The Common Good

By The Informer

Every once in a while this industry produces a decision that is so genuinely sensible that you feel like cracking open a packet of dark chocolate digestive biscuits in celebration. Even if the need for that decision to be taken had been so blindingly obvious for such a long time that contemplating it has actually made you a bit blind, causing you to buy milk chocolate digestives by mistake, leading to a series of tiny but crushing disappointments with every bite you take.

The Informer refers, of course, to the announcement this week that the European handset community is to standardise the jack on mobile phone chargers, ending the need for a new one to be issued with every handset. This is great news for the environment, because the need to manufacture more chargers will be negated, and packaging can be reduced. And it’s great news for customers, who won’t have to pay extra for the charger (and for that one guy in the office that comes by every now and again saying: “Has anyone got a Sendo charger?” to which somebody replies: “Of course not. You’re the only person in the southern half of this country who has a Sendo phone”).

It’s bad news for the companies that make chargers, however. The Informer was once told that the only reason charger jacks changed every few years, and were different for models from different vendors, was that the handset vendors were indulging their component suppliers, who would have made less money had a single standard been implemented. That little racket’s up now, though, as Apple, LG, Motorola, NEC, Nokia, Qualcomm, Research in Motion (RIM), Samsung, Sony Ericsson, and Texas Instruments have all pledged to use Micro-USB in the future.

Actually it doesn’t apply to all phones; any that do not have USB-enabled data transfer are excluded from the Memorandum of Understanding because, says Brussels, once this programme gets up and running most phones will be USB-data enabled.

In reaching this decision – which should see the first compatible products hitting stores next year – the industry has avoided legislation being passed by the EC to force it to produce a common charger standard. So perhaps that was the motivator, rather than all the touchy-feely enviro-worthiness. It will be interesting to see if the chargers are rolled out globally.

While we’re on the subject of European Legislation, the latest of EC Commissioner Viviane Reding’s directives came into play this week, with roaming charges slashed. From now on, a text message sent from abroad in the EU will cost no more than €0.11 instead of €0.28 previously, and the wholesale price of data will be capped at €1 per MB, compared to an average wholesale price of €1.68 per MB. The wholesale cap will fall to €0.80 in 2010 and to €0.50 in 2011.

Consumers will also benefit from further cuts in the price of mobile phone calls while roaming in another EU country. A roamed call made in another EU country must not cost more than €0.43 per minute, and no more than €0.19 to receive. Outgoing roaming calls will also be charged by the second, after the first 30 seconds, rather than by the minute, and incoming calls will be charged by the second from the first second.

As a result of these adjustments, European consumers are expected to save up to 60 per cent on their bill for using a mobile phone abroad in the EU.

“The roaming rip-off is now coming to an end,” proclaimed a victorious-sounding Reding, before adding a further warning, something she seems incapable of resisting: “For now, EU rules are limited to reducing inter-operator charges. I call on the mobile industry to pass these savings on to data roaming customers swiftly. The Commission and national regulators will monitor data roaming charges very carefully and assess next year whether the roaming market is finally becoming competitive.”

Heading to the UK, it is now believed that Vodafone and Telefónica O2 have entered the scrap to bag German carrier T-Mobile’s British operation. Orange and 3UK were already reported to have shown interest.

Consolidation in the mature UK market has long been expected, and a goodwill writedown of €1.8bn for the carrier on the back of its Q1 results fuelled speculation that the firm is looking to offload its UK operation. However, the recent appointment of Richard Moat as the head of T-Mobile UK was taken by some to indicate parent firm Deutsche Telekom’s commitment to the business, at least in the medium term.

Vodafone, meanwhile, has also patched up its differences with reseller Carphone Warehouse, meaning Vodafone product will soon once again be available through that high street retailer.

Still in the UK, O2 announced this week that it had sold out of its first allocation of Apple’s iPhone3GS. As if the carrier needed any more reasons to regret not offering any Android product, or the N97; now, temporarily at least, it’s got no headline grabbing handset. That could be about to change, though, as reports this week have sprung up in the mainstream press reporting what we suggested a few weeks ago – namely that O2 is going to offer Palm’s Pre.

At the other end of the handset market, it’s probably safe to say, resides the Orange BIC phone. Branded by the ballpoint and disposable razor firm, it’s no surprise that this unit is not function-rich. Orange has been selling this handset in France for the past year and is now about to take it to Spain, where the low-end prepay unit will sell for €29 with 20 minutes of airtime.

Canadian vendor Nortel’s 4G IPR is worth a little more than this, apparently, although not quite as much as the company had hoped. JP Morgan had been cited as valuing the intellectual property at $2.9bn but ABI‘s chief research officer Stuart Carlaw reckoned this was a load of hooey. The $2.9bn figure was based on the assumption that Nortel’s IPR would garner a royalty rate of one per cent of every LTE device sold, he said. “This is disproportionate to their patent holdings and cannot be seen as fair and reasonable. I doubt any other single vendor will be looking for this type of return- even Qualcomm.” Like Nortel needs another kick in the swingers.

In our (very) occasional Romanian roundup, the news this week is that Greek carrier Cosmote is to acquire local carrier Telemobil, known to Romanian consumers as Zapp. Cosmote is buying the operator under a share purchase agreement worth €61m, with the Greek firm also assuming Zapp’s debt and other liabilities worth in the region on €146m.

Zapp holds a CDMA license in the 450MHz band and a 3G WCDMA license in the 2100MHz band. Its 3G network currently covers 23 Romanian cities and its total customer base exceeds 374,000 postpaid customers. The purchase is a touch of the old in-country consolidation, as Cosmote already operates Romania’s third largest cellco, with 6.6 million GSM customers (Q109), and the company is apparently looking to merge operations with its new acquisition.

A quick update on the rumour and speculation surrounding Zain’s African portfolio, which was further fuelled by the appointment of Swiss bank UBS this week to assess the company’s assets.

Zain acquired African player Celtel in 2005 for $3.36bn, and has continued to invest and acquire in the region ever since – most recently exploring opportunities in Morocco in March 2009. But while the carrier has never had any trouble raising money in the past, even the wealth of the Middle East is not immune to a global financial crisis and, more recently, the firm has been laying off staff, hatching outsourcing plans with kit vendors and launching various cost management initiatives. The figure being touted for the firm’s African portfolio is $12bn, and the buyer is thought to be French firm Vivendi.

Earlier today a Zain spokesman told the Informer that the company is “running a strategic review to enhance shareholder value,” and has an ongoing relationship with UBS. He also said that the firm: “Is continuously assessing the telecommunications landscape in the Middle East, Africa and Asia for value accretive acquisition opportunities.”

And that’s about the size of it, readers. It’s been a quiet week.

Take care

The Informer