Telecom Italia cuts dividends to fund network rollout

Telecom Italia said it will slash dividends in half and raise some €3 billion ($4 billion) in debt so that it can continue funding the rollout of next-generation networks, but the Italian incumbent is still aiming to lower its high overall level of net debt.

The dividend cut follows similar moves by other European incumbents, including Deutsche Telekom (Bonn, Germany) and KPN (The Hague, Netherlands), which are under pressure to invest in faster mobile and fixed-line networks during a period of economic retrenchment.

Swedish Skype-rival Rebtel may list in 2-3 years: CEO

Reuters

Rebtel, which says it is the world's second-biggest provider of voice calls over the Internet after Skype, could go for a stock market listing in the next two to three years if it meets its growth targets, its CEO said.

Voice over Internet (VoIP) players like Rebtel (Stockholm, Sweden) and Skype (Luxembourg) offer calls for free or at a fraction of the cost charged by traditional telecom operators and have been growing rapidly in recent years.

KPN looks to $5.4 billion rights issue to slash debts

Dutch incumbent KPN has announced plans for a €4 billion ($5.4 billion) rights issue as it strives to reduce spiralling debts with its profits and revenues in decline.

The company’s net debt soared to €12 billion for the fourth quarter of 2012 after it spent a whopping €1.4 billion on licenses to provide 4G services in a recent Dutch auction.

As a result, net debt now works out at more than three times earnings before interest, tax, depreciation and amortisation (EBITDA), up from a ratio of 2.3 in the fourth quarter of 2011.

Liberty Global buys Virgin Media for $23.3 billion

Pan-European cable company Liberty Global has announced a $23.3 billion acquisition of the UK’s Virgin Media that looks set to shake up the country’s telecoms, broadband and pay-TV markets.

The transaction includes a mixture of cash and Liberty Global (Amsterdam, Netherlands) shares and values Virgin Media (Hook, UK) at $47.87 a share – 24% higher than its closing price on February 4.

The deal will increase Liberty Global’s customer base to 25 million and give the company a major presence in one of Europe’s biggest markets.

Tele2 profits plummet on rising costs, taxation

Sweden’s Tele2 reported a 57% fall in net profit for the fourth quarter, to SEK565 million ($89 million), as rising costs and higher taxes ate into sales.

Revenues at the company – which operates across a number of European markets – rose by 3.9% to SEK11.3 billion.

“Tele2 [Stockholm, Sweden] continued to show sustainable revenue and subscriber growth during the fourth quarter of 2012, although profitability was below our expectations,” said Mats Granryd, the company’s president and chief executive.

Get paid to text: Spanish app takes free chat a step further

Reuters

A Spanish mobile application that pays users up to 25 euros ($34) a month to send messages to friends if they accept advertising may erode telephone operators' revenue as customers switch to free messaging services.

Barcelona-based Chad2Win has attracted close to 100,000 users, who receive one cent for every advertisement they see, and three cents for every ad they click on, since its launch last month, director Fernando Troyano told Reuters.

Etisalat and Pacific Controls partner on green M2M service

Middle Eastern operator Etisalat has struck an agreement with managed services provider Pacific Controls aimed at helping customers to reduce their energy consumption and costs.

The two companies say they will offer M2M sustainable development applications to clients across Etisalat’s (Abu Dhabi, United Arab Emirates) footprint of 15 countries in the Middle East, Africa and Asia.

No price premium for 4G, promises Three UK

Three, the UK’s smallest network operator, has announced bold plans to make its forthcoming 4G services available to customers on existing price plans for no extra charge.

The move would mark a radical break with industry practice so far: most European operators are pricing 4G at a premium to older 3G services, requiring customers to sign up to new terms and conditions.

TeliaSonera boss quits after damning review of Uzbek conduct

Lars Nyberg has quit his role as chief executive of TeliaSonera following criticism of the company’s activities in Uzbekistan.

Chief financial officer Per-Arne Blomquist has been appointed acting chief executive, but a board shake-up is likely to result in further departures, according to chairman Anders Narvinger, who told a news conference the operator’s situation is “troublesome”.

Network sales growth fires hope of Ericsson turnaround

Reuters

A sales recovery at Ericsson's key networks unit raised hopes on Thursday the world's top mobile telecom gear maker is beginning to shake off the global downturn.

Ericsson's (Stockholm, Sweden) biggest business, which builds mobile networks, showed fourth-quarter sales growth - the first rise in more than a year - helping the company as a whole to post year on year sales up 5 percent. Margins in the unit also rose from the previous quarter.

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