The website of Alex Kinch, live from London
Posts tagged T-Mobile
The Orange/T-Mobile merger – what we know so far
Sep 9th
It may have only been unveiled a matter of hours ago, but the PR teams at both T-Mobile and Orange have been busy assembling a veritable ream of information about the proposed merger of their two businesses. And some video too (at the end of this post).
First, some headline figures. As mentioned in the post earlier, the joint venture will create the UK’s biggest mobile operator – with an approximate 37% market share based on figures from the end of 2008. Orange have also revealed if you combined the 2008 figures from both operators you’d get revenue of approximately £7.7 billion, and EBITDA (profitability to you and me) of £1.7 billion.
People-wise, Richard Moat – T-Mobile UK’s current CEO, will take up the COO position, with the CEO hotseat being taken over by Tom Alexander, current CEO of Orange UK. Whilst it’s far too early to predict redundancies, there are already plans in place to reduce the number of retail outlets, and combine customer service, network and general/adminstration functions. These activities – along with the decommissioning of duplicate cell sites – is estimated to cost between £600m and £800m between 2010 and 2014.
Talking about cellsites and networks – most of that £600m-£800m cost will be taken up by decommissioning redundant duplicate radio network infrastructure. T-Mobile will contribute the 50% share of their joint radio network with Hutchinson 3G (3 to its friends and customers) to the pot, who incidentally already use Orange’s 2G network for fill-in coverage. Assuming T-Mobile and 3 put both their radio networks into the joint venture, you’ll end up with the interesting situation of 3 using a joint 3G network shared with Orange and T-Mobile, and a GSM network operated by Orange and T-Mobile.
Back to the subject of money, but still on the point of the shared 3G network currently (pre-merger) owned 50/50 by T-Mobile and 3, that’s clocked up gross tax losses so far of at least £1.5 billion. Looking at the bigger picture, France Telecom will be contributing, along with Orange UK, £1.25 billion of intra-group debt to the pot. Deutsche Telekom will then loan £625 million to the joint venture, which will be immediately paid back to France Telecom. After all is said and done, that leaves a joint debt of £1.25 billion, split 50/50 down the middle with £625 million of loans owed each to Deutsche Telekom and France Telecom.
So will the T-Mobile and Orange brands be disappearing from our High Street just yet? Not for a while, it seems. Both companies have committed to maintain separate brands for 18 months after the completion of the merger – so it could be at least a couple of years until we see a new (and as yet unnamed) ‘super brand’ hitting the mobile world.
(This article was first published on Mobile Industry Review)
The T-Mobile takeover rumour mill continues
Jul 6th
There was an interesting article in The Observer over the weekend, featuring an interview with Matthew Key, Chief Executive of O2.
Is he worried about being left out of the bidding war for Deutsche Telekom’s T-Mobile UK business unit? Quite probably, but he plays it quite cool. “We are watching developments closely, but if you’re asking me whether it’s consuming my time day and night, the answer is no,” he says. I’m entirely relaxed about the situation – no one is running around here like headless chickens.”
Meanwhile the Sunday Times reports Vodafone is talking to Deutsche Telekom about swapping it’s Turkish operation (formerly Telsim) for T-Mobile UK. To put that possibility into figures, Vodafone paid £2.6m for the Telsim operation in 2006, but has since written it down due to competition from Turkcell – the dominate player in the market. It could raise £1.5m of the projected £3m worth of T-Mobile UK by disposing of the Turkish unit.
Finally, the Daily Mail adds its usual dose of doom, gloom and ‘they’re all out to get us’ sensationalism with a report that says ‘Telecoms regulator Ofcom is warning potential bidders for T-Mobile that any takeover deal will face the toughest scrutiny, amid fears that it would lead to a sharp increase in prices for consumers.’
Happy days indeed, with sources close to Deutsche Telekom still claiming there’s ‘no rush’ to offload T-Mobile UK. With new MD Richard Moat (formerly of Orange) less than two months in the job there still may be time to avoid being swallowed up by a rival player. Speaking of Orange, they’re still in the frame for a deal with T-Mobile. Or not, if you believe the claims a possible deal was rejected a few weeks ago.
Vodafone and 3 cited in T-Mobile UK takeover dance
Jun 29th
It’s been another weekend of rumours over the future of T-Mobile UK – with reports that Vodafone and 3′s parent company might team up to launch a bid for the troubled UK mobile division of Deutsche Telekom.
The Financial Times claims that the Newbury-based operator has been sniffing around its rival, said to be worth between €3bn and €4bn – and may be considering teaming up with Hutchinson Whampoa – the parent company of 3 – to launch a bid.
Even if Vodafone went it alone, the combination the two operators in the UK market would give a market share of 40%, according to the BBC. Such a large chunk of subscribers would certainly ring alarm bells with the UK Competition Commission and the higher powers of the EU in Brussels – although the BBC says it’s not uncommon for operators to have such dominance in other European countries such as France and Spain.
Vodafone are not the first operator to be linked with a bid for T-Mobile. Previous rumours of interest by Orange were vehemently denied a few weeks ago after a reported rebuffal by Deutsche Telekom, plus there’s still the distinct possibility of a ‘mega-operator’ plan involving 3, Skype and T-Mobile – which I exclusively wrote about back in May.
Whatever the outcome, one fact remains – being a mobile operator is no longer the equivalent to having a licence to print money. Vodafone are currently going through a £1bn cost cutting plan after it recently announced a 53.5% fall in annual pre-tax profits from £9bn to £4.2bn, and Deutsche Telekom recently wrote off €1.8 billion on T-Mobile UK.
T-Mobile Scottish call centre workers told ‘move to Phillipines or lose job’
Jun 13th
T
elecom Service Centre (TSC), who provide call centre staff for T-Mobile at their Larbert and Greenock sites, have been told their jobs are at risk as part of a T-Mobile plan to shift their call centre to the Phillipines.
According to the BBC, TSC announced in April that T-Mobile wanted to move 400 jobs to Manilla. It was suggested to worksers if they wanted to keep their jobs they’d have to emigrate over there.
The offshoring deal, which T-Mobile recently inked with outsourcing company 24/7 Inc, means that at least 418 jobs at the two Scottish sites are at risk.
Local SNP MSP Michael Matheson told the BBC: “TSC has stressed to me that they will treat their staff financially in the normal way that they would if they were being made redundant.
“But they have also got some difficulties in trying to deal with the legal complications which have now arisen as a result of T-Mobile offshoring this contract to the Philippines.”
via BBC NEWS | Scotland | Tayside and Central | TSC deny redundancy payment risk.
T-Mobile remove DRM from Mobile Jukebox
Jun 5th
T-Mobile have announced plans to drop Digital Rights Management (DRM) protection from music tracks on their Mobile Jukebox service from June 4th.
The move comes after the company reached agreements with three of the four major record labels and key independent labels, and will give customers access to around two million DRM-free tracks for dual download to PC and mobile devices.
The company say that any tracks purchased from Mobile Jukebox before June 4 will remain protected by DRM – however users will be able to re-download tracks already purchased to get the new DRM-free versions.
T-Mobile increase roaming charges ahead of EU deadline
Jun 4th
Looking forward to the next round of EU roaming caps from July 1st? If you’re a T-Mobile customer prepare to be disappointed – the operator is putting prices up from June 28th.
The current cost for making a call whilst roaming – 38p – will increase to 44p from the end of June. Receiving calls and receiving texts remains static (19p per minute and free of charge, respectively). Sending a text drops from 25p to 11p.
So how does this work with the EU roaming caps? Let’s recap (no pun intended) the announcement from April 22nd:
In a 646 for and 22 against vote, sending a text whilst roaming in Europe will now fall to a maximum of 11 euro cents (10p), data charges will be capped at 1 euro per megabyte, and voice charges will fall again – from an already capped maximum of 46 euro cents per minute to 43 euro cents.
Those cap figures are excluding VAT by the way. So let’s do some maths, with a little help from XE.com’s currency conversion calculator. The figures below are based on the rate at time of writing this article.
Sending a text:
EU cap (ex VAT): 11 eurocents / 9.53 pence EU cap (inc 15% UK VAT): 12.65 eurocents / 10.96 pence T-Mobile new rate: 11p
Result: FAIL
Making a call:
EU cap (ex VAT): 43 eurocents / 37.26 pence EU cap (inc 15% UK VAT): 49.45 eurocents / 42.849 pence T-Mobile new rate: 44p
Result: FAIL
Data charges:
EU cap (ex VAT): 1 euro / £0.8661 EU cap (inc 15% UK VAT): 1.15 euro / £0.996 T-Mobile new rate: £1.50
Result: MASSIVE FAIL
T-Mobile claim on their website: ‘The yearly price cap set by the EU Commission is set in euros. Due to the current economic climate and the relative weakness of the pound (GBP) against the euro (EUR), the cost of supporting using your phone abroad has increased. We’ve changed the rate to reflect the increased costs we’ve faced over the past year and continue to face now. But we’re still complying with EU regulations.’
Are you? Really? Or is there a little loophole somewhere or other T-Mobile are taking advantage of? I’ve asked their press team for a comment – will update this article when I hear back.
(Thanks to @patphelan for the tip-off).
T-Mobile to unblock VoIP – for a price
Jun 3rd
Remember the ongoing saga of T-Mobile and their blocking of VoIP applications like Skype? Well there’s good news – they will be allowing VoIP traffic on their network.. but for a price.
An announcement by T-Mobile’s parent company Deutsche Telekom late last night trumpeted a new ‘option’ for those on Combi and Complete packages which would allow ‘customers in poessession of the necessary equipment to call via the Internet’. Depending on package (or to put it another way, how much money you’re already giving T-Mobile every month) the unnamed option starts at EUR 9.95 a month – and will be available from this summer.
Georg Pölzl, Managing Director of T-Mobile Deutschland commented: “In this way, we are building a bridge between the different customers’ needs for the most competitively-priced and innovative services. It would not be fair to customers who don’t use VoIP if these additional costs were to be shared across all customers. For this reason, we are making it possible to use Internet telephony via optional rates, while keeping it otherwise barred.”
Hang on a second, you’re thinking. Surely this is just a way to replace some of the voice revenue the operator would invariably lose to the VoIP services? Back to Georg, and in a rare moment of honesty for a mobile operator said: “All network operators have invested many billions of euros in the roll-out of their networks in recent years. These investments were based on rate costings with income from voice telephony and mobile data.
“If this basis is no longer certain, then neither is the operational future of the networks. T-Mobile wants to continue offering its customers state-of-the-art technology in future and needs a reliable basis to do so”
Whether this will appease Viviane Reding, the EU Telecoms Commissioner – who in April threatened legislation to ‘force’ mobile operators to open up their networks to VoIP services – remains to be seen.
T-Mobile UK top mobile broadband survey for 2nd quarter
May 19th
T-Mobile UK’s Mobile Broadband service has topped the quarterly independent YouGov DongleTracker survey for the second quarter in a row, the company has announced.
The survey, conducted with 2,083 mobile broadband users in April 2009, explores consumers’ use of mobile broadband. T-Mobile grabbed the top spot in six out of 13 customer satisfaction questions, including ease of use, network coverage, and billing.
Richard Warmsley, Head of Internet and Entertainment for T-Mobile UK, commented: “As internet access from any location continues to rise up the priority list for our customers, we aim to provide them with total freedom to check emails, surf the internet and share photos. Coming top in two consecutive rounds of YouGov research shows that customers recognise and value T-Mobile’s range of simple plans, attention to customer care and the reassurance that no matter how often they access the internet, they will never pay more than their monthly flat rate.”
Farewell, T-Mobile UK?
May 1st
UPDATE: It doesn’t seem that long ago that we lost the one2one brand in favour of T-Mobile – and it might be about to happen again if Deutsche Telekom’s shareholders get their way, and force an exit of the UK market.
According to a report in the FT, T-Mob’s parent company are under pressure from the German government and private equity group Blackstone – it’s two main shareholders – to do something about it’s under-performing UK mobile operation.
Sources close to the supervisory board say the controlling investors are worried about the performance of T-Mobile UK, which is only the fourth-largest player in the UK market – with only Hutchinson’s 3 service having less market share.
The sources quoted by the FT continue: “the issue of getting out of one of Telekom’s largest markets was first aired about six months ago, but falling asset valuations soon made Berlin and Blackstone more cautious about pursuing a sale option alone.
“An alternative to a sale could be a merger or acquisition deal with a UK rival to gain market share, but they want a decision yesterday. Berlin and Blackstone want a quick decision [from executives] about fixing the UK”.
Any proposed merger or sale would have to meet with the approval of the German government, which controls 32% of Deutsche Telekom, and Blackstone, who account for a 4.5% stake – and then overcome any regulatory hurdles. However, according to industry analysts quoted in a recent FT article regulators would be unlikely to veto such a move. One option muted is a merger with 3 – who have already signed a radio access network sharing agreement with T-Mobile. Then again, we’ve been here before back in 2007 – although last time analysts predicted T-Mobile would purchase 3.
The deal would be a good fit – 3 themselves don’t have a 2G network, and would save money by not having to pay Orange for roaming access. The combined group would account for up to 30% of the market – quite possibly ahead of the current leader O2, who had 28.3% of subscribers at the end of 2008.
Another possibility is a merger with France Telecom’s Orange subsidary – analysts from JP Morgan say this is a possibility – which would give the combined group over 40% of the UK mobile subscriber base.
3 UK reduces losses to £152m
Apr 13th
3G-only network 3 (H3G to it’s friends) has reduced pre-tax losses in the UK from £791 million to £152 million for the year to December 2008.
Revenue at the parent group, Hutchinson Whampoa of Hong Kong, is also up 18% to £1.5 billion.
The operator has 8% of the British market, equivalent to around 4.9 million customers. Enders Analysis’ James Barford told The Times: “The UK appears to be performing relatively well, growing at 11 per cent in a market that is now growing at only 2-3 per cent.”
Rumours of a merger with an existing larger mobile operator have been around for a while – being fuelled recently by the announcement of a deal in Australia where the group merged with the domestic operations of Vodafone and ditched the 3 brand. A recent infrastructure-sharing deal with T-Mobile in the UK could also pave the way to closer working with it’s competitors.
via 3 reduces its mobile phone losses in the UK to £152m – Times Online.
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