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Tag: deutsche-telekom

  • Mobile World Congress 2013: The End of Apple Dominance Is Near

    The annual meeting Mobile World Congress, ongoing this week in Barcelona, seems to mark more than any other event the end of Apple dominance in the global market for smartphones and tablets and the rise of some rivals with more open operating systems.

    Mozilla has opened the event in Barcelona unofficially. The nonprofit organization, which used Firefox a decade ago to fight Microsoft control in the online search engine market, wants to change totally the smartphone market as well.

    The industry is currently unnaturally controlled by a few companies, said general manager of Mozilla, Gary Kovacs, during the presentation of the first generation of mobile devices with Firefox operating system.

    More than 20 telecom industry executives who brought their support to the launch of Firefox OS had similar views.

    “We change the industry for the common good,” said Cesar Alienta, general manager of Telefonica, one of the largest telecommunications companies in the world. Spanish company chief criticized the closed operating systems, such as iOS, and warned that “the smartphone market is making a step back from the internet’s opening feature”. Telefonica wants to introduce shortly Firefox OS devices in Spain, Brazil, Colombia and Venezuela.

    America Movil, controlled by Carlos Slim, the richest man in the world, committed to launch Firefox OS in Mexico “and in all possible markets” soon.

    The outgoing General Director of Deutsche Telekom, Rene Obermann, called the Firefox OS release “an important step towards more competition between different systems”. Deutsche Telekom will launch Firefox OS devices starting from this summer in Poland.

    Mozilla is not the only company that wants to change the market for smartphones and tablets. Samsung and Intel are also developing an operating system called Tizen, which would be even more open and will allow software developers more important changes compared to Apple's iOS and Google's Android.

    Mobile operators are strongly attracted by the prospect of being able to strongly change the operating systems, for an interaction as direct as possible with the user.

    The irony in this case is that the success of Samsung with Tizen would make the South Korean company less dependent on Google and stronger in the smartphones and tablets market.

    The rest of the world seems to recover the distance to Apple's platform for mobile devices, and the American company must innovate again or will be cannibalized by rivals with cheaper and more accessible devices. Smartphone market seems to have matured, so that real opportunities could be in the expansion in emerging markets.

  • AT&T to Acquire T-Mobile USA from Deutsche Telekom

    AT&T and Deutsche Telekom announced that they have entered into a definitive agreement under which AT&T will acquire T-Mobile USA  in a cash-and-stock transaction currently valued at approximately $39 billion. The agreement has been approved by the Boards of Directors of both companies.

    According to the companies, the acquisition provides "an optimal combination of network assets to add capacity sooner than any alternative, and it provides an opportunity to improve network quality in the near term for both companies’ customers." The companies also said that the acquisition provides "a fast, efficient and certain" solution to the impending exhaustion of wireless spectrum in some markets, which limits both companies’ ability to "meet the ongoing explosive demand for mobile broadband."

    With this transaction, AT&T commits to a significant expansion of robust 4G LTE deployment to 95 percent of the U.S. population to reach an additional 46.5 million Americans beyond current plans – including rural communities and small towns. In terms of area covered, the transaction enables 4G LTE deployment to an additional 1.2 million square miles, equivalent to 4.5 times the size of the state of Texas. T-Mobile USA does not have a clear path to delivering LTE.

    According to AT&T and T-Mobile, their customers will see service improvements – including improved voice quality – as a result of additional spectrum, increased cell tower density and broader network infrastructure.

    The acquisition will increase AT&T’s infrastructure investment in the U.S. by more than $8 billion over seven years.

    "This transaction represents a major commitment to strengthen and expand critical infrastructure for our nation’s future," said Randall Stephenson, AT&T Chairman and CEO. "It will improve network quality, and it will bring advanced LTE capabilities to more than 294 million people. Mobile broadband networks drive economic opportunity everywhere, and they enable the expanding high-tech ecosystem that includes device makers, cloud and content providers, app developers, customers, and more. During the past few years, America’s high-tech industry has delivered innovation at unprecedented speed, and this combination will accelerate its continued growth."

    Stephenson continued, "This transaction delivers significant customer, shareowner and public benefits that are available at this level only from the combination of these two companies with complementary network technologies, spectrum positions and operations. We are confident in our ability to execute a seamless integration, and with additional spectrum and network capabilities, we can better meet our customers’ current demands, build for the future and help achieve the President’s goals for a high-speed, wirelessly connected America."

    Deutsche Telekom Chairman and CEO René Obermann said, "After evaluating strategic options for T-Mobile USA, I am confident that AT&T is the best partner for our customers, shareholders and the mobile broadband ecosystem. Our common network technology makes this a logical combination and provides an efficient path to gaining the spectrum and network assets needed to provide T-Mobile customers with 4G LTE and the best devices. Also, the transaction returns significant value to Deutsche Telekom shareholders and allows us to retain exposure to the U.S. market."

    As part of the transaction, Deutsche Telekom will receive an equity stake in AT&T that, based on the terms of the agreement, would give Deutsche Telekom an ownership interest in AT&T of approximately 8 percent. A Deutsche Telekom representative will join the AT&T Board of Directors.

    The combined company will continue to have a strong employee and operations base in the Seattle area.

    The $39 billion purchase price will include a cash payment of $25 billion with the balance to be paid using AT&T common stock, subject to adjustment. AT&T has the right to increase the cash portion of the purchase price by up to $4.2 billion with a corresponding reduction in the stock component, so long as Deutsche Telekom receives at least a 5 percent equity ownership interest in AT&T.

  • T-Mobile and Orange Merge to Create the UK's Largest Mobile Carrier

    Deutsche Telekom and France Telecom are planning to merge T-Mobile UK and Orange UK. The companies have entered into exclusive negotiations to combine T-Mobile and Orange in a new 50:50 joint venture company.

    If the negotiations are successfully accomplished (the deal is expected to be completed by the end of October), the new joint venture will create the UK’s leading mobile operator. It will have a combined mobile customer base of around 28 million, representing approximately 37 percent of UK mobile subscribers.

    The companies assure that this combination will result in expanded network coverage and better customer proximity through a larger network of own shops.

    Obviously, the other aim of the new enlarged business is to compete more effectively with the other two large UK operators – O2 and Vodafone.

    “By combining our operations in the UK, we anticipate the long-awaited consolidation in one of Europe’s most competitive markets. This will reinforce fair competition and will provide strong benefits for our customers through improved coverage, quality of service and an enhanced capacity to develop new services and technologies,” said Gervais Pellissier, CFO of France Telecom.

    “Our shareholders will benefit from higher profitability and an immediate cash flow per share accretion without impacting the overall indebtedness of the parent companies.”

    The business will have pro forma 2008 revenues of approximately £7.7 billion. The merger and integration of the operators should generate estimated synergies with a net present value in excess of £3.5 billion, as the companies claim.

    Estimated opex-based synergies should reach an annual run rate of over £445 million from 2014 onwards.

    The operators predict that the key areas for the opex synergies of the joint venture will be network & IT – large-scale site rationalisation leading to savings notably in site rental expenses, network operations and maintenance expenses – and distribution and marketing – higher proportion of sales through own shops, resulting in lower distribution costs and savings in marketing costs primarily post roll-out of a new branding strategy.

    “We will become market leader,” stated Timotheus Höttges, CFO of Deutsche Telekom.

    “Our customers will benefit in many ways, for example from the best mobile broadband offer in Britain. In the second-biggest market in Europe, which is undoubtedly one of the toughest and most competitive, we are giving T-Mobile UK a clear and strong future.”

    The joint venture expects to invest £600 to £800 million in integration costs over the period from 2010 to 2014. Those costs would primarily relate to the decommissioning of mobile sites, the rationalisation of the network of retail stores and the streamlining of operations.

    The Board of the new joint venture company will have balanced representation from both firms. The management team would be led by Tom Alexander, currently CEO of Orange UK, as CEO and Richard Moat, currently CEO of TMobile UK, as COO.

    The T-Mobile UK and Orange UK brands will be maintained separately for 18 months after completion of the transaction.