ISLAMABAD: Telecom sector is one of the most potential sectors that remained important contributor to the national economy by depositing Rs 363 billion during the year 2012 and showed increase of 5.4 percent compared to last year.
ISLAMABAD: Telecom sector is one of the most potential sectors that remained important contributor to the national economy by depositing Rs 363 billion during the year 2012 and showed increase of 5.4 percent compared to last year.
In line with the teledensity the cellular sector also has the highest share in telecom revenue as during 2011 cellular revenue increased by 11 percent to reach Rs 262,761 million as compared to Rs 236, 047 million in the previous year. During the first two quarters of 2012, Rs 197,686 million worth of revenue has been generated by the telecom sector.
According to the report of Pakistan economic survey 2011-12, companies have invested more than US$ 12 billion in building of infrastructure and other projects in the last six years.
In 2011, the telecom sector invested US$ 495.8 million with the cellular mobile sector being the major contributor. In addition USF invested Rs 3.5 billion in the 2011.
The telecom sector made its higher contribution to the national exchequer in 2011 as almost Rs 117 billion deposited by the telecom companies showering 7% growing in 2011.
According the report, foreign direct investment (FDI) by the telecom companies is more than 30 percent of the total foreign direct investment in the country during last six years.
Owing to terrain/security situation companies were reluctant to invest further however in 2011 telecom sector attracted over US$ 79 million FDI in the country which is about 5 percent of the total FDI in Pakistan in 2011.
Despite all the factors the cellular industry managed to double its growth rate from the previous year and according to the World Economic Forum's Global Information Technology Report 2101-11 Pakistan ranks no 1 in the internet and telephony competition. The total of mobile subscriber reached 118.3 million at the end of 2012.
The mobile market over the years has come more stable due to intense competition. Market shares are now more balanced among the five operators with almost insignificant changes over the years. At the end of March 2012 Mobilink had a market share of 30.25 percent followed by Telenor with 24.80 percent and Ufone with 19.54 percent.
The auction of 3G license is expected that will bring more investment into the country and improved economic condition of the country would further encourage investors to bring the capital into the country.
Economic survey further revealed that teledensity in the country stood at 68.3 percent showing 6.7 percent growth as compared to the previous year. Since the mobile sector contributes over 95 percent to the total density of the country an increase in mobile penetration from 60.4 percent in 201-11 to64.9 percent in 2012-12 resulted into improvement of 4.3 percentage points in total density.
Fixed teledensity has been declining over the year due to mobile substitution and today it stands at 1.93 percent in 2011-12 as compared to 2.1 percent last year showing a decrease of 0.17 percent.
End.
France Telecom shareholders reject dividend cut - Reuters
PARIS, June 5 |
PARIS, June 5 (Reuters) - France Telecom's shareholders on Tuesday rejected a resolution advocated by some of its employee shareholders that would have cut its dividend by nearly 30 percent.
Some 93 percent of shareholders at its annual investors' meeting voted in favor of a proposal by France Telecom's board to keep the dividend at its current level of 1.40 euros a share.
Other European telecoms operators such as Telecom Italia , Vivendi and Telefonica have recently scaled back their dividend payouts to counter a negative mix of economic recession, competition and costly network upgrades in their mature home markets.
One company union that favored a cut in the payout blamed the recently inaugurated government of Socialist President Francois Hollande for the vote, given that the government is the company's largest single shareholder with about a 27 percent stake, including shares hold by sovereign wealth fund FSI.
"By refusing to lower the dividend to 1 euro as the employees wanted, the government has committed its first political error of its new term," the main France Telecom union said in a statement.
The government would have surrendered 145 million euros ($180.73 million) in dividend payout if the proposed reduction had gone through, according to union estimates.
France Telecom, which like other incumbent operators has been slammed by low-price competition from upstart rival Iliad's Free cellular brand, said it would almost certainly cut its dividend for 2012 and 2013.
Earlier during the shareholder meeting, France Telecom Chief Executive Stephane Richard played down the possibility that the company would enter an already crowded Brazilian telecoms market.
He also said he viewed some degree of consolidation in an intensely competitive European market as "inevitable."
Nokia: An Inexpensive $2 Stock With Strong Potential - Seekingalpha.com
Nokia is a world class company that had been the largest manufacturer of mobile phones in the world. However, Nokia's business slumped in the first quarter of 2012 and its 14 year reign as the top seller of mobile phones ended. During the first three months of 2012, Samsung (SSNLF.PK) sold 93.5 million mobile phones and had a 25.4% market share, that topped Nokia, which sold 82.7 million mobile phones and had a 22.5% market share. "Nokia's global handset shipments declined a huge 24 percent annually to 82.7 million units in Q1 2012," Strategy Analytics’s Neil Mawston said. "Volumes were squeezed at both ends, as low-end feature phone shipments in emerging markets stalled and high-end Microsoft (MSFT) Lumia smartphones were unable to offset the rapid decline of Nokia's legacy Symbian business." Nokia's first quarter year-over-year smartphone's sales dropped by 51% from 24.2 million in the first quarter of 2011 to 11.9 million in the first quarter of 2012.
Nokia reported first quarter earnings on April 19th. During the first quarter, Nokia reported earnings per share of $-0.33 versus earnings per share of $0.13 in the first quarter of 2011. First quarter revenues were $9.79 billion versus revenues of $14.75 billion in the first quarter of 2011. First quarter net income was $-1.23 billion versus net income of $488 million in the first quarter of 2011.
On April 10th, when the news of Nokia's falling sales and revenue went public, the stock price dropped by 18.8% to $3.92 per share. As additional details of the first quarter debacle became public, the stock price continued to drop. Between March 28th and May 25th the stock price dropped by a staggering 55%. I expected that Nokia would have weak first and second quarter sales and earnings. I also expected that sales of its Symbian based smartphones would fall, once buyers found out that Nokia would be dropping its Symbian powered smartphone's, in favor of the new Microsoft Window Phones powered smartphones. However, I was somewhat surprised by how negatively investors reacted to the first quarter sales and earnings results. Judging by the steep drop in the stock price, many investors must believe that Nokia is on the road to bankruptcy.
While Nokia's earnings and market share have genuinely suffered, I do not believe that the company will go bankrupt. The company is transitioning for the future and has the financial resources and the positive name recognition to survive this downturn. Nokia is still the number two manufacturer of mobile phone units and it has the backing of the Microsoft. Nokia will use Microsoft's Windows Phone operating system in its new Lumia smartphone models.
As part of Nokia's transition it will upgrade almost all of its mobile phone models. For instance, in Asia, the company has "delivered consumers more aspirational designs and experiences through 7 new Asha products." In January Nokia launched its Lumia 710 which will be distributed by T-Mobile in the United States. The Lumia 710 is a low cost smartphone (around $50) which has been well received and has exceeded sales expectation. In April Nokia launched sales of the Lumia 900 smartphone in the U.S. The launch exceeded expectations and the Lumina 900 has been well received and "has 350 costumer reviews with the average review having 5 stars. The phone received 308 five-stars, 20 four-stars and only 7 one-star." The Lumia 900 smartphone will be distributed through AT&T (T). AT&T plans to spend $150 million on the marketing of the Lumia smartphone. I have seen some of the Lumia smartphone commercials on TV and I think that they are smart and convincing. "AT&T has said its marketing blitz for the Lumia 900 will be its largest ever for a smartphone, eclipsing even the iPhone."
Positives for Nokia moving forward
Nokia is down, but it has big turnaround plans. In addition to the United States launch of the Lumia 710 through T-Mobile and the Lumia 900 through AT&T, the company launched the Lumia 800C in China and has plans to launch its Lumia 610C, 710C and 900C later this year. Each of the new Chinese Lumia models will be distributed by China Telecom, which has one of the largest customer bases in China. In additional good news in the "U.K., Germany, Italy and France, where the Lumia 800 went on sale last November, Windows Phone is showing fast growth compared to a year ago - though its share is still in the low single digits." Despite Nokia's decreased earnings, it has still been able to maintain a large cash reserve. As of March 31st the company had about $13 billion in cash and equivalents.
On April 21st in a joint press release of Nokia and Microsoft, it was announced that, "In recognition of the unique nature of Nokia's agreement with Microsoft and the contributions that Nokia is providing, Nokia will receive payments measured in the billions of dollars ... Nokia will also receive additional payments as part of an intellectual property exchange."
Nokia has also begun a cost reduction plan and has moved production from Europe to Asia. In 2010, Nokia employed 19,810 people in Finland, 11,243 in Germany and 3,859 in the U.K. By the end of 2011, it employed 16,970 people in Finland, 10,992 in Germany and 3,232 in the U.K. Wages and overall production costs are significantly lower in Asia and it is estimated that the company will save about $930 million annually as a result of the moves.
Negatives for Nokia moving forward
As Nokia moves forward it will need to increase its percentage of the smartphone market. Unfortunately it will have to confront very tough competition from smartphone manufacturers like Apple (AAPL), as well as from companies that use Google's (GOOG) Android operating system like Samsung, LG Electronics (LG) and HTC (HTC). Samsung which is the largest smartphone manufacturer in the world, is growing fast and has 30.6% of the smartphone market, while Apple which is also growing fast is the number two smartphone manufacturer and has 24.1% of the smartphone market. Nokia is currently in third place with a market share of 6.2%.
Conclusion
Nokia is in deep trouble and the drop in the stock price reflects that. The company has been losing money and market share while rapidly burning through cash. If Nokia is to survive, it urgently needs to complete its turnaround. With that said, the company has taken steps to turn things around by partnering with Microsoft and launching new products lines in North America, South America, Europe and Asia. It is still too early to judge how successful Nokia's new product lines will be. However, Nokia's stock is dirt cheap and investors that are willing to take a risk could be big winners if the company is successful in its turnaround efforts. If Nokia's Windows powered phones catch on, I think Nokia stock could see a $2 to $3 increase by early 2013. Despite this, investing in Nokia is risky and prospective investors should do further research.
Disclosure: I have no positions in any stocks mentioned and no plans to initiate any positions within the next 72 hours.
Qatar Telecom to Double Asiacell Stake for $1.47 Billion - Bloomberg
Qatar Telecom QSC said it reached agreements to double its holding to 60 percent in Asiacell, a mobile operator in Iraq, for $1.47 billion as the company seeks to expand outside its home base.
Qatar Telecom will initially increase ownership to 53.9 percent and raise that further after approval from Iraq’s government and regulators, according to an e-mailed company statement today. The transaction will be financed from existing funds, it said, without saying who is selling the stake.
“The Iraqi market is about to enter a period of rapid broadband and data growth and Asiacell is well-positioned to meet the demands of the population for high quality, reliable and affordable voice and data services,” Sheikh Abdullah said in the statement. “We continue to work hard on preparing for Asiacell’s landmark IPO planned for later this year.”
Qatar Telecom, the Persian Gulf country’s largest company by revenue, has sought to expand outside its home market where it faces increased competition from Vodafone Qatar. (VFQS) The company teamed up with Princesse Holding of Tunisia in 2010 to buy Orascom Telecom Holding SAE’s 50 percent stake in Telecom Tunisie for $1.2 billion.
Qatar Telecom held talks with MerchantBridge & Co., a London-based investment company, to buy a 19 percent stake in Asiacell, Chairman Sheikh Abdullah bin Mohammed Al Thani said in January. Eric le Blan, acting chief executive officer of MerchantBridge, declined to comment by phone today.
To contact the reporters on this story: Robert Tuttle in Doha at rtuttle@bloomberg.net; Nayla Razzouk in Dubai at nrazzouk2@bloomberg.net
To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net
Telecom rivalry sees NZ shares fall - ONE News
New Zealand shares fell, as the weight of Telecom, the biggest company on the exchange, held back the NZX 50 Index in the face of a region-wide rebound. Telecom rivals Telstra and Vodafone today confirmed they're in talks to consolidate their local units.
The NZX 50 fell 31.20 points, or 0.9 per cent, to 3420.79. Within the index, 28 stocks fell, 15 rose and seven were unchanged. Turnover was a lower-than-average $62 million.
Telecom fell 4.1 per cent to $2.435 after Telstra, Australias biggest phone company, said it is in talks with Vodafone over the possible sale of its TelstraClear unit in New Zealand. A tie-up would create a stronger competitor for Telecom and possibly give Vodafone an advantage in making content deals.
A deal would create "a faster competitor" for Telecom, "building a bigger company than now and with their own content and network," said Mark Warminger, a portfolio manager at Milford Asset Management.
The decline in Telecom stock would provide a buying opportunity at some point, given the company's returns and 11.8 percent dividend yield, he said.
Sky Network Television, the pay-TV operator controlled by News Corp, fell 0.6 per cent to $4.90. The company's content deals with telecommunications companies are facing scrutiny from the Commerce Commission.
New Zealand shares fell as benchmark indexes across the Asia Pacific region rose, rebounding from a weekend of bad news including US jobs and manufacturing data. Australia's S&P/ASX 200 Index was 1.3 per cent higher in afternoon trading as the Reserve Bank cut its cash rate a quarter point as expected.
Fisher & Paykel Appliances fell the most on the NZX 50, down 5.6 per cent to 51 cents as the kiwi dollar edged up from its recent lows.
Xero, the online accounting company, slipped 0.5 per cent to $4.08 after Australian rival MYOB launched a promotion with Westpac offering free website services.
Rubicon, the biotech company focused on forestry, fell 10 per cent to 35 cents after announcing a fully-underwritten one-for-three rights issue to raise $21 million. The company will also extend its US$20 million bank debt facility through to July 1, 2014.
Kirkcaldie & Stains, the Wellington department store and property group, was unchanged at $2.80 after the investment vehicle of father and son businessmen Selwyn and David Cushing disclosed its stake has risen to 19.55 per cent, near the 20 per cent level that would trigger a full takeover.
Metlifecare was unchanged at $2.08 after saying an appraisal report by Northington Partners deemed its proposal to merge with Vision Senior Living and Private Life Care Holdings is fair to the rest home operators minority shareholders.
Nuplex Industries, the specialty chemicals maker, rose 0.9 per cent to $2.23 after saying full-year earnings would be at the bottom end of its range although second-half trading has met expectations and margins have improved.
During the period, in addition to challenging market conditions, exchange rates and raw material prices have fluctuated significantly, said chief executive Emery Severin. However, with our focus on managing those elements we can control, we have seen an improvement in unit margins.
OceanaGold, the operator of the Macraes gold field, climbed 11 per cent to $2.59 as the spot price of gold held its recent gains, trading at US$1,618.04 an ounce, from as low as US$1,538.05 last month.
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