Personal communications services, which we define as communication and collaboration services that merge private, social and business communication in one personal view, are becoming part of the work environment. Services like Skype or Google Apps allow users to speak and send messages across multiple communications services to communicate and collaborate just as they would as consumers within a corporate context. Empowered employees expect to use these collaboration channels not just for personal use but also for work.
Although Skype has been around for more than decade, the market for personal communications services in a business context is still very much evolving. The personal communication experience is complex and challenging, as individuals wrestle with multiple communications services to manage an increasingly diverse set of communication and collaboration technologies.
At its annual Energy Analyst And Sourcing Advisor Event in Berlin, Deutsche Telekom/T-Systems re-emphasized its commitment to service the energy sector with a dedicated offering. Over the last three years, Deutsche Telekom has spent significant resources in building up expertise to become a platform and service provider for the utility sector. Our main observations during the event were that Deutsche Telekom:
As many market observers had expected for sometime, Nokia closed the chapter on what can only be described as a dramatic climb-down for what once was the world’s leading mobile player. Nokia agreed to sell its Devices & Services business to Microsoft for 5.4 billion euros. What does this mean for Nokia Solutions and Services (NSN), formerly Nokia Siemens Networks? I have several observations:
I expect that more change for both Nokia and NSN lies ahead. Nobody can accuse Nokia of shying away from fundamental transformations: from pulp producer, to electronic component supplier, to mobile phone company, to now what resembles a holding company looking after a network infrastructure business (NSN), a cloud-based mapping service (HERE), and a patents and a licensing operation (Advanced Technologies). I see no synergies between these operations. Hence, a breakup of Nokia followed by an initial public offering of NSN could be one possibility. At the Mobile World Congress 2013, NSN presented itself in a manner what - to me - looked like dressing up for an IPO: a lean and mean provider of mobile broadband network solutions.
Alas: It has finally happened. Vodafone has sold its 45% stake in Verizon Wireless to Verizon for $130 billion in a part cash ($58.9 billion) and part equity deal. The deal values the 45% stake at 9.4 times EBITDA. Markets had been speculating about this deal for years, so why has it taken place now? Arguably, the decision was made easier by Verizon’s share price, which is at a decade high, as well the the potential for rising interest rates. From Vodafone’s perspective, our main observations are that:
The deal is strategic for Vodafone and financial for Verizon. While the deal is a strategic transaction for Vodafone – it has decided to exit the US market – it is a financial transaction for Verizon: It already controlled Verizon Wireless through its 55% stake in the business. But after Vodafone’s exit, Verizon can keep the cash and no longer needs to pay out a dividend to Vodafone. It can instead use this retained dividend cash flow for capital expenditures and other investments to help boost its position in an increasingly competitive US wireless market (e.g., Softbank + Sprint; T-Mobile + MetroPCS).