CANTO Weekly Newsletter – BNamericas 05/15/15

CANTO Weekly Newsletter – BNamericas 05/15/15

ANALYSIS: What is the impact of Verizon-AOL deal on LatAm? – Regional
Digicel to offer triple play in Bermuda – Caribbean
Huawei seeking to move into Cuba – Cuba
Alcatel-Lucent reports Q1 loss – Regional
El Salvador, Honduras and Paraguay among top m-money markets – Regional

 

ANALYSIS: What is the impact of Verizon-AOL deal on LatAm? – Regional

US telecom operator Verizon announced Tuesday (May 12) a US$4.4bn deal to acquire internet group America Online (AOL), in a move aimed at increasing the carrier’s mobile video and advertising capabilities.
Verizon said the acquisition will drive its LTE wireless video and OTT (over-the-top video) strategy. The agreement will also support and connect to Verizon’s IoT (Internet of Things) platforms.
The deal is subject to customary regulatory approvals but is expected to close this half. Verizon said it will fund the transaction from cash and debt. The deal also includes websites such as the Huffington Post, Techcrunch, Engadget, Makers and AOL.com.
What exactly will be, if any, the impact of this deal on Latin America? Apparently, it’s limited.
Founded in 2000, Verizon currently disputes inch-by-inch the leadership of the US wireless market with AT&T. At the end of Q4, both companies had roughly 34%. Verizon posted operating revenues of US$32bn in Q1, up 3.8% year-over-year.
Verizon has no significant operations outside the US, though. The company says on its website it offers job careers in Latin America, but the fact is that it has no subsidiary established in the region.
Indirectly, however, Verizon has presence in the region through British operator Vodafone, acquired in 2013.
Vodafone has a legal entity in Brazil, where its Vodafone Brasil unit operates an MVNO, and is also a partner of Entel Chile.
AOL
AOL set foot in Latin America in 1999, branded AOL Latin America (AOLA), in the form of a joint venture with Brazil’s largest private sector bank Banco Itaú and the Cisneros group (Venezuela). AOLA had subsidiaries in Brazil, Mexico, Argentina and Puerto Rico.
Nonetheless, the company suffered in the region the same effects of the dot-com bubble burst, underwent financial struggles and officially shut down its Latin America operations in 2006 after a federal US bankruptcy court gave it the go-ahead to liquidate.
Brazilian operations were taken over by Terra, while Mexico’s Alestra bought AOL Mexico.
Currently, the internet company offers only specific and limited services in the region, such as email.
AOL posted revenues of US$625mn in Q1, up 7% annually.
Digicel to offer triple play in Bermuda – Caribbean

Jamaica-based operator Digicel has received the go-ahead from a Bermuda regulator to move forward with its purchase of Bermuda Telephone Company (BTC).
The acquisition will allow Digicel to offer triple play services on the island, combining BTC’s fixed voice and broadband with its own mobile offerings.
The Regulatory Authority of Bermuda (RAB) approved the transaction, which was announced in January, when Digicel offered 30mn Bermudian dollars (US$30mn) to buy BTC from Canada-led Barrie Holdings.
Robert Watson, chief executive of RAB, said there have been concerns over the emergence of dominant players, but he assured the regulator will follow the market closely.
“We will keep a close eye on it to see there is no predatory pricing,” he told the Royal Gazette, adding that smaller players will still have a place in the market.
Digicel entered the Bermudan telecom market in 2012 after it acquired local operator Transact. The company held a 41% mobile market share last year, while the remaining 59% were CellOne users, according to data from RAB.
BTC accounted for 42% of broadband users last year, with CableVision leading the market with 45%.
RAB is expected to publish a statement detailing conditions of the transaction by next week.
Huawei seeking to move into Cuba – Cuba

Chinese company Huawei is in talks to invest in Cuba’s budding telecommunications market, the island’s finance minister Lina Peraza announced, according to newspaper Diario de Cuba.
Peraza said during the World Economic Forum in Mexico that a Huawei representative has been in talks with Cuba’s state-owned telecom Etecsa “for a long time.”
The minister also said that Cuba is open to investment from foreign companies, but that the government wants to avoid “the negative side” of the internet.
Cuba has traditionally had a tight grip on the telecom market, but it started working towards improving its accessibility in recent years, and this process picked up with the newly rekindled relations with the US.
In 2008 the government allowed citizens to own mobile phones for the first time. Five years later, the internet reached the island through a submarine cable with Jamaica.
Mobile lines have reached a total of 3mn since Raúl Castro’s government lifted the ban, and Etecsa has said it plans to make an additional 800,000 lines available this year. Cubans have been allowed to register up to three mobile lines since November. Previously, each customer could register just one.
Cuban citizens are also allowed now to have their e-mail connections accessible via mobile phones. Between March and November, 460,000 people had registered for the service.
Alcatel-Lucent reports Q1 loss – Regional

Alcatel-Lucent reported 9% year-on-year growth in revenues in 1Q15 to 3.24bn euros (US$3.63bn).
The French company reported a net loss of 72mn euros, compared to a loss of 73mn euros a year ago.
IP Routing revenues were 583mn in 1Q15, 6% higher than last year.
Access segment revenues were 1.78bn euros, up from 1.57bn euros in 1Q14. Wireless access revenues came in at 1.18bn euros, a year-on-year increase of 19%, mostly from LTE rollouts in China.
Breaking down the revenue by regions, North America brought in the most with 1.56bn euros, 11% higher than last year’s 1.45bn. Asia Pacific was the fastest growing region, with revenues rising 20% to 586mn euros. The Rest of the World, which includes Latin America and the Middle East, saw revenues grow 5% to 385mn euros.
According to Alcatel-Lucent, growth in the Caribbean and Latin America was offset by revenue declines in the Middle East and Africa.
Revenue in Europe rose 7% to 704mn euros.
Alcatel-Lucent announced its intention to merge its operations with Nokia in April. Both companies will combine their efforts to create an innovation leader in next generation technology, including IoT and transition to the cloud.
El Salvador, Honduras and Paraguay among top m-money markets – Regional

El Salvador, Honduras and Paraguay are among the top 15 markets worldwide in terms of the proportion of adults using mobile money (m-money) services, according to the GSMA.
Latin America was the fastest growing region in the adoption of m-money in 2014, expanding 50% in terms of the number of active m-money accounts.
The findings are from GSMA’s “Mobile Financial Services in Latin America and the Caribbean: state of play, commercial models and regulatory approaches” report released Wednesday during the Mobile 360 Series event in Rio de Janeiro.
According to GSMA, nearly two thirds of markets have at least one mobile money service.
GSMA also says that over a quarter of all m-money transactions in Latin America in 2014 involved third parties, such as bill payments, up from just 14% in 2012.
Meanwhile, some 6% of all transactions in East Africa – “the home of the world’s most successful mobile money deployments” – were ecosystem transactions, or ones involving third parties, the report said.
GSMA reports 37 m-money services and 14.9mn registered m-money accounts in 19 countries in Latin America. In 2014, seven new services were launched in Brazil, Colombia, the Dominican Republic, Ecuador, Panama and Peru, the entity said.
Despite this increase, around half of all adults in Latin America remain unbanked, according to the association.
Sebastián Cabello, GSMA head for Latin America, said cross-industry (financial, telecom) m-money regulations are necessary to unlock the service. Another key driver would be a standardized commercial model.
Cabello welcomed regulations such as those approved in Brazil.

The information presented and opinions expressed herein are those of the author and do not necessarily represent the views of CANTO and/or its members

Copyright 2015 Business News Americas

CANTO's Secretary General Teresa Wankin strikes a pose with Aruba's Prime Minister Evelyn Wever-Croes (left). The CANTO Board is currently in Aruba for its 138th Board Meeting. pic.twitter.com/uG3W5eYyi1

About 2 days ago from CANTO's Twitter via TweetDeck

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