French budget-conscious telecom operator Iliad has set a mid-October deadline to decide whether to improve its bid for T-Mobile US or walk away as it faces resistance from seller Deutsche Telekom, several people familiar with the situation said.
Deutsche Telekom, which owns 66 percent of the fourth-largest U.S. carrier, has doubts that Iliad will be able to improve the U.S. business since the French startup has no track record in the country, a source close to the German company’s management said.
Under the deal structure proposed by Iliad, Deutsche Telekom would have to keep a stake in the combined company.
Iliad is currently in talks with several U.S. banks to help it finance a possible improved bid for T-Mobile US alongside existing lenders HSBC and BNP Paribas, the people familiar with the situation said, after a $33 per share offer for 56.6 percent of T-Mobile US was rejected by Deutsche Telekom.
Chief Financial Officer Thomas Reynaud said Iliad’s key leverage ratio would not surpass 4.5 times net debt to earnings before interest, tax, depreciation and amortization (EBITDA). He also said that Iliad would limit any capital increase to fund the T-Mobile bid to 2 billion euros ($2.57 billion).
Iliad is also seeking to team up with private equity funds including KKR to raise about $5-6.5 billion, the sources, who could not be named because the talks are private, said.
T-Mobile US, Iliad and KKR declined to comment. Deutsche Telekom could not be reached immediately for comment.
Iliad’s management team has now finished road shows to meet U.S. investors and is waiting to hear back from potential investors, the sources said.
Depending on how positive the feedback is from private equity investors, the French firm could be able to table an improved bid in the second week of October, two of the sources said.
Iliad could offer between $35 and $40 per share for a stake in T-Mobile of between 60 percent and 90 percent, depending on the appetite of private equity funds and lenders for the deal, two other sources said.
The open letter is signed by Quickflix CEO Stephen Langsford and addressed to Netflix CEO Reed Hastings and the internet community. Langsford asks Netflix to Australia through the front door. He accuses it of ignoring backdoor access to its services, hauling in cash and stepping on Australian rightsholders.
“Netflix not only knowingly collects revenues from subscribers with unauthorised access to your US service, investing nothing in the Australian market nor paying for Australian rights to the content you make available, but also tacitly encourages Australian consumers to inadvertently breach the copyright of the content owners,” he said.
“Unlike yourself, Quickflix has obtained all necessary Australian rights to the content on its platform, faithfully meets all necessary security requirements, including geo-filtering imposed by the content rights holders, and continues to reinvest in its service with the goal of offering the very best service in the market to its customers.”
We have asked Netflix to comment on this, but so far it has not responded.
Langsford made some suggestions to Hastings about getting Netflix’s game in order, starting with a legal launch and a VPN lockdown.
“We challenge Netflix to play by the rules. It’s how we do it here in Australia. Stop turning a blind eye to the VPN services acting as a gateway to your service. Be honest and face up to the issue of unauthorised access to your US service,” he said in his sign off.
“Have the courage to limit your service only to the territories where you have legally obtained the rights to operate by abiding by the geo-filtering obligations required by your content license agreements. And do so immediately.”
The Quickflix CEO said that he looked forward to fair and square competition and the resulting benefits to Australians.
Cox Communications Inc. is not interested in merging with wireless carrier T-Mobile US Inc or rival cable providers, according to Cox President Pat Esser, dispelling rumors recently swirling about the private company.
“We’re not in any discussions to buy T-Mobile,” Esser told Reuters. “I don’t see a movement inside of our company that we feel like we have to pony up or match up with a wireless company.”
Asked whether Cox, the third-largest U.S. cable and broadband company, was considering a merger with one of its smaller cable rivals, such as Charter Communications Inc or perennial takeover target Cablevision Systems Corp, Esser said family-owned Cox was not looking to become a publicly traded company.
“I would never say we’ll never be public in the future. But right now where the family’s at, where [parent company] Cox Enterprises is at, they like being private,” Esser said. “We have a very, very healthy balance sheet, we have a lot of capacity and we can do most of that inside of our current balance sheet and still remain private.”
Continuing a year marked by a whirlwind of dealmaking among telecom companies, sources told Reuters earlier this month that Iliad, a French telecom firm, was in talks with U.S. satellite and cable operators Cox, Charter and Dish Networks Corp regarding a potential joint bid for U.S. wireless carrier T-Mobile.
Esser said that instead, he saw the future of Cox Communications in wi-fi offerings and connectivity services, such as home security.
“Wireless use of broadband is growing but it’s not through traditional cellular services, it’s wi-fi. Wi-fi is exploding,” Esser said. “Wi-fi is the future … Connected homes are the future.”
Security software expert and on-the-run murder suspect, John McAfee has taken time from his busy schedule to warn the world about the perils of Googling.
McAfee has called upon people to resist Google to protect their privacy saying that the search engine appears to believe that if people have nothing to hide they have nothing to fear.
“If everybody knew everything about everybody else, what would human behaviour become? You need to think this through,” he said.
He said that people could not have intrusions into our lives and still have freedom. McAfee added that Freedom was all he had.
“And it’s all you have, if you think about it.”
We thought about it and came to the conclusion that we have a lot of things which are not defined by the fact that Google can see us. But hey, we don’t have Belize wanting us to help them with their inquiries.
Firmware is a type of software that manages interactions between higher-level software and the underlying hardware, though it can sometimes be the only software on a device. It’s found on all kinds of computer hardware, though the study focused on embedded systems such as printers, routers and security cameras.
Researchers with Eurecom, a technology-focused graduate school in France, developed a web crawler that plucked more than 30,000 firmware images from the websites of manufacturers including Siemens, Xerox, Bosch, Philips, D-Link, Samsung, LG and Belkin.
They found a variety of security issues, including poorly-protected encryption mechanisms and backdoors that could allow access to devices. More than 123 products contained some of the 38 vulnerabilities they found, which they reported privately to vendors.
They’re due to present their research next week at the 23rd Usenix Security Symposium in San Diego.
Most of the firmware they analyzed is in consumer devices, a competitive arena where companies often release products quickly to stay ahead of rivals, said Aurelien Francillon, a coauthor of the study and an assistant professor in the networking and security department at Eurecom.
“You have to be first and cheap,” Francillon said in a phone interview. “All of those things are what you should not do if you want a secure device.”
Firmware security practices lag far behind those of the PC software market, where vendors like Microsoft learned the hard way that they need to patch software automatically on a regular, frequent schedule.
That’s often not the case with firmware, which may not be designed to patch itself periodically and also relies heavily on third-party software that may not be current. In one instance, the researchers found a Linux kernel that was 10 years out of date bundled in a recently released firmware image.
“On these devices, it’s a real nightmare,” Francillon said.
“Final production of the current Reader model, PRS-T3, was made at the end of May,” a spokeswoman for Sony in Tokyo wrote in an email Wednesday. “The product will continue to be available until inventory supplies last, which differs by country.”
There are no plans for a successor to the device, she added.
The PRS-T3 was launched last year in 20 countries including Japan, Canada and European states, but was not released in the U.S.
Weighing 200 grams, it has a 6-inch E-ink touchscreen display, an optional night light, Wi-Fi and a battery life of six to eight weeks.
While it’s still available on Sony’s UK site for 99 pounds (US$166), it’s out of stock at Sony’s sites for France and Canada. The PRS-T3 will continue to be sold for the time being in Japan, where Sony maintains its Reader Store.
The company said earlier this year it is closing down its e-book business in North America, Europe and Australia and that users would be transferred to Kobo, owned by Japanese online shopping giant Rakuten.
Sony helped pioneer e-readers with a product it launched in Japan 10 years ago, the Librie. Developed with Philips, it was billed as the first commercial device of its kind to use E-ink’s electronic paper display technology.
Beginning with the PRS-500 Portable Reader System in 2006, Sony marketed a series of e-readers that were well received, though some reviewscomplained about its price compared to the features of cheaper rivals.
Sony Reader shipments had exceeded 800,000 units for 2010, according to IDC. But the product was never as popular as competitors from Amazon, Barnes & Noble or Kobo. By late 2012, Amazon’s Kindle reader was used by over 50 percent of e-book buyers, according to Publishers Weekly.
The market for e-readers peaked in 2011 at 26.4 million units, IDC noted last year, adding it expects only modest growth in 2014 after a period of decline. The category was expected to begin a gradual, permanent decline in 2015.
Sony also shed its Vaio PC business this year as it continues to struggle with restructuring efforts.
Sprint Corp has canceled its bid to purchase No. 4 U.S. carrier T-Mobile U.S. Inc after regulatory resistance showed no signs of softening despite months of lobbying, people familiar with the matter told Reuters.
The move is a rare setback for Sprint’s Japanese parent SoftBank Corp, whose billionaire founder Masayoshi Son had seen the acquisition as key to taking on U.S. market leaders AT&T Inc and Verizon Communications Inc.
Sprint, the No. 3 U.S. carrier, and T-Mobile have not ruled out consolidation in the future but concluded that a deal is unlikely to be approved at this time, the sources said. U.S. regulators have insisted that they want to keep the number of major wireless carriers at four.
“We didn’t think the opposition would be this strong,” a SoftBank executive said, but added: “The environment will definitely change”.
The failure to reach a deal could give added impetus to a rival bid for T-Mobile by French telecoms firm Iliad. Iliad made a lower bid than Sprint but is in talks with U.S. cable and satellite companies to sweeten its offer.
In the wake of the failed talks, Sprint will appoint a new CEO – Marcelo Claure, founder of mobile phone distributor Brightstar Corp which was acquired by SoftBank last year, a separate person with knowledge of the matter said. Claure, who has won a string of awards for entrepreneurship, joined Sprint’s board in January.
He will replace Dan Hesse who has been CEO of Sprint since 2007. Hesse led a rip-and-replace overhaul to modernize Sprint’s network but it caused cellular sites to go black and the company to hemorrhage subscribers.
Sources declined to be identified as the matter has not been disclosed by the companies publicly. Representatives for Sprint and SoftBank declined a request for comment. T-Mobile did not immediately respond to a request for comment.
Iliad has confirmed it has offered to acquire a majority stake in the fourth-largest U.S. mobile operator in a deal that values the company at about US$30 billion. The news followed months of reports about an impending takeover deal with Sprint, the third-largest carrier, that’s never quite materialized.
The Iliad bid may have been unexpected, but it’s not likely to be unwelcome. U.S. regulators will see a potential deal that changes the ownership of T-Mobile without affecting the makeup of the domestic mobile market. Consumers would be looking at a scrappy U.S. carrier now owned by a French company that’s specialized in undercutting bigger rivals in its own market. And Deutsche Telekom, the majority owners of T-Mobile, may have a bidding war on its hands.
As simply one foreign owner looking to buy out another, Iliad would face dramatically less government scrutiny than Sprint would as a domestic player asking to further consolidate the market, said analyst Roger Entner of Recon Analytics. If Sprint bought T-Mobile, the U.S. would lose one of the four competitors that now vie for customers, a prospect that some regulators have said they wouldn’t welcome. An Iliad buyout would preserve the four-carrier market.
“It would probably be very easy to approve,” Entner said. The only condition he sees in such a deal would be including someone on T-Mobile’s board who’s been approved by U.S. agencies, to safeguard national security, as wasrequired when Japan’s SoftBank bought Sprint last year.
Four competitors, especially with an underdog as aggressive as T-Mobile has been under CEO John Legere, could continue the battle for consumers that has led to several new types of plans and price points across the U.S. mobile industry over the past couple of years. Iliad is known for the same kind of disruption in French telecommunications, Entner said.
Deutsche Telekom, which has been looking to cash out of the U.S. for years now, may benefit most of all from the entry of a rival bidder.
Finland, Australia, Japan, Sweden, Denmark, South Korea and the U.S. had wireless broadband penetration of more than 100 percent as of December 2013, the Organization for Economic Cooperation and Development said Tuesday. That means there was more than one wireless broadband subscription per person, usually because consumers have more than one mobile device that can go online. The U.S. just barely crossed the bar, while Finland led the group with more than 123 percent penetration.
Across all 37 OECD countries, wireless broadband penetration rose to 72.4 percent as total subscriptions grew 14.6 percent. The group spans North America, Australia, New Zealand, and much of Europe, as well as Japan, South Korea, Turkey, Israel, Mexico and Chile. It’s sometimes treated as a barometer of the developed world.
Wired broadband subscriptions also grew in 2013, reaching an average of 27 percent penetration. That means there was just over one wired subscription per four people: Wired broadband services, such as cable and DSL (digital subscriber line), typically are shared. Switzerland led in that category with 44.9 percent penetration, followed by the Netherlands and Denmark. The U.S. had just under 30 wired subscriptions per 100 people, while Turkey came in last with just over 11.
DSL still makes up a majority of wired broadband subscriptions, at 51.5 percent, followed by cable with 31.2 percent. Fiber-optic grew to a 16.7 percent share, gradually replacing DSL services. Fiber more than doubled its share of the market in the U.K. and also gained strongly in Spain, Turkey and France. While those countries still have relatively low fiber penetration, Japan and Korea continued to lead the OECD for that technology. Nearly 70 percent of all wired broadband in Japan goes over fiber, and almost 65 percent in Korea.
The OECD has compiled some of its broadband statistics on a portal page. For all the technologies it tracks, the group uses a generous definition of broadband as a service capable of at least 256K bits per second downstream.
According to a report in the Sunday Times, the country’s Federal Cartel Office would be given powers to curtail Google’s influence, were it decided that it had got too big for its boots.
A document obtained by the newspaper says that under the new rules, technology companies would be treated and regulated like utilities such as electricity and water and subject to the same anti-competitive pricing laws governing their advertising.
Proposals to legislate the internet as a utility are at the heart of the debate that’s under way in the US right now, where the Federal Communications Commission (FCC) is coming under increasing pressure to classify ISPs as “Title II” utilities in order to protect net neutrality.
In Europe, a commitment to net neutrality is already in place, and any German legislation would only serve to further solidify the country’s commitment to avoiding technology strangleholds.
Full details of the 30-page document are yet to be released, with varying reports of its potential impact, ranging from “last resort” to “all out regulation”.
The German government has always been militant in matters of data protection. In 2013, it warned consumers against using Microsoft’s Windows 8 operating system due to perceived security risks, suggesting that it provided a back door for the US National Security Agency (NSA).
Of course, this might have had something to do with the fact that German chancellor Angela Merkel was one of the first high-profile victims of NSA surveillance, with some reports saying that the NSA hacked her mobile phone for over a decade.
The U.S. government made approximately 150,000 requests for customer information from Verizon Communications in the first half of 2014, most of them subpoenas, the country’s largest wireless carrier has reported.
The report is the second summary of government requests Verizon has publicly issued since shareholders pressured the company to divulge information it shared with the government in December.
The government issued 72,342 subpoenas, half of which request subscriber information on a given phone number or IP address, while others ask for transactional information, like the phone numbers a customer has called, according to Verizon.
Verizon also received over 37,000 court orders, including 714 wiretaps, which give access to the content of communications and over 3,000 pen registers and trap and trace orders, which give the government real-time access to outgoing and incoming phone numbers, respectively.
“We repeat our call for governments around the world to make public the number of demands they make for customer data from telecom and Internet companies,” Randal Milch, Verizon’s general counsel, wrote in a company blog.
The report included limited information on international requests. France led all foreign countries listed in the report in customer information point requests, which include phone numbers or IP addresses used to identify a customer, with 762 requests.
German monthly Magazine Manager cited people familiar with the matter as saying the talks were far advanced but no deal had been clinched and that Netflix was also in touch with other German telecoms groups.
Netflix in May unveiled plans to launch in both Germany and France this year, in the biggest test so far of its global expansion strategy.
Manager Magazine said Deutsche Telekom was open to accommodate Netflix’s expansion even though the service would compete with the German company’s own web-based TV offering called “Entertain”.
Deutsche Telekom declined to comment.
Netflix, whose internet-based delivery of movies and TV series such as “House of Cards” has disrupted pay-TV markets in the United States and elsewhere, wants to grow its international business to reach new customers and increase its buying clout with content providers.
It is already in more than 40 countries, mostly in Latin America, and has entered Britain, Ireland, the Nordics and the Netherlands in the past two years.
In Germany, it would compete with Amazon’s Prime Instant Video, ProSiebenSat.1′s Maxdome, Sky Deutschland’s Snap and Vivendi’s Watchever.
Germany has the highest number of broadband households in Europe, with 29.1 million in 2013, according to estimates from SNL Kagan.
Cybercriminals have stolen data on more than 600,000 Dominos Pizza Inc customers in Belgium and France, the pizza delivery company said, and an anonymous Twitter user threatened to make the data public unless the company pays a cash ransom.
Customer names, delivery addresses, phone numbers, email addresses and passwords were taken from a server used in an online ordering system that the company is in the process of replacing, Dominos spokesman Chris Brandon said.
He said he did not know if the stolen passwords had been encrypted.
A Tweet directed at Domino’s customers through an account of somebody listed as “Rex Mundi” said hackers would publish the customer data on the Internet unless the company pays 30,000 euros ($40,800), according to an article in The Telegraph.
The Rex Mundi account was later suspended.
Brandon said he was not familiar with the ransom demands, but that the company would not be making any such payment.
Domino’s Vice President of Communications Tim McIntyre said the hacking was “isolated” to independent franchise markets of Belgium and France, where the company’s online ordering system did not collect credit card orders, so no financial data had been taken.
“This does not affect any market outside of France and Belgium,” he said via email. “The site has been secured.”
Domino’s has some 11,000 stores worldwide, including 229 in France, 24 in Belgium and about 5,000 in the United States.
Mike Weatherley, the UK prime minister’s intellectual property (IP) advisor, has said that internet search firms like Google and Bing do some things to hamper copyright infringement, but not enough.
Weatherley has produced recommendations that has won immediate support from the British Phonographic Industry (BPI). He said that with ‘piracy’ costing lots of money in lost revenue, outfits like Google should take responsibility for risking UK jobs and shabby economic growth. This is music to the ears of the BPI, which leaped on it.
“Mike Weatherley’s report is a thorough and carefully considered contribution to the policy debate on the need for action to reduce the prominence of illegal websites in search results,” said BPE chief executive Geoff Taylor.
“We agree with his recommendations and invite search engines to work with us without delay to bring them into effect.” Taylor added that while some firms have volunteered to act, Google is dragging its heels.
“Google, which dominates UK search, has paid lip service to the issue but in practice has done little to address the ethical loophole in its algorithm, which directs millions of consumers to sites it clearly knows to be illegal,” Taylor said.
“If search engines will not now work with the creative sector to give effect to these Recommendations, Government should legislate to boost growth in the digital economy and to give consumers confidence they can search for entertainment safely and legally online”.
Weatherley’s report has 10 recommendations and he and the BPI hope that they win favour with the secretary of state for culture, media and sport, Sajid Javid.
The government and industry attention is not news to Google, and it has frequently been called on to veer away from its business and towards an industry that keeps Peruvian cocoa farmers busy and the egotistical out of food service roles.
“Search Engines can – and must – use the resources available to them in order to safeguard the UK’s creative industries,” said MP Weatherley in a statement.
“Piracy remains the biggest threat to the growth of digital commerce; if we want the UK to continue to be a leader in creativity and innovation, the UK must also be an international leader of IP rights protection.”
In March the Recording Industry Association of America (RIAA), the US BPI so to speak, accused Google of being a pirate hangout and piracy facilitator, and like Weatherley it favoured a “voluntary agreement with content owners”, that is, presumably in favour of those owners.
Last year the government wagged a finger at Google and said that it really ought to derank websites that media companies do not like and have arranged court orders against.
Then the web firm told The INQUIRER that actually it does a lot to aid the creative industries and very little to support those who infringe copyrights.
“We removed more than 20 million links to pirated content from our search results in the last month alone. But search is not the problem – according to Ofcom just eight per cent of infringers in the UK use Google to find unlicensed film and 13 per cent to find unlicensed music,” said a spokesperson.
“Google works harder than anyone to help the film and music industry protect their content online.”
We have asked it to comment on the Weatherley report.
Vevo, the online music video hub that is a joint venture of two of the world’s biggest music labels, has enjoyed a nearly 50 percent spike in the number of music videos streamed each month from its platform, according to the company’s top executives.
The company, which is controlled by Universal Music Group and Sony Music Entertainment, hit a monthly average of nearly 6 billion views in December, a 46 percent rise from a year earlier, said Rio Caraeff, the chief executive officer.
About 65 percent of the videos are being watched on mobile phones, according to the company.
“On a global stage, it’s really all about mobile,” Caraeff said in Miami, where he was participating in the Billboard Latin Music Conference. “Mobile and tablet and television are where the majority of the views are happening.”
A growing number of people watch music videos from the platform on smartphones, tablets or web-connected TVs using Apple TV, Roku and XBox devices.
Google Inc is a minority stakeholder in New York-based Vevo, which was founded in 2009. Universal Music is a unit of Vivendi SA, and Sony Entertainment is part of Sony Corp.
The online music video service started out distributing videos to AOL and Google’s YouTube, creating revenue from a portion of the advertising revenue it generated.
Of the approximately 6 billion music videos streamed each month, 5 billion occur outside the United States, Caraeff said. The top countries include the UK and Germany. Vevo offers its own service in more than 13 countries and will soon roll out in Mexico.
The most watched video ever is teen pop star Justin Bieber’s “Baby” with over 1 billion streams, according to the company. Last year, Pink’s “Just Give Me a Reason” topped Vevo’s list of the most viewed videos.
Caraeff said the company is holding conversations with potential investors as it seeks to expand. He declined to say who the company has spoken with. The Wall Street Journal has reported Vevo held talks with financial services firm Guggenheim Partners.
“We are continuing to speak to investors as we try to find the right partners to grow the business more rapidly than we’ve been able to do so far,” Caraeff said. “We’re still very active in that process.”
Last week, Vevo, which provides some of the most popular content on YouTube, expanded its content partnership with Yahoo in a deal that brings Vevo’s music videos and other programming to Yahoo’s video channel, Yahoo Screen, in the United States and Canada.
The partnership is expected to soon extend to Britain, Germany, Spain, France and Italy as well as the Yahoo Screen mobile app.