Notable Regional Developments In The Telecommunication Industry

Asia/Pacific

Singaporean mobile operator StarHub will launch the StarHub Silver app, aimed at the country’s senior citizens, on 15 September. The app, which is available for Android tablets at no cost, will allow senior users to access video content. According to the operator, it addresses the needs of its target audience by featuring a simple user interface, pictorial presentations, a soothing color scheme and large fonts to aid with reading and to enable easy navigation.

Europe

Slovenian mobile operator Si.mobile has introduced a package called Startup aimed at young entrepreneurs and startup businesses. The plan’s monthly cost is €19.99 (US $26.38) and it includes unlimited all-net calls and SMS, 2 GB of data for a mobile phone and 3 GB of data for a tablet or computer, as well as Microsoft Office 365 Small Business plus consultation. Small businesses can have up to five employees and are able to use the package for two years.

Latin America

Mexican operator Telmex has partnered with UN Habitat, a United Nations program that promotes socially and environmentally sustainable urban planning and design, to launch “+XMiCiudad” (more for my city). The app will aid citizens and authorities in creating urban development solutions related to water, waste, the environment, mobility, public space, safety, animals, buildings and noise.

Middle East/Africa

Tanzanian mobile operators Airtel and Tigo have introduced a money-transfer service, which will allow the operators’ mobile money customers to send and receive money between the two MNOs in Tanzania. This announcement follows last month’s agreement by the operators to adopt interoperability to help alleviate the challenges that were associated with financial transactions.

North America

U.S. mobile operator Verizon Wireless has partnered with JCDecaux, the leading global outdoor advertising company, to deploy digital mobile charging stations, a service that has been in demand, at the four largest international airports in the U.S.—John F. Kennedy, Newark Liberty, Miami and Los Angeles International Airports. The rollout includes 169 charging stations that will be equipped with USB ports, AC outlets and wireless recharge devices, as well as two 32-inch HD screens, on which Verizon will display commercial and content messages.

 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

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