Daily Digest 31 July

31-07-2008

by Billy MacInnes

ComReg presses ahead with LLU changes | Sky falls in on BSkyB profits

The decision by ComReg to reduce the maximum monthly wholesale price Eircom charges for line sharing by 65 percent has come into effect -- at least until Eircom's appeal is heard in the High Court on 16 December. The regulatory body published its decision on 27 June, directing Eircom to reduce the price for local loop unbundling (LLU) line share charges to EUR2.94 a month. Eircom lodged an appeal on 23 July. But because Eircom has not sought to stay the new pricing until the hearing, ComReg has pressed ahead and brought the new regime into effect.

Satellite broadcaster British Sky Broadcasting Group (BSkyB) has posted a loss of STG127 million for the year ending 30 June, compared to a profit of STG499 million in 2007 -- despite a 9 percent increase in revenues to STG4.9 billion. The company said it had added 398,000 customers in 2008 and increased average revenue per user to "a new high" of STG427. But while retail subscription revenue increased by 11 percent to just under STG3.77 billion, advertising revenue fell 7 percent to STG328 million and BSkyB admitted it expected "an overall decline in the second half of calendar 2008". The company also announced it will cut 250 jobs.

Telecoms firm Colt grew its revenues 1.5 percent to EUR416.3 million for the second quarter of 2008, posting an increase in EBITDA of EUR8.6 million, or 12.7 percent, to EUR76.5 million. Higher margin data revenue grew by EUR18.7 million, or 9 percent, in the period, while lower margin voice revenue declined by EUR12.4 million, or 6.1 percent. After excluding the impact of reductions in fixed to mobile prices, voice revenue declined by 3.6 percent and total revenue increased by 2.8 percent. "After a strong first half, we expect to report improved results for 2008. Our outlook is however tempered with some caution given the current economic uncertainty," said Colt CEO Rakesh Bhasin.

BT Group's first quarter sales increased 3 percent to just under STG5.2 billion on the back of improved managed services, broadband and convergence revenues. Income from major corporate customers and business also increased, but the consumer space was broadly flat. BT's pre-tax profits declined 7 percent to STG613 million, but the company benefited from a reduction in tax rate from 24.8 percent in 2007 to 22.8 percent, compared to a UK statutory rate of 28 percent.

A 22 percent decline in sales of mobile devices has led to a fall in Q2 revenues at Motorola, despite improved performances by its home and networks mobility and enterprise mobility divisions. Revenues at the mobile devices unit fell to USD3.3 billion as it reported a loss of USD346 million for the quarter, compared to a loss of USD332 million last year. Motorola's other divisions contributed USD4.7 billion to the company's revenues, amounting to 59 percent of overall sales of just over USD8 billion. Increased profits from these divisions helped to neutralise the deficit from the mobile devices division, enabling Motorola to report an operating profit of USD5 million for the quarter, compared to a loss of USD158 million in 2007.

Mobile handsets appear to be impervious to the gloomy economic climate, with global shipments increasing 15 percent in the second quarter to 297 million. Strategy Analytics reported that Nokia had strengthened its hold on the number one position by gaining 41 percent of the global market. Samsung was in second place with a 15 percent share, while Motorola managed to retain third place and hold off the challenge from fourth-placed LG Electronics. Strategic Analytics said Apple's share had declined as it wound down stock of the previous iPhone and predicted the company would achieve a 1.1 percent market share in the third quarter, with 3.5 million units. But while lower prices would increase demand for the iPhone, the analyst firm also suggested "the iPhone is less valuable than many expected and, despite the hype, Apple is not invincible".

More than a fifth of the mobile games market was taken by the four largest games publishers in 2007, and the figure is expected to increase, according to a report from Screen Digest. It found that EA Mobile, Gameloft, Glu and THQ Wireless had doubled their global market share to 22 percent. At the same time, the value of the mobile games market is predicted to rise by USD1 billion to USD2.6 billion by 2012. Screen Digest also suggested the iPhone and other touchscreen handsets could have a significant effect on mobile gaming, pointing to the 10 million applications downloaded from the Apple online store in the three days after the iPhone 3G launch, but it noted that games could suffer from a lack of sophistication. It predicted North America would become the biggest market for mobile games next year, taking the lead from Asia.

Online DVD rental company Moviestar.ie claimed to have posted its 1 millionth DVD on Thursday, just under two years after the company was established. The recipients of the 1 millionth DVD, Michael and Debbie Williamson from Blackrock, County Dublin, were given free life membership of Moviestar.ie. The company launched a digital video-on-demand download service last month.