This sums up much of my thinking - I hold a few and swing trade a few and even trade intraday sometimes ......

I think there is a lot of slack that management can cut out of the costs and would also anticipate sector consolidation ..... good value currently and have been holding their own in a falling market. Lot of US interest.

ains


Edited by Dominic White
(Filed: 08/02/2003)


Texting makes MmO2 sexy but it's also risky

More and more Britons are discovering the joys of textual intercourse. In the month of December, we fired off more than 50m mobile messages a day, and next Friday (that's Valentine's Day, folks, in case you'd forgotten) we'll send considerably more than that.



It emerged this week that the chief beneficiary of this craze is MmO2 . BT's former mobile phone division revealed that it gets a higher proportion of revenues from texting than any of the other three operators.

Revenue from messaging grew at its fastest rate ever in the last quarter, up 19pc, and data services as a proportion of MmO2 's revenue rose to 17.7pc from 15.6pc.

More good news was the rise in MmO2 's average revenues per customer. ARPUs, as nerdy analysts like to dub them, grew by 5pc to 243 in the UK and by 9pc in Germany to 212.

MmO2 now has 19.1m subscribers and in Britain it may be the smallest player, with 11.9m users, but it is growing faster than its rivals - testament to the success of its rebranding from BT Cellnet.

Only 114,000 of its 503,000 new UK subscribers were higher-spending contract customers, but MmO2 claims its pre-pay customers have started spending more than before.

Customer growth in Germany, which continues to be dominated by T-Mobile and Vodafone, is less impressive and the MmO2 share price ascribes little or no value to this part of the business.

That seems unfair, given the fact that the group has attracted higher-spending customers and has made a decent fist of turning the operation around. An eventual sale or merger is almost as inevitable as a disposal of the Dutch unit, which is losing customers.

MmO2 's larger rival Vodafone is trading on a free cashflow yield of 6pc, while at 49p this week, MmO2 's equivalent valuation remains negative. It might not have Vodafone's scale or profitability but there is room for upside. A risky buy.

Tomorrows press looks good


April 15, 2003

MmO2 launches shake-up with Dutch disposal
By Nic Hopkins TIMES



MMO2 yesterday began its long-awaited consolidation of European assets by selling its loss-making Dutch subsidiary for 25 million (17 million), bringing the mobile phone operator a 1.4 billion charge.
The writedown is in on top of the 2 billion that mmO2 has invested in the subsidiary over the past three years.

The sale fanned speculation about mmO2s future in Germany, where it owns the smallest of four mobile networks. MmO2 has previously held talks to merge its business with that of KPN, the Dutch owner of third-ranked E-Plus.

Peter Erskine, mmO2 chief executive, said the sale price of O2 Netherlands was the best price we got, given that the company had seen no way of making the business anything more than cash break-even.

The business was bought by Greenfield Capital Partners, a private equity firm, which is to reinstate the old Telfort name, and defer spending on third-generation mobile technology.

MmO2 had struggled to stoke buying interest in O2 Netherlands after Vodafone ended talks to acquire it in January. The Dutch division ranks fourth in its market, has just over a million customers and recorded operating losses of 49 million in the six months to September 30.

Analysts said the sale price was more than O2 Netherlands was worth, despite the one-off charge that mmO2 will take as a result of the sale.

MmO2s German arm, with a book value of 6 billion, has 4.6 million customers but is barely profitable. The German market leaders, Vodafone and Deutsche Telekoms T-Mobile, each have more than 20 million customers and collectively control 80 per cent of the market.

MmO2 said that the division needs to lift its market share from 8 per cent to 12 per cent to be sustainable, although analysts say that closer to 20 per cent is needed. The fastest way to hit the target in a mature market would be to merge with E-Plus, which has a 20 per cent market share.

Rodney Sherrington, an ABN Amro analyst, said: In the long run, a merger is going to happen. But there is no pressure to do a deal immediately and the management appear to have no intention to rush.

Tempus



MMO2s disposal of its Dutch subsidiary has come sooner than most investors would have dared to hope. Shareholders were told of the companys intention to sell last November, when mmO2 presented its latest set of half-year results. But given the unenviable position of the business, and the straitened financial circumstances of most trade buyers, few would have held their breath for a deal.
The emergence of Greenfield Capital Partners, a private equity group, has not only allowed mmO2 to sell more quickly than was hoped. Greenfield has also paid more for the business than many would have thought likely. A sum of 25 million (17 million) hardly sounds princely, but the fact that the business is loss-making meant that most analysts ascribed a negative net worth to it. As importantly, the sale removes a notable distraction for mmO2 managers, giving them more time to focus on the stronger operations in the UK, the Irish Republic and Germany.

However, the true significance of the deal comes not in the speed of its execution, or the financial terms or the management ramifications. The true significance is in the nature of the buyer. Private equity groups are not sentimental sorts. They want to see positive cashflow. If Greenfield has its chequebook out, it suggests that there is hard cash to be made in mobile telephony.

Of course, the cash-generative qualities of mobile phone operators may not be as positive as Greenfields interest in mmO2s Dutch business suggests. Private equity firms across Europe are flush with cash since investors in them have been so attracted by the rates of return delivered in the recent past. They may feel the cash burning a hole in their pockets and are taking on riskier ventures in order simply to get invested. In addition, Greenfield already owns the Dutch fixed-line telecoms formerly owned by Energis and may see some more amorphous strategic advantage in crunching the two together.

However, if Greenfield thinks there is a reasonable return to be made out of the relatively weak player that is O2 Netherlands, it will do nothing but encourage investors in stronger outfits. Private equity buyers affection for exit routes also means returns may come more quickly than is often assumed. It may also imbue mmO2s domestic business in the UK, and its German operations, with a potential value exceeding current reckoning. It may even heighten hopes that the whole of what was BT Cellnet will be bid for. Hold.

Durlatcher says charting wise the shares have lifted up through the top of a congestion band ie around the 50p level and are poised to break out in a serious way - need to get through the next barier at 55p ..... I still hold and hold the most I have held in recent times ..... hanging on for the ride



ains

Lehman Bros retains its overweight rating in mmO2 raising its price target to 73p from 70p following yesterday's sale of O2 Netherlands.

L2? Are any other firms currently updating forecasts & price targets after the disposal.

i expect they all are .... but don't have any more details at this time


Buy orders Sell orders
Num(%) Num Vol(%) Vol VWAP Vol Vol(%) Num Num(%)
1% (32.26%) 10 (29.70%) 1,057,687 53.72 - 54.46 2,504,102 (70.30%) 21 (67.74%)
5% (34.04%) 16 (36.93%) 2,506,449 53.32 - 54.68 4,280,050 (63.07%) 31 (65.96%)
10% (32.76%) 19 (40.64%) 3,258,622 53.07 - 54.77 4,758,673 (59.36%) 39 (67.24%)
15% (35.00%) 21 (41.52%) 3,378,522 52.99 - 54.77 4,758,673 (58.48%) 39 (65.00%)
50% (38.81%) 26 (49.63%) 4,696,162 51.21 - 54.78 4,766,977 (50.37%) 41 (61.19%)
100% (41.89%) 31 (49.64%) 4,749,282 51.09 - 54.89 4,817,669 (50.36%) 43 (58.11%)
all (40.79%) 31 (47.54%) 4,749,282 51.09 - 58.58 5,241,669 (52.46%) 45 (59.21%

Is L2 still quite weak? Cannot believe how far its fallen due to bad US figs. I really need the US to end +ve in a similar manner to yesterday & O2 closing near the 54.25 level today.

US is improving a little - L2 also



Buy orders Sell orders
Num(%) Num Vol(%) Vol VWAP Vol Vol(%) Num Num(%)
1% (57.14%) 16 (56.56%) 1,813,784 53.08 - 53.97 1,393,175 (43.44%) 12 (42.86%)
5% (47.37%) 18 (49.26%) 2,155,622 52.99 - 54.17 2,220,214 (50.74%) 20 (52.63%)
10% (34.48%) 20 (40.20%) 2,576,177 52.79 - 54.54 3,832,537 (59.80%) 38 (65.52%)
15% (37.70%) 23 (43.46%) 2,946,077 52.21 - 54.54 3,832,537 (56.54%) 38 (62.30%)
50% (39.39%) 26 (50.47%) 3,913,717 50.70 - 54.55 3,840,841 (49.53%) 40 (60.61%)
100% (42.47%) 31 (50.48%) 3,966,837 50.56 - 54.69 3,891,533 (49.52%) 42 (57.53%)
all (40.79%) 31 (47.89%) 3,966,837 50.56 - 59.19 4,315,833 (52.11%) 45 (59.21%)

L2 must be weak right? Despite nice move up this am now ignoring mkt advances ↓0.5%.

some profit taking today I suspect - still holding mine



Buy orders Sell orders
Num(%) Num Vol(%) Vol VWAP Vol Vol(%) Num Num(%)
1% (44.44%) 16 (47.87%) 1,861,517 53.49 - 54.28 2,027,105 (52.13%) 20 (55.56%)
5% (41.07%) 23 (46.43%) 2,919,616 53.32 - 54.51 3,369,228 (53.57%) 33 (58.93%)
10% (37.14%) 26 (50.42%) 3,569,349 53.14 - 54.57 3,510,228 (49.58%) 44 (62.86%)
15% (35.53%) 27 (45.38%) 3,619,349 53.07 - 55.04 4,356,357 (54.62%) 49 (64.47%)
50% (37.04%) 30 (52.04%) 4,735,658 51.88 - 55.05 4,364,661 (47.96%) 51 (62.96%)
100% (39.08%) 34 (51.99%) 4,780,778 51.77 - 55.16 4,415,353 (48.01%) 53 (60.92%)
all (38.20%) 34 (51.96%) 4,780,778 51.77 - 55.25 4,419,653 (48.04%) 55 (61.80%

Goldman Sachs initiates coverage of Intercontinental Hotels with an underperform rating and of Mitchell & Butlers with an in-line rating.

The broker has an in-line rating for Invensys buts cuts estimates and has an outperform rating for mmO2 (OOM).

13:07 Wednesday 16th April 2003
Matthew Broersma


A select 350 users will begin trialling O2's video download and video messaging services next month, with a commercial version to follow this year
Mobile network operator O2 UK will begin trials of a wireless video service with 350 of its mobile phone customers at the end of this month, ahead of a possible commercial launch later this year.

The trials are the latest move by network providers to make use of emerging technologies such as GPRS (general packet radio service), along with the recent spread of multimedia-capable handsets, to roll out money-making features. Previous attempts to entice consumers into using data services such as WAP and early GPRS were less than successful, but more recent features such as picture messaging are proving more popular with users.

Those taking part in the trial, which begins at the end of this month, will be able to download or stream video without charge to their Nokia 7650, Nokia 3650 or xda handsets.

Potentially more attractive to consumers, however, will be the ability to send video clips recorded on either of the Nokia handsets to other video-enabled mobile phones or to email addresses. Both Nokia handsets have built-in cameras and can record up to 10 seconds of video.

The video-messaging, streaming and downloading services all use O2's GPRS network, but O2 is paving the way for similar services that will ultimately run on 3G with much faster transfer rates. Hutchison's 3 has already launched a 3G network in the UK, and operators have been running 3G services in Japan for several months.

The success of such multimedia offerings is crucial to wireless providers, who paid billions for 3G licences and must find a way to recoup the costs.

O2 will offer video clips from BSkyB as well as from Arsenal football club and the England rugby team, which are both sponsored by O2.

"We want to develop a range of communications and entertainment services that our customers really want and trials like this give us the opportunity to listen to our customers and get crucial feedback," said Dave McGlade, O2 UK's chief executive, in a statement. The company recently announced trials of a music download service that will begin next month in the UK and Germany. O2 parent mmO2, formerly known as BT Wireless, said earlier this week that it would sell its Dutch operation, O2 Netherlands, for 17m. The decision will cost mm02 a 1.4bn charge on top of the 2bn euros (about 1.4bn) that it has invested in the subsidiary over the past three years.

Silicon.com's Will Sturgeon contributed to this report.

Ains did GS provide any price targets for the stocks they evaluated today. Thanks.

L2? It seems quite strong just a short while ago is their any news or reason for strength?

not seen any news today other than nokia stuff





Buy orders Sell orders
Num(%) Num Vol(%) Vol VWAP Vol Vol(%) Num Num(%)
1% (64.44%) 29 (43.73%) 745,459 54.62 - 55.54 959,411 (56.27%) 16 (35.56%)
5% (58.33%) 35 (49.38%) 1,919,579 54.33 - 55.79 1,967,835 (50.62%) 25 (41.67%)
10% (61.63%) 53 (73.60%) 5,753,438 53.59 - 55.85 2,063,711 (26.40%) 33 (38.37%)
15% (63.46%) 66 (73.84%) 6,705,638 53.28 - 56.24 2,376,215 (26.16%) 38 (36.54%)
50% (65.18%) 73 (76.13%) 8,151,588 52.23 - 56.59 2,555,415 (23.87%) 39 (34.82%)
100% (64.75%) 79 (72.84%) 8,913,510 51.24 - 59.23 3,322,909 (27.16%) 43 (35.25%)
all (63.71%) 79 (72.82%) 8,913,510 51.24 - 59.35 3,327,209 (27.18%) 45 (36.29%

10:00AM 2003.04.17 (GMT+1)
Nokia achieves excellent profitability in the first quarter and mobile phone volumes grow faster than market


First quarter 2003 compared with the first quarter 2002:
- Net sales were EUR 6 773 million (EUR 7 014 million in 1Q 2002), down by 3%.
- Pro forma operating profit was EUR 1 187 million (EUR 1 286 million), down by 8%. This included a gain of EUR 56 million in 1Q 2003 from the sale of the remaining shares of Nokian Tyres. Pro forma operating margin was 17.5% (18.3%).
- Pro forma adjustments for 1Q 2003 were EUR 183 million, including:
- Goodwill amortization of EUR 43 million
- Positive adjustment of EUR 226 million to 3Q 2002 customer finance impairment (MobilCom)
- Pro forma net profit was EUR 860 million (EUR 915 million), down by 6%.
- Pro forma earnings per share (diluted) were EUR 0.18 (EUR 0.19). The sale of the shares of
Nokian Tyres contributed approximately EUR 0.01.
- Reported operating profit increased by 11% to EUR 1 370 million (EUR 1 234 million).
- Reported net profit increased by 13% to EUR 977 million (EUR 863 million) and reported earnings per - share (diluted) increased to EUR 0.20 (EUR 0.18).
- Operating cash flow in the first quarter continued strongly at EUR 1.4 billion.

Thursday April 17, 11:04 AM








Mmo2 leads FTSE higher as Nokia boosts telecoms
LONDON, April 17 (Reuters) - Britain's top shares pushed higher on Thursday, with mobile firm mm02 in the lead after pleasing earnings from Finnish handset giant Nokia (Helsinki: news) soothed fears over the outlook for corporate earnings.

"I think people quite like these Nokia numbers," said one dealer. "It's a sentiment issue. It simply shows there's a European corporate that is doing well."

MmO2 (LSE: OOM.L - news - msgs) shares were up 3.4 percent, while rival Vodafone (LSE: VOD.L - news - msgs) was up one percent.

By 0957 GMT the FTSE 100 (^FTSE - news) was up 41.6 points or 1.1 percent at 3,895.4, bouncing off a session low of 3,826.1 as traders geared up for a higher opening on Wall Street.

The expiration of FTSE 100 index options earlier in the session had boosted the market as dealers scrambled to buy the underlying shares.

Merrill Lynch has upgraded mmO2 to buy with a price target of 66p, following the news that the group is selling O2 Netherlands for 25m. The broker says it is a good deal for the telecoms group and is proof that the management is keeping its shareholders in mind.

O2 adds video trials to test plans

London, April 17 2003, (netimperative)



by Susie Harwood

O2 has announced plans to trial a new mobile video service at the end of this month, which will be followed by a previously announced music-over-mobile service trial in May.


The mobile operator has picked 350 users of Nokia 7650 and Nokia 3650 handsets to take part in the video service, which will allow them to create and record up to 10 seconds of video and send it to another video capable phone or email address, and download or stream video content free of charge for a six-week period.

During the trial, users will be offered downloadable content including Sky news, sport, weather and entertainment. O2 will use its sponsorships of Arsenal football club and the England Rugby team to offer users exclusive interviews with the Arsenal manager and post match highlights, and access to footage of England Rugby internationals.

The music download service, which will let users download chart-topping songs to their phones, will begin trials in the UK and Germany next month.

Both services will run over O2's GPRS network and if the trials are successful, the company will look to launch commercial services to expand its current MMS portfolio and attract more subscribers to its GPRS network, ahead of the launch of 3G next year.

O2 is also trying to catch up with Vodafone, which has signed up more customers for its Vodafone live! service. In January, O2 announced it had signed up 80,000 UK subscribers to its new Java games and MMS portfolio by the end of last year, compared to the Vodafone live! Service, which had 90,000 UK users.

Meanwhile, the take-up of MMS services already available, such as picture messaging, should be boosted by news earlier this week that Vodafone has signed an interoperability agreement with T-Mobile, O2 and Orange that will finally allow customers to exchange picture messages with users of all the major mobile networks.

10:20 Thursday 17th April 2003
Winston Chai, CNET Asia


A climbing expedition on Everest will be able to send text messages to report their progress using a temporary wireless network
The last phone-free sanctuary has just been conquered: in a stunt to promote mobile messaging, three companies have joined hands to provide a mobile phone service up the world's highest mountain, Mount Everest.

China Mobile, one of the largest cellular operators in the mainland, has set up a temporary wireless network on the mountain to allow progress of an upcoming expedition to be documented via SMS (Short Messaging Service) and MMS (Multimedia Messaging Service).

Handset maker Motorola will provide its 388C MMS-enabled handset for message transmission while a third partner Sohu.com, a China-based Net firm, will provide content services such as exclusive reporting on its Web site.

Besides seasoned mountaineers, Charles Zhang, president and CEO of Sohu.com, will also participate in the company-sponsored climb in May, Sohu.com said in statement.

"He will use SMS and MMS throughout the journey to report on the expedition," the firm added.

While mobile coverage can be boosted by adding base stations, this is one of the first attempts to bring wireless technologies up such great altitudes.

"Generally, wireless operating equipment can only work below a height of 4,000 metres. China Mobile is the first carrier to bring wireless applications to a level above 5,100 metres," claimed China mobile spokesman Wang Hongyu.

Future alpinists hoping to tap into the Everest mobile network will be disappointed as this is a temporary publicity stunt and will not be commercially launched.

"China Mobile is setting up this system temporarily for now. Maybe in the future they will make it permanently available for climbing expeditions," said Sohu.com spokeswoman Caroline Straathof.

She did not say if there will be a ban on annoying ringtones on the rooftop of the world.