UK

Virgin Mobile Fishing For Extra Cash – Vodafone and FT Interest
Both Vodafone and France Telecom are now considering a rival bid for Virgin Mobile, following a “unanimous” decision by the Virgin board to reject the starting offer from NTL. Financial sources say both companies have asked to look at the Virgin Mobile books.
This means that if NTL wants to buy the brand and put it on all NTL products, it will have to come up with a bigger offer. NTL, waiting for the Stock Exchange to open before making any announcement, is going to have trouble finding the money after its big takeover offer for Telewest, say finance analysts.
It also means a nasty gap in the future of T-Mobile, which provides the network for Virgin as a virtual network; neither France Telecom nor Vodafone would renew that contract, and the loss could be crushing, following T-Mobile’s defeat in the contest to buy O2.
Virgin founder Sir Richard Branson has told reporters he is sure the deal will go ahead.
From Australia, Forbes quotes Branson as saying that the new company will be formed and will be called Virgin TV – all it will take, he added, is a small increase in the offer. He said the current offer under-valued the company in the eyes of his fellow directors, but that “the difference between what they’ve asked for and what NTL has offered is not considerable in financial terms.”
According to the Times, the difference is between the current offer of £817 million and a hoped-for bid of £891m – increasing the bid to 345 per share while the Guardian thinks the extra needed is rather less at 340 pence.
Guy Kewney write extensively, and quite brilliantly, in lots of places, including NewsWireless.net
8 December, 2005
ITV Buy Friends Reunited: Why?
The Digital-Lifestyles office is in a state of total confusion over major UK broadcaster, ITV, buying the Web Site, Friends Reunited (FR).
Our reaction when we initially heard of the deal was – What? Why? How much!?
It’s been widely reported that ITV is paying £120m + £55m in bonuses for FR. The site that has been running for four years, currently has 12m members and is expected to make revenues of £12.4m this year.
It’s not that we don’t think that businesses should appear to diversify. We’ve been clear that we think eBay’s purchase of Skype was genius. The major difference, beyond the value to the transaction, is that Skype is still growing.
What?
We think that FR has done an amazing sales job on ITV. It’s a site that would appear to be in decline rather than its ascendancy. Their expansion into Genes Reunited, Dating and Jobs Reunited would appear to point to them thinking the same.
If you look at why FR worked, we think it’s because there were generations of school leavers going their separate ways prior to the Internet, leading them a very limited means of contacting their previous peers.
The school leavers departing since the wide use of the Internet, will not have to resort to third-party services – the majority of them will have an online presence, allowing direct contact, if desired.
Why?
ITV are suffering. The business that, when it was launched fifty years ago, was described as a ‘license to print money’ has gradually slipped to a low grade, trashy set of channels. It’s widely thought of as a bit of a joke with appalling programming.
70% of ITV’s revenues come from Ad sales on its flagship channel, ITV1. The word in media circles is that ITV1 is now struggling to sell ads, as the audience generally drops off (the exception to this being their recent reality show, ‘I’m a celebrity, get me out of here’), and goes down market.
ITV do have a huge advertising sales department that has been merged across all of its regions. Bringing FR into this sales force will give better economies for ITV, letting them squeeze additional profits from FR. It will also give ITV the chance of selling adverts across TV and the Web – extracting additional cash from the advertiser.
Another benefit will be letting ITV have access to the 12m members of FR, allowing them to expose the online FR audience to promotion of ITV’s programming, if they’re UK based. Later this can be expanded to on-demand sales.
When we sat around at Digital-Lifestyles to come up with other reasons, one that came up was the possible creation of a programming strand or, heaven forbid, whole channel covering the now-various services of FR. eg reality programming following a group of FR subscribers going through the steps to ‘reunited’, with the trial, tribulations and toe-curingly moments that it would entail.
The question we keep on coming back to is, Is this this really worth £10-£14.50 per FR member?
Even after ITV boss Charles Allen has tried to explain the deals advantages, we’re still not convinced.
This deal brings to mind ITV’s disastrous, misguided huge, £788m investment into ITV Digital – their attempt to take on BSkyB in the UK. The service collapsed in 2002, later to reborn as Freeview.
7 December, 2005
BT Cashes In To Goverment Money
BT have been enjoying government payouts to maintain their networks.
Interesting news for all those that thought it was many years since BT was an ailing monopoly to be propped up by a Labour government.
It was revealed in an answer to a parliamentary question (text below), that around £7 million has been paid to BT in England and Wales, and a contract for work in Scotland, that is not yet complete, should benefit the Telco goliath to the tune of a further £16.5 million. BT has also received undisclosed sums from the East Midlands Development Agency to extend broadband availability in the region.
Now this might come as a surprise to those who’ve got the impression that BT was doing this along with its investment in the so-called 21C network, as some sort of “Noblesse Oblige”.
Looking back over our archives for January of this year, it put a smile on our faces to see BT, when defending itself against smears of improper financial assistance related to the UK property rating system, responded to criticism leveled by those terrible bureaucrats in Brussels with…
“BT is surprised that the European Commission is to investigate the UK government over the property rates that BT has been paying. In BT’s view, any allegation of state aid would be groundless as BT has received no benefit from the UK government. BT is confident that the UK government will demonstrate the fairness of the UK ratings system.”
Expect smaller UK operators to cry foul – with some justification – as they see the dominant player’s position reinforced by government money, and BT’s competitive edge further strengthened in areas that include upgrading their network for TV delivery.
(Ed: Looking at this information, it feels wrong that BT are being given public money to maintain their network, one which they are directly gaining income from. This benefit isn’t passed back to the general public who are funding it, but instead to BT’s shareholders.
—-Fully text of the questions and answer.
Stephen Crabb (Preseli Pembrokeshire, Con)
To ask the Secretary of State for Trade and Industry what the total amount of financial subsidies and grants received by BT has been since 1997 for the purpose of extending broadband availability in the UK.
Alun Michael (Minister of State (State (Industry and the Regions)), Department of Trade and Industry)
Since 1997 BT has received the following financial sums to enable exchanges to extend broadband availability in the UK:East of England Development Agency paid BT approximately £500,000, to enable most of their remaining exchanges in BED A areas. This was awarded through the Broadband Aggregation programme.
Following a competitive tender South West Regional Development Agency awarded BT approximately £3900,000 to enable some exchanges in the Cornwall area.
Following a competitive tender, BT in Wales was awarded £3.6 million of European Structural Funding to upgrade over 40 BT telephone exchanges from UXD5, making ISDB2 services available to 99 per cent. of BT lines. The investment was also used to enable Digital Subscriber Lines, ahead of the commercial roll-out programme for the UK, in BT exchanges in market towns across Wales. It is estimated that the total project value was around £6 million.
Following a full EU Procurement Process to extend broadband availability in the North East region, BT was paid £1,830,345. This sum is subject to a downward adjustment, in accordance with a reverse contribution scheme, which operates to repay money to the Agency if broadband take up in the region exceeds a prescribed level.
£364k was awarded to Vale Royal Local Authority acting on behalf of the Cheshire Digital Development Agency who, following a competitive tender through the North West Regional Aggregation Body, awarded BT a contract to enable of a series of remote rural exchanges in Cheshire.
In Cumbria, Your Communications was awarded a large infrastructure project (Project Access) contract for approximately £17 million following a negotiated, state aid approved OJEU competitive tender. Your Communications sub contracted part of the contract with a value of around £1 million to BT for the early enablement of all the exchanges in Cumbria and specifically for the enablement of 14 exchanges in the remotest areas of the sub region.
In Scotland £16.5 million was awarded to BT following competitive tender. The roll-out has not yet been completed so not all the money has been paid as yet. The European Commission was notified under State Aid rules.East Midlands Development Agency has worked with BT on a number of sub- regional strategic partnerships, to extend broadband availability. As part of the contractual arrangements confidentiality agreements were signed by the sub- regional partnerships to protect information as commercial in confidence. Accordingly, this information is not be available for disclosure.
Hansard reference
1 December, 2005
UK Broadband To Peak At 60% Adoption: Datamonitor
Broadband adoption in the UK may soon be reaching its peak, according to a new report from Datamonitor.
The analyst firm says that although consumer adoption of broadband is at its fastest rate yet in Europe, it expects national broadband adoption to peak at around 60 per cent.
Broadband is currently used by at least half of all internet users in the UK, but looks set to follow the US market where broadband take-up has slowed sharply.
By the end of 2005, nearly eight million UK households should be hooked up to a broadband connection with report author Tim Gower predicting “a good eighteen months to two years of strong penetration increases across Western Europe before markets begin to mature.”
Although we’re nearly broadbanded out in Europe, the report sees excellent opportunities for growth in less mature markets.
“The current situation in many markets is best described as one of rapidly increasing penetration, where broadband has effectively entered its growth sweet spot,” observed Gower.
“With some markets potentially experiencing changes in the household penetration of broadband of up to 10 per cent in a calendar year, service providers must be well positioned to take advantage of the forthcoming penetration acceleration, prior to the inevitable slowdown,” he added.
The report found that DSL and ADSL were the most popular broadband technologies, with adoption being driven by cheaper access rates, marketing campaigns and the growing popularity of broadband-reliant applications like iTunes.
Datamonitor
28 November, 2005
MetroNet Bought By PlusNet in £1.7m UK Broadband Deal
MetroNet, UK broadband ISP, has been purchased by PlusNet in an all cash deal for £1.7m.
MetroNet, who came first in the most recent Which? survey of UK ISPs, happens to be the broadband provider to Digital-Lifestyles HQ. We’ve found them very impressive – the speed of the service is good, the customer services is rapid and responsive and their online software is solid.
MetroNet has grown since their start in 2003 to 16,000 subscribers, turning over £2.1m bringing an operating profit of £40,000 in the year ended 31 March 2005. They have net cash of over ~~£200,000~~ (update, final figures) £400,000. Bearing this in mind, we estimate that each subscriber has been valued at ~~£93.75~~ £81.25.
PlusNet have been running for over eight years, and were, out of interest, 7th in the Which? survey that MetroNet topped. They currently have 150k users.
Speaking to PlusNet about the future of MetroNet, we were told that short term nothing will change. But longer term, as the purchase sinks in, MetroNet subscribers will be moved over to PlusNet network and 24-hour support system. They thought that longer term translated to some time next year.
PlusNet offer a number of services that MetroNet currently don’t, including a SIP-based VoIP system called PlusTalk which connects to other open standard systems like SIPGate.
We, and we assume other MetroNet subscribers, hope that the high quality of service that we’ve received from them continues, without interruption, in the transition to PlusNet.
An interesting feature of the broadband market in the UK is that changing to another provider is relatively painless, which makes it all the more important that a consistently good service is delivered to the subscriber.
MetroNet
PlusNet
28 November, 2005
Mydeo Signs Tiscali In Home Video Sharing Deal
Mydeo, the UK consumer video streaming company, has teamed up with UK ISP Tiscali to offer streaming video sharing services to broadband users of the UK Tiscali Website.
Available within the Community, Members and Technology areas of the Tiscali.co.uk site, the co-branded service will let users add home videos to their Websites, blogs or personal Webspace areas, and send streaming video emails.
‘Streaming is perfect for sharing home videos on the web because it allows users to show people their videos without giving the files away. Downloading not only means waiting to watch but, for the publisher, it also means you lose control of your content,’ enthused Cary Marsh, Managing Director and Co-Founder of Mydeo.
‘We know how important this is to our members sharing personal and family videos,’ Marsh added, earnestly.
The accent is definitely ‘family videos’ here. Unlike some of the other services that have sprung up since Mydeo first started, the video on it are definitely on the respectable side. It’s the sort of place you’d be happy to point your family to without them seeing anatomy shots or someone having their head cut off.
Members will be able to stream their cinematic masterpieces on a pay-as-you-go basis, and will only have to shell out when they choose to upload a video. Users can pay in Euros, UK Pounds or US Dollars.
Once on the server, members can blast out their captivating home videos in customised video emails to lucky recipients.
We’ve learnt that the deal with Tiscali is a one-way exclusive, i.e. Tiscali can’t use another video sharing services, but Mydeo can work with other ISPs. It’s our understand that Mydeo are in discussion with other broadband ISPs, who we’re told are showing a lot of interest in carrying the service.
‘We are very pleased to be able to bring such an exciting and innovative service to our users. Streaming video and broadband are a natural fit,’ purred a deeply chuffed Alex Hole, commercial director of Tiscali UK.
“Mydeo is really easy to use and offers lots of help and support for our members who may be putting video on the Web for the first time,” Hole insisted.
With the Mydeo service already integrated into the popular Windows Movie Maker 2 package, the process of uploading videos should be fairly straightforward for Windows XP users.
Mydeo are the only European supplier of streaming services to Microsoft Windows Movie Maker 2.
The company claims that their service lets the “humble home video maker” enjoy the “quality and reliability of a world-leading streaming network, something they would never have been able to purchase as an individual.”
Mydeo
Tiscali
23 November, 2005
Royal Mail: Internet Fuels Growth Of Paper Catalogues
The Internet was supposed to herald in an age of paperless offices, online browsing and tree-untroubling electronic mail, but it seems that when it comes to flogging goods, the trusty old print catalogue still rules the roost.
According to new research from the Royal Mail, online retailers will be looking to stuff your letterbox full of paper catalogues before Christmas in an attempt to drive up sales over the festive season.
In a survey conducted by the Royal Mail, more than 20 online traders – including big names like John Lewis Direct and Firebox.com – were asked about their marketing strategies.
The survey found that old fashioned catalogues remain one of the most effective promotional channels for generating online orders, with 60% of survey respondents currently licking stamps on catalogues and brochures to be sent to customers in an attempt to increase online sales.
Of course, the Royal Mail has something of a vested interest in promoting these figures, but we have to admit that we always prefer to flick through a glossy print catalogue than stare at a screen. And, of course, it’s a bit trickier to take a laptop to the loo for a bit of furtive, at-work browsing for gifts.
The Royal Mail also found that some 36% of consumers agreed that having an online catalogue makes them more likely to purchase something from a retailer’s website.
Additionally, the survey revealed that 55% of retailers planned to follow the annoying trend set by High Street stores and “extend” the Christmas buying period by encouraging consumers to buy earlier (If only we could “extend” the Christmas holiday period too).
Record earnings are predicted for online retailers this year, with UK shoppers leading their European counterparts when it comes to online shopping.
Around 80% of consumers are expected to buy at least a quarter of their Christmas purchases online this year – up a mighty 15% over last year.
Royal Mail
22 November, 2005
Hauppauge Nova-s PC Card Offers Freesat TV Via Sky
Hauppauge Digital have whipped out a new add-on card to convert a boring old PC into a multimedia-tastic satellite TV receiver.
Their new WinTV Nova-s card receives free satellite channels (the -s is for satellite), and will work with Sky’s Freesat, that give free access to the unencrypted channels on Sky, which are currently all of the BBC offering and soon ITV (hopefully). Sky normally charge you £150 for the privilege.
Once they’ve shelled out for the £59.99 (~$103, ~€87) decoding device, punters won’t need a viewing card or subscription fees to enjoy free satellite transmissions on their desktop.
The card is aimed at consumers who already have a satellite dish stuck on their roof/wall, with Hauppauge suggesting that the WinTV Nova-s would be ideal for a PC “in the kitchen, study or bedroom as an additional digital TV.”
Owners can watch full screen satellite TV on their desktop, or have a smaller window open whilst trying to work on something else (yeah, right: who’s going to carry on working on their VAT return when there’s some top notch footie onscreen?!)
The Nova-s is compatible with Microsoft’s Windows XP Media Center Edition, and also offers the option to record shows to the PC’s hard disk. It will also work with all-round media handlers like ShowShifter.
At the moment, the Hauppauge’s WinTV Nova-s can receive all the BBC TV channels (including One, Two, Three, Four, CBBC, Cbeebies and BBC News24 and Radios 1 to 7.)
ITV currently encrypts, or scrambles, its satellite transmissions using the service provided by Sky, but will soon be following BBC’s lead and broadcasting its channels without encryption, so they can be viewed any satellite receiver.
This means that ITV1, ITV2, ITV3 and the ever-fascinating Men&Motors will become available soon, with more channels to be added in 2006 when Freesat officially launches.
Freesat will be the satellite equivalent of Freeview,” said Yehia Oweiss, Managing Director of Hauppauge Digital. “Already broadcasting BBC, the service will be available to all UK households and bring free digital TV to the 25 per cent who are outside Freeview’s area. Consumers can buy our Freesat tuner now and enjoy many digital channels now, with more being added all the time.”
The WinTV Nova-s looks reasonably future proofed too, offering HDTV (High Definition TV) compatibility, with HDTV broadcasts expected to be delivered by satellite in 2006/7
Freesat’s EPG (Electronic Programme Guide) will be made available on the Hauppauge card, but for now the information can be downloaded through the Internet.
The Hauppauge WinTV Nova-s also provides a video input socket for slapping in a camcorder and digitising the content into MPEG format for editing and burning to DVD.
Hauppauge
Showshifter
21 November, 2005
Digital Dividend Review: Ofcom Look At Spectrum Use After Analog TV Switch Off
Now that the Government has hit the ‘go’ button for switchover there are plenty of people anxious to know how the released spectrum will be used – and thereby how we will realise the value of it for UK plc.
In an attempt to address this issue Ofcom announced today the beginning of the Digital Dividend Review (DDR) – the project which will examine the options arising from the release of spectrum afforded by the digital switchover programme.
Ofcom estimates that the digital switchover programme will release up to 112 MHz of spectrum in the UHF (Ultra High Frequency) band for new uses. The UHF band is prime spectrum, because it offers a technically valuable combination of capacity (bandwidth) and range.
Ofcom say,
“The cleared spectrum – the Digital Dividend – offers real opportunities for wireless innovation.”
The Digital Dividend could enable the launch of a wide range of different services. Ofcom’s examples include:
- New mobile services, with high quality video and interactive media delivered to handheld devices
- Wireless broadband services, with high-speed data and voice services
- Wider coverage for advanced services in remote and rural areas. This spectrum is particularly suitable for low cost, wider-area coverage
- Advanced business and broadcasting services, such as those used to support major sporting events
- Additional television channels including possible High Definition (HD) channels carried on Freeview
Ofcom point out that this is not an exhaustive list – which will please HM Treasury since the greater the potential uses and users the higher the value likely to be realised from auctioning it.
On this point, Ofcom have a tricky job since they will have to ensure that there is enough incentive to investing the development of a particular wireless technology with no guarantee of it actually securing an allocation of the spectrum required – however it should be noted that Ofcom have stated that they will also begin work on a new auction design, with a view to ensuring that the spectrum is acquired by users who are likely to make best use of it – (i.e. best use = greatest value) – not sure how HMT will view this.
This approach means Ofcom will:
- Consider the potential uses for the available spectrum
- Set out the technical limits on spectrum use to prevent potential interference
- Draw up packages of frequencies that give flexibility to the market
- Design an efficient auction/allocation process
The proposed timetable for DDR is:
- Digital Dividend Review (DDR) begins – November 2005
- Programme team and consultants in place – end 2005
- Stakeholder meetings begin – Jan-Feb 2006
- Outcome of RRC – June 2006
- Digital Dividend Review completed – Q3 2006
- Ofcom publishes final proposals – Q4 2006
- Digital switchover programme begins – 2008
- Digital switchover programme completed – 2012
Luke Gibbs writes regularly for Ofcomwatch.
Ofcom Digital Dividend Review
17 November, 2005
Search Safe: UK Gov Advises Parents
The Home Office’s Internet Task Force yesterday published guidance aimed at advising parents on how to keep children safe when using the Internet, mobile phones or other means.
The simple document covers:
- What an Internet search actually is, why users sees the results they do and how search is generally made available on the internet
- Advice for parents and carers on safe searching
- Guidance for service providers and what they can do to make searching on the internet as safe as possible for children
The document discusses the variety of searches you can make and how this affects the results you get.
It also provides practical guidance on how to use search effectively but safely, for example, by monitoring or filtering your search results.
Home Office Task Force on Child Protection on the Internet: Good practice guidance for search service providers and advice to the public on how to search safely (PDF)
16 November, 2005