Pipeline Publishing, Volume 7, Issue 5
This Month's Issue:
Wireless for Developing Markets
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NewsWatch: October — M&A and Other News
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As business combinations make some telecom providers larger and more diverse, with increased triple and quadruple play offerings for customers, there will also be room for much smaller, niche companies to be very profitable.

Room for Small, Niche Players

Frontier Communications’ announcement of $40 million to expand broadband in Illinois in 2011, part of its goal to provide 85 percent of its Illinois customers with broadband by 2013, will provide higher revenue services in areas where the company is the only or one of only a couple of choices for such services in the state, according to Sapien.

Beyond the desire for additional revenues, the company was likely under some pressure to expand its broadband offerings as a result of the approval of the acquisition of the $8.6 billion in wireline assets from Verizon, according to Sapien.

There will also be room for much smaller, niche companies to be very profitable.

Ovum predicts that the market for MVNOs will hit 85.6 million connections in 2015, up from 53 million in 2009. Meanwhile revenues will reach $9.5 billion in 2015, up from $8 billion in 2009.

Change at the Top

The month also saw the announcement of the passing of the torch at Amdocs Limited. Dov Baharav, the company’s president and CEO, will retire in the first quarter of calendar 2011 and will be replaced by Eli Gelman, a current director and former executive vice president and chief operating officer.

“Dov began his tenure at a difficult time for the company and led it to new heights,” said Amdocs chairman Bruce Anderson. “During his years as CEO, Amdocs doubled its revenue,

The market for ‘no frills’ mobile operators such as Tesco will increase over the next five years as more and more people opt to select their service as they shop, according to a recent Ovum report.

The supermarket giant and other established retailers will see increased success in the ‘no frills’ mobile market as more people turn their backs on traditional players and go for convenience, according to Ovum.

Tesco and its counterparts are mobile virtual network operators (MVNO), buying minutes from traditional players to sell to their own customers.

It is a model that works well, as all the retailers need to do is free up shelf space for their mobile offering, then focus their resources on marketing, distribution and sales, leaving the networking issues to the traditional operator.

significantly grew its product and services portfolio, expanded its global presence, and, ultimately, became the world’s leading provider of customer experience systems.”

It’s unknown at this time what changes might be in store for the company stemming from the change in leadership. During the conference call following the announcement of the change in early September, Gelman said: “I think it's a little bit premature for me to strategize. I can tell you in terms of my personality and the way I look forward, I like to do big things and to take the company to higher places and new places. But whether it is in one direction or the other I think it will be almost irresponsible for me to really share it with you at this time.”

The new business combinations among telcos will provide Gelman with some interesting challenges in the years ahead.

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