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Sun shines on IBM

The company acquired The Weather Company's B2B, mobile and cloud-based Web properties for $2 billion.

Paul Booth
By Paul Booth
Johannesburg, 02 Nov 2015

IBM's $2 billion acquisition and two more deals from Cisco were the highlights of the international ICT market last week.

At home, MTN's trouble in Nigeria dominated the local news.

Key local news

* Rockaway Capital, a Czech-based investment firm, acquired Naspers' holdings in online retailer Netretail and price comparison site Heureka, for $201 million.
* Huge Group proposed the acquisition of Centracom, a company that aggregates converged voice, connectivity and cloud solutions services utilising multiple technology brands.
* A new JSE cautionary by MTN.
* A renewed JSE cautionary by Huge Group.

Key African news

* A quarterly loss from Bharti Airtel Africa.
* MTN Nigeria has been issued with a NGN1 trillion (approximately US$5.2 billion) fine, arguably one of the highest in the history of the West African country's telecommunications sector, after allegedly violating a SIM registration order from the government. In addition, Nigeria's communications commission has reportedly suspended all regulatory services to MTN Nigeria as it awaits payment of this fine.
* NTEL has become Nigeria's fifth telecommunications player as it enters the Nigerian $32 billion telecommunications sector. NATCOM began as a consortium of companies which came together to bid for the core assets of NITEL/MTEL through a guided liquidation process. Having acquired the telecom licences to operate in Nigeria as a GSM operator, NTEL becomes the newest telecoms operator in Nigeria.

Key international news

Look out for the possible buy-out of Cell C by Telkom SA.

* Cisco bought Lancope, in the latest in a series of deals by the networking giant to boost its security business. The deal was worth $453 million.
* Cisco also bought IOT analytics company ParStream, which was part of the Cisco Entrepreneurs in Residence, a start-up incubation programme that works with early-stage entrepreneurs who are about to reshape the industry through their disruptive technologies.
* IBM purchased The Weather Company's B2B, mobile and cloud-based Web properties, including WSI, weather.com, Weather Underground and The Weather Company brand. The deal was worth $2 billion.
* Integrated Device Technology acquired fellow semiconductor company Zentrum Mikroelektronik Dresden for $310 million.
* Intel bought Saffron Technology, a cognitive computing firm.
* Securitas (Sweden) purchased the electronic security business of US-based Diebold for $350 million, as it aims to strengthen its technology offering.
* German payments company Wirecard acquired the payments business of Great Indian Retail Group, a major south-east Asian electronic payment and e-commerce business.
* Canada Pension Plan Investment Board and private-equity firm BC Partners agreed to buy a 30% stake in Cablevision Systems Corporation for about $1 billion, as part of Altice NV's takeover of the US cable provider.
* Xavier Niel, founder of ISP Illiad, made a further investment in Telecom Italia, raising his stake to about 15% and becoming the second largest stakeholder behind Vivendi.
* Chinese state-owned chipmaker Tsinghua Unigroup made a $600 million investment in Taiwan's Powertech Technology.
* A strategic partnership between 3E Company, a provider of environmental health and safety compliance and information management services, and Airsweb, a provider of EH&S software, in an alliance aimed at promoting seamless access to critical hazard communication documentation, substance-level regulatory content, and chemical regulatory data.
* ADP has dropped its lawsuit for defamation against Zenefits, a three-year-old Silicon Valley start-up.
* In a verdict that XYZ is characterising as a David-versus-Goliath-scale victory, the California-based domain registry behind .xyz has prevailed in a lawsuit levied by Verisign, the company that manages .com.
* The European Union on Monday said it had agreed in principle with the US on a new transatlantic data-transfer pact, as both sides race to complete the deal after the bloc's highest court junked a previous framework used by thousands of firms. The European Court of Justice this month invalidated a 15-year-old agreement, known as Safe Harbour, which allowed businesses to move Europeans' data, such as payroll information, to servers in the US. The court ruled that Europeans' data was insufficiently protected when transferred to the US, where it could fall prey to national intelligence services.
* Very good quarterly figures from Alibaba, Cirrus Logic, GoPro and Infinera.
* Good quarterly numbers from Apple, Aspen Technology, AVX, Cray, Digi International, Gemalto, Integrated Device Technology, InterDigital, IPG Photonics, MediaTek, PayPal, Sabre and Verisk Analytics.
* Satisfactory quarterly results from ADP, Avnet, Bharti Airtel, BT group, CACI International, Cadence Design Systems, Cascade Microchip, Cavium (back in the black), Charter Communications (back in the black), Check Point Software Technologies, F5 Networks, Insight Enterprises, MegaFon, Mercury Systems, Nice Systems, PC Connection, PMC-Sierra, Samsung Electronics, Shenandoah Telecommunications, Sony (back in the black), Synchronoss Technologies, T-Mobile US (back in the black), Vasco Data Security International and ZTE.
* Mediocre quarterly results from Amkor Technologies, Arris Group, AU Optronics, Belden, Corning, Diebold, Dow Corning, Etisalat, Ingram Micro, Innolux, Inotera Memories, Iron Mountain, Ixys, Nintendo, Nokia, OpenText, Pitney Bowes, Seagate Technology, Teradyne, TESSCO Technologies, Western Digital and Winbond Electronics.
* Mixed quarterly figures from Akamai Technologies, with revenue up but profit down; Altice, with revenue down but profit up; American Tower, with revenue up but profit down; Anixter International, with revenue up but profit down; Arrow Electronics, with revenue up but profit down; ASE, with revenue up but profit down; ASM International, with revenue down but profit up; Baidu, with revenue up but profit down; Broadcom, with revenue down but profit well up; Comcast, with revenue up but profit down; Equinix, with revenue up but profit down; Fiserv, with revenue up but profit down; Garmin, with revenue down but back in the black; Intelsat, with revenue down but profit up; Intersil, with revenue down but profit up; KPN, with revenue down but profit up; LG Electronics, with revenue down but back in the black; MicroStrategy, with revenue down but back in the black; Monolithic Power Systems, with revenue well up but profit down slightly; NCR, with revenue down but profit up; Pericom Semiconductor, with revenue down but profit up; Ruckus Wireless, with revenue up but profit down; ScanSource, with revenue up but profit down; Silicon Motion, with revenue up but profit down; STMicroelectronics, with revenue down but profit up; Time Warner Cable, with revenue up but profit down; Ultimate Software, with revenue up but profit down; UMC, with revenue up (just) but profit down; Web.com, with revenue down but back in the black; and Yandex, with revenue up but profit down.
* Very poor quarterly figures from Level 3 Communications.
* Quarterly losses from Atmel, Black Box, Bottomline Technologies, Ciber, Commvault Systems, EA, ESI, Extreme Networks, First Data, FormFactor, HTC, Imperva, L-3 Communications, Lattice Semiconductor, Lexmark, LinkedIn, MDC Partners, NetScout Systems, NTELOS Holdings, Quantum, RadiSys, Rovi, SGI, Square, Twitter, Xerox and Yelp.
* The appointments of Andrew Johnson as interim CEO of 3D Systems; Christopher E Kubasik as president and COO of L-3 Communications; and Sue Swenson as CEO of Novatel Wireless.
* The resignations of Svein Aaser, chairman of Telenor; Alex Mashinsky, CEO of Novatel Wireless; and Avi Reichental, CEO of 3D Systems.
* A good IPO on Nasdaq from Adesto Technologies, an IOT player.
* A withdrawn IPO by Deezer, the music streaming service.

Research results and predictions

EMEA/Africa:
* Vendors shipped a total of 355.2 million smartphones worldwide in 3Q15, up 6.8% from the 332.6 million units in 3Q14, marking the second highest quarter of shipments on record, according to IDC. The 3Q15 shipments were slightly below IDC's previous forecast of 363.8 million units, largely due to slightly lower than expected iPhone shipments, as well as Android flagship introductions from several top-tier OEMs, with price points outside the consumer sweet spot.

Worldwide:
* Global notebook shipments (not including detachable two-in-one products), are expected to drop 17.5% on year and 5.3% sequentially in Q4, as most notebook vendors had already completed their inventory preparation for the year-end holiday sales in Q3 and are still conservative about overall demand in Q4, according to Digitimes Research.
* The worldwide tablet market recorded lower shipments for the fourth straight quarter, with 48.7 million units shipped in 3Q15, according to IDC. At the close of 2014, IDC estimated the installed base of tablets to be 581.9 million globally, which was up 36% from 2013 but slowing quickly.
* Worldwide IT services and business services revenue is expected to decline 4.8% and 0.2% year over year in 2015. However, both categories are expected to return to positive growth in 2016.

Stock market changes

* JSE All share index: Down 0.9%
* Nasdaq: Up 0.4%
* NYSE (Dow): Flat (marginally up)
* S&P 500: Up 0.2%
* FTSE100: Down 1/3%
* Nikkei225: Up 1.4%
* Hang Seng: Down 2.2%
* Shanghai: Down 0.9%

Look out for

International:
* The outcome of the battle for PMC-Sierra, involving Microsemi and Skyworks.

South Africa:
* The possible buy-out of Cell C by Telkom SA, despite a recent refusal of the latter's initial offer.

Final word

Total Telecoms recently published its annual Global 100 telecoms list. The following are some of the top players and key changes:

* 1: AT&T
* 2: Verizon Communications
* 3: China Mobile (was number four)
* 4: NTT (was three)
* 5: Softbank (was seven)
* 6: Deutsche Telekom (was five)
* 7: Vodafone (was eight)
* 8: Telefonica (was six)
* 9: Am'erica M'ovil
* 10: China Telecoms (was 11)
* 11: Orange (was 10)
* 21: Bharti Airtel (was 25)
* 23: Comcast (was 27)
* 27: Etisalat (was 37)
* 28: TeliaSonera (was 22)
* 29: MTN
* 32: Liberty Global (was 24)
* 43: MTS (was 32)
* 46: Millicom (was 56)
* 49: Idea Cellular (was 63)
* 50: MegaFon (was 42)
* 59: PCCW (was 72)
* 68: Tata Communications (was 75)
* 76: Telkom SA (was 78)
* 81: Intelsat (was 85)

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