UPDATE:Vodafone Launches Own 3G Handsets; In Talks On 2G

HONG KONG -(Dow Jones)- Vodafone Group launched its first own-brand consumer cellphone based on third-generation technology Thursday, and said it is exploring possibilities to make second-generation mobile handsets under its brand.

The company is talking with several parties including Chinese handset manufacturers, Vodafone group director of terminals, Jens Schulte-Bockum, told reporters following the launch of the new handset in Hong Kong.

“We are in discussions with many different players,” said the executive. “There is no front runner…we continue to monitor the space.”

He didn’t provide more specific details.

The new clamshell 3G handset, called Vodafone 710, will be launched across Europe from early October, the company said in a statement.

The handset will be supplied by China’s Huawei Technologies under an alliance signed by the two companies in February.

Schulte-Bockum said Vodafone is aiming to sell a minimum of 200,000 3G units in the next six months. Vodafone is also aiming to launch an upgraded version of the handset in early summer next year.

The executive said the handsets will cost 30% less than the handsets manufactured by first-tier manufacturers such as Nokia, Motorola and Samsung Electronics among others.

Huawei isn’t Vodafone’s first partner for original design manufacturer handsets. The company has a partnership with Taiwan’s High Tech Computer to supply handsets for business users.

The executive said the company is aiming to have around 3% to 5% of the handsets it offerscarry its own brand sometime in 2007.

Vodafone’s handset volume is around 45 million, of which a third is 3G handsets, according to Schulte-Bockum.

As part of the company’s aim to further boost the number of Vodafone-branded handsets and devices, the company also said Thursday it has relocated part of its terminals division from Japan to Hong Kong to better source new devices and negotiate contracts with Asian manufacturers.

On whether Vodafone has any near-term plans to increase its stake in China Mobile, the executive said: “We believe the current stake we have in China Mobile gives us a very good presence in China. I’m not aware of any plans to change the current position.” Vodafone has a 3.27% stake in China Mobile.

Vodafone has been paring its holdings in slow-growth markets, with the mobile operator agreeing in August to sell a 25% stake in Belgian mobile phone operator Proximus for $2.6 billion.

Source- http://www.cellular-news.com

Option Shares Plunge 25% On Nokia Competition Fears

BRUSSELS -(Dow Jones)- Shares in Belgian wireless technology company Option lost a quarter of their market value Thursday after Finnish technology giant Nokia said it had developed a rival to its flagship product.

The data card maker, which had EUR198.6 million in revenue in 2005, compared with Nokia’s EUR34 billion, has had a head start in the development of state-of-the-art high-speed Internet access cards that can be embedded inside laptops.

But Nokia’s announcement that it has developed its own embedded card and will team up with Intel to produce it for laptop makers has roused fears of a squeeze on Option’s market share and profits.

In a double blow, Japan’s biggest telecom operator Docomo also announced a deal with US mobile phone maker Motorola to market Motorola’s high-speed Internet access cards. Japan is the world’s largest market for third-generation wireless services, which allows e-mail access, Internet browsing and video streaming.

“For several months now, Option has been hinting at the potential that Japan represents,” said KBC Securities analyst Nico Melsens who has a buy rating on Option.

There are other Japanese operators such as SoftBank/Vodafone KK and eMobile, but these are smaller and offer less growth opportunities, he said. Option has been a hot stock on the Belgian market, doubling its share price over the last year as demand soars for its market-leading products.

Earlier this year it produced the world’s first data card that integrates two leading 3.5G Internet access technologies, HSDPA, or High-Speed Downlink Packet Access and WLAN, or Wireless Local Area Networks which use radio waves instead of cable to connect to the Internet.

Bank Degroof analyst Siddy Jobe said it was too soon to say how badly the company would be hit by the Nokia competition.

This year, most of Option’s revenue is expected to come from data cards that plug in to laptops when the user requires wireless Internet or e-mail access, with only 6% coming from embedded cards.

In the future, however, the embedded cards market is expected to take over as the mainstream product, he said.

“So far we didn’t expect players like Nokia to enter this market,” Jobe said. “It is a new market with high-growth figures and very good margins.”

Increased competition would eat into market share and increase pricing pressure and could hurt Option’s business model in the longer term, he added.

In its favor, Option has a 20-year head start on Nokia in the technology and is purely focused in the datacard market with several world firsts to its name. And Nokia still needs to show it can deliver a strong alternative.

If it can’t, it could always decide to buy the technology in instead, and Option could then top the list of targets, analysts said.

Source- http://www.cellular-news.com

Tele2, Versatel to merge Dutch, Belgian operations

Tele2 and Versatel have agreed to merge their Dutch and Belgian operations. The merger will take the form of Versatel acquiring Tele2’s Dutch and Belgian operations. Versatel will issue new shares to finance the transaction, with all shareholders able to participate in the share issue on a pro rata basis. Versatel said as well that it may need to raise capital to complete its business plan, although has yet to decide whether this would take the form of a debt or equity issue. Versatel and Tele2 have been working to complete their merger for nearly a year. While Tele2 holds a majority of shares in Versatel, opposition from minority shareholders has held up the legal merger of the companies.

Source- http://www.telecompaper.com/news/article.aspx?id=138199