Qualcomm fined for “predatory pricing”

While the US Department of Justice asks the appeals court to pause its antitrust ruling, the company is hit with a €242 million fine by the European Commission.
Read time 7min 40sec

Events involving Qualcomm dominated the international ICT market last week.

At home, the latest news regarding the EOH investigation was in the spotlight.

Key local news of the past week

  • Karoo, an investment holding company, made a R2 748 480 000 (35%) investment in Cartrack Holdings that may lead to a complete take-over of the group.
  • The announcement by EOH that the ENSafrica investigation has found evidence of a number of governance failings and transgressions at EOH, including unsubstantiated payments, tender irregularities and other unethical business practices, which are primarily limited to the public sector business centralised in EOH Mthombo and to a limited number of EOH employees.
  • The Gauteng High Court in Pretoria has set aside the City of Tshwane’s Municipal Broadband Network Project contract, which was awarded to Thobela Telecoms, a special purpose vehicle in which Altron Nexus, a subsidiary of JSE-listed Altron, was a minority shareholder. Altron Nexus was involved as primary network designer and architect, supplier of broadband equipment and related services.
  • Naspers expects to list Prosus on Euronext Amsterdam in September.
  • A renewed JSE cautionary by EOH.
  • The resignations of Rob Godlonton, CEO of EOH’s ICT business; and Zunaid Mayet, CEO of Nextec, a subsidiary of EOH Holdings.

Key African news

  • Zimbabwe expects to complete the sale of its majority shareholding in mobile phone operator NetOne and fixed telecoms company TelOne by the end of the year.

Key international news

The ENSafrica investigation has found evidence of a number of governance failings and transgressions at EOH.

Bad behaviour
  • 8x8 acquiredprivately held Wavecell, a Singapore-based global communications platform as a service provider, for $125 million.
  • Appriss, a leading provider of data analytics solutions in safety, health and retail, bought the retail loss prevention solutions from Verisk.
  • Blackstone, a private equity firm, purchased Vungle, a mobile advertising company.
  • Ebix acquired Yatra Online for $239 million.
  • Entegris bought MPD Chemicals, a provider of advanced materials to the specialty chemical, technology and life sciences industries.
  • Eaton purchased Innovative Switchgear Solutions.
  • Fluke, a global leader in test and measurement instruments, acquired German-based Prüftechnik, a market leader in precision laser shaft alignment, condition monitoring and non-destructive testing.
  • J2 Global bought certain assets of Idea First Technologies, a digital media group, and Highwinds Capital and Cloak Holdings, which operates a VPN network and cloud services business.
  • L&T Infotech purchased Lymbyc, an India-based firm with capabilities in the advanced analytics space.
  • Visa acquired Payworks, a German provider of next-generation payment gateway software for the point of sale.
  • eBay made a 5.5% investment in India’s Paytm Mall, an e-commerce marketplace.
  • Esker made a 40% investment in B/2BNOW, a leading provider of electronic data interchange (EDI) solutions for the SAP S/4HANA Cloud enterprise resource planning system.
  • NetEase Games, the online games division of NetEase, invested in Behaviour Interactive, Canada's largest independent video game developer.
  • Ping An Insurance Company of China invested in online education company iTutorGroup in a move to expand its smart education business.
  • Xiaomi made a 6% investment in compatriot chip designer VeriSilicon Holdings, as the smartphone maker revamps its years-long pursuit of success in semiconductors, which it sees as central to driving innovation.
  • The following patent and lawsuit activity:
    • Deutsche Telekom has lost a legal battle to continue offering an all-you-can-watch mobile video product after a court sided with the German regulator, saying it violated European rules on roaming and network neutrality.
    • Impact Engine has filed a complaint alleging various Google online advertising platforms, including Google Ads and Google AdSense, infringed on six patents.
    • Taiwan-based Egis Technology (Egistec), which specialises in the design and development of fingerprint sensors, has been accused by China's Goodix Technology of infringing Goodix's patent concerning optical in-display fingerprint sensor technology.
  • Broadcom has called off its potential acquisition of Symantec.
  • Amazon has become the target of an antitrust investigation by the European Union over its use of merchants' data, underlining regulators' increasing focus on how tech companies exploit customer information.
  • The EU has approved Vodafone's $22 billion purchase of Liberty Global's cable networks in Germany and central Europe, clearing the way for the British company to become Europe's largest mobile, broadband and TV provider.
  • The US Department of Justice has asked the appeals court to pause the antitrust ruling, citing “Qualcomm’s critical role in 5G technology in the short term” as the rationale behind its decision.
  • Toshiba Memory, which was spun off from Toshiba in April 2017, will change its corporate name to Kioxia on 1 October.
  • Qualcomm has been fined €242 million by the European Commission for “engaging in predatory pricing”.
  • Good quarterly numbers from Adtran (back in the black), Ericsson (back in the black), Esker, Microsoft and Sterlite Technologies.
  • Satisfactory quarterly results from Crown Castle International, Jio, Millicom International (back in the black), Plexus, Wipro and WNS Holdings.
  • Mediocre quarterly results from Alliance Data Systems, ASML Holding and Ubisoft.
  • Mixed quarterly figures from America Movil, eBay, Netflix, SAP, Software AG and TSMC, with revenue up but net income down; and from IBM, Omnicom Group and Snap-On, with revenue down but net income up.
  • Quarterly losses from Aehr Test Systems, Limelight Networks and MicroVision.
  • Half-year losses from Access Intelligence and Audioboom Group.
  • A full-year loss from Snapdeal.
  • The appointments of Devendra Kamtekar as CEO of Digisol Systems, a subsidiary of SmartLink Holdings; and AM Naik as non-executive chairman of Mindtree,
  • The retirement of Tom Mendoza, vice-chairman of NetApp.
  • A planned IPO on Nasdaq from Hong Kong-based Diginix, a blockchain financial services and technology company, in Q4 this year.
  • A planned IPO from ROXi Music, the maker of the home-based music streaming device ROXi, in Q4 2019.
  • A planned IPO in the US from Netease’s Youdao arm, which provides an Internet education platform.
  • An IPO filing in the US from CloudMinds, a Chinese intelligent cloud robot developer backed by the SoftBank Vision Fund.
  • A good IPO on the Shanghai Stock Exchange by Quectel Wireless Solutions, the Shanghai-headquartered supplier of cellular and global navigation satellite system modules.
  • A disappointing IPO on the NYSE by DouYu International Holdings, China's largest live-streaming platform.
  • A very good IPO on the NYSE by Medallia, a software as a service company specialising in real-time business intelligence.

Research results and predictions

  • EMEA/Africa:
    • Sub-Saharan Africa will continue to be the region that experiences the fastest growth in smartphone adoption, according to the GSMA.
  • Worldwide:
    • Worldwide shipments of devices – PCs, tablets and mobile phones – will total 2.2 billion units in 2019, a decline of 3.3% year on year, according to Gartner.
    • 5G-capable phones will represent 6% of total sales of phones in 2020, rising to 51% by 2023, according to Gartner.

Stock market changes

  • JSE All share index: Up 1.7%
  • FTSE100: Flat (marginally up)
  • DAX: Down 0.5%
  • NYSE (Dow): Down 0.7%
  • S&P 500: Down 1.2%
  • Nasdaq: Down 1.2%
  • Nikkei225: Down 1%
  • Hang Seng: Up 1%
  • Shanghai: Down 0.2%

Look out for

  • International:
    • Cisco, scooping up cyber security start-up Signal Sciences.
  • South Africa:
    • Further revelations from EOH.

Final word

DocuSign recently published its “Eight digital best practices for IT professionals”:

  • Look for paperless opportunities in core tasks. Most companies that have achieved the greatest digital efficiencies began the journey with small initiatives.
  • Cultivate IT and line of business partnerships. According to CIO’s 15th Annual State of the CIO survey, the top strategic focus of today’s IT leaders includes fostering IT/business unit partnerships and leading organisational change efforts to align IT initiatives with business goals.
  • Identify and mitigate information security risks. IT leaders are under increasing pressure to protect their businesses from risk and comply with privacy policies and legal regulations.
  • Integrate new capabilities within existing platforms. With increased budgetary pressures, it’s important to identify ways to make the most of your existing investments in department-specific technology.
  • Align technology with customer and vendor systems. Your company’s external customers and vendors are likely focusing on their own digital efficiency initiatives.
  • Empower mobile technology and workflows. Fast reaction times are crucial to success in high-service, deadline-driven businesses. In today’s multi-platform BYOD environment, it’s challenging for IT leaders to protect confidential information while delivering operational conveniences to a global workforce.
  • Understand geographic standards and regulations. It’s commonplace for employees, vendors and customers to be located around the world. This creates challenges in document execution given strict national and international security laws and standards.
  • Learn from best practices in consumer services. The transactional experiences in our daily lives – online shopping, communication and support – are setting a new bar for expectations in professional services.
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