CANTO Weekly Newsletter- BNamericas 10/07/16

CANTO Weekly Newsletter- BNamericas 10/07/16

América Móvil to invest US$600mn in Dominican Republic over 3 years – Dominican R.
AT&T, Amazon Web Services to integrate cloud and networking – Regional
Younger generations put radio broadcasting to the test – Mexico, Regional
Ericsson to cut 3,000 jobs in Sweden – Regional
Telefónica scrubs Telxius IPO on weak investor demand – Regional

América Móvil to invest US$600mn in Dominican Republic over 3 years – Dominican R.
Mexican telecoms giant América Móvil has promised to invest US$600mn in its Dominican Republic unit Claro Dominicana over the next three years, América Móvil CEO Daniel Hajj was quoted as saying by local daily Listin Diario.
The announcement was made after a meeting between Hajj and Dominican President Danilo Medina.
“The Dominican Republic is currently the fastest growing country and we will continue investing,” Hajj said, adding that the company will invest US$200mn a year in rolling out broadband and LTE networks.
In February this year the three big telcos, Claro, Orange Dominicana/Altice and Trilogy Dominicana, announced investments of more than 18.2bn pesos (US$400mn) for 2016.
Claro is the market leader in the mobile sector with 4.52mn lines at the end of the first quarter, followed by Orange Dominicana/Altice with 3.61mn and Trilogy Dominicana with 415,000, according to telecom regulator Indotel.

AT&T, Amazon Web Services to integrate cloud and networking – Regional
Press release
By AT&T, Amazon
October 6, 2016
AT&T has reached a multi-year, strategic alliance agreement with Amazon Web Services (AWS) to optimize delivery of integrated solutions built on the companies’ respective cloud and networking capabilities. The collaboration is designed to help both existing and new customers more efficiently migrate to and utilize the AWS Cloud with the AT&T network. The solutions are intended to span cloud networking, mobility, Internet of Things (IoT), security and analytics.
“Customers of all sizes are quickly migrating to the AWS Cloud to reduce their data center footprint, become more agile and take advantage of innovation in areas such as IoT, Big Data and Analytics,” said Terry Wise, Vice President of Worldwide Partner Ecosystem, Amazon Web Services, Inc. “Advanced connectivity and network solutions are critical to enabling our customers to get the most out of our services. We are excited to expand our alliance with AT&T and deliver new solutions designed to enable customers to accelerate their journey to the AWS Cloud.”
“For many enterprises, the cloud’s potential can be equal parts tantalizing and challenging. Emerging technology trends and fluctuating needs mean that a company’s plans are dynamic, and can quickly change,” said Mo Katibeh, Senior Vice President, Advanced Solutions, AT&T Business Solutions. “Together, AT&T and AWS can help streamline the leap to the cloud. We’re helping businesses connect everything and anything to the cloud. More importantly, we’re doing this so it can be simple, scalable and highly secure.”
The collaboration will focus in three main business areas, with potential expansion in the future:
Business Cloud Networking: Since the integration was initially launched, AT&T NetBond® has become an increasingly popular way for customers to establish high-speed, highly secure network connections to the AWS Cloud. In fact, the AT&T NetBond ecosystem has seen four fold growth in connections and eight fold in traffic over the last year. In order to deliver even more advanced networking capabilities to customers, AT&T and AWS will work together to identify new solutions with security, performance, and mobility in mind. Emphasis will be placed on enhancing end-to-end customer visibility across more highly secure and high performing network connections, allowing for faster and more automated decision making capabilities to the customer.
IoT: AT&T and AWS will coordinate introduction of AT&T IoT-connected sensors and devices preconfigured to seamlessly and more securely send data into the AWS Cloud. This integration will provide customers with massive breadth and scale. It brings together AT&T’s global network, which connects nearly 29 million connected devices as of 2Q 2016 and reaches over 200 countries and territories, with AWS IoT, a managed cloud platform that can more securely and reliably scale to billions of devices and trillions of messages. Integration with the AT&T IoT Starter Kit and IoT Data plans are also intended to be included, which would allow customers to build their own solutions using AT&T IoT and AWS IoT.
Threat Management: AT&T and AWS both view security as the highest priority. As part of this expanded strategic relationship, AT&T and AWS plan to employ their respective expertise and knowledge in security to help customers prevent, detect, and respond to threats faster and more efficiently. Using threat data and knowledge from both organizations will help fuel the processes and tools that comprise AT&T Threat Intellect, the “brains” behind AT&T’s security platform that uses advanced analytics to help provide improved end-to-end security protection for every user on our network.
With a key focus on implementing innovative strategies, the alliance relationship will bring together designated professionals from each company to integrate automated and flexible cloud solutions in support of the global, mobilized workforce.
*AT&T products and services are provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not by AT&T Inc.

Younger generations put radio broadcasting to the test – Mexico, Regional
While the emergence of new technologies has had little effect on radio broadcasters’ market share, tapping into new audiences is key to ensuring advertising revenues.
“When television emerged, people said radio would die. And all the new media that appear seem to want to kill radio broadcasting, but it’s still here,” said Jaime Von Bertrab, commercial vice president of Televisa Radio, during his opening remarks on the NexTV Series panel on traditional radio and OTTs.
Experts who participated in the panel agreed that affordability and easy access have made radio a stable communication channel that can withstand competition from new technologies.
Panelists claimed that radio broadcasts give their audiences a sense of company that has not been matched by audio streaming platforms such as Spotify. In fact, Mexican telecom regulator IFT’s national survey on consumption of audiovisual content indicates that only 6% of the sample population listens to radio online.
Mónica Miranda, director general of Capital Media’s radio division, underlined that radio broadcasters are not resting on their laurels when it comes to new media, and every radio company in Mexico has an online presence to be closer to their audience.
Since many platforms are concerned with reaching digital natives, BNamericas approached Miranda to ask whether a generation gap could pose a threat to the popularity of radio in Mexico. “The gap is evident and we need to find a way to reach new generations, as radio companies can’t afford to live off adult contemporary listeners forever.”
Miranda said it is important for radio companies to reach younger digital natives because advertisers are very interested in those market segments.
Applying the lessons learned from other media, radio companies are inviting influencers from other platforms to act as announcers or commentators, since millennials seem to be attracted to digital personalities, Miranda explained.
The Capital Media executive said radio companies should focus on content creation, something they have been doing for almost a century. That way, they will be prepared for the time when technology finally appears that competes in terms of affordability and coverage.

Ericsson to cut 3,000 jobs in Sweden – Regional
Press release
By Ericsson
October 4, 2016
Change in operations and adjustment of competence to meet technology shifts, new customer groups and a continued increased proportion of software development.
Ericsson intends to reduce 3,000 positions in production, research and development (R&D) and sales and administration – combination of voluntary and forced reductions as well as other measures such as outsourcing.
Ericsson intends to make significant reductions in operations in Borås and Kumla, in line with the company production strategy, consolidating to fewer production sites and continued work with partners.
Union consultations about the proposed changes are ongoing.
Measures taken are part of the ongoing cost and efficiency program.
Ericsson intends to recruit about 1,000 R&D positions in Sweden over the coming three years, mainly from universities, to support the company’s competence buildup in new technology and customer domains.
Ericsson (NASDAQ:ERIC) has over the course of several years driven a transformation of the company to meet fast technology shifts and the digitalization of the telecom industry as well as other industries. Today, Ericsson announces measures intended to be implemented in Sweden, in line with the ongoing cost and efficiency program. The proposed actions primarily impact production, but also parts of R&D as well as group and support functions.
Jan Frykhammar, President and CEO, Ericsson says: “Ericsson is going through a large transformation. We continue to have a strong focus on R&D, and since many years, most Ericsson employees work in software development and services, rather than hardware production. The measures are necessary to secure Ericsson’s long term competitiveness as well as technology and services leadership.”
Ericsson today has approximately 16,000 employees in Sweden. The proposed reduction affects approximately 3,000 positions, of which approximately 1,000 positions in production, approximately 800 in R&D and approximately 1,200 in other operations.
The proposed reductions will impact operations on the following sites in Sweden: Borås, Göteborg, Karlskrona, Kumla, Linköping and Stockholm. Ericsson intends to make significant reductions of operations in Borås and Kumla. The proposed reductions are intended to be met through a combination of voluntary and forced reductions as well as other alternatives such as outsourcing.
Ericsson will also make general cost reductions and take out external costs, primarily by reducing the number of consultants in Sweden by 900, but also through general reductions in operating expenses.
Ericsson has continued to drive change in its global R&D organization to increase efficiency, optimize operations and reduce the number of R&D sites globally. Ericsson in Sweden is the base for R&D in radio technology and 5G. Ericsson has invested SEK 7 billion in three global ICT centers supporting R&D operations and forming the base for new digital business models. Two of them are in Sweden, in Rosersberg and in Linköping, strengthening Sweden’s role as a platform for R&D in Ericsson.
Ulf Ewaldsson, Chief Strategy and Chief Technology Officer, says: “We have a clear goal that our R&D in Sweden should be world leading, not least in next generation systems. In the short term we have to reduce the number of positions in R&D, primarily within administrative roles. At the same time our intention is to bring in new competence in new technologies. Therefore, we intend to recruit approximately 1,000 engineers in Sweden, primarily from universities, over the coming three years.”
Production in telecom has changed significantly over the past decade with smaller products and a more efficient production – manufacturing time per radio unit has been reduced by more than half. Higher volatility in production volumes has increased the need for flexibility and using partners has become more important. As a consequence, Ericsson is consolidating its own production to fewer sites globally.
The cost in sales and administration will be reduced as a result of the new company structure introduced July 1, 2016, with the aim to create a more efficient and purpose built organization to meet the needs of different customer segments and more quickly seize business opportunities.
Union consultations on the proposed changes in Sweden are ongoing. The process will have a step by step approach and, for the majority of the operations, is expected to be concluded during the first quarter of 2017. The process related to the operations in Borås and Kumla is expected to be concluded during the second half of 2017.
Ericsson intends to continue the discussions with the Swedish union representatives about the need for competence development, flexibility and transformation.
About Ericsson cost and efficiency program
The cost and efficiency program targeting savings of SEK 9 b. during 2017, is progressing according to plan. In addition, the company announced on July 19, 2016, additional activities to reduce the annual run rate of operating expenses, excluding restructuring charges, to SEK 53 b. in the second half of 2017. This is to be compared with SEK 63 b. for full-year 2014 and equates to double the previously targeted savings in operating expenses. At the same time, the company announced its intention to intensify activities to reduce cost of sales and adapt operations to a weaker mobile broadband market
Total restructuring charges for 2016 are, as previously communicated, estimated to
SEK 4-5 b.

Telefónica scrubs Telxius IPO on weak investor demand – Regional
Telefónica has canceled an initial public offering (IPO) of its infrastructure unit Telxius, after previously announcing the offering at the beginning of September, citing weak investor demand.
Telefónica, “has decided to cancel its offering because it regards the valuation of Telxius implicit in the purchase orders as inadequate,” it said in a statement to the Spanish stock market regulator.
The company said it would continue to study strategic alternatives.
The telecoms giant, which has extensive operations in Latin America had hoped to sell as much as 40% of Telxius to help trim its 52bn euro debt (US$58bn), is seeking a valuation of 3.75bn euros for the unit.
Telefónica created Telxius in February to improve the profitability of its networks by renting them out to third parties.
The Spanish company’s largest rival in Latin America, América Móvil, spun off its infrastructure into a separate rental company, Telesites, which began operations in December.
Bloomberg reported that investors thought the 12-15-euro per share on offer was too high, while the Financial Times quoted a source as saying that the market situation, plus a lack of knowledge of Telefónica’s underwater cable business, was responsible for the limp investor response.

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