Today's Top Stories If Vivendi (Paris: VIV.PA) is interested in selling its Global Village Telecom (GVT) Brazilian phone company, DirecTV (Nasdaq: DTV) is interested in bidding for it as a way to bolster its already strong Latin American presence, two sources familiar with the matter have said. According to a Bloomberg report, Vivendi is setting up a list of those interested in bidding on the formerly untouchable and still money-making telco. Those on the list will then have access to GVT's financial data to mull a potential bid on its assets. It's all very tenuous; the talks are private and a deadline for a first round of bids hasn't been set. Vivendi did hire Rothschild and Deutsche Bank (NYSE: DB) to study what to do about GVT—perhaps a sale, perhaps a public offering, sources have said. Still, DirecTV appears to be on the inside track to at least bid on the deal, even though spokesman Darris Gringeri joined a Vivendi spokesman in declining to comment. DirecTV would be a logical candidate for the telco because its U.S business seems to be flattening. The satellite operator for the first time lost customers in the United States last quarter but saw its Latin American base climb by 36 percent year-over-year. And then there's the high-speed Internet access--part of GVT's business that DirecTV has to find attractive. Since last year, DirecTV has been offering high-speed data access over a wireless network in Brazil, and in a June government auction it bought the rights to use regional airwaves for Internet. GVT, which Vivendi bought in 2009 for $4.18 billion, won't come cheap. Vivendi is making money on the telco and estimates are it's now worth about $6.4 billion. The only real reason it's even being considered for sale is that Vivendi is apparently in some financial difficulties. Vivendi stock fell to a nine-year low in April and its debt rating is in danger. New Vivendi Chairman Jean-Rene Fourtou, who took over after CEO Jean-Bernard Levy was ousted in June, is looking for ways to reduce the company's emphasis on telecommunications business because he thinks they lack scale and require too much investment, those inevitable "people familiar with the matter" said in June. For more:
- Bloomberg has this report Related articles:
Telecom Italia won't bid on GVT
Vivendi taps Jean-Yves Charlier to head up its telecom unit
Vivendi might sell GVT telecom unit Read more about: Vivendi, Brazil
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Japanese telecom giant NTT (NYSE: NTT) has expanded its strategic focus on cloud computing by acquiring Centerstance, a consulting company that specializes in cloud-enabled business transformation solutions, the two companies announced Tuesday. Centerstance will become a wholly owned NTT subsidiary. No financial terms of the acquisition were announced. "NTT is focused on becoming the leading partner of choice to help clients transform their business as they move to the cloud," Hiroo Unoura, NTT's president-CEO said in a news release. "Through this M&A, NTT will be able to strengthen its consulting capability and migration capability which are necessary to achieve a cloud migration supporting customer needs. Additionally, it will be a driving power for NTT to approach global cloud business especially overseas as a pioneer providing cloud service immediately taking in leading edge technologies without being bounded by existing systems and technologies." NTT is using a group of companies, Dimension Data, NTT Communications and NTT DATA to extend its reach into the cloud with an "extensive portfolio of cloud solutions... Enabled by capabilities that span the full applications lifecycle and managed infrastructure services" of "one of the world's largest IP backbones and a network of over 200 data centers," the carrier said in the news release. Centerstance, a Salesforce.com Platinum partner in the United States, described itself as a "fast-growing consulting company specializing in helping companies identify and move key business processes to the cloud leveraging the Salesforce.com platform." Combining with NTT will "fuel our ability to execute our growth strategy toward global expansion and bring new integration capability to our customers in all corners of the world while still providing an exceptionally high level of service to our customers," Arne Kainu, Centerstance's managing partner said in the news release. For more:
- see this news release Related articles:
NTT ups capacity on its Asia-Oceania backbone to 500 Gbps
NTT to extend enterprise cloud services to 8 countries by 2013 Read more about: Acquisition, cloud computing
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Burlington, Vt. dodged a bullet Tuesday when Citibank withdrew a U.S. District Court contempt-of-court motion because it said it wasn't getting the full story about municipally owned and operated Burlington Telecom. The bank was pressing for the city to be held in contempt as part of an ongoing dispute that started last year when the bank said the city and its law firm owed $33.5 million on a BT lease agreement. It withdrew the complaint when the city agreed to follow the bank's discovery schedule, as ordered by U.S. District Judge William Sessions. Citibank wants to find out when the city can or will offer up compensation. The dispute between the two parties really heated up in 2010 when the Burlington City Council legally dissolved its lease agreement with the bank and stopped allocating lease payments. Citibank moved to repossess BT's fiber optics, switching gear and servers, buildings and vehicles, but was stymied because Vermont regulators claimed an abrupt disruption of voice, video and data services would damage the utility's "public good," according to a story in the Burlington Free Press. Instead, in March 2012, the city and the bank reached what the newspaper described as an "interim agreement" where the city-run telco would deliver a portion of its earnings to the bank and a separate escrow account and let Citibank monitor its finances. Citibank attorney Kevin Fitzgerald told the newspaper that this month's payment was $301 and last month's was "just more than $500." Citibank in August said that Burlington "changed plans for an audit, causing an inconvenient and costly delay to its auditors" and the bank filed for the contempt motion. Burlington disputed that, claiming that Citibank didn't have the right to seek the documents it wanted and maintaining that the contempt claim be dropped. The city offered to share "several months of BT financial statements" with the bank and that conformed to the March court order, city attorney Michael Burak said. The bank said it wanted several years' worth of documents. Judge William Sessions, while calling Citibank's contempt claim "academic," seemed to side with the bank and amended his March order to require Burlington to make the past two years' worth of BT accounts available within the next 30 days. "I'm hopeful that it's enough time for us to make a thorough review of what they're asking for," Burak told the newspaper. "If it isn't, we'll ask for more." While all this is going on, Burlington is actively seeking a buyer for BT which, to complicate matters even further, still owes Burlington $16.9 million. All things considered, the city seems stymied when it comes to getting a new owner, a Seven Days story said. The business is now being managed by financial advisory firm Dorman & Fawcett and "the number of BT subscribers has nosed up in recent months," but there's no "major growth spurt" on the horizon and "BT can't afford to conduct a marketing campaign with its primary competitor, Comcast," according to the article. For more:
- The Burlington Free Press has this story
- and Seven Days has this story Related articles:
Burlington Telecom lender CitiCapital to repossess its network equipment
Burlington Telecom wants to extend network throughout Vermont Read more about: Burlington Telecom
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Chinese telecommunications giant China Unicom has further increased its Canadian presence by opening an office in Toronto and proclaiming that it will push further communications between both carriers and companies in the two countries. The move is all part of the Chinese telecom's international expansion into 240 countries, including a key focus on trade relationships with Canada and the U.S. market. The company's goal in Canada is to serve as a communications gateway to Asia by providing network backbone support to Canadian telcos that want to connect to China and telecom services to Canadian companies expanding into China. At the same time, a Globe and Mail story said, Chinese businesses will be encouraged to connect with Canada. "Our sole mission and unwavering force or our Toronto operations will be to support the global network infrastructure requirements of our Canadian clients," Yitao Wu, president of China Unicom (Americas) Operations said during a ribbon-cutting ceremony covered by the newspaper. The telecom's presence is only part of what the paper called a "flourishing trade relationship" between the two countries. China is the second largest merchandise trading partner for Canada, a position that Prime Minister Stephen Harper emphasized when he led a trade mission to China earlier this year. Bell Canada (NYSE: BCE), Telus (Toronto: T.TO), Rogers Communications (NYSE: RCI) and Manitoba Telecom Services are among China Unicom's Canadian telco partners. Worldwide, the company has partnership agreements with over 100 carriers. "There are many, many Chinese companies that are coming here, so they need telecom services because they want to expand their business," Wu told the newspaper. For now, at least, the company's North American advances are limited to wireline services even though Wu said that the carrier has "the largest iPhone user base outside the United States." It won't expand its wireless base here because "the market is too competitive" and building new wireless infrastructure would require "a lot of investment," he concluded. For more:
- the Globe and Mail carried this story Related articles:
Canadian content going to China; Sky sees no limits for New Zealand online video
Feds boost probe into Chinese telecom ZTE Read more about: Telus
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Bahrain Telecommunications (Batelco) has $1 billion to spend and is looking to use it to buy up Cable & Wireless Communications' (London: CWC.L) assets in Monaco, the Maldives, the Falkland Islands and other island nations. The two companies said in separate statements that talks are going on, confirming information that three banking and industry sources had told Reuters. The official statements, however, said that there was "no guarantee a deal would be reached." What's known for sure is that the properties are in play and the players are playing. BNP Paribas and Citigroup are advising Batelco while J.P. Morgan Chase has CWC's ear, the story said. Citi, meanwhile, is leading financing efforts for the transaction, a banker told Reuters. "Batelco has been keen to do a deal for a while now to address falling home revenue," one of the sources said in the story, adding that the "potential deal to buy CWC assets should give them presence in markets they are not in currently." Those markets would include Monaco & Islands locations in Maldives, Seychelles and the Falkland Islands and where the telco "offers fixed line, mobile, broadband and television services via brand names like Monaco Telecom, Dhiraaguy in the Maldives and Sure in Britain's Channel Islands and Isle of Man. Monaco and Islands had 543,000 mobile subscribers and 125,000 fixed line subs as of the end of March. Batelco, meanwhile, has money in the bank and an interest in expanding. It owns Jordanian telecom operator Umniah and holds 25 percent of Yemeni mobile operator Sabafon as well as minority stakes in Internet providers in Kuwait, Saudi Arabia and Egypt. CWC, the British telecoms group operating in the Caribbean, was formed through a Cable & Wireless demerger in 2010. For more:
- see this Reuters story Related article:
Cable & Wireless targets Asia for expansion Read more about: Acquisition, Bahrain
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