The increasing global demand for Wide Area Network processing power and speed means mobile wireless operators and bandwidth wholesalers are becoming overwhelmed by staggering volumes of Cloud & LTE traffic. Aggregate bandwidth usage is forecast to continue bringing a tidal surge of traffic behind waves of video and infotainment apps, Cloud data storage, social media, Location Based Services (LBS), Machine-to-Machine (M2M), smart homes, connected cars, and you name it.
Ericsson has struck a managed services deal valued at $1 billion with India’s Reliance Communications, covering the management of both fixed-line and mobile networks in the north and west of the country.
The contract is for an eight-year period and will see the Swedish vendor take over responsibility for the field maintenance, network operations and operational planning of Reliance Communications’ 2G, CDMA and 3G mobile networks.
MetroPCS shareholder P. Schoenfeld Asset Management has lashed out at the proposed merger between MetroPCS and T-Mobile USA and said it will vote against the deal unless substantial changes are made to the terms.
The hedge fund believes the combined entity would have unsustainable debts, a credit rating substantially below investment grade and have to pay a punitive rate of interest on financing provided by Deutsche Telekom (Bonn, Germany).
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.
Thai operator DTAC reported a healthy 13% increase in full-year revenues, to THB89.5 billion ($3 billion), thanks to the take-up of mobile data services, but the operator largely blamed more onerous revenue-sharing arrangements for a 4.5% decline in net profits, to THB11.3 billion.
Traditional operator business models are failing to keep pace with the “irreversible” shift to IP-based communications, according to the International Telecommunications Union (ITU).
Following debates held during the recent ITU Telecom World 2012 conference in Dubai, the international standards body has issued a statement to say that telecoms business models, regulatory frameworks, development cycles and infrastructure investments look “dangerously out of sync” with the ongoing adoption of IP-based communications.
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.
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.
Latin American operator NII Holdings has said financial results for 2012 are likely to miss expectations and provided a disappointing outlook for 2013.
The company – which runs telecoms operations in Argentina, Brazil, Chile, Mexico and Peru – said fourth-quarter revenues were likely to be $1.5 billion, compared with $1.6 billion in the fourth quarter of 2011.
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.