Alcatel-Lucent outlines strategy and cost cuts
Web 3.0 and beyond, but not for 6,000 staff and contractors
Alcatel-Lucent has said it will position itself to support "Web2.0, Web3.0 and beyond" business models, reacting to the future needs of its customers by re-prioritising investment in its portfolio of products and services.
The company will freeze R&D investment, and make cuts in several core areas, to focus engineering and technical support on next generation equipment and services support, Ben Verwaayen, ceo, said. The company will be focusing on three markets: service providers, enterprises, and selected verticals and on four key areas of investment: IP, Optical, mobile and fixed Broadband and Applications enablement.
Although no acquisitions were announced to help drive this focus, the company did say it would partner and co-source where necessary.
Verwaayen is betting the company's strategy on servicing the needs of its key markets to benefit from next generation web business models. This means combining web-based applications with "trusted" network and communications services, Verwaayen said
To do this, Al-Lu said it will invest in supporting open systems and platforms, as well as flat, next generation IP technologies.
LTE will be a key beneficiary, with resources being pulled from WiMax. HSPA+ will also be an investment target. Alcatel-Lucent will continue to support 3G CDMA progression path technologies, but will seek to shift all its customers, from 3GPP and 3GPP2 camps onto LTE for 4G networks.
Verwaayen told journalists and analysts, "I want to run a normal company, one that understands its purpose, is valued by its customers and returns a fair return to is shareholders. The choices we are making today are strategic choices, and the shift we are going to make will be pretty dramatic. They are really well thought through but they are not a piece of cake. We have to translate this into operational reality."
He added that he thought the story Alcatel-Lucent was telling was a "strong" one, that will gain traction and give the company "purpose" as well as "put momentum in the marketplace"
Financially, the company expects to see the market for telecommunications equipment and related deployment services to be down between 8% and 12% during 2009.
The company has targeted a break-even position for 2009, so it has said it will make savings for the full year of $750 million to achieve this. One thousand managers will lose their jobs from the company's 70,000 srtong workforce, and half the company's 10,000 contractors will be looking for new roles as well.
In 2010, with the set of actions described above, Alcatel-Lucent is targeting to achieve a gross margin in the mid thirties range and an operating margin in the mid single-digit range.
Looking beyond, the goal of the company is to achieve a gross margin in the mid to high thirties range and an operating margin in the mid to high single-digit range in 2011.
Responding to concerns that the business may not be viable if the strategy fails, or it falls victim to tough macro economic conditions, Verwaayen said, "The best thing we have going for us is that our customers are saying that they want us to be alive and kicking, and that's a very important element."
Annual mobile revenues to hit USD 1 trillion by 2013 as global subs top 5 billion, says research
Annual revenues from the global mobile market will top USD 1.03 trillion by 2013, when the number of subscriptions worldwide will have risen to more than 5.3 billion, according to Informa Telecoms & Media. From end-2007 to end-2013, the global mobile market will see huge growth, increasing in size by over half (56%), according to the latest edition of Informa Telecoms & Media's Global Mobile Forecasts to 2013.
It took over 20 years to reach 3 billion subscriptions, but another 1.9 billion net additions are forecast in just six years, with the global total nudging past the 5-billion milestone in 2011. With this extraordinary growth, total annual revenues derived from mobile operators will grow by over a third (33.9%), jumping from USD 769 billion in 2007 to USD 1.03 trillion six years later.
Informa Telecoms & Media forecasts more than three quarters (78%) of global net additions between 2007 and 2013 to come from markets in Asia Pacific, Africa and Latin America, which will be the powerhouses of organic growth over the next five years. Astonishingly, nearly half (47%) of the 1.9 billion global net adds will come from just five markets – India, China, Indonesia, Brazil and Russia. By contrast, the mature markets of North America and Western Europe will in total contribute just 8% of global net adds, reflecting the high level of saturation in these markets.
Globally, subscription penetration will approach the 75% mark in 2013, while some countries will push past the 150% barrier – Romania (152%), Russia (153%), Italy (168%), Ukraine (173%) and Greece (183%). Growth in subscriptions (the number of SIMs) will outstrip growth in subscribers (the number of unique users), pointing to greater multi-SIM ownership. The global ratio of subscriptions to subscribers will increase from 1.29 in 2007 to 1.32 in 2013. In Western Europe, the ratio will reach 1.55 in 2013, and even higher (1.75) in Eastern Europe.
The high growth potential of developing markets reflects the entrance of new operators, as well as improvements in regional network roll-out and rising competition, which is expected to lower the barrier for new subscribers. "Reductions in voice tariffs, the option of very low-denomination prepaid top-ups and the greater availability of cheap 2G and 2.5G handsets will open out mobile services to low-income, low-ARPU subscribers who have never previously owned a mobile phone," said Chris Stamatakis, research analyst at Informa Telecoms & Media and author of Global Mobile Forecasts to 2013.
As the global subscription base expands, total annual revenues will increase to over USD 1 trillion in 2012. Voice revenues will continue to make up the lion's share of total revenues, but will see slowing growth, and even a decline from 2010 onwards. With regulators worldwide looking to promote competition, forcing operators to push down voice tariffs, Informa Telecoms & Media expects voice revenues to peak as soon as 2009 in Western Europe, and even by end-2008 in North America. In more developing markets such as the Middle East and Asia Pacific, voice revenues will not peak until 2011, and 2012 in Latin America and the Caribbean.
Operators globally will be challenged to generate sustainable revenues as average revenue per user (ARPU) continues to drop. To keep annual revenues on the up, operators will need to promote usage of data services. Annual data revenues, unlike voice revenues, will go from strength to strength, and will more than double from USD 148 billion in 2007 to USD 347 billion in 2013. As a result, the proportion of total revenues generated by data services will increase from less than a fifth (19.2%) in 2007 to over a third (33.7%) at the end of the forecast period.
With voice revenue streams diminishing, industry players will encourage data spend among subscribers by innovating in non-voice services and differentiating their data service offerings from those of their competitors. While 2G will remain the dominant technology generation by subscription numbers until 2013, its market share will fall from over two thirds (66.9%) in 2007 to less than one third (32.7%) in 2013, as 3G+ technologies continue to gain ground. 3.5G technologies accounted for just 1.2% of total subscriptions in 2007, but will represent nearly a quarter (22.9%) of the global subscription base by 2013 and exceed the number of 3G subscriptions.
"As more next-generation networks roll out, 3G and 3.5G traffic will grow vigorously and the number of global HSDPA subscriptions will increase exponentially in the short term," said Stamatakis. "Furthermore, with migration to next-generation technologies already under way, with operators increasingly favouring HSDPA as they jump on the LTE bandwagon, Informa Telecoms & Media expects operators to focus increasingly on fulfilling consumers' growing demand for mobile broadband – which is becoming the long-sought killer app for mobile operators."
Vodafone tops brand values
Tellas, Wind, TeliaSonera and others underperform
The three most valuable mobile telecoms brands in Europe are Vodafone, T-Mobile and Orange, according to Intangible Business, a company that values brands.
Intangible Business has carried out an assessment of the brand value of mobile operators across the world, looking at a range of measures such as subscriber numbers and revenues, as well as market share, brand perception and heritage.
It found that in Europe, Vodafone has a brand value of £22 billion, with T-Mobile at $16.8 billion and Orange at $15.4 billion.
The top brands globally are China Mobile, Vodafone, Verizon, AT&T and T-Mobile.
But with the next three positions on its European chart occupied by brands owned by Telefonica (Movistar, TEM and O2), it could be argued that it is Telefoncia which is sitting on the biggest brand asset base.
Intangible Business also looked at companies that it says are “punching below their weight” in terms of their brand – in other words, the difference between a brand’s rank by income and rank by brand.
It found several European operators are underperforming in terms of brand value – with the worst culprits being Tellas, Proximus, Wind, Bouygues and TeliaSonera.
So why carry out this assessment of brand value? William Grobel, marketing director of Intangible Business ,said that brand strength will be vital in the current climate.
“Brands are generally the main differentiator in the largely commoditised telecoms industry. This research highlights just how valuable telecoms brands are. Collectively, the top 100 are worth over $300bn. China Mobile’s ascendancy to the top has been impressive. With Chinese penetration levels not even at 50%, there is considerable scope for the brand’s value to dwarf its already impressive $31bn.”
Grobel added: “2009 is likely to see further consolidation with a preference for acquisitions over organic growth as assets become cheaper. This research helps identify which brands are performing well and which look vulnerable. Nowhere is immune from the global slowdown and the telecoms sector is no exception. Maintaining brand equity will be challenging for all.”
The three most valuable mobile telecoms brands in Europe are Vodafone, T-Mobile and Orange, according to Intangible Business, a company that values brands.
Intangible Business has carried out an assessment of the brand value of mobile operators across the world, looking at a range of measures such as subscriber numbers and revenues, as well as market share, brand perception and heritage.
It found that in Europe, Vodafone has a brand value of £22 billion, with T-Mobile at $16.8 billion and Orange at $15.4 billion.
The top brands globally are China Mobile, Vodafone, Verizon, AT&T and T-Mobile.
But with the next three positions on its European chart occupied by brands owned by Telefonica (Movistar, TEM and O2), it could be argued that it is Telefoncia which is sitting on the biggest brand asset base.
Intangible Business also looked at companies that it says are "punching below their weight" in terms of their brand – in other words, the difference between a brand's rank by income and rank by brand.
It found several European operators are underperforming in terms of brand value – with the worst culprits being Tellas, Proximus, Wind, Bouygues and TeliaSonera.
So why carry out this assessment of brand value? William Grobel, marketing director of Intangible Business ,said that brand strength will be vital in the current climate.
"Brands are generally the main differentiator in the largely commoditised telecoms industry. This research highlights just how valuable telecoms brands are. Collectively, the top 100 are worth over $300bn. China Mobile's ascendancy to the top has been impressive. With Chinese penetration levels not even at 50%, there is considerable scope for the brand's value to dwarf its already impressive $31bn."
Grobel added: "2009 is likely to see further consolidation with a preference for acquisitions over organic growth as assets become cheaper. This research helps identify which brands are performing well and which look vulnerable. Nowhere is immune from the global slowdown and the telecoms sector is no exception. Maintaining brand equity will be challenging for all."
The top fifty mobile telecoms brands by value in Europe (values in millions of US Dollars):
The top fifty mobile telecoms brands by value in Europe (courtesy: Intangible Business)
1 VODAFONE
2 T-MOBILE
3 ORANGE
4 MOVISTAR
5 TEM
6 O2
7 TIM
8 VIRGIN MOBILE
9 SFR
10 TELENOR
11 TURKCELL
12 BOUYGUES TÉLÉCOM
13 KPN
14 WIND
15 E-PLUS
16 TELIASONERA
17 KYIVSTAR
18 POLKOMTEL
19 SWISSCOM
20 ERA
21 COSMOTE OTE
22 MOBILKOM
23 PROXIMUS
24 TDC
25 MOBITEL
26 TMN
27 MOBISTAR
28 ELISA
29 TELE2
30 NETCOM
31 AVEA
26 TELLAS
32 OPTIMUS
Commission slides from DVB-H requirement for mobile TV
Is the European Commission’s enthusiasm for DVB-H on the slide? Have a look at its communication from March this year, and then its statement from yesterday.
THEN:
Today, the Commission decided to add the Digital Video Broadcasting Handheld standard (DVB-H) to the EU List of Standards, which serves as a basis for encouraging the harmonised provision of telecommunications across the EU. The addition of DVB-H is a new step towards establishing a Single Market for Mobile TV in Europe that will enable all EU citizens to watch TV on the move.
"For Mobile TV to take off in Europe, there must first be certainty about the technology. This is why I am glad that with today's decision, taken by the Commission in close coordination with the Member States and the European Parliament, the EU endorse DVB-H as the preferred technology for terrestrial mobile broadcasting," said Viviane Reding, EU Commissioner for the Information Society and Media. The next steps for implementing the EU strategy on mobile broadcasting will include guidance on the authorisation regimes as well as the promotion of rights management systems based, as is DVB-H, on open standards"
An EU-wide adoption of DVB-H will provide operators/industry with the necessary market scale to launch mass Mobile TV services across the EU. A European common standard will also benefit consumers, who will be able to watch TV on their own phones or mobile devices at any time, anywhere across Europe. After publication of the Commission decision in the EU List of Standards in the EU's Official Journal, Member States will be required to encourage the use of DVB-H. This clear support to the DVB family of standards is also an important signal given to third countries about to take a decision on the technology for digital and mobile broadcasting, using DVB-T, DVB-H and DVB-SH.
NOW:
“The objective of full interoperability across networks and devices remains important in order to make possible EU-wide roaming where appropriate, and interoperable solutions should be favoured. Developments in the market have shown that interoperability can be achieved when stakeholders act together with a common aim of implementing a technical standard such as DVB-H.”
“a technical standard such as DVB-H” … that’s an interesting little phrase. Where is the “certainty” now? Where is the “Member States will be required to encourage the use of DVB-H”.
It seems possible that the Commission does seem to be moving round to what many said before: that allocating spectrum on a technology-specific basis is not they way to go. Mostly, of course, yesterday's statement was looking at best practice for regulators in making spectrum awards.
"Successful commercial launches of Mobile TV in Austria, Italy, Finland and the Netherlands have proved that efficient authorisation procedures are a key factor for the fast take-up of Mobile TV. In Austria, 5,000 citizens were using Mobile TV within the first weeks of its launch. With predicted growth in sales during the Christmas period, many more Europeans should have the opportunity to watch TV on the go", said Viviane Reding, EU Telecoms and Media Commissioner. "This is why we want to give Member States guidance on how to allow industry to get these innovative services on track as quickly and smoothly as possible. We stand for a collaborative approach between all actors involved including broadcasters, mobile operators and platforms operators, andwe oppose heavy regulation or burdensome authorisation procedures for the introduction of Mobile TV in Europe."
But aside from those fine words, there were some interesting hints that the DVB-H or else approach of earlier this year is being toned down.
Yesterday's communication stated that "Aspects related to interoperability and roaming for mobile TV should be given due consideration in light of the wireless nature of the services." Due consideration. Another interesting choice of words.
The document also states that optimal use of the spectrum should be considered when making license awards, something that may prick up the ears of those not in the DVB-H camp.
54% of large enterprises in Europe spend more on wireless infrastructure than wired
The Enterprise Mobility business of Motorola has today released European research showing that wireless infrastructure spending has overtaken wired in the majority of large enterprises. Respondents were also questioned on drivers for wireless adoption and 57% cited their main reason for going wireless as a strategic need for mobility while others included the need to upgrade or replace an existing wired LAN. The research also revealed that 88% of companies expect all their networked equipment to be wireless enabled within three years.
"With budgets being squeezed, companies in every industry sector are looking for ways to become more efficient and mobility gives businesses the means to be more responsive. It is therefore no surprise that the trend is towards all wireless networks," commented Marco Landi, Acting VP and GM, Motorola Enterprise Mobility Business – EMEA. "The applications for mobility are endless including, accessing patient data at the bedside, enhancing lessons in schools and tracking whisky casks to name but a few. The truth is that workforces are no longer fixed and employees need to be able to access data on the move, both inside and outside their offices."
The research also found that 76% of companies already have some form of wireless infrastructure in place and almost a fifth of businesses are ‘mostly' or ‘completely' wireless. Interestingly, the Spanish market appears to be the most advanced when it comes to wireless infrastructure, with 42% of Spanish IT directors who took part in the survey, stating that their organisations have a ‘mostly' or ‘completely' wireless LAN today.
"Now that companies are moving towards all wireless networks they need to consider how to get the most from wireless technology," continued Landi. "For instance, wireless networks actually provide an extra level of security over wired networks if configured in the right way. It is of prime importance that organisations perform site surveys to ensure that their wireless coverage meets their business needs; for example, they might need additional access points if they plan to have voice over wireless."
Respondents to the survey were also questioned on any concerns they have on moving towards a completely wireless network. The top two concerns were security (63%) and performance (41%) showing a need for further education on how to secure and get the most from wireless networks. However, the results showed that as long as these concerns can be addressed, 69% of companies expect to have completely wireless networks in place by 2010.
The research was said to have been carried out to understand adoption rates of wireless infrastructure across Europe, expected benefits and any barriers to adoption. The survey was undertaken by Vanson Bourne and questioned 400 IT directors at companies with over 1,000 employees across the UK, France, Netherlands, Germany, Italy, Spain and Nordics.
