Poor little rich boys

By The Informer

The Informer visited a basement bar in The City of London this week to see a friend who wears pinstripe suits every day. You hear tales of the City being full of men who are brash, flash and flush with cash and the Informer was expecting to see people burning £50 notes and pouring champagne over one another.

But the Citymen were glum – the bubbly was non-vintage! – because they’d lost a bloody fortune in this recession that’s been hitting the headlines. Stocks and shares, it’s a mug’s game. Unless you’re Nokia, in which case you’re simply unaffected by trifling global economic downturns. While corporate and financial bigwigs the world over were putting their holiday homes up for sale, Nokia, like a character from one of those old Imperial Leather adverts, popped another olive in its mouth and smiled suggestively at its beautiful wife.

The Finnish vendor announced its full year ’07 results this week, posting net profits up a thumping great 67 per cent to EUR7.2bn. Revenues were up 24 per cent to EUR51bn, even factoring the restructuring costs at Nokia Siemens Network into the equation. NSN sales for Q4 were up 25 per cent to EUR4.6bn.

Not only were the numbers pretty tasty, the firm reckons that Q4 saw it hit its oft-stated target of 40 per cent of the global handset market. The final three months of 2007 saw Nokia shift 133.5 million units with the Christmas boom.

Happy days indeed at Nokia – well, everywhere apart from the plant at Bochum in Germany, which the firm is closing down because it’s less cost effective than the operation in Romania that will be replacing it. As many as 2,300 staff could lose their jobs in the closure and it’s understandable that – given the powerhouse performance their employer is putting in – they’re a little miffed to be given the boot.

There were demonstrations against the closure of the plant this week, with employees and residents in Bochum turning out to protest the decision. But Nokia didn’t grow its profits 67 per cent by passing up the opportunity to better manage its costs and it seems unlikely that the protests will achieve much. German unions this week also called for a boycott on Nokia products.

As Nokia sailed skywards this week, Motorola slid further into the doldrums. Q4 profits for last year dropped to $100m, from $623 for the same period in 2006. Forced to stand in the naughty corner – again – was the handset division, where Q4 sales were down 38 per cent year on year to $4.8bn and operating losses sank to $388m. Shipments for the quarter were a whisker shy of 50 million.

Ovum’s Martin Garner commented that “it’s increasingly difficult to see why shareholders should see logic in keeping the divisions together,” which will be music to the ears of rebel shareholder Carl Icahn, who’s been saying much the same thing for some time now. The Informer’s not too sure who would want to buy Motorola’s handset unit, which remains focused principally on a constant recycle of the RAZR format. Ovum reckons a JV might be an idea but, again, who wants it? If the Informer had to put a finger in the wind, he’d look to China for the partner.

Mind you, there are firms out there that want to buy mediocre handset concerns, as Japanese vendor Kyocera has proven this week by cementing its purchase of compatriot player Sanyo.

In other Motorola news, the firm has put Qualcomm back on its supplier list. The Jacobs family firm lost the Motorola contract in September last year and Motorola was believed to be looking at Texas Instruments in the longer term.

Staying in Japan, and in the handset sector, NTT DoCoMo has announced that it’s working with Google on devices for the Japanese market based on the Android platform. The two firms have struck a deal that will see the web firm deliver search services, mobile advertising and possibly i-mode applications to the carrier’s customers. i-mode is being adjusted to better exploit Gmail, YouTube and Picasa and Google’s getting home-page status on the operator’s phones.

Meanwhile, DoCoMo has disbanded its wireless broadband partnership with ACCA Wireless in the wake of their combined failure to win a tranche of Japanese WiMAX spectrum in December. The winners, you may remember, were KDDI and PHS player Willcom.

There’s been a bit of a palaver in the world of WiMAX this week and, wouldn’t you know it, the Informer had a cameo role in its creation. A couple of weeks ago, you may remember, we ran a quotation from Airspan CTO and WiMAX Forum founding member Paul Senior. It had to do with his assertion that the WiMAX Forum would “have an FDD profile for mobile WiMAX inside six months.” You can refresh your memory here.

Despite the fact that Senior had made a similar comment in November last year, which also appeared on telecoms.com, this time around his proclamation was picked up by a few bloggers and some news sites (precious few of whom bothered to mention that they’d found the quotation in A Week in Wireless). While describing the attention it got as ‘fevered’ might be overdoing it somewhat, there was enough of a hoo-ha for the WiMAX Forum to put out a statement to “clarify and correct the inaccurate information presented in these articles”.

Said Forum chairman Ron Resnick: “Contrary to any of the unofficial statements made recently, the WiMAX Forum has not made any Board-approved policy or determination of when FDD mobile WiMAX system or certification profiles will be created. All profiles will be determined by the WiMAX Forum, driven by market demand, and the WiMAX Forum is exploring mobile profiles for FDD certification and is defining a network architecture to support FDD. However, no decision has yet been made when to propose an FDD evolution of the “WiMAX” IMT-2000 air interface to the ITU, nor has it been decided what specific profile might be proposed by WiMAX Forum in the future.”

One reason why the Forum might not want the industry thinking an FDD profile was around the corner, as it’s only just started the certification process for the TDD profile – a process into which the Forum has poured an awful lot of work and from which it stands to reap key revenues. If vendors felt FDD kit might be a better bet, they might just sack off the TDD certification altogether if there was only going to be a six-month wait. We’ll have to see. Anyway, you can read more of Paul Senior’s comments in the February issue of Mobile Communications International, the lead feature of which is a discussion on the prospect of WiMAX and LTE going head to head in the mobile market – something that an FDD profile for mobile WiMAX would certainly bring about.

It’s all eyes on US carrier Sprint in terms of WiMAX this year, which has to make good on its pledge to launch its mobile WiMAX network in April. You’ll recall that the firm’s CEO Gary Forsee left under a cloud last year. Now his replacement appears keen to put his own stamp on the company, meanwhile, and has spring-cleaned a few top men out of the door.

Dan Hesse, the former head of Sprint’s fixed line spin off, Embarq, took over the reins as president and CEO of Sprint at the start of this year and now chief financial officer Paul Saleh, who had been acting as CEO since Forsee’s departure, will leave the company, accompanied by chief marketing officer, Tim Kelly, and Mark Angelino, president of sales and distribution. Earlier this month, Sprint said it is to cut 4,000 jobs as financial pressure and subscriber losses continued through the fourth quarter of 2007.

Staying in the US, the 700MHz spectrum got underway this week, amid some concerns that the economic issues affecting the nation’s wider economy might have a detrimental impact on the whole process. The first two rounds drew total bids of over $2.8bn, though, which, as the Informer’s old Granddad used to say, is better than a poke in the eye with a burnt stick.