January 26, 2015

O3, Verizon, Euregulators, Cablevision, Apple in China: Telco 2.0 News Review

[Ed: We are delighted to be partners of the GSMA’s Mobile World Congress in Barcelona, March 2-5 - and are making our plans for the week now. If you’d like to meet us there here is how, and here are our thoughts on why its worth going in general.]

3UK-O2 is official; Sky and others want MVNOs; full reaction

Here’s the statement - Hutchison has started exclusive negotiations with Telefonica over a bid for O2 UK. A price of £10.25bn is named, almost all of which would be in cash and up front. Depending on how you count M2M subscribers, the combined O3 would have as much as 41% of the UK market.

The point is made here that this still doesn’t settle the fibre-to-the-cell or quad-play issues - so it’s interesting to see that Sky has approached O2 about an MVNO agreement, and so have both TalkTalk and Virgin Media. (Note that the CEO of Belgacom is talking about quad-play and fixed-mobile integration here.)

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Barcelona here we come: see you there?


Our analyst team will be attending this year’s Mobile World Congress in Barcelona (March 2-5), where they will be discussing the latest industry trends with our clients. If you are interested in meeting with our analysts to hear what we have to say on a particular topic or learn more about our research, we would invite you to request a meeting.

Additionally, if you are an established start-up or a Telco with a proven innovation in mobile and digital technology and are looking to develop new channels and opportunities to grow your innovation, we would like to hear from you - providing you meet the criteria below…

Why should I talk to you?

STL Partners’ Innovation Scouting Service is a unique integrated proposition for innovators and innovation decision-makers alike. It combines our core strengths in telecoms consulting and research with our strong industry network to help Service Provider identify, evaluate and deliver innovation quickly.

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By participating in our Innovation Scouting Service, you will be added to our “opportunities roster”. STL Partners will introduce your innovation to appropriate Telcos globally, providing you with the opportunity to position your service or product with a tightly defined market of potential buyers and partners, building visibility and providing new routes to growth.

What sort of innovations are we looking for?

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Insight: what the MWC inspires

Among many other things, the GSMA’s Mobile World Congress (MWC) is a useful barometer for the industry overall. Looking back at our analysis of Catalonian forays by Google, Microsoft and Facebook, telco CEO-speak, and also predictions for Huawei and others, we examine its appeal and look at the key trends it’s highlighted over recent years.

To a certain section of the telecoms industry (somewhere between 50,000-85,000 people depending on how and when you count them), the MWC is a regular institution on the annual calendar. Like all ritual opportunities for clan gatherings there are those that love it and those that hate it. It marks out something each year: something familiar and yet always with new aspects, a huge humming snapshot of the industry at a given moment.

We’re delighted to be official partners with the GSMA’s Mobile World Congress 2015, and love participating in the Congress for three main reasons:

  • It provides a concentrated experience of CEO-think, like the market briefly playing out in public;

  • We get to see lots of ‘stuff’ - ideas and technologies;

  • We also get to see and meet a lot of our clients and friends in the industry, in the enjoyable context of Barcelona.

Looking back overthe past few years, here are a few of the themes we’ve seen emerging and playing out. [Ed: Please email contact@stlpartners.com if you’d like to catch up with us there or take advantage of the discount code for Conference packages kindly offered to Telco 2.0 readers by our partners the GSMA.]

OTT - From Enemy to Frenemy

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The biggest name on show in 2014 was Mark Zuckerberg, Facebook’s CEO and founder. This was on the back of Facebook’s acquisition of Whatsapp (our analysis here). Speakers from the Internet players have featured heavily in the past few years, with Steve Ballmer, then Microsoft CEO, failing to land all punches in 2012, and Google’s Eric Schmidt stealing the show in 2010. This year sees Jimmy Wales, Wikipedia’s founder, joining the roster (so please remember to pay that donation you’ve always promised to make before then) alongside Jeanie Han, CEO of LINE Euro-Americas, the communications app that originated in Japan.

Zuckerberg and the others received rock star welcomes live at the Congress relative to most speakers, bringing some intrigue and excitement to the show from the Valley. In terms of the messages they shared via the public platform of the MWC, it has been intriguing to watch the strategic sub-text playing out between the Internet CEOs and the telcos. We commented in 2012 in ‘Facebook, Google and Apple: of Bêtes Noires and the Art of Evasion’ on how to read what the players did and didn’t say, and noted in 2013 that the European operators had subtly changed tack and declared ‘Peace with OTT, War on the Regulators’.

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January 25, 2015

Six Good Calls: Were You In On Them?

STL Partners and the Telco 2.0 team are not naturally boastful people. From time to time though, we make predictions based on our views and insights. This is a risky business as forecasting the future is full of pitfalls. As a professional organisation it takes a bit of guts to put our name to predictions in public so we’re pleased when we get it right.

In this vein, here are six predictions we’ve made in our Executive Briefing Service that have recently come true.

To find out how you and your company could get ahead of the game by working with us, please email us at contact@stlpartners.com. [NB We promise not to let this run of success go to our heads.]

AT&T Is Dumping A Ton Of Its Copper, Like We Said

AT&T has issued an official stock exchange filing in which it announced that a substantial chunk of its fixed network is now surplus to requirements:

Our fourth-quarter 2014 operating results will also include a $2.1 billion noncash charge for the abandonment in place of certain network assets. During the fourth quarter, we performed an analysis of our network assets and determined that specific copper assets will not be necessary to support future network activity, due to declining customer demand for our legacy voice and data products and the migration of our networks to next generation technology. This decision by management will not be considered in our assessment of segment performance and therefore, this charge will be reflected only in consolidated results and will not affect segment operating results or margins.

The wording (“abandonment in place”) suggests that they’re going to close some networks, rather than selling them, and provide service via fixed-wireless, or possibly overbuild them with fibre.

In our December 2014 Executive Briefing, Will AT&T shed copper, fibre-up, or buy more content - and what are the lessons?, we predicted that AT&T was likely to reduce its fixed footprint, whether by sales or closures, and concentrate on either “wireless, plus satellite TV” via the DirecTV deal, or else build FTTH into a smaller, more urban footprint.

We expect, however, that AT&T may consider a Verizon-like disposal of some DSL assets, perhaps coupled with the beginning of major FTTP rollout

However, we thought they wouldn’t get out of the business completely, not least because of its interdependence with their star Strategic Business Services product line.

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January 19, 2015

European Consolidation is Here: Telco 2.0 News Review

After BT-EE, it’s O2-3UK. DTAG CapEx. Notspot deal in trouble. Missing €900m hangs over Altice-PTel

The BT-EE deal really is the starting gun for European consolidation. Canning Fok, managing director of Hutchison Whampoa, is promising more acquisitions to come in Europe, and the company has just reorganised its structure to support a big bid.

HWL, of course, bought the O2 network in Ireland not so long ago, which perhaps tips their hand towards this story - there is a rumour out that they will bid £9bn for O2 UK, left standing in the wake of BT’s merger with EE. Telefonica is, of course, so keen to get rid of O2 UK and cut its debts that Cesar Alierta hared to London before Christmas in an effort to push it on BT, so they won’t need much persuading to take a big bag of cash.

The problem of course is that this is consolidation with a vengeance. BT-EE can be defended on the grounds that it still leaves the UK with 4 MNOs, although the consequences for spectrum and for network vertical integration are serious. You can’t deny, though, that O2-3UK (O3? That’s ozone, isn’t it?) would take the UK down to 3 operators.

The really interesting question is that an O2-3UK deal leaves open the future of Virgin Media, whose Gigabit Ethernet backhaul has powered 3UK’s competitive surge forward over the last few years, and also CityFibre, which provides dark fibre to the cell for some 3UK networks. As it stands, O3 would be a beast of an operator, especially once it finished pulling the VMED or CF fibre to whichever O2 base stations it chose to keep. But Vodafone UK would then be a weak third operator a long way behind on fibre, although its pockets are very deep. It would be keen to make a bid for a broadband network, ideally Virgin Media.

And then things would get complicated. Did we mention that O3 would be in both the Cornerstone and the MBNL infrastructure alliances? In-depth coverage of the whole issue is coming in this week’s Newsletter and the Executive Briefing Service

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January 12, 2015

India, Gigabit Cable, FCC, Roku: Telco 2.0 News Review

India approaching 1bn subscribers, plans huge spectrum auction; Uninor +5k Node-Bs; East Africa ends roaming charges; more PTel/Oi weirdness

India’s regulator, the TRAI, says they had 937 million subs on the 30th November, 2014, growing a few million a month. As a result, it looks like they’ll hit the billion in the next year or so.

90% of Internet connections in India are wireless, and this means they’re going to need more spectrum. The Indian government has just decided to launch its biggest ever spectrum auction, with 465MHz going on sale across the 800, 900, 1800, and 2100MHz bands and a $12bn target price.

However, it’s worth pointing out that this isn’t a net increase of 465MHz, because Vodafone, Bharti, Reliance Communications, and Idea all have licences that are going to run out.

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January 5, 2015

Comcast-TWC, TIM Brasil, Huawei, HKBN, TalkTalk - Telco 2.0 News Review

Ed: Happy New Year and welcome to the first Telco 2.0 News Review of 2015, packed as full of rich content as most of the Telco 2.0 team have been for the last two weeks. Nonetheless we’re back, and if you’re full of New Year zeal and interested in the future of the network, we’d love to get your thoughts on what the key questions ahead are here to help drive our latest research.

Comcast-TWC on hold again; net neutrality vote on 26th February; Mexican spectrum; Telefonica sale of TI shares OKd

The FCC has stopped the clock on the Comcast-TWC deal again, holding the process at Day 104 of 180, rather like that rocket launch before Christmas that kept getting put off. They have decided to resume the review after the 12th of January - wouldn’t we all? The problem is that 31,000 documents have turned up that the cablecos should have already disclosed, and the FCC staffers need more time to read them.

Meanwhile, the regulator is moving forward with its proposed net neutrality rules. A final draft is expected in early February, with a vote at the open meeting on the 26th. Republican politicians are hopping mad and are speculating about trying to close the FCC.

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December 22, 2014

Iiad, Oi, Comcast, OFCOM, ARM, Merry Christmas: Telco 2.0 News Review

Ed: if you’re interested in the future of the network, and you’ve got a couple of minutes to spare, we’d love to get your thoughts on what the key questions ahead are here to help drive our latest research. Whatever the case, we wish you ‘season’s greetings’ and all the best for 2015.

So what will Xavier Niel do next, now that the T-Deal is off and so is more consolidation in France? Well, there’s the cloud, and there’s also this - buying an Orange OpCo, specifically the Swiss one they sold to Apax Partners in 2011. The carrier is valued at €2.3bn, after Apax bought it for €1.6bn, and gives Free a crack at Switzerland’s relatively concentrated, 3 MNO market. I think we can guess what the plan is there - discount all the things?

Meanwhile, the president of ARCEP has confirmed that Free Mobile now has 75% population coverage, three years from launch, ahead of the regulatory deadline on the 15th of January. They’re also deploying both 3G and 4G into the Paris Metro.

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December 18, 2014

Will AT&T shed copper, fibre-up, or buy more content - and what are the lessons?


We’ve just published a new research paper Will AT&T shed copper, fibre-up, or buy more content - and what are the lessons?’. AT&T’s residential fixed operation is underperforming as faster cable connections take over. It would probably like to trim its footprint or get out, and invest in fibre and its content business model. Is that really an option, and what are the lessons for other telcos?

You can read an excerpt of the report here

For more on any of these services, please email contact@telco2.net or call +44 207 247 5003.

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December 15, 2014

Regulation, Americas, Europe, APAC, Cloud: Telco 2.0 News Review

GSMA ups the pressure on Oettinger; UK MNOs meet Javid halfway; TIA threatens investment strike over Title II, VZ says it doesn’t care

The GSMA fires its lobby cannon again: Director General Anne Bouverot says it’s ridiculous that there are almost a hundred MNOs in Europe, compared to “three or four” in the US, and further argues that wholesaling is likely to “reduce” incentives to invest. The context of this is that they’re trying to influence the new European Commissioner to on the European Parliament’s text of the next telecoms directive.

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December 11, 2014

Samsung and Google versus Apple?


We’ve just published a new research paper ‘Samsung and Google versus Apple?’. Apple is weakening Samsung Electronics’ grip in the high-end of the handset market, lowering the Korean company’s profitability and capacity to compete effectively. After a series of largely unsuccessful attempts to break into software and services, a daring option for Samsung is to seek a strong, strategic alliance with Google to enable both companies to mount a serious challenge to Apple’s dominance in the affluent demographic. Telcos could back such an alliance in return for a profitable role in the service layer. This report analyses the strategic rationale for such an approach. (December 2014, Dealing with Disruption Stream)

You can read an excerpt of the report here

We’ll also be exploring the topic of Dealing with Disruption at OnFuture ARABIA and OnFuture EMEA (21-22 April, Dubai) (9-10 June, London), and are initiating coverage of a new research programme on Dealing with Disruption . For more on any of these services, please email contact@telco2.net or call +44 207 247 5003.


Samsung & Google Vs Apple

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December 8, 2014

Vodafone, Liberty Global, 5G, Spectrum, Wire: Telco 2.0 News Review

Last week saw our Digital Asia 2014 event. A big ‘thank you’ to our sponsors, the speakers and the 220+ participants who made it both valuable and enjoyable.

As an early preview of findings, the brainstorm found that developing innovation skills was the top priority in the region, followed by improving the technological infrastructure, while regulation and under-developed early-stage investment communities were the biggest barriers to overcome. We’ll report back more in coming weeks.

Next: a diary date: OnFuture Arabia, 21-22 April 2015, Dubai. Please email us at contact@telco2.net if you’d like to know more or get involved.

Vodafone denies bidding for Liberty Global; might bid for Metroweb; 5G visions; EE rural small cells

At an analyst meeting this week, Vodafone tried to convince everyone there’s nothing in this Liberty Global bid talk. A deal would give the carrier a huge broadband network, plus content, and fix its fibre backhaul problem, but it would also be hugely expensive and problematic from a regulatory point of view.

This is of course being driven by the BT-O2 story. Stéphane Richard of Orange seems to know something about it, saying that BT would make an announcement “before Christmas”.

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December 1, 2014

Altice x PTel, Vodafone, Liberty Global, Chinese broadband: Telco 2.0 News Review

  • ‘Digital Asia 2014’ Executive Brainstorm and Innovation Forum, run by STL Partners in collaboration with Telkom Indonesia, is designed to equip 250 specially-invited business leaders from across the region’s telecoms, enterprise and technology sectors with new, breakthrough ideas, methods and tools on how to grow significant new revenues in the next 12-18 months leveraging Mobile, Cloud and Big Data.

    Altice bid for Portugal Telecom is a go at €7.4bn; TI sells Italian towers ahead of Brazilian consolidation

    Altice Group, the holding company of Numericable and SFR, has entered exclusive negotiations for the acquisition of Portugal Telecom. They offered €7.4bn for the company’s Portuguese assets, minus the infamous Rioforte bonds, which presumably means that Oi gets to exit from its deal with PTel ready to take on whatever is coming in the Brazilian market. Altice, which already owns an enterprise ISP and a cable network in Portugal, is presenting the deal as being all about fixed-mobile convergence - it’s worth noting that PTel owns a lot of FTTH assets.

    Continue reading "Altice x PTel, Vodafone, Liberty Global, Chinese broadband: Telco 2.0 News Review" »

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  • November 27, 2014

    Five Principles for Disruptive Strategy


    We’ve just published a new research paper ‘Five Principles for Disruptive Strategy’. What is disruption, when is it a good idea, and what do you do when it happens to you? We illustrate five principles of disruptive strategy based on our analysis of the telecoms and adjacent markets over the past eight years. The analysis covers both principles of creating and defending against disruption.

    You can read an excerpt of the report here

    For more on any of these services, please email contact@telco2.net or call +44 207 247 5003.


    Figure 4  KPNs SMS volumes have continued to decline since 2010.jpg

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    November 24, 2014

    America-T-Movil, BT Cellnet 2.0, PSTN transition, Free’s cloud - Telco 2.0 News Review

    ‘Digital Asia 2014’ Executive Brainstorm and Innovation Forum, run by STL Partners in collaboration with Telkom Indonesia, is designed to equip 250 specially-invited business leaders from across the region’s telecoms, enterprise and technology sectors with new, breakthrough ideas, methods and tools on how to grow significant new revenues in the next 12-18 months leveraging Mobile, Cloud and Big Data.

    America T-Movil? AT&T after Nextel.mx, TI after Oi, Oi wants to sell PTel to Altice

    Will America Movil make a bid for T-Mobile USA? Deutsche Telekom CEO Timotheus Höttges mentioned them in a list of hypothetical buyers that also included DISH and also Comcast, but denied being in any talks or indeed really wanting to sell any time soon. America Movil, of course, faces the arrival of real competition in Mexico and is keen to diversify. It also owns pre-pay MVNO Tracfone, which is under heavy pressure from T-Mobile’s price cuts.

    Continue reading "America-T-Movil, BT Cellnet 2.0, PSTN transition, Free's cloud - Telco 2.0 News Review" »

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    Telco 2.0 Strategy Report Out Now: Telco Strategy in the Cloud

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