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.

Full story in the Indy

Mobile operator 3 'unlikely to survive beyond 2006'
By Liz Vaughan-Adams
19 May 2003


The mobile phone operator 3 is unlikely to still be trading by 2006, having been broken up or sold off before that, according to the industry research house Enders Analysis.

3 launched the UK's first commercial third generation (3G) phone service in March and has been dogged by technical problems. There are now fears the company will not even get close to its target of 1 million customers in the UK by the end of the year.

Richard Wray
Monday May 19, 2003
The Guardian

Mobile phone operator MMO2 will this week announce a dramatic drop into the red as it slashes the value of its business including the licences it bought

to operate so-called next generation or 3G services.
The company warned earlier this year that it was reviewing its balance sheet and it is expected to announce, alongside its annual results on Wednesday, that it is cutting up to 6bn from the value of its assets.

The majority of the writedown relates to the value of licences to operate 3G services bought at the height of the internet boom. Technical difficulties and the squeeze on telecoms spending which followed the dotcom crash have delayed the rollout of the new technology, which opens the door to new services such as video calling.

MMO2's management will point out that the 9bn bill for the 3G licences it owns in Germany and Britain was footed by its parent company at the time, BT.

Wednesday's colossal loss will include the 1.4bn hit the company was forced to take in April in order to sell its ailing Dutch business. That sale led many in the City to predict that the company would also quit the highly competitive German market where MMO2 has a share of less than 8%.

Chief executive Peter Erskine is understood to believe that the German operation, which has gained ground recently under a new manage ment team, should be given more time.

As for the underlying performance of the business, MMO2 gave the market an update about its trading in March, saying profits for the year before financial charges were likely to be in line with analysts' forecasts of 838m, compared with 433m last year.

The communications equipment manufacturer Marconi completes its financial restructuring today as shares in Marconi Corp, the new company owned largely by its banks, start trading in London.

The Herald this morning


The telecoms group's full-year results are likely to focus on its two main markets, the UK and Germany.

In the UK, it is expected to show good revenue growth and improving profitability, but slowing subscriber growth. It is also likely to report positive earnings in Germany, after the turnaround throughout the year. The City sees a pre-tax profit of 844m, up from 433m last year.

broker summary

20 buy

8 hold

6 sell

L2 for VOD & OOM? Moneyam is totally down this morning & cannot even see the trades now.

all down at this time although I have ME L1

There seems to be a softening up exercise going on :-))


19 May 2003 - Associated News

MOBILE phones operator mmO2 is set to write off as much as 6bn from the value of its business as it exorcises the ghosts of its former management.


The write-down - expected to be revealed with the network's annual results on Wednesday - will be an admission that more than 9bn which its former parent BT invested in licences to operate 3G multimedia networks will never deliver an adequate return.


It will also put more pressure on mobiles giant Vodafone to follow. It has so far resisted write-downs, claiming that its strong position in all of its major markets make it much more valuable than its rivals.






MmO2 boss Peter Erskine has been forced into the write-down by the sale of its Dutch arm in April. The group made a 1.4bn loss on that deal, which set a unflattering benchmark to value the rest of the group - particularly its struggling German operation.


The investments in 3G as well as the billions poured into Germany and Holland were made during a quixotic expansion bid by ousted BT chief executive Sir Peter Bonfield at the peak of the dotcom boom.


The City is expected to welcome the write-offs and says the move will make it easier for investors to track mmO2's underlying performance. They have little effect on its health because they are accounting adjustments that do not drain any cash from the balance sheet.


Stripping out these so-called 'one-off items', annual pre-tax losses are expected to almost halve from 731m to around 380m. Sales are expected to rise from 4.3bn to 4.9bn reflecting gains in market share.

L2 for VOD & OOM? Where do you see the price going today and over the next 2 days after results?

No L2 at this time

OOM - would expect this to move with the market until results are out - market seems to be heading for 3900 at this time. Now is not the time to take a new position in my views


ains

Released: 19 May 2003



mmO2 continued record-breaking growth for text messaging (SMS) - handling on
average more than 30 million messages per day - and other mobile data services
for the year ending 31 March 2003, it was announced today. This comes ahead of
mmO2's preliminary results this Wednesday, May 21.



Peter Erskine, chief executive of mmO2, said: 'mmO2 is gaining momentum in the
mobile data space and person-to-person SMS is the core service from which demand
for more sophisticated higher-value data services is emerging. In the third
quarter, mmO2 had already exceeded its 2002/2003 target of 16% of service
revenues from data, and this trend was further accelerated in the fourth
quarter. This puts the company well on track to achieve 25% of revenues from
data by the end of 2004.'



SMS

Group-wide, more than 11.6(1) billion text messages were sent and received
during the year and around 60% of O2 customers now use text messaging. In the
UK, O2 maintained its number one position and carried more than 8.3 billion text
messages during the year(2), giving it a market share of 35%. In all markets, O2
increased the number of customers using SMS and messages sent per month. O2
Ireland, for example, consistently achieved amongst the highest SMS usage levels
in Europe with each customer sending and receiving on average 100 messages each
per month.



Premium SMS

Taking person-to-person SMS to the next stage, O2 is also leading the market in
the provision of innovative premium text messaging services, leveraging its
partnerships in broadcast and football. In the UK, more than a third of premium
SMS's are football-related and the business handled nearly seven million premium
texts from fans during the course of the season. Arsenal's international fan
base also took advantage of ring-tones, match analysis and commentary, text
alerts and votes and multimedia messages (MMS) via their mobile handsets. The
company expects to announce plans to offer similar services for fans of other
Premiership clubs shortly.



O2 UK, in conjunction with Channel 4, is also introducing a range of new
interactive mobile data services to coincide with the launch this Friday of Big
Brother 4 - a fly-on-the-wall television programme in the UK, which it is
sponsoring for the second consecutive year. The new services will enable
customers to receive pictures, news updates and 3D talking heads of the
contestants to their MMS handsets as well as text the producers, send a message
direct to the on-screen news ticker and nominate 'housemates' for eviction. Last
year, O2 UK handled more than 10 million related texts from viewers.



In Ireland, viewers of the show can, for the first time, evict people from the
Big Brother house by using O2 Ireland's premium text service. Irish viewers can
also keep up to date throughout the nine weeks with all the hidden gossip
sessions, stolen kisses and escape plots via the Big Brother news alerts.



Peter Erskine continued: 'This year we expect to see a continuation of the
explosive growth in text and interactive services on the back of such
sponsorships as Big Brother 4. In addition, we will continue to build on the
success of the O2 brand, focus on data-centric customer segments and innovative
customer services, such as text 'Bolt-on's', to further attract and retain high
value customers.'



GPRS

Signs that usage of 'email on the move', multimedia messaging services (MMS) and
Java games is on the increase was reflected in the latest GPRS figures. mmO2 now
has more than half a million 'active' GPRS customers up from 200,000 at the end
of December 2002.



O2 media messaging

The O2 media messaging service was launched in October 2002 and by the end of
the year there were around 100,000 active MMS users across the O2 footprint,
sending an average of five messages per month. O2 has led MMS interconnect
agreements with other network operators across its territories. During the last
few months, it announced the first such deals with Vodafone, Orange and T-Mobile
in the UK and O2 customers in Germany now have full interconnect with T-Mobile,
Vodafone and E-Plus.



O2 'Games Arcade'

O2's Java games service, the O2 Games Arcade, launched in September 2002 and is
proving highly popular amongst the high value 'youth' target audience. By the
year-end more than 278,000 games had been purchased. The service is constantly
made more appealing by the addition of the latest games - more than 60 new games
have been added in the last few months as well as an online highest score
service.



Music and Video Trials

O2 has recently announced trials of video and the world's first 'music over
mobile' services using GPRS. Video services being trialled include the ability
to create and send 10-second video clips, and to browse, select and download
video clips including regularly updated news, sport, weather and entertainment.
Once selected, the clip will be 'streamed' or downloaded direct to the mobile
handset. The O2 music service enables customers to select, retrieve and store
the latest chart hits via their GPRS-enabled mobile handset onto a specially
designed 'digital music player' - and start listening in around 12 seconds. O2
is working with some of the biggest names in broadcasting and media, to support
these services, including MTV and BMG.



O2 Online

At the year-end the Online channel accounted for more than 600,000 of the O2 UK
customer base, compared to just over 300,000 at the end of last year. Online
customer ARPU is significantly higher than that of customers acquired through
other channels, in particular for pre-pay customers, mainly reflecting their
higher mobile data usage. O2 is the clear leader in the UK online market well
ahead of it s nearest competitors, reflected in overall WAP and web portal
usage, as well as customer numbers.





Note to Editors

Mobile data roaming

O2 UK offers GPRS roaming with 29 networks in 26 countries, including Australia,
Austria, Belgium, Canada, Czech Republic, Finland, France, Germany, Hong Kong,
Ireland, Italy, Netherlands, Norway, Portugal, Russia, Spain, Sweden,
Switzerland and the USA (AT&T and T-Mobile).



O2 Ireland offers GPRS roaming with the UK, Germany, Austria, Italy, USA, ,
Portugal, Czech Republic, Finland, Hong Kong, Singapore, Sweden, Norway, the
Netherlands and Israel.



O2 Germany offers GPRS roaming to Finland, France, UK, Hong Kong, Ireland,
Italy, Netherlands, Norway, Austria, Philippines, Poland, Russia, Switzerland,
Singapore, Turkey and the USA.


mmO2

mmO2 has 100% ownership of mobile network operators in four countries - the UK,
Germany, the Netherlands and Ireland - as well as a leading mobile internet
portal business. All of these businesses are branded as O2. Additionally, the
company has operations on the Isle of Man (Manx Telecom) and owns O2 Airwave -
an advanced, digital emergency communications service.



mmO2 was the first company in the world to launch and rollout a commercial GPRS
(or 2.5G) network and has secured third generation mobile telephony ('3G')
licences in the UK, Ireland, the Netherlands, and Germany.



mmO2 has some 13,500 employees, with revenues for the year ended 31 March 2002
of 4.276 billion. The company had 19.1 million customers and data represented
17.7% of total service revenues in the quarter ending 31 December 2002.

volumes are high this morning @ 31 millions and we seem to be recovering on the trading update


Buy orders Sell orders
Num(%) Num Vol(%) Vol VWAP Vol Vol(%) Num Num(%)
1% (50.00%) 15 (52.70%) 2,596,657 57.46 - 58.25 2,330,384 (47.30%) 15 (50.00%)
5% (55.00%) 22 (60.95%) 4,533,733 57.21 - 58.38 2,904,728 (39.05%) 18 (45.00%)
10% (54.39%) 31 (59.41%) 4,943,380 57.13 - 58.55 3,377,030 (40.59%) 26 (45.61%)
15% (49.28%) 34 (62.31%) 5,850,768 56.64 - 58.71 3,538,630 (37.69%) 35 (50.72%)
50% (46.75%) 36 (57.36%) 6,055,768 56.42 - 59.86 4,501,710 (42.64%) 41 (53.25%)
100% (48.75%) 39 (57.44%) 6,075,888 56.35 - 59.86 4,501,710 (42.56%) 41 (51.25%)
all (48.15%) 39 (57.42%) 6,075,888 56.35 - 59.94 4,505,710 (42.58%) 42 (51.85%)

L2 for VOD & OOM? Stength shown after announcement faded now back to lows, any lower poss? Do you think the price will return to 60+ either tommorrow or Wed? Did you sell any on Fri?

I did sell a few on Friday as I hinted .... not sure we will see 60p before the figures. markets are way down although I think they will close aabove 4000


Currently looking to buy back at sub 57p



Buy orders Sell orders
Num(%) Num Vol(%) Vol VWAP Vol Vol(%) Num Num(%)
1% (56.25%) 18 (56.17%) 2,912,467 56.97 - 57.82 2,272,537 (43.83%) 14 (43.75%)
5% (52.38%) 22 (48.33%) 3,244,614 56.92 - 58.03 3,469,199 (51.67%) 20 (47.62%)
10% (51.79%) 29 (46.12%) 3,582,817 56.81 - 58.25 4,185,545 (53.88%) 27 (48.21%)
15% (45.71%) 32 (50.64%) 4,490,205 56.25 - 58.40 4,377,445 (49.36%) 38 (54.29%)
50% (43.59%) 34 (46.78%) 4,695,205 55.97 - 59.43 5,340,525 (53.22%) 44 (56.41%)
100% (45.68%) 37 (46.89%) 4,715,325 55.88 - 59.43 5,340,525 (53.11%) 44 (54.32%)
all (45.12%) 37 (46.87%) 4,715,325 55.88 - 59.49 5,344,525 (53.13%) 45 (54.88%

Do you think the bid will drop below 57.5 today or prior to results? L2 for Vod?

O2 Signs Up With NewWorldIQ
19/05/03: NewWorldIQ, a provider of online marketing solutions, has announced mobile communications company O2 Ireland as a licensed customer


O2 will use NewWorldIQs online marketing solutions as part of its overall marketing strategy, to create, deliver and manage its online customer communications.

NewWorldIQs Business Development Manager Fiona Harte said: O2 understand the benefits of integrating online campaigns into its overall marketing strategy, so we feel that it is particularly significant that they recognised the unique features which our suite of products can offer.

"We are delighted to have O2 on board and look forward to working with them.

Yvonne Cassidy, Marketing Programmes Manager with O2, added: O2 Ireland is committed to providing customers with innovative, up-to-date and relevant information and we have chosen NewWorldIQ for their impressive online marketing solutions portfolio, in addition to the strong support services team.

O2 will use DialogueIQ, one of NewWorldIQs online marketing solutions, as part of its ongoing customer relationship management strategy to deliver relevant, personalised communications to its large customer base throughout Ireland.

These will include email direct marketing initiatives, O2 customer surveys and online campaigns to manage event registration.

NewWorldIQ (formerly NewWorld Commerce) is headquartered in Los Angeles with offices in Dublin, New York and Saratoga. (19/05/03)

LONDON (SHARECAST) - Mobile phone operator mmO2 generated record-breaking growth for mobile data services last year, it announced today, but investors are more concerned about the huge losses likely with this week's results.

MmO2 said it exceeded its full year target for service revenues from data by the third quarter, putting itself on track to generate 25% of revenue from data services by the end of 2004.

However, the news will be overshadowed in its full year results, to be released on Wednesday, by write-downs of up to 5bn on the value on its UK and German 3G licences. The former BT subsidiary has already written down the value of its Dutch business by 1.4bn this year.

In the UK, O2 said it had maintained its number one data position last year by carrying more than 8.3bn text messages (including both sent and received text messages), giving it a market share of 35%.

O2 also said it was sponsoring Channel 4s reality TV show Big Brother again this year, and would be introducing a range of new interactive services. Last year, O2 said it handled more than 10m related texts from viewers.

Do you think the bid will drop even further today or prior to results? L2 for OOM & Vod?

I think that's possible with falling markets and the misunderstanding of the probable write-downs



Buy orders Sell orders
Num(%) Num Vol(%) Vol VWAP Vol Vol(%) Num Num(%)
1% (43.75%) 14 (44.10%) 1,964,937 56.68 - 57.30 2,490,239 (55.90%) 18 (56.25%)
5% (40.48%) 17 (35.50%) 2,240,040 56.59 - 57.55 4,070,205 (64.50%) 25 (59.52%)
10% (42.37%) 25 (35.62%) 3,228,628 55.83 - 57.90 5,836,013 (64.38%) 34 (57.63%)
15% (35.21%) 25 (35.00%) 3,228,628 55.83 - 57.99 5,996,213 (65.00%) 46 (64.79%)
50% (33.75%) 27 (32.88%) 3,433,628 55.48 - 58.86 7,009,293 (67.12%) 53 (66.25%)
100% (36.14%) 30 (33.01%) 3,453,748 55.36 - 58.86 7,009,293 (66.99%) 53 (63.86%)
all (35.71%) 30 (33.00%) 3,453,748 55.36 - 58.92 7,013,293 (67.00%) 54 (64.29%)




Buy orders Sell orders
Num(%) Num Vol(%) Vol VWAP Vol Vol(%) Num Num(%)
1% (43.68%) 38 (45.72%) 8,223,798 119.52 - 120.70 9,765,062 (54.28%) 49 (56.32%)
5% (44.09%) 56 (38.77%) 9,952,664 119.28 - 121.09 15,715,517 (61.23%) 71 (55.91%)
10% (40.20%) 80 (38.83%) 15,820,224 118.13 - 122.31 24,920,646 (61.17%) 119 (59.80%)
15% (33.58%) 91 (35.11%) 16,263,499 117.99 - 123.47 30,054,040 (64.89%) 180 (66.42%)
50% (33.55%) 102 (34.59%) 16,392,612 117.87 - 123.81 30,995,852 (65.41%) 202 (66.45%)
100% (32.30%) 115 (34.05%) 16,575,949 117.58 - 124.52 32,112,092 (65.95%) 241 (67.70%)
all (31.68%) 115 (34.02%) 16,575,949 117.58 - 124.70 32,147,288 (65.98%) 248 (68.32%

LONDON (AFX) - UK mobile phone operator mm02 PLC declined to comment on weekend press reports that it will write down the majority of its 9 bln stg investment in third generation licenses.
"We did state back in March at the time of our trading statement that we would be taking a look at the value of assets," said a company spokesman.

"But we have no comment on what the results of that review will be," he added. The group is expected to announce the outcome of its review with annual results on Wednesday.

The 9 bln stg bill for the 3G licences it owns in Germany and the UK was paid by its parent company at the time, BT Group.

At the same time, the company will take a massive hit on its loss-making Dutch operation, valued in the books at 1.4 bln stg, but sold last month for 25 mln eur.

The twin write down will see mm02's asset value reduced by between 6 bln and 9 bln stg, say newspapers.

mmO2 carries a book value of about 10 bln stg for its 3G licences. But delays in launching a 3G service has meant the mobile operator has had less time to earn a return on its investment.

tf/kl

L2 for OOM & Vod seems to have improved? Will this 3G writedown lead to a share fall Wed?