Friday News Round-up: 24/10/14

24 October 2014 | Kavit Majithia

A summary of the week’s biggest telecoms news stories.

Operators look towards the startup
Both Telefónica and SoftBank announced plans to invest in startups outside of their home markets this week.

Spain’s Telefónica struck a partnership with innovative developer VLX Ventures in a bid to tap into the Israeli market, and the companies will look at developing startups across the country.

The collaboration is an interesting one. Telefónica will offer investment capital to a range of companies focussed on the telecoms verticals, including cloud computing, big data, the IoT, smart homes and wearable technologies.

Telefónica – which launched its Telefónica Digital entity as part of a move towards developing new services – said it was committed to Israel, given that it is a “country packed full of world-leading talent and innovative companies”.

Active Japanese player SoftBank also announced a partnership with tech investor Sequoia Capital, to spend $100 million in Indonesian startup player Tokopedia.

Global companies continue to target the pending growth in internet penetration across the country, with the amount of users expected to jump from 75 million to 125 million by 2015.

SoftBank’s investment with Sequoia Capital, which has previously financed a range of Silicon Valley startups, will leverage pending growth in Indonesia’s e-commerce market.

The country’s incumbent Telkom Indonesia announced it will also triple investments in the country in 2015, as part of growth plans for the sector.

Verizon not interested in Mexico
Verizon took the unusual step of distancing itself from a deal to acquire parts of América Móvil's assets after rumours emerged that it could rival AT&T in acquiring parts of the company.

América Móvil is looking for prospective buyers as the Carlos Slim-owned company looks to appease the country’s regulators by lowering its market share to below 50%.

Verizon’s CFO Francis Shammo told the world’s press this week that the company was not interested in América Móvil assets, and seemingly is not interested if AT&T were to make a play for those parts of the entity.

Several global operators are said to be interested in acquiring a chunk of the assets, and investment from an international player would be welcomed by the government, which is promoting the entrance of new companies.

Verizon’s announcement comes as a surprise, but it is doubtful that they are completely out of the running at this stage.

EE tops the charts in Europe
Despite all the rumours and speculation surrounding a potential sale of UK operator EE, the company announced this week it had added 1.4 million 4G subscribers to its network in Q2. The company is now the largest 4G player in Europe and it continues to grow its 4G offering.

With the UK market due to become even more saturated with the entrance of BT as a mobile player, the news of its growth in 4G comes as a welcome development.

Despite this, rumours that Orange and T-Mobile will look at either an IPO or a sale of the joint entity continue to surface, and the company’s CEO drew on low consumer spending as a potential factor for some of the troubles it is facing due to flat revenues.

EE forecasts it will have approximately six million 4G customers by the end of the year, and if both parent companies persist with the sale, EE could prove to be an attractive proposition for any potential buyer.

Kavit Majithia
News Editor