Displaying items by tag: O2

UK telecoms regulator Ofcom has banned phone carriers from selling locked phones starting December 2021 in an effort to give people greater autonomy when it comes to switching between providers.

While operators such as Sky, Virgin, Three and O2 already sell unlocked phones, some of the UK’s other operators like Vodafone, Tesco and EE, still sell phones that need to be unlocked manually before users can switch to a different carrier.

According to Ofcom, the banning of this practice comes as a set of new measures are about to be launched. The telecoms watchdog found that more than a third of people in the UK who were against switching operators said that one of the contributing factors to their decision was that they were put off by having to go through the process of unlocking their phone. In the UK, unlocking a phone costs £10 and it can often lead to delays, loss of service or other issues.

Ofcom’s connectivity director, Selina Chadha, said, “We know that lots of people can be put off from switching because their handset is locked. So we’re banning mobile companies from selling locked phones, which will save people time, money and effort – and help them unlock better deals.”

In reference to this, Vodafone said that it was “ready to implement these changes when they come into force”. BT also said that it was willing to “work with Ofcom to comply with the guidelines”.

In an official statement by Ofcom, the regulator disclosed that it plans to also simplify the switching process for broadband customers.

“We’re also making it easier to switch between broadband networks. At the moment, customers switching between providers such as BT, Sky and TalkTalk on Openreach’s copper network can simply contact their new provider, who will manage the switch from there,” the statement read.

While the UK has moved to ban the sale of carrier-locked mobile phones, the US is on the other end of the spectrum; it is still quite a common practice in the US.

Published in Reports

Spanish telecom giant Telefónica posted its Q2 results for 2017 showing strength in its South American subsidiaries and declines in Europe. The company showed “a general acceleration in growth in main financial and operational terms” as it moves to organically reduce its €48.5 billion debt pile rather than sell off assets.

The operator posted revenue of around €13 billion, an increase of 1.9 percent from the same quarter in 2016. Net profit for Telefónica reached €821 million, an increase of 18.4 percent from the same period in 2016. The company’s key revenue drives, it said, was mobile data revenue.

Telefónica was able to reduce its debt by €3.7 billion year-on-year, which will increase once the company completes the sale of its 40 percent stake in tower unit Telxius, which it’s selling for €1.3 billion. Telefónica moved to sell its O2 unit in the UK to help reduce its debt after it felt pressure from investors, but the company is now attempting to reduce its debt organically by improving cash flow.

“The strength and better business trends in the first half of the year, as well as being well-positioned to continue capturing sustainable growth in the coming quarters, allow us to upgrade our guidance for 2017,” commented José María Álvarez-Pallete, Executive Chairman of Telefónica.

Published in Finance

US technology firm Cisco Systems has announced that its technologies will be used to help roll-out free public Wi-Fi in London. Last week, London Mayor, Sadiq Khan vowed to make London the ‘smartest city’ in the world - and one way of ensuring that vision is to enhance ‘connectivity’.

In a statement released by the US conglomerate which is headquartered in San Jose, California, it said Cisco hardware is set to underpin O2 and Vodafone in an effort to implement free public Wi-Fi across the city. It was further disclosed that the new network will use Cisco’s outdoor access point, the Aironet 1560 series, to provide high bandwidth connectivity points in the square mile area.

In addition to this, Cisco’s technology will sit in passive physical infrastructure provided by O2’s joint-venture with Vodafone, Cornerstone Telecommunications Infrastructure, while 02 will provide the network core. The new network will replace the existing service entitled ‘The Cloud’ which is provided by Sky. The new roll-out is expected to be complete by autumn - and users will be able to access the network for free after completing a one-time registration process.

Chief Operating Officer for O2, Derek McManus emphasized the importance of continuous investment in new infrastructure and digital technologies. McManus said, “Continued investment in infrastructure is essential to maintain the UK’s reputation as a digital leader and we needed a partner that would be able to provide cutting-edge technology to help us realize this." McManus also expressed his delight that they were able to broker an agreement with Cisco, and said the organization’s technology was robust, fast and seamless.

According to Cisco SVP, Global Service provider, Peter Karlstromer access to free Wi-Fi and enhanced connectivity is now a basic requirement for any city looking to drive ‘innovation’. He said, “Free Wi-Fi connectivity is now a pre-requisite for any city looking to drive innovation and compete on a globe scale."

The multi-million pound contract with the City of London was announced in April, and it aims to improve the city’s ‘smart infrastructure’. 4G connected cells will be implemented in street furniture such as street signs, lamp posts and buildings in an attempt to make London ‘connected’. It’s also been reported that Cornerstone Telecommunications Infrastructure Limited will offer all ‘smart infrastructure’ on a wholesale basis to all UK operators, as part of a collective effort to enhance mobile coverage in the area.

In May, O2 said it would invest £80m to install 1,400 small cells in London in a collaboration agreement with Cisco in order to improve mobile coverage for its own subscribers.

Published in Telecom Operators

UK telecommunications provider O2 has confirmed after months of speculation that they will scrap roaming charges for its customers in Europe. From June, O2’s Pay Monthly and Business customers will be able to avail of their UK data and call plans in a total of 47 different countries within the EU – at no extra cost.

The move follows a similar trend made by other providers who all scrapped roaming charges, companies such as EE, Three and Vodafone. The decision by O2, which is owned by Spanish multinational Telefonica – coincides with the incoming abolition of such fees by the European Union on June 15th.

It has also confirmed that O2 customers will be able to utilize their UK plans into some non-EU countries as well, which includes Iceland, Switzerland and Monaco. Prior to this announcement when travelling in the Europe Zone out of the UK – customers were charged when making and receiving calls – and sending texts to other countries.

However, that has all changed which now means you can send and receive texts and make and receive calls without any additional charges to your current data package. The move benefits thousands of customers who travel frequently in the EU, but experts claims that Brexit will present a challenge to operators.

He stated that operators will have a hugely difficult task to reintroduce roaming charges after the UK leaves the EU in two years. A telecoms analyst at CCS Insight, Kester Mann told the BBC, “I think it would go down very, very badly with customers - it would be a very bold and perhaps foolhardy option. It would be very difficult for them to do that just because the UK is such a competitive market and we've moved such a long way from roaming."

Mann added that whilst mobile operators had taken a "financial hit" from not being able to charge roaming fees as they had in the past.  They were increasingly trying to recoup that revenue through other means, he added.

Published in Telecom Operators

A study by O2, the commercial brand of Telefónica UK Limited, called 'Tech-onomy: Measuring the impact of 5G on the nation's economic growth', has revealed that national 5G infrastructure will outstrip the economic benefits of fibre fixed broadband by 2026 – just six years after it begins rollout.

The report, which predicts the impact of digital connectivity on post-Brexit Britain, shows that as the UK aims to shore up its economy, accelerating investment in 5G infrastructure will unlock opportunities to sustain growth, boost productivity and compete on a global stage.

The network will introduce entirely new industries, platforms and services – from 3D video calls to smart home and health applications. In addition to £7 billion of direct economic value through businesses using 5G, the 'ripple effect' through the supply chain will also see it indirectly boost the nation's productivity by an extra £3 billion a year.

The added value of 5G mobile connectivity to the UK economy will also become apparent almost twice as quickly as fibre broadband. Despite rollout of fibre broadband already taking place and 5G rollout not scheduled until 2020, 5G will achieve the same economic benefits as fibre by the 'tipping point' year of 2026, says the report.

With more than four in every five adults owning a smartphone and nearly three quarters using a mobile to access the internet on the go [according to Ofcom], the UK is a nation and economy increasingly reliant on mobile connectivity. The combined value of 4G and 5G connectivity will add £18.5 billion to the economy in less than a decade, compared to just £17.5 billion for broadband overall.

"Mobile is the invisible infrastructure that can drive the economy of post-Brexit Britain," says Mark Evans, CEO of O2 UK. "The future of 5G promises a much quicker return on investment than fibre broadband, and a range of unprecedented benefits: from telecare health applications to smarter cities to more seamless public services."

"At O2, we are obsessive about customer need and delivering a best in class customer experience," he added. "But for individuals, businesses and communities to use mobile connectivity to its full potential, we need to set the right conditions to ensure a competitive and fair mobile marketplace."

"We need a sophisticated spectrum auction that encourages the quickest and fairest deployment of mobile spectrum, with a regulatory environment that delivers a level playing field for businesses and supports a competitive market for customers."

Later this year, Ofcom will launch its mobile spectrum auction to release new airwaves to meet growing demand for mobile connectivity. 190 MHz of spectrum in the 2.3 GHz and 3.4 GHz bands will be auctioned – an increase of just under a third of the total mobile spectrum currently available.

To aid competition, Ofcom has proposed that BT/EE – which currently holds the largest proportion of useable spectrum (45%) – cannot bid for immediately usable spectrum (the 2.3Ghz band). O2 has stated that these measures do not go far enough to foster a fully competitive market, and has also called for Vodafone, which holds the second largest proportion of spectrum (28%), to be restricted to no more than half of this frequency.

O2 states that these measures will avoid strategic bidding that harms competition to the detriment of consumers, and has also called for a cap on overall spectrum ownership of 35 percent. They state that only these measures will allow the industry to successfully evolve towards 5G setting the foundation for a prosperous digital future that benefits all consumers, businesses and ultimately UK plc.

Published in Telecom Operators

Mobile consumers are missing out on faster mobile speeds by networks’ hoarding large amounts of the airwaves used to provide a mobile phone service, claims UK mobile operator Three. Together, EE (owned by BT) and Vodafone are sitting on a pool of unused airwaves, commonly known as spectrum, which if redistributed could as much as triple mobile data speeds for customers of other operators, says Three.

“The amount of unused spectrum they hold is greater than all the spectrum currently owned by Three or O2 standalone,” said Three in a release. “Putting the unused airwaves to use would mean more seamless video streaming, quicker uploads to Instagram and faster browsing on the internet,” the operator claims.

Spectrum is essential to the mobile industry and the single biggest factor in determining a network’s ability to deliver speeds, capacity and coverage that consumers want and businesses need.  Three is part of the ‘MakeTheAirFair campaign’, calling on telecoms regulator Ofcom to cap the amount of spectrum that a single company can own at 30%. This cap would ensure a fairer balance in spectrum allocation, improving services across the board.

Research was conducted by Three’s Network team which created a model based on EE and Vodafone’s unused spectrum to show what speed improvements could be gained by customers on the Three and O2 networks. Dave Dyson, Chief Executive at Three UK, said: “This research shines a light on how much quicker speeds could be for mobile consumers, if only the UK’s airwaves were shared more fairly.” 

Dyson added: “BT/EE and Vodafone are sitting on a vital and finite public resource that should be used to deliver a faster and more stable service for customers of all mobile networks. A 30% cap on useable spectrum will deliver the best outcome for mobile users in the UK.”

UK’s current spectrum shares: 

  •  BT/EE: 42%
  •  Vodafone: 29%
  •  Three: 15%
  •  O2: 14%
Published in Telecom Operators

Global revenue made from telecom services is expected to reach over 1.2 trillion Euros in 2018, says research group Statista. The telecom sector continues to be at the epicenter for growth, innovation, and disruption for virtually any industry, and leading telcos aren’t holding back from the opportunity to capitalize on this growth. The latest example of this is AT&T, the U.S. telecoms heavyweight, and its recently announced $85 billion deal to purchase Time Warner that would create a powerhouse with control over a vast array of media and entertainment assets and the means to deliver them. The deal represents a big step forward for AT&T, but some analysts have voiced concern about the merger, saying it could lead to “self-dealing and discrimination” by a combined powerful media and telecoms provider.

More and more content is being consumed on-the-go nowadays, and this trend hasn’t gone unnoticed by telecom providers like AT&T. Mobile devices and related broadband connectivity continue to be more embedded in the fabric of society today, which means people want to be able to access their favorite content via their mobile device. Based on the results of Deloitte’s Global Mobile Consumer Survey (GMCS), U.S. consumers look at their devices over 8 billion times a day in total. That makes mobile content a big deal for all sectors within the telecom industry including wireless and wireline/broadband carriers, network equipment/infrastructure companies, and device manufacturers who are all critical components of this key ecosystem, says Deloitte.

Just look at Snapchat’s recent activities: it already hosted outsourced content from Mashable, CNN, and National Geographic to name a few, and in August, Snapchat announced an expansion of its partnership with NBC Universal, to host short-form versions of several of its popular TV shows on the Snapchat platform. This trend in consuming content on-the-go is likely what led AT&T to pursue a merger with Time Warner, which hosts a vast media lineup, including networks such as CNN, TNT, the prized HBO channel and Warner Bros. film and TV studio. It could also further AT&T’s bet that television and video can drive growth into a stalled wireless market.

“Premium content always wins. It has been true on the big screen, the TV screen and now it’s proving true on the mobile screen,” said Randall Stephenson, AT&T’s chief executive, who would head the new company. AT&T and Time Warner said they aim to be the first U.S. wireless company to compete nationwide with cable companies by providing an online-video package similar to traditional pay-TV. The merger will “disrupt the traditional entertainment model and push the boundaries on mobile content availability for the benefit of customers,” the companies said.

The merger will make AT&T a strong rival to Comcast, which owns NBC Universal, and aims to counter the growing threat from online rivals such as Netflix and Amazon which currently dominate the online consumption of content. It also positions AT&T – which recently acquired satellite TV group DirecTV – against its U.S. telecom rival Verizon, which has acquired internet group AOL and is in the process of buying Yahoo, and against new delivery platforms expected from Google and other players.

Will regulators be willing?

Massive merger deals are carefully exposed to the world with optimism by the players involved who expect to reap the benefits. For instance, AT&T’s merger with Time Warner could see it thrive in the content market, combining its strong network with premium content for its customers. But often mass mergers like this aren’t necessarily good for all parties in the industry – an issue that has been raised by various regulators around the world, such as the European Commission. Even Donald Trump, the Republican U.S. presidential candidate has expressed his distaste for the current proposed merger deal.

“As an example of the power structure I'm fighting, AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration because it's too much concentration of power in the hands of too few," Trump said at a recent campaign rally. Trump argued that the merger is an example of a rigged “power structure”. He also said he would look into “breaking” up Comcast’s acquisition of NBC Universal. "Deals like this destroy democracy," he said, expressing the need to minimize the taxation and regulation of American companies.

The question of whether regulators will accept AT&T’s merger with Time Warner is hanging heavily on AT&T, even though Mr. Stephenson played down any regulatory concerns in a conference call, arguing that AT&T isn’t eliminating a competitor, but rather buying a supplier, which isn’t blocked by regulators, The Wall Street Journal reported. “Any concerns by the regulators we believe would be adequately addressed by conditions,” he said. According to the WSJ report, on the contrary, former regulatory officials believe there could be significant conditions placed on the merger.

Earlier this year, a similar major European merger was blocked by the European Commission. CK Hutchison Holdings, the Hong Kong-based owner of Three UK, planned to merge with O2, Telefonica’s British arm – a merger deal that would have created the largest mobile operator in the country. But the European Commission blocked the merger saying it would have led to less choice and higher prices for consumers, by reducing the number of network-owning operators from three to four.

“Allowing Hutchison to takeover O2 at the terms they proposed would have been bad for UK consumers and bad for the UK mobile sector,” said the Commission’s competition commissioner Margrethe Vestager at the time. “We had strong concerns that consumers would have had less choice finding a mobile package that suits their needs and paid more than without the deal. It would have hampered innovation and the development of network infrastructure in the UK, which is a serious concern especially for fast moving markets.”

In a statement, CK Hutchison said it was “deeply disappointed” by the Commission’s decision and was considering the possibility of a legal challenge. “We strongly believe that the merger would have brought major benefits to the UK,” it said.

Even in New Zealand, concerns were raised in August this year over Sky TV’s merger with Vodafone New Zealand, due to similar competition reasons. Spark, one of New Zealand’s leading telecom operators, formally spoke out to New Zealand’s Commerce Commission about Sky TV’s planned merger with Vodafone New Zealand, the country’s other major telecom operator. Spark raised the issue over concerns that the merger was not in the best interest of sports fans and the content market. Spark argued that a merged Sky/Vodafone company would be able to leverage its “monopoly power” in the sports market to the detriment of consumers. However, Sky TV denied that it would be in its interests to tie its pay-TV service to Vodafone’s broadband service.

Similar concerns have been raised by John Bergmayer from the consumer group Public Knowledge, regarding AT&T’s merger with Time Warner. He says the merger could open the door to “self-dealing and discrimination” by a combined powerful media and telecoms provider. "DirecTV, for instance, might favor Time Warner content, crowding out or refusing to carry alternative and independent programming that viewers might prefer," he explained. "AT&T might also make it more expensive or difficult for competitors to DirecTV or to its streaming service to access Time Warner programmer, hoping to drive customers to its own platforms," he added. "AT&T could also give preferential treatment to its own programming and services on its broadband networks."

But not everyone is skeptical about large-scale mergers in the industry. In fact, some analysts think it makes sense given the changing media landscape – the same change that the likes of Snapchat have capitalized on. For example, Richard Greenfield of BTIG Research says the sector can no longer count on consumers watching "linear" TV and subscribing to expensive cable "bundles," with many opting for online services and on-demand viewing.

"Time Warner Chairman and CEO Jeff Bewkes and his senior management team can see where the entire legacy media world is headed: secular decline," Greenfield said in a recent blog post. "If Time Warner and its management team were confident in the future of the media sector, particularly the cable network industry, they would not be selling now," he added. "The harsh reality is that the legacy cable network business has been over earning for decades with an unvirtuous circle of pain about to begin."


Published in Reports

It’s been a rocky road for Spanish telecom giant Telefonica this year. Following the uncertainty unleashed by the recent Brexit vote, Telefonica has finally admitted defeat and no longer plans to sell its UK mobile network O2 to its rival Three, which is owned by Hong Kong-based CK Hutchison.

Last year, Telefonica announced plans to sell O2 to Three for £10.25 billion deal. But the sale was blocked this year in May by the European Commission who felt the deal wouldn’t work in favour of healthy market competition. Following the block, Telefonica looked to other parties who might consider purchasing O2 at a reduced asking price of £8.5 billion. The company even considered offloading a minority interest through a listing.

But there is too much uncertainty in the market following the Brexit vote in the United Kingdom, so Telefonica executives, according to a report by The Week, have decided to bury plans to sell O2 altogether. Telefonica however, has a lot of debt to deal with, amounting to £42 billion, which could prompt a credit downgrade in these times of heightened volatility and uncertainty in Europe.

There’s a chance that Telefonica could seek to cut a £3 billion dividend planned for this year that “hinged” on the outcome of the Brexit vote, says ratings agency Moody’s. Telefonica could also look to issue “hybrid bonds” that qualify as equity and so would not add to the overall debt total.

Telefonica has said O2 UK is a "discontinued operation" within the group since the deal with Three was originally struck. In a regulatory filing, The Week reports that Telefonica said it “would now re-include the business's financial statements into wider results.”

Fears of an economic slowdown in Europe could greatly affect the price that a buyer is willing to pay for O2. But Telefonica says it “continues to explore strategic alternatives for O2 UK, to be implemented when market conditions are deemed appropriate.”

Published in Telecom Operators

The European Commission has officially blocked Telefonica's blockbuster sale of British telecom giant O2 to Hong Kong group Hutchison on fears it would inflict higher prices on British consumers. Hutchison is controlled by one of the richest men in Asia, Li Ka-shing, and his buyout of O2 from Spain's Telefonica for £10.25 billion (14 billion euros; $15.2 billion) would have created Britain's biggest mobile phone company.

"Today the commission has decided to block Hutchison's plan to takeover O2 in the UK," EU competition commissioner Margrethe Vestager told a news briefing in Brussels. "Our investigations revealed significant competition concerns with this deal," she added. "It would very likely have led to higher prices and less choice for UK consumers."

The decision deals a major setback for telecom companies in Europe which have lobbied Brussels to relax anti-trust rules in order to help build global telecom corporations. Vestager, the former Danish economy minister, has already grabbed headlines for taking on internet giant Google over anti-trust violations on its search engine and Android mobile phone platform.

She insists her work remained outside politics. There "is a lot of work that goes into this. We cannot let politics interfere into this," she said, adding that the decision would have to stand up in court.

Hutchison in a statement said it was "deeply disappointed" by the decision. "We will study the commission's decision in detail and will be considering our options, including the possibility of a legal challenge," the company added. The blow lands at an especially sensitive moment as it could intensify accusations in the UK of Brussels meddling in national affairs ahead of a June 23 referendum on whether Britain will remain in EU.

“With network operators losing streams of revenue due to regulatory changes, such as EU roaming charges, margins are under increased pressure,” says Claire Cassar, CEO of HAUD. “Because of this, and with similar deals approved in recent years, it was widely expected for the European Commission to accept Hutchison’s acquisition of O2 in the UK.  

“Despite the EU stressing its commitment to not overstretching licenses, the fact remains that if we want to boost investment, not to mention retain reliable and secure services, mergers such as this should be accommodated,” she added. “However, despite Hutchinson making an extensive list of concessions to restore competition in the British mobile market, it wasn’t enough to dress the commission’s concerns.”

“By rejecting this consolidation, the EU risks leaving operators exposed to reduced investment and as a result, a drop in the efficiencies in product research and development. Equally, fewer networks would ensure regulators can control the operator ecosystem more effectively, which could lead to fewer security breaches and better overall customer experience,” Cassar concluded.

Hutchison owns UK-operator Three and hoped to merge the company with O2. The tie-up would have reduced the national market in Britain to three players from four. But the EU believes a downsized landscape hurts competition.

Last year, Scandinavian groups TeliaSonera and Telenor abandoned plans to merge their Danish mobile operations ahead of an almost-certain veto by the EU's anti-trust chief.
Hutchison and Telefonica's O2 in March offered concessions to push through the deal, but the EU said these were insufficient.

Another Hutchison-owned unit in Italy is also the subject of an EU investigation, which would similarly reduce the national market to three actors. But Vestager said the EU worked on a "case-by-case basis" and was not motivated by keeping national markets to any particular size.

"O2 will ideally still look for a buyer, and Virgin Media who are owned by Liberty Global certainly could step in," said Imran Choudhary, an analyst at Kantar Worldpanel, a consumer research group.

Published in Finance