Icahn and I will

By The Informer

If corporate raider Carl Icahn lived in the classic 1954 MGM musical Seven Brides For Seven Brothers, he’d probably step out onto the veranda of his ranch each day to admire the fine, hand-painted Technicolor morning. Then, in response to his wife’s enquiry as to what he planned to do, he’d launch into song:

“Well, my dear…

I’m a goin’ ousting, ousting, ousting, that’s what I’ll do.Corporate jousting, jousting, jousting ’til the day’s through.Gonna buy me a few more million shares, gonna oust that board right outta their chairs,I’ll oust today and oust tomorrow, too.”

Then, as he galloped off to work (on a horse) his wife would cock her head and laugh to herself, saying:

“Dear lord, but my Carl sure does love to oust!”

And doesn’t he just? Not content with securing his strategic objectives at Motorola, Icahn has turned his attentions to web giant Yahoo, where he feels the board has made a significant booboo by spurning the moustache-twirling advances of Microsoft. The software firm turned on its heel earlier this month after the Yahoo board waved away its offer of $34/share, opting to hold out for $37.

Microsoft, bristling from the rejection, has stated its intention to push on unaided in the online search space and Icahn, who bought 50 million shares in Yahoo following the collapse of negotiations, believes the portal has overestimated its appeal. He is not alone in his assessment – other Yahoo shareholders are known to be unhappy with the board’s decision – and this week Icahn announced his intention to nominate a board of his own choosing to replace the incumbents at the firm’s shareholder meeting in early July. His primary objective looks to be persuading Microsoft to resume discussions.

It could be done. Hopeful WiMAX pairing Sprint Nextel and Clearwire were able to sort out their differences, after all. And with both firms putting out results this week, it looks like they have a thing or two in common, challenging Paula Abdul’s assertion that opposites attract. Both firms had a bit of a shocker, to be blunt. Clearwire’s Q1 revenues were up 76 per cent year on year at $51m, on the back of a 72 per cent growth in the customer base, which now sits at 443,000. But losses grew by 90 per cent to reach $176.4m.

Sprint, meanwhile lost $505m for Q1, considerably more than double its Q107 deficit of $211m. Revenues were down eight per cent year on year to $9.3bn, as 1.09 million customers (net) fled the carrier’s network. The Informer wonders what the two firms’ coterie of WiMAX investors – Google, Intel, Comcast, Time Warner Cable and Brighthouse – made of these results, what with them having just stuffed $3.2bn up Sprint and Clearwire’s collective chute.

Speaking of questionable collaborations, US MVNOs Virgin Mobile and Helio are making noises about banding together. On the back of a few days’ worth of rumours this week, Dicky Branson’s US outfit confirmed that it is in talks with South Korea’s SK Telekom which, along with EarthLink, owns Helio.

Opinion out in the industry appears to be divided as to whether this duet will be comparable to The Girl is Mine by Michael Jackson and Paul McCartney (a very bad idea) or Walk This Way by Run DMC and Aerosmith (a very good idea).

MVNOs don’t have the easiest time of it in the US and there have been some high profile disasters involving the likes of ESPN, Amp’d and Disney. Virgin Mobile is the most successful MVNO the world has ever seen but, although its US arm turned a profit for 2007, it had a poor Q4 – traditionally strong for prepaid, youth-focused players as Christmas shopping gets underway. Net adds for the quarter were only 209,669, down from 613,752 for Q406. And the firm itself predicted that churn in Q2 will lead to a net loss in customers for the second three months of the year.

Helio’s no great shakes, either. It’s got a nasty case of the financial trots and has a subscriber base of only around 200,000 people. Why should the amalgamation of two struggling firms create one strong one?

Still, the optimists argue that the target markets are complementary – Virgin goes after the low-spend prepaid youths, while Helio targets the idle rich with its fancy handsets and contracts. And both operations are on the Sprint network, which could possibly lead to a slight reduction in wholesale rates if they start joint negotiations with their host. Either way, it will be a while before we find out – if we ever do – as Virgin is stressing that it’s very early days at the moment.

It’s been all about the get-togethers this week. Alcatel-Lucent has formed a new joint venture company with Indian operator Reliance to provide managed services. AL currently sits third in the managed services vendor rankings, with around seven per cent of the market, according to the industry watchers at Informa Telecoms & Media. It’s a long way off the pace, though, with Ericsson and Nokia Siemens Networks commanding more than 20 per cent apiece.

The growth in managed services is significant for vendors whose kit sales are drying up and it’s a big focus for the Franco-US outfit. But partnering with an operator to build on your existing portfolio is an unusual manoeuvre for a vendor to make. The first contract the new firm is announcing will see it manage the networks of none other than Reliance itself, which is a little odd. Is an ownership stake going to be a prerequisite for all customers?

It’s a novel way for an operator to spread its international reach, though, which is high on the agenda for Indian carriers. The Informer understands that Alcatel-Lucent will shoulder the greater part of the operational burden.

It was party time and the cava was flowing at Spanish carrier Telefonica this week, which reported a 22.4 per cent year on year increase in Q1 profit, up to EUR1.54bn. The firm’s European properties dropped off a little, with revenue sinking 1.7 per cent to Eur3.5bn. It was Latin America – where Telefonica operates in ten markets – that did the business, with revenue growing just over ten per cent to EUR5.16bn.

It’s a region effectively dominated by Telefonica and America Movil, a carrier which – through a series of partnerships – gives Vodafone its presence in the market. The big V extended its tendrils further into Latin America this week, striking a partnership deal with Chilean player Entel PCS. Here’s one for the cellular history buff(s) out there: What is special about Entel PCS? (Answer at the bottom of the page).

Vodafone will introduce a range of push email devices, branded handsets and HSDPA USB modems into the market. Entel places second in Chile, behind Telefonica, which will no doubt be delighted to welcome Vodafone to the market, and will probably pop round with some empanadas on the first night, so Vodafone doesn’t have to cook anything while it’s unpacking. Unattached as it is to a big international group, the deal will probably help Entel as much as it does Vodafone.

In New Zealand, Vodafone is the one laying on the welcome. Hitherto a duopoly, with Telecom New Zealand offering the only competition to Mr Sarin’s people, NZ is set to become a triumvirate market with the news that a third player is entering the fray.

Well, it’s not really a fray, is it? The population of the country is only a little over four million; and half of them seem to be in London, where they’re attempting to watch cricket in the rain. The two incumbents had to release a bunch of spectrum as part of their licence extension deals with the Kiwi G. So now it’s business time for NZ Communications.

Right then, what else? A bit of handset malarkey, perhaps. Research in Motion unleashed its new model on the world this week, which it has named after a laundry detergent. The ‘Bold’ is the first of RIM’s BlackBerry family to support tri-band HSDPA, wifi and GPS.

Like all new, high-end handsets that get launched, it’s been hailed as a response to Apple’s iPhone, partly because of the industrial design that’s all black chrome and leatherette (sounds more like a mid 80s bachelor pad to the Informer). The Bold was apparently delayed somewhat by RIM’s attempts to get the battery life up to scratch, and the firm says five hours of talk time and 13 standby can be expected when the phone hits global markets later this year.

Also, following in the footsteps of Google and Apple, RIM has announced a partnership with Canadian bank RBC and business information group Thomson Reuters to launch the BlackBerry Partners Fund. The initiative is a $150m venture capital fund designed to promote investment in mobile applications and services for mobile platforms.

Meanwhile, those brainstorming sessions at Motorola are finally beginning to pay off, with the news that the firm is launching a new ‘silver-pink’ version of the RAZR for the ladies of South Korea. Mind-blowing stuff.

On the OS side, open mobile Linux initiative the LiMo Foundation opened its doors to a handful of new players on Wednesday, including US carrier Verizon.

New additions to the forum also include browser platform Mozilla, as well as Infineon, Kvaleberg, Red Bend Software, Sagem Mobiles, SFR, and SK Telecom, expanding LiMo’s membership to 40 since the foundation’s launch in January 2007.

A not for profit organisation, the LiMo Foundation aims to blend the community-based development benefits of Linux with development practices from the mobile community in a bid to minimise fragmentation – an ambition shared by Android backers the Open Handset Alliance and as well as the LiPS Forum among other Linux collectives.

The collective was launched in January 2007 by six mobile players – Vodafone, Motorola, NEC, Panasonic Mobile, Samsung and NTT DoCoMo.

The last of these – Japan’s leading mobile operator – is apparently interested in kicking its faltering international investment strategy into drive again. Historically DoCoMo has attempted to spread its solutions through minority stakes in operators in Europe and the States, a policy marked by failure. But now the carrier has expressed an interest in Bangladeshi player Aktel, according to local reports.

And that’s about the size of it this week.

Take care

The Informer

Entel PCS quiz answer:

Ay Carumba! You guessed it! Entel PCS was the first GSM carrier to launch on South American soil, earning it a GSMA Gratitude Award in 1998.