CANTO Weekly Newsletter – BNamericas 06/19/15

CANTO Weekly Newsletter – BNamericas 06/19/15

Claro-Digicel merger challenged by Jamaican regulator – Jamaica
O3b announces satellite broadband deals in Chile, Caribbean – Caribbean, Chile
Comverse buys Acision for US$135mn – Regional
Hondutel keeps numbers in black as earnings rise 57% in May – Honduras
Alierta: Telefónica the most profitable large telco in 2015 – Regional

Claro-Digicel merger challenged by Jamaican regulator – Jamaica
The Digicel-Claro merger in Jamaica is set to be challenged again by the country’s Fair Trade Commission (FTC), after a court of appeal gave it the go-ahead to look into the transaction.
The FTC is seeking clarification on and interpretation of a series of issues, such as whether there is a breach of competition legislation or a further explanation of the term “agreement”, which has been specifically used by the operators in all of their paperwork.
FTC challenged the merger back in 2011 when the operators announced the deal for the first time. The institution argued that the transaction contravened the fair competition act, a decision that was backed by competitor Cable & Wireless Communications.
LIME, CWC’s operator in Jamaica, alleged in September that the merger amounted to an abuse of a dominant position.
The court of appeals in Jamaica then approved the merger in December, and rejected an appeal from Digicel questioning the jurisdiction of FTC to look into the transaction.

O3b announces satellite broadband deals in Chile, Caribbean – Caribbean, Chile
O3b, a satellite provider aiming to offer cheap broadband in emerging markets, has announced a series of contracts in the Pacific, South Atlantic, the Caribbean and a multi-year agreement to enable Chilean telco Entel to offer 3G and 4G LTE services on Easter Island.
The use of O3b satellites, which orbit closer to the Earth than conventional geostationary satellites, reduces latency, increases internet speed and improves voice and video quality, the company claims.
O3b offers satellite connectivity to connect remote areas where laying fiber is not viable and says that its network offers lower latency speeds than long-haul fiber with round trip times of less than 150 milliseconds.
Last year, O3b launched eight satellites, bringing its fleet to 12 and total capacity to over 100Gbps.
EASTER ISLAND
With a population of 6,000, Easter Island is the most remote part of the Entel network, almost 3,700km from mainland Chile, and is famous for its Moai stone statues, receiving some 80,000 tourists a year.
ROYAL CARIBBEAN
O3b also said it has enabled high-speed broadband access and SMART Connect mobile access for Royal Caribbean International’s Anthem of the Seas.
O3bMaritime has already provided four of Royal Caribbean’s largest ships (Oasis of the Seas, Allure of the Seas, Quantum of the Seas and Anthem of the Seas), each with more bandwidth than the rest of the cruise industry combined, O3b said
In the near future, Royal Caribbean’s Quantum of the Seas will move across the Pacific to Japan and other Asian destinations.
To date, O3b’s service has had limited availability in Latin America and more capacity deals in the Pacific and South Atlantic.
This week, O3b also announced capacity deals with the American Samoa Telecommunications Authority (ASTCA), Digicel PNG in Papua New Guinea, Palau National Communications Corporation (PNCC), Bharti Airtel in Timor-Leste, and Our Telekom in the Solomon Islands.

Comverse buys Acision for US$135mn – Regional
US converged solutions supplier Comverse announced that it is acquiring IP messaging specialist Acision for US$135mn in cash.
The deal also includes 3.13mn shares and potential earnout payments of US$35mn. Comverse expects to close the deal by the end of the third quarter this year.
In addition to offering cloud multi-VAS and IP messaging solutions, the combined company will provide network operators, over-the-top service providers and enterprises with data analytics, enterprise application-to-person messaging, credit orchestration, two-factor authentication, M2M communications, RCS, WebRTC and APIs.
“Continued consolidation in the service provider space creates the need for strong suppliers,” said Philippe Tartavull, president and CEO of Comverse.
“Acision brings a diverse portfolio of mobile monetization and rich enterprise messaging solutions complementing Comverse’s market leading digital services platform,” he added.

Hondutel keeps numbers in black as earnings rise 57% in May – Honduras
Honduras state-owned telco Hondutel posted earnings of 19.4mn lempiras (US$875,000) in May, up 57% from the 12.3mn lempiras reported in April.
This increase in revenue is mostly due to a marked cost reduction strategy, which has led to expenses being cut by 130.3mn lempiras. Most of the savings have come from reductions in salary costs, which have been lowered to 53.9mn lempiras from 65.3mn lempiras in May 2014.
The operator, which has been fighting bankruptcy for the past few years, has been on the up this year. The firm posted a profit of 6.7mn lempiras for 1Q15, the first positive result for the company since 2010.
The telco forecasts profits of between 20 and 30mn lempiras for 2015, and 100mn lempiras by the end of next year.
Last year the company made a loss of 238mn lempiras, but that was a significant improvement from 2013, when it reported a loss of 752mn lempiras.
The telecom company has been on an strict cost-cutting offensive to reduce losses, including closing customer service centers and shedding half its managerial positions under an early retirement scheme, as well as suspending 700 workers who had turned down an offer of early retirement.
The telco has said that it is not planning further staff reductions for the time being.

Alierta: Telefónica the most profitable large telco in 2015 – Regional
Spain’s Telefónica has achieved profitability of over 40% for shareholders since 2013 and has a mean profitability of 5.8% so far this year, making it the most profitable large telco globally, the company’s president César Alierta told a shareholders’ meeting on Friday.
Alierta added that shares have risen 9.3% so far in 2015 and are up 28% since 2013.
The company approved a dividend of 0.75 euros per share for 2015 of which 0.35 euros per share will be distributed in the fourth quarter as a “scrip dividend”, while the remainder will be paid in 2Q16.
Alierta said that the company had managed to cut its debt by 13bn euros (US$14.6bn) by the end of 2014 as the company began to restructure its operations.
He attributed the company’s success to transforming itself into a digital company that principally sells “gigabytes” rather than voice.
The company made a record investments in 2014 of 9.5bn euros to add value added services.
The executive also underscored the importance of the acquisitions of e-Plus in Germany and GVT in Brazil as well as the sale of the O2 asset in the UK.
“On one hand we are consolidating in 2015 in Europe and Brazil that adds value and potentially could generate significant synergies,” Alierta said.

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