed to be dissatisfied with their mobile service.

Spain, to a large extent, exemplifies the situation in Europe. Incumbents, who invested heavily in acquiring spectrum and rolling out 4G networks, have had their ambitions to charge more for 4G services frustrated due to offers of free 4G services from smaller rivals. Consumers’ reluctance to spend on mobile services has also led to measures to prevent bill shock, such as data caps and alerts, as well as the forthcoming elimination of roaming charges in the EU and in some cases the elimination of two-year contracts. Some of these moves have been initiated by regulators, others by operators.

The OCU’s move to hold an auction to source lower mobile tariffs can be understood in terms of this trend. The question is, how successful will it be? In 2013, the OCU held a similar process to procure lower electricity tariffs for retail consumers. It signed up nearly 500,000 consumers, but only got one energy company, a small player called Holaluz.com, to submit a bid. The auction finally led to savings of €49.00 (US $67.84) per year for the 28,000 consumers who chose to sign up for the winning bid. In the case of mobile services, the OCU hopes to attract 150,000 consumers (it had 48,893 signups at the time of writing). While larger players may be reluctant to participate, the auction may attract participation from the smaller MVNOs that can take advantage of the opportunity to sign up a large number of customers at relatively low cost. So while this auction may not be a game changer, it may be one more step toward an even more competitive market in Spain.


The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx