CMT shows Fusión supporting Telefónica/Movistar market fight back in Spain

7 February 2013

Sleeping Giant: Eric Schultz by Paul VabDerWerf, Licenced under Creative Commons Attribution

Sleeping Giant: Eric Schultz by Paul VanDerWerf, Licenced under Creative Commons Attribution



<i>Telefonicawatch Report #73</i> <b>Extract</b>


CMT shows Fusión supporting Movistar market fight back

Spanish communications regulator, the CMT, issued market statistics for the month of November 2012, showing continued turbulence in the mobile market, but more stable growth in the fixed broadband sector. However, the picture emerging from performance indicators provided by the regulator suggest that Telefónica España’s latest attempted fight-back in the market is beginning to have an effect, although the smallest, most flexible players are still thriving the most strongly.

Movistar losing mobile customers, but rate slows

The mobile market in Spain saw a 4.1% year-on-year decline at the end of November 2012, with total lines at 56 million compared to 58.4 million a year earlier. In November 2012 alone, 452, 000 accesses were lost from the market. The monthly fall was largely attributed to losses of 380, 000 prepaid accesses, and 120, 000 data cards (presumably usurped by smart device connectivity), which was not offset by a 44, 000 increase in contract accesses. Machine-to-machine mobile accesses continue to see strong growth in the country, with the total up 11% year-on-year to 2.75 million, which for the first time exceeds data card totals (standing at 2.69 million).

Movistar España lost 252, 000 customers in November 2012 (the lowest level since July 2012), compared to 287, 000 at Vodafone, and a loss of just 2, 000 at Orange. Yoigo’s performance was broadly flat for the month, while only mobile virtual network operators (MVNO) posted meaningful growth, adding 88, 000 new lines in the month. Movistar’s performance also marked the first time in 2012 it has not taken bottom spot in terms of customer acquisition numbers.

Month-on-month, Movistar’s lead as Spain’s largest mobile operator actually increased slightly, with number-two player Vodafone losing customers at a faster rate and therefore marginally increasing Telefónica’s lead to nearly ten percentage points. At the end of November 2012, Telefónica controlled 36.6% of the market compared to Vodafone with 26.8%, followed by Orange with 21.6%, collective MVNOs with 8.75%, and Yoigo with 6.25%.

Movistar broadband share holds steady on fibre growth

The monthly review of the market suggested that the fibre market in Spain is growing successfully, and pushing forward a generally lacklustre fixed internet sector.

The fibre customer base has roughly doubled in the past year, with Movistar controlling 300, 000 of the country’s 310, 000 lines. Fibre adds in November 2012 accounted for 25% of all net adds, and Telefónica was able to stretch its total broadband market share marginally by securing 45, 000 of the 86, 000 total net adds driven by fibre adoption. Altnet operators signed up 36, 000 new customers, and cablecos 6, 000.

Another positive for Movistar España is that the rate of fibre adoption is also increasing sequentially — the 22, 000 lines recorded in November 2012 marks an increase from 17, 000 adds in October 2012, and twice the 11, 000 added in September 2012, and there were indications of continued acceleration in December 2012 (see separate report).

Fusión supporting the fight-back

Fusión appears to be supporting strong broadband growth for Telefónica’s Movistar consumer business in Spain in the months since its launch, while also bolstering efforts to minimise declines in mobile services.

Telefónica’s rate of growth in broadband for November 2012 is the fastest the telco has seen in three years, and the positive performance was attributed to the popularity of the Fusión integrated communications product.

The popularity of Fusión also saw the telco report the lowest monthly decline in mobile customer numbers since June 2012, and the incumbent outperformed Vodafone in this area, despite its rival volte-face from its own decision to remove handset subsidies in Spain (Vodafonewatch, passim). Telefónica has also seen, in the months since the launch of Fusión, a significant increase on monthly averages for mobile customers switching to its services from other operators (up from around 50, 000-per-month to 100, 000), but customer porting losses continue to exceed gains.

“ [Performance improvements are] related to the launch of Fusion, which will be a mainstay in business strategy this year along with fibre. ” – unnamed internal Telefónica source on the stronger performance in CMT figures.

Early reports suggest December saw year finish on a high

There are early indications that Telefónica’s commercial progress in Spain continued during December 2012.

Reports of the main operators’ performance for the final month of the year apparently come from provisional figures submitted to the regulator, and it appears that Telefónica has been succeeding at the expense of its converged altnet challenger, Jazztel, which has begun to lose customers after a sustained five-year period of growth. Average customer access gains for Telefónica España during the final quarter of 2012 reportedly reached 43, 000-per-month across its fixed and mobile businesses. This compares favourably to rivals that have apparently seen lower overall growth: Orange added 14, 500 customers-per-month on average, Jazztel 10, 650, Vodafone 1, 840, and cableco Ono has lost net customers.

Fibre is also supporting the growth at Telefónica, with suggestions that around 35, 000 new fibre accesses were added in December 2012.

[Further reference: Éstos son los frutos que está recogiendo Telefónica del bombazo Movistar FusiónLa Informacion, January 2013; Telefónica disminuyó a junio su cuota en banda ancha por debajo del 50 % — El Economista, 13 January 2013; Telefónica da un vuelco en el ADSL gracias a su oferta ‘Fusión’ — El Pais, 13 January 2013.]


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About Telefonicawatch

Report: #73
Covering: December 2012-January 2013
Published: January 2013
Next report: February 2013

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<b>Contents</b>


Telefonicawatch Report #73 contents

1 Executive brief

4 Telefónica Group

4 Acquisitions and disposals
4 Álvarez-Pallete quashes UK IPO rumours…again
5 …but speculation continues over fixed-line broadband exit
5 Acquisitions and disposals
5 Telefónica offered TI exit in exchange for pay-TV deal
6 Telefónica sells Hispasat stake in revised deal
6 Acquisitions and disposals
6 Telefónica sells Amper stake
7 PPF rumoured to be eyeing Czech O2 acquisition
7 Financial reports
7 Telefónica issues EUR1.5bn ten-year bond
7 Financial reports
8 Legal
8 Telefónica to face EUR66.8m fine over PT non-compete deal
8 Financial reports
9 People
9 Navarro consolidates role, Smith to leave Telefónica
9 Executive moves a precursor to Alierta move?
9 Community
9 Telefónica participates in European education initiative
10 Telefónica courts controversy with Rato advisory role
10 Trade unions wade in on outdated appointment practices
11 People movement highlights

13 Telefónica Global Resources

13 Networks
13 O2 picks NSN for 4G network upgrade
15 Operations
15 Operators discuss possibility of pan-European network
15 Regulatory support
16 Single network could suit regulators but challenge operators
16 Telefónica Global Solutions
16 Telefónica to offer broadband services via Eutelsat deal

17 Telefónica Digital

17 Executives
17 Telefónica Digital appoints country heads
17 Industry groups
17 Operators form ETSI virtualisation standards group
18 eHealth
18 O2 UK appoints new health MD
18 eHealth remains an underdeveloped area of interest
18 Industry groups
19 M2M
19 Telefónica Digital unveils Smart M2M Solution
19 Key underlines importance of M2M
19 Research
20 Mobile payments
20 Telefónica ties with Bango for carrier billing
21 Expanding ecosystem as Telefónica recognises limitations
21 Driving mobile payments
21 Tuenti
21 Tuenti deploys chat function to rival OTT
22 Open Web Devices
22 Firefox OS nears completion…
22 WAC
23 …Developer handsets unveiled, provided by GeeksPhone
23 Further developer support
23 Wayra
24 Telefónica Digital Insights
24 Digital Insights’ chief underlines Smart Steps benefits
24 No mention of privacy concerns
26 Telefónica Ventures
26 Telefónica invests in Taskhub
28 Telefónica Latinoamérica
28 Argentina
28 Telefónica heralds fibre rollout in investment plans
28 Movistar launches In Sync cloud service
28 Telefónica looks at eHealth with Hospital Italiano
28 Regional
29 Brazil
29 Telefónica Brazil sells masts in EUR133m deal
30 Chile
30 Telefónica sells Chilean towers to Torres Unidas
30 Telefónica announces interim dividend
31 Colombia
31 New data centre opens in Colombia
31 Peru
31 Telefónica grudgingly signs licence renewal
31 Moviltalk extended to Colombia with international calling
32 Claro revives Telefónica anti-competitive suit
33 Telefónica trumpets fibre rollout
33 Uruguay
33 Telefónica to see stiff competition in ‘4G’ auction
33 Ecuador

34 Telefónica Europe

34 Czech Republic
34 Telefónica to cut headcount by 10% in 2013
34 Telefónica ordered to renew services to LeeToo
34 Ireland
35 Fights with grey operators continue
37 ČTÚ moves to boost MVNOs
38 Germany
38 O2 Germany final brings SIM-based NFC to mpass
38 O2 Germany bucks Group NFC scepticism
39 mpass comes of age
39 O2 Germany launches flat-rate gaming service
40 Slovakia
40 Telefónica launches NFC payments with Tatra Banka
41 Spain
41 CMT shows Fusión supporting Movistar market fight-back
41 Movistar losing mobile customers, but rate slows
41 Movistar broadband share holds steady on fibre growth
42 Fusión supporting the fight-back
42 Early reports suggest December saw year finish on a high
43 Rumours of corruption surround Telefónica contracts
44 Movistar flags customer service focus
44 New Spanish contact centre looks to expand range
44 Telefónica takes on short-term TV production contract
45 More CRM coming in-house in wake of Atento sale
45 Telefónica begins shift from outsourcing model
45 Wholesale fixed-line rates to rise at Telefónica
46 Movistar and Moneygram launch new remittance service
46 Telefónica puts 2013 fibre plans into action
46 Castilla y Leon expected to see next-generation focus
46 Orange grows share with Simyo buy
48 CNC fines operators over message pricing infringements
48 BT disputes still unresolved
49 United Kingdom
49 Bidding begins in UK spectrum auction
50 Confirmed bidders and expectations
50 Sally Cowdry leaves Telefónica UK
50 O2 Unify partner in administration
51 O2 UK selects MACH for Charge to Mobile platform
51 Ofcom to scrutinise fixed contract price rises
52 O2 to stop supplying chargers by 2015

53 Associates and investments

53 China Unicom
53 Unicom misses 3G goals
53 Telecom Italia
53 TI Media sale to go ahead

54 Index


<b>Index</b>


Telefonicawatch Report #73 index

Symbols

2e2, 50

A

ABC, 45
Abertis, 6, 29
América Móvil, 29, 32, 33
- Claro, 29, 32, 33
American Tower, 30
Amper, 6
Anatel, 29
Antel, 33
Anti-Corruption Office of Catalonia (OAC), 43
Apigee, 22
Apple, 22, 53
- iOS, 22, 38
AT&T, 17, 32
Avenir, 50

B

Bain Capital, 45
Bango, 20, 21, 51
Bankia, 10
Barclay Communications, 50
Berkshire Partners, 30
- Torres Unidas, 30
Bernstein, 7
BlackBerry App World, 20
BOKU, 21, 27, 39
BTG, 22
BT Group, 5, 12, 17, 18, 45, 48, 50

C

Cairo Communications, 53
Caixa Capital Risc, 23
Campus Party, 10, 23
Carphone Warehouse, 50
CCOO, 10
Centrica, 18
Cisco Systems, Inc., 9
Clessidra, 53
CMT (Spain), 41, 42, 45, 48
CNC (Spain), 48
CNMV, 6
Competition Commission, 8, 15
- Almunia, Joaquín, 8, 15
ComReg, 34, 35
Consob (Italy), 53
Consumer Electronics Show, 22
ČTÚ (Czech Republic), 34, 35, 37
cVidya, 28
Czech Telecommunication Office (ČTÚ), 37

D

Daisy Distribution, 50
Daisy Group, 12
Deutsche Post
- DHL, 15
Deutsche Telekom, 12, 15, 17, 18, 39
- T-Mobile, 7, 37
- – Czech Republic, 37
DHL, 15

E

EA, 39
eBay, 49
Eircom, 35
Equinox Converged Solutions, 53
ETNO, 15
European Telecommunications Standards Institute (ETSI), 17, 18
European Union, 8, 15, 16
- European Commission, 8, 9, 15
- – Kroes, Neelie, 9, 15
- European Court of Justice, 8
Eutelsat, 6, 16
Everything Everywhere (Orange/T-Mobile UK), 50

F

Facebook, 15, 20, 21, 51
Fédération Internationale de Football Association (FIFA), 39
Fitch, Inc., 7
- Fitch Ratings, 7
France Télécom, 15
- Orange, 16, 17, 41, 42, 46, 48
- – Simyo, 46
– – Spain, 46, 48

G

Gartner Group, 21
GeeksPhone, 23
Generali Assicurazioni, 7, 19
Generalitat of Catalonia, 43
General Motors, 19
- OnStar, 19
Genus Pharmaceuticals, 18
GfK, 24
Google, 20, 22, 40, 51
- Android, 21, 22, 38, 39, 40
GP Investments
- BR Towers, 29
GSM Association (GSMA)
– Mobile World Congress, 22

H

Hewlett-Packard, 9
High Court, 34, 35
High Tech Computer Corp. (HTC), 52
Hispasat, 6
Hospital Italiano, 28
Hutchison Whampoa
- H3G
- – UK, 50

I

Inditex, 8
International Monetary Fund (IMF), 10

J

Jazztel, 42
Joyent, 27

K

KIT Digital, 27
Komercni Banka, 40

L

La Caixa, 23
LeeToo, 34, 35
LightSquared, 17
LinkedIn, 12

M

MACH, 51
Marks and Spencer, 18
MasterCard, 11, 12, 38, 53
Mediaset, 5
- Berlusconi, Silvio, 5
MFS Payment Services, 53
Microsoft, 20, 51
- Skype, 15
- Windows Phone, 20
MLL Telecom, 50
MoCo, 50
MoneyGram International, 46
Mozilla, 22, 23
- Firefox, 22, 23
- Firefox OS, 22, 23
- Open Web Devices, 22
MVNOs, 35, 37, 41, 46, 48

N

National Health Service (UK), 18
NejbliZSi, 35
Nokia, 9, 13
Nokia Siemens Networks, 13

O

Ofcom (UK), 13, 49, 50, 51
Olympic Games, 24
Ono, 42
Opera, 20
Osiptel, 32

P

PaymentOne, 39
PCCW, 50
- HKT UK, 50
Peruvian Bureau of the Judiciary (OCMA), 32
Portugal Telecom, 8
PPF, 7
- Kellner, Petr, 7
Prisa, 5

Q

Qualcomm, 23
Quantenna Communications, 27

R

Regions
- APAC
- – China, 16, 50, 53
- EMEA
- – Austria, 16
– – Czech Republic, 7, 19, 34, 35, 37, 39, 40
– – Europe, 4, 5, 6, 8, 9, 10, 11, 12, 15, 16, 17, 18, 19, 34, 39, 40, 44, 45, 51, 52
– – France, 15
– – Germany, 4, 7, 24, 38, 39, 40, 44
– – Ireland, 11, 17, 26, 34, 35
– – Israel, 19
– – Italy, 5, 7, 53
– – Netherlands, 50
– – Norway, 21
– – Portugal, 8
– – Slovakia, 39, 40
– – Spain, 5, 6, 9, 10, 11, 17, 19, 21, 23, 27, 28, 29, 31, 41, 42, 43, 44, 45, 46, 48
– – UK, 4, 5, 11, 13, 17, 18, 24, 26, 27, 28, 39, 45, 49, 50, 51, 52
- Latin America, 4, 5, 6, 9, 10, 11, 17, 18, 21, 30, 44, 52
- – Argentina, 19, 28, 31
– – Brazil, 17, 19, 22, 23, 29, 30, 31, 53
– – Chile, 19, 30, 31
– – Colombia, 29, 31
– – Ecuador, 11, 17, 31, 33
– – El Salvador, 31
– – Guatemala, 31
– – Mexico, 29, 30, 31
– – Nicaragua, 31
– – Panama, 31
– – Peru, 5, 31, 32, 43
– – Uruguay, 31, 33
– – Venezuela, 11, 17, 31
- North America
- – USA, 16, 19
Research In Motion, 20, 51
- BlackBerry, 20
Ringier Axel Springer, 37
Royal KPN, 46

S

Samsung, 38, 40
- Galaxy, 38, 40
SBA Communications, 29
Screen Digest, 39
Siemens, 13
Sogecable, 5
Sunat (Peru), 32
Supertel (Ecuador), 33

T

Tabacalera, 9
Tatra Banka, 40
Technologies
- 2G, 53
- 3G, 13, 23, 53
- 4G
- – LTE, 5, 11, 13, 18, 33, 46, 49, 50
- ADSL, 42
- Broadband, 5, 6, 16, 41, 42, 50, 53
- DSL, 27
- eHealth, 18, 28
- GPS, 18
- GSM, 13
- ICT, 9, 50
- IP, 5
- Java, 39
- LLU, 5
- M2M, 16, 19
- MMS, 48
- NFC, 38, 39, 40
- NGN, 15
- push-to-talk (PTT), 31
- SIM, 34, 35, 38, 40, 50
- SMS, 48
- TV, 5, 44
- Wholesale line rental, 35
- WLAN
- – WiFi, 20, 27
Telecom Italia, 5, 11, 15, 17, 53
- Telecom Italia Media, 53
- Telecom Italia Mobile, 53
- TIM Brasil, 53
Telefónica Group, 4, 5, 6, 7, 8, 9, 10, 12, 15, 16, 17, 21, 27, 30, 50, 52
- Advisors
- – Rato, Rodrigo, 9, 10
- Associates and investments
- – BOKU, 21, 27, 39
– – China Unicom, 53
– – Joyent, 27
– – Portugal Telecom, 8
– – Quantenna, 27
– – Sogecable, 5
– – Telecom Italia, 5, 15, 17, 53
- Atento, 6, 45
- Corporate Social Responsibility, 52
- Digital, 11, 12, 17, 18, 19, 20, 21, 22, 23, 24, 26, 27, 28, 39, 51
- – BlueVia, 20, 51
– – Clipyoo, 23
– – Direct-To-Bill, 20, 21, 51
– – Everything.me, 22, 27
– – Health, 11, 12, 18
– – Joyent, 27
– – M2M, 16, 19
– – Mobile commerce, 50
– – Open Web Devices, 22
– – OTT, 21
– – Project Oscar, 50
– – Quantenna Communications, 27
– – Smart Center, 19
– – Smart M2M, 19
– – Smart Steps, 24
– – Talentum, 10
– – Taskhub, 26, 27
– – Telefónica Digital Holdings, 27
– – Telefónica Digital Insights, 24
– – Telefónica Digital UK, 18
– – Telefónica I+D, 27
– – Telefónica Ventures, 26, 27
– – Tokbox, 27
– – Tuenti, 21
– – WAC, 22
– – Wanda, 11, 12, 28
– – Wayra, 10, 23, 26
– – Weve, 50
- Directors
- – de Paz, Javier, 10
– – Urdangarin, Inaki, 10
- Europe
- – Be Un limited (UK), 5
– – Czech Republic, 7, 9, 34, 35, 37
– – Germany, 11, 13, 38, 39, 40, 44
– – Giffgaff, 52
– – Ireland, 12, 34, 35
– – Movistar Remesas, 46
– – O2, 5, 7, 9, 11, 12, 13, 18, 24, 26, 34, 35, 37, 38, 39, 40, 44, 49, 50, 51, 52
– – O2 Guru, 50
– – O2 Wholesale, 49
– – Online Smart Disk, 38
– – Slovakia, 40
– – Spain, 12, 17, 41, 42, 43, 44, 45, 46, 48
– – Telefónica Deutschland, 7
– – Think Big, 10
– – UK, 4, 5, 11, 12, 13, 15, 17, 18, 24, 26, 49, 50, 51, 52
- Executives
- – Abella, Fernando, 11, 17
– – Alden, Steve, 24
– – Alierta, César, 5, 9, 10
– – Álvarez-Pallete Lopez, José María, 4, 9, 10, 17
– – Andreu, Alberto, 52
– – Barclay, Danny, 51
– – Conway, Andrew, 13
– – Corcoran, Lisa, 12
– – Cortez, Pedro, 11
– – Delgado, Javier, 11
– – Dicks, Matthew, 20
– – Domingo, Carlos, 27
– – Duncan, Michael, 17
– – Dunne, Ronan, 4, 17, 52
– – Empey, Rachel, 7
– – Evans, Mark, 11
– – Farghali, Hany, 34
– – Flanders, Nikki, 11, 18
– – Garcia Cuartango, Araceli, 12
– – Gilpérez López, Luis Miguel, 17
– – Giner, David, 27
– – Goulu, Juan, 17
– – Guardincerri, Eduardo, 16
– – Harriman, Martin, 11, 17, 18, 26
– – Jenkins, Emma, 52
– – Keough, 11, 12
– – Key, Matthew, 18, 19, 22
– – Lopez, Pilar, 11
– – Manzanares, Javier, 32, 33
– – Marti, Antonio, 27
– – McManus, Derek, 11
– – Morales, Carlos, 19
– – Morgan, James, 11
– – Navarro, Eduardo, 9
– – Nolte, Alex, 11
– – Perez, Horatio, 46
– – Plumb, David, 50
– – Prieto Guerrero, Amelia, 11, 12
– – Schuster, Rene, 39
– – Smith, Jaime, 9
– – Summers, Paul, 12
– – Valles, José, 20
- Ex-executives
- – Cowdry, Sally, 11, 12, 50
– – Nurcombe, Keith, 11, 18
- Global Resources, 11, 12, 13, 16
- – Cornerstone Telecommunications Infrastructure, 11
– – Telefónica Global Solutions, 6, 16
– – Telyco, 44
- Latinoamérica, 5, 9, 10, 17, 28, 29, 30
- – Argentina, 28
– – Brazil, 19, 29, 53
– – Chile, 30
– – In Sync, 28
– – Moviltalk, 31
– – Pegaso PCS, 30
– – Peru, 5, 11, 12, 31, 32, 33
– – Vivo, 17, 30, 53
- Latinoamérica
- – Brazil, 29
– – Vivo, 8
- Products and services
- – Eco Rating, 52
– – Fusi, 41
– – Fusión, 41, 42
– – mobile payments, 20, 21
– – mpass, 38, 39, 40
– – O2 Health, 11, 12, 18
– – O2 o, 51
– – O2 Priority, 50
– – O2 Unify, 50
– – O2 Wallet, 38
– – pay-TV, 5
– – Priority Moments, 26
– – Side by Side, 18
- Telefónica Audiovisual Services, 44
- Telefónica Emisiones, 7
- Terra
- – Rumbo, 6
- Wayra, 10, 23, 26
Telenor, 21
TeliaSonera
- Yoigo (Xfera), 41
Tesco, 35
Tuenti, 21

U

Ursec (Uruguay), 33

V

Verizon Communications, 17, 18
Visa, Inc., 40
- Visa Europe, 40
Vodafone Group, 7, 11, 12, 34, 39, 41, 42, 48, 50
- Germany, 39
- Ireland, 34
- Spain, 12, 48
- UK, 11, 50

W

WhatsApp, 21
WHSmith, 18
Wired, 23
World Economic Forum, 10


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