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SIMalliance Open Mobile API Release 2 now available

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With SIMalliance Open Mobile API Release 1 being specified by an increasing number of mobile network operators and already implemented by some handset manufacturers as the de facto standard for access to the Secure Element (SE), SIMalliance today announces the availability of its Open Mobile API Release 2.

Featuring a new service layer, the new Open Mobile API Release 2 enhances the current transport API to provide a more intuitive interface and increasingly powerful functionality to make it easier for developers to connect their applications to the Secure Element within todays feature phones and smartphones. ??By choosing to implement the Open Mobile API, handset manufacturers will be able to enrich their application portfolios through the introduction of a host of mobile services that demand the highest levels of security and identity protection afforded by the Secure Element.

For developers this common API eliminates the need to reengineer applications to each specific device by delivering a single, consistent specification and interface across multiple operating systems. By making the move, application developers will be able to manage costs, and reduce time to market and revenue.

In addition, a common set of reusable high level services as crypto, file management, discovery, PKCS#15 and secure storage, allows developers to allocate time and resource to developing the functionality of their application rather than focusing on the complexities of integration with the device’s Secure Element.

According to Frédéric Vasnier, Chairman of the Board, SIMalliance: “The importance, and the adoption, of Secure Element(s) in the device is now beyond question. The challenge for the developer community has always been how to access SE(s) to fully secure their services in the most straightforward manner. With the launch of the SIMalliance Open Mobile API Release 2 that barrier has now been removed and will stimulate the creation of a host of new payment, loyalty and identity management services.”

To download the Open Mobile API Release 2, click here.

 Note that the Open Mobile API Transport Test Plan V1.0 is also available here.

The Open Mobile API Release 2 will be showcased as part of a Webinar on Secure Authentication for Mobile Internet Services on 1st of December at 15:30 GMT (London), 16:30 CET (Paris), 7:30 PST (San Francisco).

 Join Us for this FREE Webinar on www.simalliance.org/webinars.

A white paper: ”Secure Authentication for Mobile Internet Services – Critical Considerations” will be published that same day.

The businesses that are getting the axe at Nokia Siemens Networks

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Carrier ethernet, CES, WiMax, broadband access, fixed VoIP, BSS all to go in NSN clearout

Nokia Siemens Networks has outlined plans to focus on just a few core elements, with all non-core lines of business to be sold or put into “maintenance”. The decision will result in 17,000 job cuts and a proposed €1 billion opex and overhead savings by 2013.

NSN’s official position is that the Mobile Broadband (including optical), CEM (including subscriber data management technology) and Services businesses are core, and therefore will be staying — supported by increased investment. Everything else is non-core, and will either be sold or mothballed.

At NSN’s press conference CEO Rajeev Suri appeared reticent to identify the exact areas of business that NSN would be walking away from. Yet Mobile Europe has seen extracts from what it was told was an internal company email that outline just what units will go.

That internal communication said: “perfect voice (fixed-line VoIP), broadband access, WiMAX, narrowband, carrier Ethernet, business support systems (BSS), and communications and entertainment solutions (CES) – will be targeted for exit (possibly through divestment) or put in maintenance mode.”

On the press conference, although pushed for details, Suri would only commit to saying that NSN’s “fixed line” assets would now be non-core. (The microwave business has already been sold in a deal with Dragonwave).

With 17,000 jobs due to be cut by 2013, NSN was clearly keen not to get drawn into specifics of where and when jobs would go – especially as it has not yet started negotiating with the relevant parties, unions or governments.

The company, however, told its employees that the business will be separated into four categories: lead, attach, adapt and exit or maintain:

Its businesses break down within that proposed structure like this – with the businesses facing an exit clearly listed.

LEAD
Mobile Broadband and Customer Experience Management will be the lead businesses, where NSN will maintain or increase investments.

ATTACH
Care and Network Implementation – both part of Global Services – will be attached closely to, and expected to perform in parallel with, NSN’s lead businesses.

ADAPT
Managed Services and Consulting and Systems Integration – also both part of Global Services – will be adapted to meet NSN’s narrower portfolio and deliver greater profitability. Optical Networks will also be in this category, with a focus on building a strong base of select customers and leveraging its strong linkage to mobile broadband. 

EXIT or MAINTAIN
A wide range of other businesses – such as perfect voice (fixed-line VoIP), broadband access, WiMAX, narrowband, carrier Ethernet, business support systems (BSS), and communications and entertainment solutions (CES) – will be targeted for exit (possibly through divestment) or put in maintenance mode.  Our recently announced plan to sell microwave transport to Dragonwave is an example of this approach.

Suri told journalists that the company was well-placed to benefit from this new, focussed strategy, and he predicted that others would be forced to follow. Any line of business where the company was not placed first or second by market share made R&D investment in that business difficult to justify, Suri said.

“We are the first company to decide to focus on this sector (mobile broadband) while others remain committed to that [end to end approach]. The industry does not any longer allow for end to end players to be successful. So this give us a clear opportunity to differentiate,” Suri said.

“Our customers have welcomed these changes. We are the first company to make these difficult choices, and they are looking for others to do the same,” he said.

Defending the company’s strategic turnaround since the lows of the 2008-2009 financial crash, Suri said the company thinks it is a strong second place in mobile broadband, with 1.3 times and 1.7 times the share of the third and fourth placed companies, respectively.

Liquid Net has established the company as a leader of innovation, and is the benchmark of network architecture globally, Suri said. In CEM and SDM, NSN is recognised as having the “smartest toolbox” and has made a significant breakthrough in SaaS innovation, he added. The services business is taking a new base station on air every 95 seconds, and has taken multi-vendor network management mainstream – with some 60% of its managed network elements multivendor in nature.

The company has delivered five quarters of year-on-year sales growth, and in seven out of the last eight quarters NSN achieved an operating profit, although Suri said “we are far from satisfied with our profitability”.

Nokia Siemens Networks outlines €1 billion cuts for “independent future”

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Nokia Siemens Networks has said it will in future focus on mobile broadband and services, as it cuts 13,000 jobs and €1 billion from operating expenses, to prepare the company for the prospect of an independent future.

Key points:

  • Focus to move to mobile broadband and services:
  • 17,000 jobs to go by 2013
  • operating expenses and production overheads reduced by €1 billion by the end of 2013
  • savings to come from “elimination of the company’s matrix organizational structure, site consolidation, transfer of activities to global delivery centers, consolidation of certain central functions, cost synergies from the integration of Motorola’s wireless assets, efficiencies in service operations, and company-wide process simplification
  • CEO Suri says action needed to prepare for “prospect of an independent future”

Full statement from Nokia Siemens Networks reproduced below:

Nokia Siemens Networks today announced its strategy to focus on mobile broadband and services and the launch of an extensive global restructuring program.

 

“We believe that the future of our industry is in mobile broadband and services – and we aim to be an undisputed leader in these areas,” said Rajeev Suri, chief executive officer of Nokia Siemens Networks. “At the same time, we need to take the necessary steps to maintain long term competitiveness and improve profitability in a challenging telecommunications market.”

Strategy update
Nokia Siemens Networks will target end-to-end mobile network infrastructure and services, with a particular emphasis on mobile broadband.

“Our goal is to provide the world’s most efficient mobile networks, the intelligence to maximize the value of those networks, and the services capability to make it all work seamlessly,” said Suri. “Despite the need to restructure parts of our company, our commitment to research and development remains unchanged, with investment in mobile broadband expected to increase over the coming years.”

Nokia Siemens Networks plans to realign its business to focus on mobile broadband (including optical), customer experience management and services. The company’s Services organization will further strengthen its highly-efficient global delivery system. Business areas not consistent with the new strategy are planned to be divested or managed for value. Quality and innovation will continue to be priorities for the company, with ongoing investment in both areas.

Restructuring program
Nokia Siemens Networks targets to reduce its non-IFRS annualized operating expenses and production overheads by EUR 1 billion by the end of 2013, compared to the end of 2011. While these savings are expected to come largely from organizational streamlining, the company will also target areas such as real estate, information technology, product and service procurement costs, overall general and administrative expenses, and a significant reduction of suppliers in order to further lower costs and improve quality.

Nokia Siemens Networks plans to reduce its global workforce by approximately 17,000 by the end of 2013. These planned reductions are expected to be driven by aligning the company’s workforce with its new strategy as well as through a range of productivity and efficiency measures. These planned measures are expected to include elimination of the company’s matrix organizational structure, site consolidation, transfer of activities to global delivery centers, consolidation of certain central functions, cost synergies from the integration of Motorola’s wireless assets, efficiencies in service operations, and company-wide process simplification.

Nokia Siemens Networks will begin the process of engaging with employee representatives in accordance with country-specific legal requirements to find socially responsible means to address these reduction needs. More information will be shared in impacted countries as the process proceeds. In order to reduce the impact of the planned reductions, Nokia Siemens Networks intends to launch locally led programs at the most affected sites to provide re-training and re-employment support.

“As we look towards the prospect of an independent future, we need to take action now to improve our profitability and cash generation,” said Suri. “These planned reductions are regrettable but necessary – and it is our goal to make them in a fair and responsible way, providing the support we can to employees and communities.

How operators could gain from more network sharing

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Peter Jackson, Director, Europe, Communication Components Inc (CCI) says that sharing cell-site infrastructure in today’s competitive and crowded mobile environment must increasingly be accepted as standard practice by operators. By doing so, not only will they make serious opex and capex savings, but they will also attain optimum capacity and coverage levels over which to deliver the high-value content and services that, today, from their core, revenue-generating activities.

Ten years ago, ‘Focusing on core business to maximise revenues’ typically described, for a mobile operator, their race to attract new subscribers and retain hard-won existing users by rolling out network hardware, filling in coverage gaps, conducting 2G/2.5G optimisation issues and generally making sure that all was well in the land of base stations and towers, microwave links and remote electrical tilting (RET) antennas.

When a base station appeared in a town or the countryside it was typically the property of a single operator and its visible wireless furniture was restricted to a set of three or four directional planar antennas and one or two microwave radios linking it, line-of-sight, to other base stations and into the PSTN. Poor coverage, dropped calls, poor QoS were the operator’s nightmare and the major reasons for churn, hence, core focus on infrastructure.

But today, content and services are the core revenue-generating, subscriber-attracting focal points of operators, and strict ownership of infrastructure is not as essential to them as it used to be. As long as a Service Level Agreement, including such parameters as available capacity, call quality, dropped call ratio and blocked calls, is provided by the 3rd-party infrastructure provider, it is feasible that the operator will consider outsourcing, or, at least, sharing RF infrastructure.

 

It’s Good to Share
Sharing RF infrastructure at a time when base stations are under more stress and pressure than ever before makes good business sense for operators who need to sweat their assets to maintain revenues and remain competitive. It also means they will be able to decommission many existing cell sites – and eliminate the costs of running them – as they will no longer be needed to duplicate coverage.

With towers often awash with several operators’ antenna systems, numerous microwave radios and, on occasion, playing host to different technologies, e.g. UMTS and LTE, now is not the time for operators to ignore the smooth, cost-effective operations of their basic network building blocks; they must still keep a close eye on their infrastructure and how it’s being managed. Inefficient tower overcrowding is a surefire recipe for potential interference, and poor installation and maintenance problems increase in likelihood the more equipment is installed on any one tower.

And if a problem happens at the base station it invariably does not stay at the base station. A glitch caused by any number of equipment issues, such as a poorly sited antenna system, or by badly installed or poorly maintained powered amplifier causing passive intermodulation (PIM), can easily degrade the whole network’s performance, reduce coverage, be the cause of dropped calls, and become the root cause behind poor, churn-inducing customer experience.

Needless to say, as the daily pressure on cell sites to deliver more in terms of capacity and coverage has increased, so too have site running costs. To reduce these costs, and eliminate the risk to network performance and spectrum efficiency due to overcrowding, operators need to consider their cell-site infrastructure-sharing strategies in detail.

Efficient cell-site equipment sharing – not simply sharing a tower – can call on several solutions which are readily available and can deliver increased site capabilities without impacting network performance. Equipment such as low-loss combiners and multiplexers will help reduce capex and overall opex by enabling operators to share infrastructure viably, including RF equipment, as well as add new technologies such as LTE, without compromising network quality and performance. A new breed of passive, tuned filters for combined operations, for example, can bring operators together within the same band and with virtually no losses. Their use ensures the operators’ respective services are protected and network performance remains at least as good as it was prior to sharing. By not sharing equipment operators can find themselves at a serious disadvantage to their competitors.

To illustrate the potential problems, which can arise if operators do not share equipment such as antenna systems, let’s take a tower supporting four mobile operators in the same band. Each has its own antenna system, and in such a scenario there is usually a minimum vertical-separation requirement of 2m between antennas to avoid cross coupling and interference. If these four are not sharing antenna systems, their individual, 3m-high antennas (typical 900MHz high gain antenna length), together with the 2m vertical separation between each, will take up 18m of a 30m tower. As RF signal coverage and range will lessen the closer to the ground the antennas are, the bottom antenna will, as a result, achieve the worst propagation.

The height of the radiating element matters and is a key factor in delivering good coverage. If these four operators combined into one antenna, they would benefit from optimum height and tower positions and, therefore, optimum range and coverage. In an outsourced arrangement, the independent infrastructure provider can ensure prime antenna position and optimum level performance for all users through the use of passive filter combiners – and with lower costs all round.

Conclusion
With the right planning and the use of suitable solutions, the cost/performance benefits of site and equipment sharing to the mobile operator are potentially huge. Being able to share infrastructure right through to the RF system, without compromising network QoS, suggests an attractive alternative to the operator than one of higher costs and potentially worse coverage.
Clearly, it’s good to share.

Operators worried by loss of core revenues: split over IMS answer

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Half of 31 operators interviewed by research company Mobile Squared have said they expect competition from over the top apps to eat significanty into voice and messaging traffic and revenue over the next 5-10 years.

Mobile Squared, commissioned by Mavenir, asked the operators what they thought the impact on their businesses would be from “OTT” applications such as Skype, iMessage and WhatsApp. 32.3 per cent of respondents thought operator traffic (from messaging, voice and video calling) would decline between 11 and 20 per cent and a further 20 per cent expected a decline of 31 to 40 per cent over the next 5-10 year period.

Gavin Patterson, chief markets analyst & head of data at Mobile Squared said, “This study confirms that lucrative messaging revenues are already impacted and operators are assessing ways to deliver core-network services in the all-IP environment. Rich Communication Ecosystem (RCE) applications are one example of how mobile operators can overcome the hurdles they face.” 

The operator sample surveyed by Mobile Squared were split fairly evenly in terms of how they would address the deployment of simlar services. 42 per cent of operators said that they would roll-out IP Multimedia Subsystem (IMS) based services to offer RCSe and VoLTE, while 45 per cent of operators think that other similar technologies would enable a quicker route to market.

Shubh Agarwal, Vice President, Marketing of Mavenir Systems, said, “This is one of the primary reasons the industry is currently moving towards an all-IP converged core network accelerated by the deployment of LTE technology. By allowing users to place high definition voice and video calls, chat, share content, and discover new services as part of a globally connected framework, operators can retain and even grow their share of customer communication spend.”

MTS to deploy data optimisation across entire network

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Mobile TeleSystems (MTS) has said it will reduce its  mobile network data transmission load by almost 40%, and its transit load by 30%, as a result of implementing optimisation technology from Flash Networks. The Russian operator said it will deploy Flash Networks’ Harmony Mobile Internet Services Gateway across its entire Russian footprint by the end of 2011, using the technology to “optimise” up to 90% of its mobile internet traffic.

Harmony compresses and controls the flow of picture, video, and other mobile data in order to reduce mobile network traffic load. MTS launched a pilot project to test the technology for all customers in Murmansk. The solution is being deployed in MTS’ network together with the Russian system integrator Technoserv.

“The solution introduced by MTS will provide our customers with faster and more convenient internet access as the up-to-date text and multimedia compression technology applied by Flash Networks optimises data in a way practically imperceptible to the human eye,” said Sergei Stepanyuk, Head of Data Transmission Department at MTS. “Using the data optimisation platform allows us to reduce our mobile network data transmission load by almost 40% and our transit load by 30%, ultimately resulting in faster Internet speeds and better quality of data services for our users.”

“We are pleased to offer MTS the most advanced solution for managing traffic while providing mobile internet services. Harmony enables MTS to optimize up to 90% of its mobile internet traffic, including web and video applications, and to provide complete data services to its subscribers,” said Merav Bahat, Vice President of Marketing and Business Development at Flash Networks.”

 

Don’t judge O2 on this LTE trial

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O2 announced at the start of the week that it has launched a live LTE trial in central London. The head of the project, Rob Joyce, told Mobile Europe that the trial would map onto existing cell sites, and would therefore be a macro-based trial.

He also said he was confident that the trial would offer good in-building coverage, as O2’s 3G network works well indoors and so, therefore, it seems likely that LTE signals at a nearby frequency would also provide good coverage.

Both these statements attracted some interest. First, a comment from iBwave on our site stated that perhaps O2 knows something about in-building coverage that others don’t.

“When you look at things on paper, it appears that in order to achieve higher data rates (which is the main reason why LTE is being adopted), you also need a cleaner signal, i.e. better signal-to-noise-and-interference, than with 3G. And thus, in many cases, a simple LTE upgrade will NOT suffice, additional antennas/cells WILL be needed. Or maybe not, but then what’s the trick?”

Another comment we received, from TE Connectivity, took a very strident view on the necessity of small cells plus Distributed Antenna Systems to achieve full benefits from LTE networks.

Tony LeFebvre, director of product management at TE Connectivity, told us:

“A major problem with this trial is that it appears O2 will be delivering signals via the traditional macro tower architecture, which has already proven to be insufficient for 3G services. When considering that LTE services will require three – five times as many base stations, it seems unlikely that 25 masts within a 15 square mile radius will be enough. Making cells smaller is the most efficient way to deliver higher capacity per cell. By using smaller cells and the right products, operators can deliver high-quality service throughout a coverage area without the dead zones so common in macro networks. By combining with small cell architecture, such as Distributed Antenna Systems (DAS), operators would then be able to distribute this increased capacity via remote antennas to exactly where it is needed. Not only will this overcome any potential opposition to the erection of more masts within urban areas, but it will ensure that operators are in a position to provide the capacity required for future smartphone demands.”

You shouldn’t, though, get the impression that O2 is anti-small cells, or even anti deploying dense in-building networks. Joyce stated that this trial is intended to monitor the macro network performance, and that the operator is fully aware it will need to move to a Het Net approach as usage develops. Indeed, O2 itself has equipped its own HQ in Slough with a small cell on every floor, so it knows the value of small cells in providing in-building coverage. And it will be providing small cell LTE coverage at the O2 arena in Greenwich.

Additionally, O2’s trial supplier, Nokia Siemens Networks, will be keen to trial its Liquid Radio approach, and backhaul supplier Cambridge Broadband Networks is specifically geared to provide high capacity backhaul for dense small cell networks. If the suppliers have anything to do with it, O2 will be checking out a dense, small cell approach sooner rather than later.

I think, then, that when it comes to LTE network architecture, we shouldn’t read too much into O2’s current trial. And, of course, if all the small cell proponents are right, then the trial will swiftly show up the limits of the macro-only approach.

This week, Cisco announced that it has won a big contract to install lots of WiFi coverage at Real Madrid’s stadium in Madrid. The football club is using WiFi to offload a lot of data, and free up the mobile network for calls and those without WiFI devices. So what better illustration, then, of the relevance of our two upcoming webinars, the first looking at how to design high capacity networks in stadiums, and the second at how operators can build carrier-grade WiFi networks.

Please do register to find out more on these topics: Stadium design and WiFi Offload. Both events feature independent analyst comment, as well as expert information from the sponsors — who are iBwave and Ixia, respectively.

Finally, I’d like to draw your attention to a bout of mobile payments news: in Sweden, in Poland, from the GSMA and from Inside Secure. Check out the links to the left. There is increasing momentum in this field, even if not all of it is as focused as it could be on driving mass adoption. Although the Swedish JV is a sign of increasing cross-operator momentum, we can also view announcements such as that from Poland as continued evidence that there is, at the same time, a need for a piecemeal approach that is simply about getting a solution, any solution, into users’ hands.

Have a good weekend,

Keith Dyer?
Editor?
Mobile Europe

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Swedish operators to form payments joint venture

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Telia, Tele2, Telenor and 3 have followed operators in the UK, USA and Denmark, by announcing their intention to form a mobile payments joint venture.

A statement from Telia said that cross-operator mobile payment services, offered by the joint venture, will be available by summer 2012.

The operators hope that by working together they can create greater scale, expanding the range of transactions that consumers carry out via mobile. A joint company for all types of mobile payments would make payments easier and safer for consumers, the operators said. Additionally, a cross-operator solution would enable users to change operator more easily. 

The operators also said that merchants and partners will also, by working with a single cross-operator party, be subject to less administrative cost, and be granted greater security.

The joint venture is equally owned by Telia, Tele2, Telenor and 3. The intention is that all Swedish mobile customers, contract and prepaid, will have access to the combined payment service by summer 2012. Recruitment for a CEO for the joint venture has begun. Telia’s statement said that there would be more information on the JV made available in early 2012.

Moves to create a similar JV in the UK have been hit with protests from 3 UK, which was not asked by O2, Vodafone and Everything Everywhere to join the m-commerce JV. The UK approach, if it gains competition clearance, combines NFC payment and mobile wallet services along with a cross-operator mobile advertising and marketing network. It’s not clear yet if the Swedish operators intend to go beyond a payments tie-up.

In the USA, AT&T, T-Mobile and Verizon formed Isis with the original intention of creating an operator-led NFC-payments and mobile wallet service. Isis has announced it will begin pilot programs in Salt Lake City and Austin next year, and just recently added that it is building relationships with three card issuers to put card services onto NFC-enabled mobiles.

In Denmark, TDC, Telenor, TeliaSonera and 3 said they would build a common platform and brand for NFC mobile payments, loyalty, ticketing and wallet services. The operators have said they would have a limited launch by the end of 2012, followed by larger rollouts in 2013.

(Thanks for Lars Aase at Accumulate for alerting Mobile Europe to this story. Lars’ blog post on the news can be read here)

 

 

Another piecemeal m-payments service – this time in Poland

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Visa Europe, mBank and MultiBank launch mobile payments project for Apple iPhone users in Poland

Participants given iCarte accessory to enable them to use their Apple device for contactless payments at point of sale terminals

Visa Europe and its partners, mBank and MultiBank, today launched a project to bring NFC mobile payments to Apple iPhone users in Poland.

Participants in the project will be given the iCarte clip-in accessory created by Wireless Dynamics inc. and Visa Europe to attach to their third generation iPhone, or an iCarte case to use with their fourth generation device. Once they have downloaded the companion Visa Mobile application and associated the device with their bank card, they will be able to use their smartphone in the same way they use contactless card payments today to make payments of up to the value of 50 zloty (approx. €12) without needing to enter their PIN*.

Poland has a rapidly maturing contactless payment infrastructure covering 35,000 enabled retailer point of sale terminals, so consumers are already benefitting from faster contactless payments. Thanks to the Visa Cards Accepted Everywhere programme, the number of contactless terminals will top 200,000 by the end of 2015. The latest project signals the start of a broader contactless payments programme for consumers that will bring the technology to more devices. The project will also assess how solutions such as the iCarte accessory can bring mobile payments to older smartphones that are not equipped with NFC technology, which is a key barrier for the industry.

“mBank and MultiBank are the first to put iPhone mobile payments into action in Poland, using the Visa Mobile contactless application,” said Gosia O’Shaughnessy, Visa Europe Senior Vice President, General Manager for Poland, Czech Republic and Slovakia. “Contactless payments using devices such as the iPhone are fundamental to Visa Europe’s strategy for robust development of mobile payments. By testing contactless mobile payments on a project basis such as this, we can perfect the technology to offer ultimate customer ease of use and convenience.”

“We are launching the mobile payments pilot for holders of iPhone devices because it is from these devices that our clients log into our transaction service most frequently. Our statistics show that as much as 35% of all log-ins to MultiBank are from Apple handsets. At mBank, too, this proportion is high, running at 20%,” explains Pawe? Kucharski, Director for Marketing and Retail Banking Business Development of BRE Bank. “The solution provided by Visa makes it possible to learn the new form of payments for a growing number of users, and simultaneously it adds another important functionality to the popular iPhone,” Kucharski adds.

The first stage of the project, which will run for three months, will see the mobile payment services become available to MultiBank and mBank’s customers and employees. After the initial deployment, invitations to test the solution at a second stage will be sent to those who entered a competition via the banks’ websites.

We will follow, not lead, says Vimpelcom

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Russian operator Vimpelcom has presented a “new strategy” to investors — called ‘Value Agenda 2012-2014’. The operator said that the focus of its strategy is now on maximising cash flows, even at the expense of higher revenue growth. This means that the operational effectiveness of the combined company moves to the forefront of attention.

The headlines of Vimpelcom’s strategy are:

Sector follower, rather than sector leader
CEO Jo Lunder claims that he does not believe in first move advantages, preferring to stick to best practices, maintaining flexibility, and keeping options open.

Greater freedom for regional business units
Only two functions will be centralized under the new business structure: procurement and roaming. Other functions are to be performed on the regional level.

No big cross-border M&As are planned
With the big transformation phase over, only local M&As are possible in the intermediate term. $5.1bn of additional revenue by 2014. Management expects to add $4bn of revenue from mobile data, which is set to grow at 13% CAGR 2012-2014. It is also guiding for $1bn more in fixed data revenue, which is set to grow at 11% CAGR. Finally, the company anticipates an extra $0.1bn in mobile voice revenue, a segment estimated to grow at 1% CAGR.

Capex
The company plans a cautious stance on capex for the upcoming years. Management intends to reduce capex as a share of revenue from its 2011 level of ~20% to 15% of revenue iin 2014.

Decision on Euroset deal to be announced in January 2012
VimpelCom is currently mulling the pros and cons of exercising an option to acquire a 25% stake in Euroset. Since VimpelCom management intends to improve the operational effectiveness of its distribution channels, which implies more focus on its own retail network, the management needs to consider different options of increasing its retail network in Russia.
Djezzy issue could be delayed. As the VimpelCom Board of Directors recently decided not to prolong a revenue sharing agreement on Djezzy, which is a riskier option, we think there is a good opportunity for VimpelCom  to see upside from Djezzy. There is no timeline for the government to decide on nationalization.

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