France's Quad-Play Competition

France has led Europe in flat rate broadband pricing and the development of IPTV. Now the French retail market promises to rapidly become a test bed for fixed mobile convergence. The country’s second largest mobile operator, SFR, is set to buy Neuf Cegetel outright. The deal is unsurprising in that Neuf Cegetel’s directors have spent recent months banging the drum for consolidation between fixed and mobile operators. In addition SFR, which is 54 percent and 46 percent owned by Vivendi and Vodafone respectively, already owns 40.5 percent of Neuf Cegetel. (The Louis Dreyfus Group has reached an agreement to sell its 29.5 percent stake in Neuf Cegetel to SFR, which will seek to buy the remaining publicly owned shares of Neuf Cegetel.) And the two companies already work closely together: SFR provides MVNO access to Neuf Cegetel, which in turn manages SFR’s DSL access network. Yet the merged company will combine dense national fixed and mobile network coverage with a large customer base and a small workforce relative to Orange, giving it every chance to make life very uncomfortable for the incumbent.
The new company should be able to develop low-cost, high volume FMC products to rival Orange’s Unik, which currently has approximately 600,000 customers. But SFR won’t only be getting fixed mobile convergence for its money (the buy-out out of the 49.5 percent of shares SFR does not own is valued at 4.4 billion Euros in the French press). SFR’s parent company, Vivendi, also owns French pay TV giant, Canal +, giving the group the combined weight to take on Orange in IPTV and mobile TV content services. And with SFR behind it, Neuf Cegetel will be able to pump more money into its FTTH build.
None of this is good news for Orange, but it also raises questions over the future of the few remaining French telcos. In the last eighteen months Neuf Cegetel has overtaken Iliad’s Free, which can claim much of the credit for both initially creating France’s low cost broadband market and driving today’s FTTH investment. Now Free looks small-scale and isolated, as do France’s third mobile operator, Bouygues Telecom and the cable company, Numericable. Change, however, is afoot at Numericable, of which the Carlyle group has bought a third for one billion Euros, according to Les Echos. The question now is whether Numericable or Free teams up with Bouygues -- and if the odd fixed man out will finally but that unsold fourth 3G licence.

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Google's Christmas wish-list...

...should include Motorola, according to the latest missive from ARCchart. The analyst company denies this latest 2008 prediction is a product of too much Christmas cheer, insisting it really could make sense for the Internet giant to buy the troubled handset vendor.

"If Google is prepared to go as far as Android, why not go the next step and produce its own handsets?" the company asks. "Not just a single ‘gPhone’ but entire portfolios of Android-enabled devices."

ARCchart adds that combining a manufacturing business with a company producing a handset OS, along with a rich set of mobile applications and services is not as unusual as it sounds.

"There’s a company in Finland doing the very same thing. That company is called Nokia and it has recently spent almost $10 billion trying to play catch-up with Google in search, email, file sharing, advertising and mapping (e.g. Enpocket, Intellisync, Avvenu and NAVTEQ). Shouldn’t Google be spending the same to take Nokia on its home turf?" the company demands to know.

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Orascom knocking on French doors

Egyptian telecoms operator Orascom is keen to enter the French telecoms market, according to a report in La Tribune today, as cited by a number of sources.

Orascom chairman and CEO Naguib Sawiris was quoted by the French newspaper saying his company is "knocking on every door" in France, including those of telecoms and media player Vivendi and mobile operator Bouygues Telecom.

This time last year Total Telecom predicted that a major Middle Eastern player would make the move into Europe before too long. It hasn't happened so far, but maybe 2008 will be the year.

Have an opinion? Leave us a comment or join the discussion on our predictions board.

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UK spectrum auction in 2009

This morning the UK telecoms regulator issued what it described as "one of the most important that Ofcom has ever made". In a nutshell, Ofcom plans to auction off the digital dividend – spectrum freed up when analogue TV is switched off – in 2009.

Licences will be technology-neutral, allowing licensees to decide on technology and services themselves, and will be tradeable.

Only a small part of the spectrum will be reserved specifically for one use

In just one case Ofcom has elected to reserve spectrum for a particular use – wireless microphones. This will be awarded via a beauty contest.

That leaves DTT (standard and HD), cognitive radio, high-speed mobile broadband and mobile TV, and local TV fighting it out for the remaining spectrum. Ofcom claims its research showed keen interest in the above services, although interestingly, a previously published document actually showed little or no public interest in mobile TV.

More info on Total Telecom later.

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Crystal Balls

The telecoms industry could never be accused of being predictable. Far from it, in fact. Nonetheless, we all have our opinions on what the next killer app will be, who is likely to buy whom, and how many iPhones Apple's various mobile operator partners will sell before the next over-hyped device steals the headlines.

And so, why not share your predictions for 2008 with us here at The Editor's Cut?

Now Telefonica's Telco has finally taken control of Telecom Italia, what will be the next major telecoms takeover?

Which top executive will be the first to lose his or her job once the holiday season is over?

Is China ever going to issue 3G licences?

And so on.

So, get those crystal balls out and tell us what you see!

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New top dog at O2 UK

O2 UK has named Ronan Dunne as its new chief executive officer as part of a management reshuffle triggered by the resignation of Telefonica O2 Europe CEO Peter Erskine late last month. (Don't forget where you read that first - Erskine's departure was predicted by Total Telecom on The Editor's Cut several weeks before it was officially announced.)

Dunne, currently CFO at the U.K. mobile operator, replaces Matthew Key, who will himself take on Erskine's role.

More information on Total Telecom.

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The photos are out!

Photographs from this year's World Communication Awards are now online on Total Telecom. View them here

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