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Predictions Weekly
June 1, 2007
Fixed Mobile Convergence: What works, what doesn’t, and the MNO’s Path to Substitution

MVNOs Need Understanding Parents— Helio’s Relationship with SK Telecom and EarthLink

VoIP via Cable Networks in Mexico: Lots of Potential, but Also a Steep Learning Curve

From Apple to Orange: How MNOs Can Make Mobile Music Work in an iTunes World?

Telecom Roundup - Powered by ITI

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Fixed Mobile Convergence: What works, what doesn’t, and the MNO’s Path to Substitution
By Svetlana Issaeva, Analyst

Discussions of “fixed-mobile convergence (FMC)” are at the top of the agenda for most service providers and all equipment manufacturers today. The term means different things to all of them, which generates a lot of confusion. For some market players, any bundle of fixed and mobile services means FMC, for others, FMC is an equivalent of extending mobility to PBX applications. Many other definitions are also in use. All of them are correct, but it becomes increasingly clear that a framework must be established to alleviate the ambiguity and help with the analysis of fixed-mobile convergence. Pyramid Research has developed such framework, using an overarching umbrella of “fixed-mobile services”. These services fall into three categories: fixed-mobile service bundles, fixed-mobile substitution services, and fixed-mobile convergent services (FMC), such as UMA and SIP-based dual-mode services. Read more
 
Pyramid Premium Analysis

MVNOs Need Understanding Parents— Helio’s Relationship with SK Telecom and EarthLink

Among the current crop of data-centric MVNOs in the US, Helio is financially the most transparent, being a joint venture between SK Telecom and EarthLink. Both parent companies have to report publicly on Helio, which includes submitting financial details specifically on the MVNO. This is problematic, since the high cash burn rate that is unavoidable for a fledgling MVNO is likely to raise the blood pressure for investors in both parent companies. Between 2005 and 2006, Helio’s net loss increased 356% to US$192m—enough to deliver a Q1 2007 net loss for EarthLink of $30m. Read more

Pyramid Prediction: Shareholder discomfort is cited as a primary reason for the premature demise of Mobile ESPN. Is Helio likely to be euthanized for the same reason? We think not.


VoIP via Cable Networks in Mexico: Lots of Potential, but Also a Steep Learning Curve
A few days ago, the third biggest Mexican cable operator received authorization from the country's Transport and Communications Ministry (SCT) to offer fixed line telephony services. With the green light to provide voice services to end users, Cablevision will implement a full triple play offer across its 11,000 km fiber network in Mexico City, a move main cable firms have already made in other cities. According to a statement, Cablevision (controlled by Grupo Televisa) plans to roll out voice services by 3Q2007. Read more

Pyramid Prediction: We expect a domino effect in current authorization processes for other cable players. However, even with both regulatory and technical conditions solved, cable operators will face a challenging learning curve before they can achieve a solid position (niche or massive) in the Mexican voice market.
 
Pyramid Report Watch

From Apple to Orange: How MNOs Can Make Mobile Music Work in an iTunes World?
By: Pyramid Research

Nearly two years ago, Pyramid Research published a report on mobile music models. At that time, the market was non-existent outside Southeast Asia. Pyramid Research investigated two leading mobile music businesses—SK Telecom’s MelOn service in South Korea and KDDI’s Chaku-uta Full in Japan. Both providers took a different stance in delivery methods. SKT opted for an open subscription-based system that allows the transfer of tracks between mobile phone and PC, as well as over-the-air downloads directly to the device. KDDI opted for a mobile-only system that limits capabilities to move outside the mobile environment. Pyramid Research, at that time, said that SKT’s more open model was more likely to prevail in the rest of the world.
Read more
 
Pyramid Telecom Roundup - Powered by ITI Digest!*
Magyar Telekom to construct next-generation IP network in Hungary

The expansion of services based on Internet technology and broadband facilities has become an integral part of Magyar Telekom's business strategy. As part of the upgrading process of its IP backbone network, the company has deployed two CRS-1 terabit routers from Cisco Systems Inc that allow a significant increase in network reliability and the satisfaction of future capacity demands.
Read the full article in ITI Digest

Indonesian operators to build US$1.5bn fibre-optic network

A group of seven Indonesian telecommunications operators are to build a countrywide fibre-optic network, according to the Financial Times. The US$1.5 billion Palapa Ring project will involve the laying of 57,000km of cables across all 440 districts and is expected to take two years to complete. The cable will provide a boost for the country’s overloaded telecommunications infrastructure and improve connection with the nation’s remote regions. The first phase of the project, which was first proposed two years ago, will cover eastern Indonesia. Read the full article in ITI Digest


Ericsson and Telstra run world's first live 40Gbit/s optical transmission trial in Australia


Ericsson AB and Telstra have successfully completed what they claim to be the world's first live network trial for next-generation 40Gbit/s optical transmission technology in Australia. Read the full article in ITI Digest


LOUNET to merge with Elisa


Elisa Corporation and LOUNET Oy have signed a merger plan according to which LOUNET will merge with Elisa. Elisa Group currently owns 80.51% of LOUNET, which offers telecommunications services in western Finland. The business activities of the companies participating in the merger complement each other as a whole, and combining these activities will generate a stronger and more competitive entity. The merger will also simplify Elisa's current group structure.
Read the full article in ITI Digest


Swisscom purchases stake in Transmedia


After the launch of Bluewin TV and the purchase of holdings in multimedia companies as part of a move to strengthen its position in the fields of media and entertainment, Swisscom AG is now acquiring a 35% stake in the VoD specialist, Transmedia. The stake in the Geneva-based company represents a further step in Swisscom’s alignment as a multimedia provider. Read the full article in ITI Digest


Another consortium enters privatisation talks with BCE


The Strategic Oversight Committee of the board of directors of BCE Inc has announced that another group is entering into discussions to explore the possibility of taking the company private and that members of the group have signed non-disclosure and standstill agreements with BCE on a non-exclusive basis. The consortium includes Cerberus Capital Management, LP and a group of Canadian investors.
Read the full article in ITI Digest



Mobistar to acquire VOXmobile


Mobistar, a mobile operator in Belgium, has signed an agreement to acquire 90% of Luxembourg-based VOXmobile. In December 2006, the shareholders of VOXmobile authorised a bank to investigate the strategic options for the company. After the approval of its board of directors, Mobistar made a binding take-over offer that was accepted by VOXmobile. Mobistar will acquire 90% of the VOXmobile shares for €80.3 million. This amount equals proportional the estimated value of the company, minus its debts after capitalisation of the shareholders loans.
Read the full article in ITI Digest

Pyramid Predictions Weekly reaches more than 25,000 telecommunications and media professionals each week. We differentiate ourselves from newsletters which simply recycle news by analyzing news and events against our own primary research and providing predictions based upon our views.

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 Research Reports
  Market Positioning and Operator Strategies for IPTV
  WiMAX Business Models
  The Next Billion
  From Triple Play to Quad Play
  Rethinking MVNO and MVNE Economics
  Can Video On Demand Save IPTV?
  The Global Mobile Capex Index
 
 Market Forecasts
  Convergence
  Fixed Operator Marketshare
  Mobile Operator KPI
  Mobile Data
  Fixed and Mobile Operator Spending
  Media