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.

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?

It might .... but it shouln't



Buy orders Sell orders
Num(%) Num Vol(%) Vol VWAP Vol Vol(%) Num Num(%)
1% (54.29%) 19 (51.94%) 2,719,532 56.79 - 57.42 2,516,742 (48.06%) 16 (45.71%)
5% (54.76%) 23 (46.30%) 3,042,707 56.71 - 57.59 3,529,015 (53.70%) 19 (45.24%)
10% (54.72%) 29 (44.67%) 3,141,207 56.66 - 57.77 3,891,217 (55.33%) 24 (45.28%)
15% (48.48%) 32 (50.09%) 4,048,595 56.06 - 57.90 4,034,017 (49.91%) 34 (51.52%)
50% (45.33%) 34 (45.73%) 4,253,595 55.77 - 59.13 5,047,097 (54.27%) 41 (54.67%)
100% (47.44%) 37 (45.85%) 4,273,715 55.67 - 59.13 5,047,097 (54.15%) 41 (52.56%)
all (46.84%) 37 (45.83%) 4,273,715 55.67 - 59.20 5,051,097 (54.17%) 42 (53.16%)

L2? Let me know when you're getting back in ie. qty & price. You think it will be today?

Think I will hold off until tomorrow now but ready to jump in at any time - 56.25p current to buy with high vol of 80 million with 40 mins to go




Buy orders Sell orders
Num(%) Num Vol(%) Vol VWAP Vol Vol(%) Num Num(%)
1% (51.61%) 16 (35.90%) 1,564,333 55.84 - 56.55 2,792,701 (64.10%) 15 (48.39%)
5% (52.27%) 23 (31.66%) 2,174,066 55.64 - 56.78 4,692,249 (68.34%) 21 (47.73%)
10% (48.21%) 27 (33.19%) 3,099,554 55.15 - 57.05 6,238,228 (66.81%) 29 (51.79%)
15% (39.71%) 27 (31.62%) 3,099,554 55.15 - 57.24 6,703,630 (68.38%) 41 (60.29%)
50% (38.16%) 29 (30.08%) 3,304,554 54.83 - 58.09 7,680,618 (69.92%) 47 (61.84%)
100% (38.55%) 32 (30.00%) 3,324,674 54.71 - 58.15 7,756,310 (70.00%) 51 (61.45%)
all (38.10%) 32 (29.99%) 3,324,674 54.71 - 58.20 7,760,310 (70.01%) 52 (61.90%)

L2 for VOD? WRT todays falls do you still think it'll not fall on results day & go 60+?

I would rather wait until results day ..... but suspect we will see a mini bounce before then. Sub 56p now



Buy orders Sell orders
Num(%) Num Vol(%) Vol VWAP Vol Vol(%) Num Num(%)
1% (53.57%) 45 (39.74%) 6,565,622 119.33 - 120.39 9,955,246 (60.26%) 39 (46.43%)
5% (49.23%) 64 (34.03%) 9,144,059 118.92 - 120.83 17,726,544 (65.97%) 66 (50.77%)
10% (42.50%) 85 (35.44%) 14,361,647 117.86 - 121.94 26,166,064 (64.56%) 115 (57.50%)
15% (34.78%) 96 (32.63%) 14,804,922 117.71 - 122.91 30,567,246 (67.37%) 180 (65.22%)
50% (34.62%) 108 (31.67%) 14,936,570 117.59 - 123.45 32,226,686 (68.33%) 204 (65.38%)
100% (33.33%) 121 (31.20%) 15,119,907 117.27 - 124.13 33,347,328 (68.80%) 242 (66.67%)
all (32.62%) 122 (31.17%) 15,119,908 117.27 - 124.32 33,388,124 (68.83%) 252 (67.38%

So what price are you thinking of topping up now or have you already done so today?

I haven't bought back yet but will asap ..... hoping for a dip early this morning .... maybe 54p


TIMES

BIG losses loom for mmO2 when it reports full-year results later this week. The airy mobile phone operator has already confessed to a 1.4 billion write-off on its Dutch business, which was recently sold. More write-offs are expected.

They may include the companys third-generation mobile licences, acquired for 5.1 billion in Germany and 4 billion in the UK three years ago. The significance here is not the size of the numbers write-offs are non-cash charges and do not affect current trading but the implicit admission that the licences were not worth the original price paid.

Nonetheless, the prospect of big write-offs widely trailed last March has led to all manner excitement. After all, if mmO2 overpaid for its German and British licences, then hasnt the whole industry done likewise? It is hardly a welcome precedent for Vodafone, which has staked its future on people using mobiles as internet devices, running at high third-generation speeds.

But not all licences are the same. MmO2s auditors will determine whether the write-offs are necessary, based on ten-year projections for each country. Its German operation may be improving fast, but it remains loss-making. In the first half, operating losses were 121 million. The company is a firm fourth in a four-horse market with a 7 per cent share. Vodafone, incidentally, has a 40 per cent share in Germany. For mmO2, reducing Germanys value on the balance sheet is merely a statement of the obvious.

The bigger question is whether similar write-offs are on the cards for mmO2s UK business. This, however, is unlikely. Cellnet, mmO2s former identity, was well established and profit margins are rising. In the first half it earned 196 million. If the auditors take a dim view of Cellnets licence, that will be disquieting. But a German provision is a belated admission of what the market already knew. The bad news is already in the share price. Hold.

There we go .... said this the other day



mmO2 preps market for 3G writedowns
By Drew Cullen
Posted: 19/05/2003 at 10:14 GMT


mm02's financial PR bunnies are softening up the press in advance of Wednesday's results in which the UK-owned network operator is expected to declare a massive loss.

Stories in the Sunday Times, FT and The Guardian all say that mmm02 will write down, the majority of its 9bn investment in 3G licences (to be precise, former parent BT footed the bill). At the same time, the company will take a massive hit on its lossmaking Dutch operation, valued in the books at 1.4bn, but sold last month for 25m. The twin write down will see mm02's asset value reduced by between 6bn and 9bn, according to which newspaper you read. Currently, mmO2's asset value is 18bn.

mmO2's 3G writedown is to be welcomed. It will be interesting to see if Vodafone, T-Mobile and Orange get realistic too.

Vodafone maybe could take the pain, but T-Mobile parent Deutsche Telekom and Orange parent France Telecom have battered enough balance sheets as it is without this additional headache.

L2? So do you think it will go down to 54 today or tommorrow am. The above article seems to be the only press report that welcomes the write down. Unsure of outcome.

The article closely reflects my own views .... masrket has reversed again - US futures are mixed .... could go either way but I am waiting .


20 May 2003


Lehman Bros has an equal-weight rating and 500p price target for Rexam, an overweight rating and 73p price target for mmO2