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Daily Digest - 18th November 2005

We are not in takeover talks, says Virgin chief

Richard Wray Friday November 18, 2005 The Guardian

Virgin Mobile is not in takeover talks, said chief executive Tom Alexander, though he admitted it could be an "interesting piece of the jigsaw" for other acquisitive firms.
The company brushed aside news that it attracted a disappointingly low 44,000 new customers over the three months to end September and predicted healthy growth in revenues for the year as a whole.

Vodafone chief apologises to investors

by Mark Odell in Barcelona
November 17
The Financial Times

Arun Sarin, chief executive of Vodafone, on Thursday apologised to investors for the mobile operator’s failure this week to communicate some of the financial information he felt contributed to the worst slump in the company’s share price in seven years.
The shares of the world’s largest mobile operator by revenues are still in the doldrums after falling almost 11 per cent on Tuesday, when the group revealed that margins would fall next year because of increased spending at its Japanese unit and intensifying competition in Europe.

Buy-out consortium bids for TDC

By Clare MacCarthy in Copenhagen,
November 17 2005
The Financial Times

TDC has received a firm offer from a buy-out consortium that values Denmark’s leading telecommunications group at close to $11.5bn. The group’s enterprise value rises to nearly $15bn, including estimated debt of $3.5bn, which would make TDC one of the world’s largest leveraged buy-outs. Europe’s largest LBO was this year’s €12bn ($14bn) takeover of Wind, the Italian telecoms group.

Vodafone pursues virtual operators

By Michiyo Nakamoto in Tokyo and Mark Odell in London
November 16 2005
The Financial Times

Vodafone has held talks with about 30 companies in Japan about hosting them on its network as so-called mobile virtual network operators as part of the restructuring programme at its troubled Japanese unit.
Bill Morrow, who heads Vodafone’s Japan operations, said on Wednesday the UK mobile operator was “feverishly in negotiations with quite a few” potential MVNOs. The world’s largest mobile operator by revenues wants to sign up to 10 MVNOs within two years, with the first contract expected to be signed in the next financial year.

Wanadoo says it is no.1 for VoIP

Telegeography 18th November 2005

UK ISP Wanadoo claims it is the country’s top consumer VoIP provider, with 80,000 registered users signed up to its Wireless & Talk package in the eight months since launch. The France Télécom subsidiary says it is adding new VoIP users at a rate of 5,000 a week, eclipsing the rival VoIP service of UK incumbent BT. ‘BT’s Communicator product took around 20 months from launch to attract 50,000 registrations,’ Wanadoo said in a statement.

Daily Digest 16th November 2005

Battle for control of internet heats up By Andrew Ellson

The Times 15th November 2005

The inter-governmental negotiations in Tunisia are a prelude to the World Summit on the Information Society, which begins in Tunis on Wednesday. At stake is how the technical and administrative infrastructure at the root of the internet is managed.
At present, a private Californian-based organisation called ICANN (Internet Corporation for Assigned Names and Numbers) administers the global domain name system to ensure that all users of the internet can find all valid addresses. It does this by overseeing the distribution of unique technical identifiers used in the internet's operations and the delegation of top-level domain names (such as .com, .org, .co.uk, etc). Without this "universal resolvability" the same domain name might map to different internet locations in different countries or networks.

The US Department of Commerce oversees the organisation giving it the theoretical power (or at least technical ability) to disconnect countries and disrupt communications for political or economic reasons. For example, it could turn off all domain names that point to websites in a particular country- for example all ".ir" websites run from Iran.

It is America’s power over the internet that has rankled other countries and led to calls for change.

Some developing nations, including Iran and China – both of which regulate the content available to their domestic internet users - want a governmental body affiliated to the United Nations to oversee ICANN.

The European Union is proposing a formula that would remove American control and replace it over time with a purely technical intergovernmental body - though not necessarily the United Nations. Goverments, industry and campaigners would also gather in a separate "forum" to discuss other related issues, including "public policy", according to the text of the EU proposal.

But the Americans steadfast refuse to even consider relinquishing their control arguing that ICANN’s performs a technical function that works well, fosters innovation and investment and is responsive to the needs of the global internet community. The Americans say that the alternative of intergovernmental governance would be costly and bureaucratic. On a political level, it also objects to countries with unimpressive records on freedom of speech having any say in the control of the internet.

The Financial Times 16th November 2005

Skype in China talks over new call service By Mure Dickie in Beijing

Skype, the internet telephony company owned by eBay, is in talks with Chinese state-owned operators that it is optimistic will clear the way for the launch of its computer-to-telephone call service in the world’s most populous telecoms market. Niklas Zennström, Skype chief executive, waved aside suggestions that Verso Technologies, a US company, was close to selling an anti-Skype filtering system to a leading Chinese operator. Skype offers its free computer-to-computer telephony service to users in China, but does not directly market its fee-paying “SkypeOut” computer-to-telephone service because of regulatory restrictions Mr Zennström declined to forecast when Skype would be able to introduce the SkypeOut service, which allows users to make calls around the world at a fraction of the price charged by traditional operators. However, his comments were the most direct response by Skype to the announcement last week by Atlanta-based Verso that it was marketing a Skype-blocking system to an un-identified Chinese “tier-one carrier”. Verso’s announcement fuelled speculation that Chinese state-owned operators would seek to block cut-rate telephone services based on “voice over internet protocol”, or VoIP.

Daily Digest 14th November 2005

There's no such thing as a free phone call

Thursday November 10, 2005 The Guardian

Making telephone calls through the internet for almost nothing is now moving from geekdom to a high street near you, as Dixons and BT fight for control of what is expected to be a massive market that will eventually make the present telephone system redundant. Dixons has just launched Freetalk, its £79.99-a-year service that, unlike the hugely successful Skype, does not need your computer to be on all the time because it links via a small box directly to the modem/router. I was looking forward to it with visions of turning my home into an internet-only phone zone. I tried it out alongside a similar product, BT Broadband Voice, but with rather disappointing results.
The attraction is not the technology itself (who cares?) but the claim it will cut your phone bill. Yet Dixons' charge of £79.99 for a year's "free calls" is equivalent to making more than 1,400 off-peak hours of calling using a BT landline tariff of 5.5p an hour, so you would have to be a pretty heavy user to make it worthwhile. The same applies to BT's own Broadband Talk tariffs - £7 a month if you opt for the one offering free calls at all times of day.
Both were reasonably easy to install, though Dixons required several unscheduled resets before it started working. More worryingly, with both of them, but particularly the Dixons model, conversations frequently lapsed into monologues when my voice could not be heard at the other end. Whether it was due to the phone or my broadband connection I do not know, but it was not encouraging.
And don't delude yourself that you can say goodbye to the cost of that landline yet. BT's option requires broadband and a normal BT line - so it becomes a straight calculation whether you would make enough free calls to justify the extra cost. In theory you could use Freetalk as your sole phone service - but first you would have to find a broadband supplier or cable operator willing to allow that.
You will still need a landline if you want to be sure of making 999 calls with Freetalk, because internet phones don't tell the emergency services where the phone is located (though BT claims to have solved this problem). You may also need a traditional phone as an insurance against a power cut, loss of speed or even the spam associated with broadband. Dixons is currently marketing it as something additional to your normal phone rather than an alternative.
Internet telephony will turn out to be the most disruptive technology since the internet itself. But for the moment, it is best to stick to easily downloadable services requiring a computer, such as the pace-setting Skype, which added 9 million customers last week alone, BT Communicator, which is linked with Yahoo, or the less impressive Google Talk, which, like BT/Yahoo, also offers instant messaging. None is any use unless you know others on the network but Skype, which also has a paid-for service, SkypeOut, for calls outside the net, claims 200m downloads and is most likely to be the first to reach a critical mass.
The prospect of globally free calls, once the majority of people are on board, is fascinating. It will enable anyone in the world to speak to anyone for nothing if they are online, as most subscribers will eventually be. It will spawn countless new businesses and consumer applications, while giving poor nations a chance to leapfrog into a new era.
At present it is like the wild west. You can't talk to anyone on Communicator or Google if you are on the free Skype service and vice versa. The nirvana of free, easy-to-use net calls is not yet here, especially not in the UK, which is trailing behind other countries. But at least one gets a glimpse of what will happen once the wild west has been tamed. It is worth signing up now if only because it will be fun being part of the journey rather than waiting for the new era to arrive.

DT rivals up in arms at broadband exemption

November 13 2005
The Financial Times

The new German government will exempt a broadband network planned by Deutsche Telekom from regulation for two to three years, a move certain to set a controversial precedent for other recently liberalised telecommunications markets in Europe.
Conservative Christian Democrats and leftist Social Democrats pledged, in their coalition agreement signed on Friday night, to free DT's €3bn investment from "regulatory actions for a certain period of time" to ensure adequate returns.

E-Plus, Skype launch VoIP over UMTS service

E-Plus has enabled Skype use for customers who are subscribed to its Online Flatrate tariff for UMTS use. Current and new customers can receive a free Skype starter package including Skype software and a headset. This promotion runs until 31 December and is part of the field tests Skype and E-Plus announced during IFA 2005.

10th November 2005

Telegeography 10th November 2005

O2 and iO team up

Manx Telecom, the O2 subsidiary operating on the Isle of Man, has contracted mobile content supplier iO Global to supply it with its 3G managed mobile content service. The iO Global service will be used to manage and deliver all content for Manx Telecom’s 3G mobile data network, which is Europe's first commercial network to incorporate HSDPA technology.

The Guardian Thursday November 10, 2005

Broadband take-up boosts BT results

BT has announced revenues from broadband grew by 57% in the three months to September while reporting weaker second-quarter overall earnings. The former telecoms monopoly said it had added 171,000 retail customers in the last quarter, taking overall connections to 6.2m as revenues from its legacy fixed-lined business continued to fall.

DT hits out at Telefonica’s ‘subsidies’

November 9 2005
The Financial Times

Deutsche Telekom, Europe’s largest telecoms operator, has accused Madrid of unfairly subsidising foreign acquisitions by Spanish companies and is studying whether any help over tax in the takeover of O2, the UK mobile phone company, by Spain’s Telefónica contravened EU law. Kai-Uwe Ricke, chief executive, said Telefónica’s ability to write off the goodwill of the planned €26bn ($30.5bn) deal thanks to exceptional Spanish tax rules highlighted Europe’s “skewed competitive environment” and was “an important factor” in deterring DT from making a counter offer. He also cited price and potential regulatory difficulties.

Swisscom steps up Eircom interest

November 8 2005
The Financial Times

Swisscom confirmed on Wednesday it was in talks with Ireland’s Eircom but warned that a takeover, thought to value the group at at about €2.6bn ($3.06bn), was not assured. “Swisscom confirms that it has entered into discussions with Eircom in relation to a possible transaction. However, there can be no certainty that an offer will in fact be made,” Switzerland’s foremost telecommunications operator said.

The Telegraph Telephone number price tag hung on Phones4U

John Caudwell hoisted the For Sale sign over his entire Phones4U empire yesterday and put plans to sell its smaller business Homecall on hold. The 53-year-old mobile phone entrepreneur wants in excess of £1billion from a private equity buyer for the Caudwell Group, which employs 8,500 staff and turns over £2billion a year.
It includes the mobile phone retailer Phones4U, the handset and accessories distributors 20:20 and Dextra, repair outfit MPRC, and telecoms business Homecall. Rivals Carphone Warehouse and American group IDT are understood to have offered around £50m for Homecall, which Rothschild was struggling to sell due to the simultaneous sale of Centrica's rival service OneTel and Swedish-owned Tele2.

November 9th 2005

TV on mobiles proves a turn-off
Monday November 7, 2005 The Guardian

Most people have no desire to watch television on mobile phones, preferring to use home computers to watch TV while on the internet, according to new research.
The findings of a survey of 1,500 entertainment consumers in Britain by Entertainment Media Research (EMR) deflates some of the hype about mobile-television alliances, such as Vodafone's deal with Sky last week.

Funds could move on C&W, says chief November 8 2005
The Financial Times

Richard Lapthorne, chairman of Cable and Wireless, on Tuesday signalled the UK’s second-largest fixed-line telecoms network operator could become a takeover target for private equity funds following a recent profits warning. “I don’t know for a fact but it is almost a certainty that people are doing their numbers on us,” Mr Lapthorne said after he suggested that private equity funds would find more value in the business than the stock market at present.

T-Online lifts number of DSL customers
November 8 2005
The Financial Times

T-Online, Europe’s largest internet service provider, between July and September gained almost twice as many new customers for high speed web access as United Internet, its biggest competitor in Germany. The internet unit of Deutsche Telekom slashed prices for digital subscriber lines by up to two-thirds this summer, boosting the number of DSL-customers in its vital home-market by 342,00 to 4m by the end of the third quarter.

Swisscom steps up Eircom interest
November 8 2005
The Financial Times

Swisscom is understood to have offered between €2.40 and €2.50 a share for Eircom, which would value Ireland’s former state-owned telecommunications company at about €2.6bn ($3.06bn). Eircom, which last week said that it had received a preliminary approach, is understood to be willing to open its books to Swisscom to allow the Swiss operator to conduct due diligence.

November 8th
Telegeography United Internet adds 190,000 DSL users in Q3

Frankfurt-based United Internet added 190,000 DSL users to its ranks in the three months ended 30 September. The increase helped boost nine month sales by 48.5% to EUR543.3 million and EBITDA bu 7.3% to EUR87.7 million.

November 8th Telegeography Multimedia phones boost 3Q sales

1.7 million mobile handsets were sold in Taiwan in the third quarter of this year, according to the Taipei Times. Revenues from the sale of handsets in the three months to the end of September 2005 totalled USD345 million, up 2% year-on-year, on the back of increased take-up of mid and high-end multimedia phones. Taiwanese manufacturers accounted for 20% of all handsets sold in the period, down 2% y-o-y.

November 8th Telegeography Qualcomm launches GSM patent suit against Nokia

Qualcomm has filed a lawsuit against Nokia for alleged infringement of twelve of its patents pertaining to GSM technology. The lawsuit was filed in a federal court in San Diego and refers to patents deemed essential for the manufacture or use of equipment that complies with the GSM, GPRS and EDGE cellular standards. Qualcomm is seeking monetary damages for Nokia’s ‘continuing sale of infringing products’. Six of the patents in Qualcomm’s complaint against Nokia were also involved in a suit filed against Broadcom in July.

8th November 2005

Credit-card fraudsters target internet

Tuesday November 8, 2005 The Guardian

Credit-card fraudsters are increasingly turning to the internet now that the "chip and pin" system has closed other money-making avenues, new figures show.
"Card-not-present" fraud - in which criminals get hold of people's credit and debit card details and use them to buy goods online, over the phone or by mail order - has grown by 29% in a year, says the Association for Payment Clearing Services (Apacs). Online banking fraud has also risen sharply. Apacs is promoting a consumer awareness campaign to inform people of safety precautions they can take when shopping online.
Overall, card fraud losses have fallen. For the six months to June 30 they totalled £219m - down 13% on the £253m of losses recorded during the same period last year. Many fraudsters now appear to have shifted their attention to the internet. Card-not-present fraud amounted to £90.6m in the first six months of this year, up from £70.2m during the same period in 2004. Internet card fraud made up the lion's share (£58m) of this. A Lloyds TSB spokesman said the figures showed that criminals were getting more cunning. "We have seen a rise in attempts by fraudsters to steal online banking details in ever-more-sophisticated ways," he said. The bank is conducting trials of a keyring-sized device that generates a unique six-digit number that customers enter when they log on.

Qualcomm sues Nokia over 12 patents

November 7 2005 The Financial Times

A patent war involving leading mobile phone and chip makers intensified on Monday, with Qualcomm announcing it was suing Nokia for infringement of a dozen of its patents. The move by the US mobile chip maker appeared to be a response to last month’s complaints to the European Commission by Nokia and five other companies that Qualcomm was being anti-competitive in refusing to license its patents to the industry on “fair, reasonable and non-discriminatory terms.” Qualcomm said it filed suit on Friday in a federal court in San Diego alleging infringement of 11 of its patents and one owned by its subsidiary SnapTrack.

Disney acquires Living Mobile

The Walt Disney Internet Group (WDIG) announced the acquisition of Germany-based mobile games developer Living Mobile. No financial details wre disclosed. The move is part of The Walt Disney Company's overall strategy to leverage technology, supporting WDIG's growth plans for its mobile business and raising its profile in the mobile games category. Under the terms of the agreement, Living Mobile will operate as a subsidiary of WDIG Europe. It has approximately 40 employees and offices in Munich and Prague.

8th November 2005

Credit-card fraudsters target internet

Tuesday November 8, 2005 The Guardian

Credit-card fraudsters are increasingly turning to the internet now that the "chip and pin" system has closed other money-making avenues, new figures show.
"Card-not-present" fraud - in which criminals get hold of people's credit and debit card details and use them to buy goods online, over the phone or by mail order - has grown by 29% in a year, says the Association for Payment Clearing Services (Apacs). Online banking fraud has also risen sharply. Apacs is promoting a consumer awareness campaign to inform people of safety precautions they can take when shopping online.
Overall, card fraud losses have fallen. For the six months to June 30 they totalled £219m - down 13% on the £253m of losses recorded during the same period last year. Many fraudsters now appear to have shifted their attention to the internet. Card-not-present fraud amounted to £90.6m in the first six months of this year, up from £70.2m during the same period in 2004. Internet card fraud made up the lion's share (£58m) of this. A Lloyds TSB spokesman said the figures showed that criminals were getting more cunning. "We have seen a rise in attempts by fraudsters to steal online banking details in ever-more-sophisticated ways," he said. The bank is conducting trials of a keyring-sized device that generates a unique six-digit number that customers enter when they log on.

Qualcomm sues Nokia over 12 patents

November 7 2005
The Financial Times

A patent war involving leading mobile phone and chip makers intensified on Monday, with Qualcomm announcing it was suing Nokia for infringement of a dozen of its patents. The move by the US mobile chip maker appeared to be a response to last month’s complaints to the European Commission by Nokia and five other companies that Qualcomm was being anti-competitive in refusing to license its patents to the industry on “fair, reasonable and non-discriminatory terms.” Qualcomm said it filed suit on Friday in a federal court in San Diego alleging infringement of 11 of its patents and one owned by its subsidiary SnapTrack.

7th November 2005

Gamers get Wi-Fi access courtesy of BT and The Cloud

Wi-Fi service providers BT Openzone and The Cloud have signed deals with video game manufacturer Nintendo UK to enable wireless internet access to users of the Nintendo DS handheld console from 25 November. Gamers will be able to access the internet at more than 7,500 Wi-Fi hotspots throughout the UK.

Tiscali and Aastra team up for SME solutions

Tiscali UK and global telecoms solutions provider Aastra Telecom have entered into a partnership to provide integrated voice and data solutions to small and medium enterprises (SMEs). Under the agreement, Tiscali's Quality over DSL (QoDSL) service, which guarantees allocated bandwidth for applications such as VoIP, will be sold as part of Aastra's customised corporate solutions products.

TelstraClear questions Telecom's broadband commitment

TelstraClear has taken out full page advertisements in the country's main newspapers accusing Telecom of trying to back out of its commitment to open up the broadband market. According to TelstraClear CEO Allan Freeth, the former incumbent is trying to wriggle out of an agreement it made to have 83,000 of its residential broadband connections available to alternative providers by the end of the year. According to Telecom's third quarter results it had 244,000 broadband customers at the end of September, not far off of its 250,000 target by the end of 2005. However only a small percentage of this figure came from competitors (via unbundled bitstream access or wholesale arrangements), much less than the anticipated 83,000.

Telkom launches ISP

Kenyan incumbent fixed line telco, Telkom Kenya, has launched Jambo Telkom, a wholly-owned internet service provider (ISP) subsidiary. Telkom claims to have invested around USD2 million into the company, and its launch is expected to stimulate much needed competition in the ISP arena. Jambo Telkom offers three services - Jambo Dial Up, Jambo ADSL and Jambo Mail.