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6 posts

Wannabe Geek


# 45597 3-Nov-2009 11:07
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I'll just state clearly first that what I'm about to say at this stage is an absolute unsubstantiated rumour. However if this is  true, has massive implications on the mobile market.

..So here goes...

I have heard from a handful of highly credible sources in the investment/finance/stock trading industry that 2degreesmobile have no plans what so ever to solidify themselves as a genuine 3rd mobile operator.

The people I have been speaking to monitor investment plans, business plans, markets etc etc VERY closely and are all singing from the same song sheet on this...

According to them and to use their words, 2degreesmobile have made it VERY clear that their business strategy is to sell up to the highest bidder (Vodafone or Telecom) when they reach 5% market share.


The expected bidders according to the people I've been speaking to are obviously Vodafone NZ and Telecom NZ, although presumably TelstraClear or perhaps one of the other ISP's would do their best to find themselves in a position to bid as well.

I personally don't want to beleive this, but my sources are reputable.

Some of the factors of this assessment that I can see supporting what I've said are:

- Trilogy Wireless bought a 51% stake in 2degreesmobile a week before launch.

- Based on what Trilogy have done outside the US to date, there is a pretty clear record of them going into countries (Bolivia, Honduras, Equador to name a few) managing the inception and launch of a mobile network and then selling it off.

- Hautaki Trust appear to have failed in their attempts to raise 20 million dollars by the end of October so you can only assume (based on reports) that their 26% shareholding will be absorbed by Trilogy Wireless and the remaining shareholders. (please someone correct me on this if in fact Hautaki Trust have managed to postpone or meet their deadline.)

- The absorbtion of shares would give the green light for a snap auction of the type I'm suggesting.

- If the MTR issue is not sorted then 2degrees are running at a loss for some of their services which supports the concept of a 'marketshare grab'. Perhaps the whole 'drop the rates mate' campaign is a smoke screen.

- Their pricing and services packages have no complexity to them what so ever which indicates at least for now, no real long term strategy.

- There doesn't appear to be anything in the pipeline in terms of offering new technology or services that Telecom and Vodafone do not currently offer (unless you count EDGE)


Some of the factors of this assessment which do NOT support what I've said so far:

- Why roll out a mobile network in the main centres providing coverage in areas that are already covered by Vodafone and Telecom if they plan to sell up? (its quite common now for every 1 tower, to see 2 more within a few hundred meters of each other)

- They have a clear rollout plan for their network that in theory would never be completeted by the time they reach 5%, yet they have spent a good amount of money suring up the RMA side of things country-wide.


Like I said, I really hope this is a major misjudgement or misinterpretation on the part of my sources and you may or may not agree or understand the relevance of my breakdown of factors listed.

But I would like feedback on this!
Someone tell me it isn't so!

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BDFL - Memuneh
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  # 269554 3-Nov-2009 11:19
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First, welcome to Geekzone... Second, you will notice that, regardless of how this rumour comes out in the future, first time posters have a hard time getting credibility here when it comes to rumours.

Let's see how it goes.




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Ultimate Geek


  # 269557 3-Nov-2009 11:28
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Interesting, however I wager a bet that Telstra would be hungry for a peice of that pie. Also wouldn't rule out Singtel Optus as a contender.

Only time will tell, but I like a good unsubstantiated rumour, it's more interesting that the facts.

 
 
 
 


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  # 269562 3-Nov-2009 11:34
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I would be surprised if the Commerce Commission would allow them to sell off to one of the incumbents, but your points form a pretty compelling case for them to sell off to a third party who might want to get a foothold in the New Zealand market.

It will be interesting to see what happens to 2 Degress in the long term.



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Wannabe Geek


  # 269564 3-Nov-2009 11:41
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freitasm: First, welcome to Geekzone... Second, you will notice that, regardless of how this rumour comes out in the future, first time posters have a hard time getting credibility here when it comes to rumours.

Let's see how it goes.

I take your point and its fair... Hopefully posters can take my assessment at face value. I understand that my post puts me in the 'potential troll' basket right from the get go... But I'm really just interested in peoples thoughts on what I've said.

I don't share the same interests as the demographic on this forum, I'm basically posting this because the last few people I've said this to (people in the Telecommunications Industry) have all said I should post it on geekzone if I really wanted to know.

I'm wondering if anyone else has any information that supports or rejects my claim?

I agree that 5% does seem very low, but this is the magic number my sources have given me.

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Ultimate Geek

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  # 269569 3-Nov-2009 11:47
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Selling to a third party such as Telstra or Optus would be believable. Can't imagine they'd plan to sell to Telecom or Vodafone.

The MTR issue has been going on since way back in the Econet days - predates Trilogy by a long way. The plan (un)complexity is one of their marketing points. Not sure what technologies they could offer as a differentiator but they would have to get HSPA launched first - who knows what else is in the pipeline. If it was something special it wouldn't be announced yet.

The value of a network is in the sites so as you say they wouldn't be rolling out all their new sites if they were just going to sell to someone who already has sites in the neighbourhood.




 

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  # 269574 3-Nov-2009 12:23
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I remember making a comment like this before the launch saying that they most likely will sell of to TelstraClear.. Here's hopping that this is just a rumor and not going to be fact. There would be allot of peed of people in NZ..




Regards,

Old3eyes




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Wannabe Geek


  # 269578 3-Nov-2009 12:31
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The value of the NETWORK might be in sites, but as we've seen in the ISP/Telco market (particularly in the early years of this decade) the comodity that companies trade in is usually "users".

See TelstraClear buys Paradise
See Vodafone buys IInet's NZ share of Ihug customers
See Ihug sells Ultra customers to Woosh
etc...
See Google guys 1% of Facebook etc...
Most valuable IT related networks get their value from USERS.

 
 
 
 


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Ultimate Geek


  # 269585 3-Nov-2009 12:53
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I wonder if Kordia along with Orcon could front up with the dosh, like Telecom and Vodafone you have a strong business if you can combine Voice, Data and Mobile services.

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Ultimate Geek

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  # 269587 3-Nov-2009 13:10
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Frantastits: The value of the NETWORK might be in sites, but as we've seen in the ISP/Telco market (particularly in the early years of this decade) the comodity that companies trade in is usually "users".

See TelstraClear buys Paradise
See Vodafone buys IInet's NZ share of Ihug customers
See Ihug sells Ultra customers to Woosh
etc...
See Google guys 1% of Facebook etc...
Most valuable IT related networks get their value from USERS.



Sure, from a buyer's point of view - but I was thinking more from the network deployment point of view - putting all that money into an asset that will be largely redundant if they sell to an existing operator. (Agreeing with your second last point.)




 

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Ultimate Geek


  # 269591 3-Nov-2009 13:21
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It wont be to VF or TNZ it will be to Telstra / Orcon / etc, someone looking to increase their marginal market share.



6 posts

Wannabe Geek


  # 269604 3-Nov-2009 13:49
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langi27: I wonder if Kordia along with Orcon could front up with the dosh, like Telecom and Vodafone you have a strong business if you can combine Voice, Data and Mobile services.
Don't Kordia already have a number of sites?

They definately already make up parts of mobile networks as it is, so it'd make sense for Kordia to bid more than TelstraClear imo.

You'de think that buying 2 degrees would be more valuable to Telecom or Vodafone than anyone else though....its an opportunity to stamp out the competition and resume status quo...

My sources were pretty firm and specific on their echo'd statements "2degreesmobile have made it VERY clear that their business strategy is to sell up to the highest bidder (Vodafone or Telecom) when they reach 5% market share."

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Master Geek


  # 269612 3-Nov-2009 14:03
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Hautaki were trying to raise capital to maintain their twenty-something % stake - they are unlikely to sell as you suggest: Hautaki failing to raise the capital merely means that their overall shareholding will be diluted to less than its current shareholding.

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Ultimate Geek


  # 269619 3-Nov-2009 14:22
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Frantastits:

You'de think that buying 2 degrees would be more valuable to Telecom or Vodafone than anyone else though....its an opportunity to stamp out the competition and resume status quo...




Dunno about that, since they roam on VF anyway so they are already getting a slice, maybe TNZ to get more maket share..


I personally think it will be a third player with enough $$$ to complete 3/4G, and build a competing network..


Otherwise its just a heap of low margin customers, not exactly ideal...

1030 posts

Uber Geek


  # 269623 3-Nov-2009 14:32
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"2degreesmobile have made it VERY clear that their business strategy is to sell up to the highest bidder (Vodafone or Telecom) when they reach 5% market share."


They'd need CommerceCommission approval to sell to either Telecom or Voda - which I think would be very unlikely to obtain.

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Ultimate Geek

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  # 269628 3-Nov-2009 14:38
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Frantastits:

Some of the factors of this assessment which do NOT support what I've said so far:

- They have a clear rollout plan for their network that in theory would never be completeted by the time they reach 5%, yet they have spent a good amount of money suring up the RMA side of things country-wide.



This could make it more attractive for Tesltra etc, if all the 'grunt work' has been done.  However, I guess we will have to see.  I wonder if 2degrees are gonna come on here and say anything?  Their absence may lead people to conclusions...

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