Spam lasagne

By The Informer

Apparently this week sees the 30th birthday of spam. Not the tinned meat product (which is 71 years’ old, if you’re interested), but the endless, unsolicited electronic messages with which we are each bombarded daily. The Informer wouldn’t have known about this anniversary were it not for a press release he was sent using the news as a hook to plug some anti-spam products.

There are layers of meaty irony here upon which we could feast, like a rich literary lasagne. But the Informer will simply observe that he can imagine no more appropriate way to be told about the birthday of spam than a press release such as this one. He should also point out that there is an unsubscribe link at the bottom of this newsletter.

Birthdays are usually celebrated of course, but to bake a cake for this would be a bit like throwing a party to mark the anniversary of the day you first learned you had herpes.

In equally un-celebratory mood this week was Alcatel-Lucent, which sat out the clamour of last week’s results-fest in order to have the stage all to itself on Wednesday for the mournful announcement of its fifth straight quarterly loss. Q1 this year saw a shortfall of EUR181m, compared to EUR8m for the same period in 2007. Sometimes things get worse before they improve. But sometimes, things just get worse. Nokia Siemens Networks is faring no better and proof of concept for the mergers that created the two companies is hard to find at the moment.

Revenues at AL were down a sliver at EUR3.86bn, and the firm projected more misery to come. Half of its sales are in US dollars, and customers are cutting back on their spending anyway.

Another problem is that the CDMA market in which Alcatel Lucent is the leader, is showing little sign of growth, according to CEO Pat Russo. There was speculation last October that Russo had been given a month to turn the Franco-US JV around, which clearly came to nought. But French press reports this week suggested that the firm was scouting around for a replacement again.

Nomura analyst, Richard Windsor, said: “There is still no sign of a consistent return to spending growth from operators, which leads us to believe that recovery to a sensible valuation is some way off.” Windsor also notes that the company offloaded what is believed to be its UMTS IPR portfolio during the quarter, and that this went to Research In Motion (RIM) for a profit of Eur31m.

Perhaps the firm will be hoping that the French Government goes ahead and issues a fourth 3G licence, as Alcatel historically didn’t do too badly in its home market (ahem). There were four licences originally in France, but there were only three takers prepared to stump up. The fourth licence was shelved because the only interested party, Iliad Telecoms, sheepishly admitted it couldn’t afford it last year. Its request for special treatment met with a haughty Gallic nose in the air.

But now French regulator ARCEP has been tasked with figuring out what to do with the frequencies that are gathering dust. French penetration is at a little over 90 per cent according to the Informer’s abacus wielding cohorts at Informa’s WCIS, and the market is often characterised as competitively stagnant. Western European Greenfield opportunities simply don’t exist, so if the French G decides to go ahead – and we won’t know until September – it could be interesting. After all, of the four major European players, Telefonica and Deutsche Telekom are absent from the market.

DT’s T-Mobile this week emerged as only the second operator to give public support to Nokia’s Ovi internet services initiative. Under a collaboration agreement, T-Mobile and Nokia will offer their European customers faster and easier access to all of T-Mobile’s web’n’walk internet services as well as all to Nokia’s Ovi internet services on a wide range of Nokia devices.

One of the core focuses of the partnership will be advancing the mobilisation of social networks, primarily through T-Mobile’s community-oriented MyFaves service, while widget cooperation is another development area for the companies.

The Finnish vendor said it would customise its devices to provide a dedicated suite of T-Mobile services which will be ‘seamlessly’ integrated with Nokia’s devices. The T-Mobile exclusive Nokia 6650 device to be made available in July in Europe, will be the next step in this partnership.

Vodafone was the first operator to publicly throw its support behind Ovi, signing a deal with Nokia in November last year. The Vodafone deal is similar in scope to T-Mobile’s, involving the launch an integrated suite of Vodafone services combined with Nokia Ovi services on a range of Nokia handsets.

But Vodafone’s keeping its end up in the content and services space, this week unleashing an exclusive tie up with pop music’s primary exponent of looking good for her age, Madonna. Vodafone customers in 14 markets were given access to a one-off show from the singer, which was streamed live to the Vodafone Live portal. Meanwhile, Vodafone’s UK arm is now to bundle web access into its tariffs, instead of charging a stinking bloody fortune for it.

Elsewhere the World’s Largest Operator By Revenues has teamed up with the carrier that nicked its previous title The World’s Largest Operator By Subscriber Numbers (China Mobile) and Japanese player Softbank to establish a Joint Innovation Lab, to get busy on new mobile internet technologies, applications and services. It looks a little like a defensive play against internet players who have pointed their Chinos at the mobile industry and started walking.

Sticking with 3G in the UK for a moment longer, stroppy teenager O2 has realised the error of its ways and reacted in meek contrition to Ofcom’s threats over the carrier’s failure to get its 3G network coverage up to the requirements dictated by the licence. You may recall that in February UK regulator Ofcom saw fit to threaten O2 with a clipped licence term for its procrastination, which was a bit daft given that the punishment wouldn’t take effect for another 13 years. Nonetheless, O2 has pulled its finger out, and beat the new deadline by two months, running back to Ofcom for some fatherly approval.

Every now and again, as the Informer stares at the drizzle outside his window, he feels like buggering of to South America. So come with me, if you will, on a whistle stop wireless tour of the region. First to Brazil, where two interesting things caught the Informer’s eye this week. The first involved former footballing genius Ronaldo and a trio of none too convincing she-he private entertainers, and the second dealt with the prospect of consolidation in the nation’s telecoms sector. You can imagine which one the tabloids ran with.

Brazilian carrier Telemar Participacoes, which operates under the Oi brand, held a conference call on Monday to discuss the proposed acquisition of fixed line operator, Brasil Telecom. Telemar shareholders agreed to the deal last Friday, which would see the company pay out Reais5.9bn (EUR2.26bn) to acquire the parent of Brasil Telecom, accompanied by an offer to minority shareholders which would increase the total purchase price to about Reais12.4bn.

The move has stirred some controversy because it would be illegal under current regulations but it is known that the government is in favour of changing the law to allow for some consolidation in the market. In fact, new rules are expected to be introduced within the next couple of months.

Ovum analyst, Fernanda Mello Veiga, said: “This deal can only go ahead if the Brazilian president, Luis Inacio Lula da Silva, approves a decree authorising the merger. We believe that Brazilian president Lula may approve the decree because Oi would argue that a super national telco (majority-owned by Brazilian capital) would be able to compete on equal footing with Spanish conglomerate Telefonica and Mexican group Telmex/America Movil – the other telcos with significant power in Brazil.”

America Movil had some bad news in Equador, meanwhile. The regulator Conatel has rejected the carrier’s third offer to renew its mobile licence. The company, operating under the brand name Porta, will be offering mobile services until the end of August.

“Conatel’s head Jaime Guerrero said that Porta’s economic offer was not convenient for the state, but the offer value was not disclosed yet,” said Veiga. “We wonder how much Porta offered to pay for the renewal of its mobile licence. Non-official sources say that the total offer was around $307m. Ovum believes that the Ecuadorean government was expecting an offer around $550m, as Movistar just paid $220m for the renewal of its mobile licence in mid-April.”

Equally disappointed, probably, is Telecom Italia Mobile, which is about to lose its foothold in Bolivia. The country’s president Evo Morales gave TIM its marching (powder) orders this week with the announcement that he is going to privatise the carrier’s Entel operation. He claimed that TIM had not invested as much in the market as it had promised to, and that it owed the state some $25m in unpaid taxes.

And that’s about it for this week, where in the UK the May Day long weekend stretches in front of the Informer like a very short break. There are two traditional activities for this holiday. One involves carrying out ancient fertility rituals with bells on your knees and the other involves smashing up McDonalds franchises in protest at global capitalism. It’s a tough call to have to make.