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.

L2? Did you topup or holding & waiting. Can't believe could've paid far less today.

I have topped up and back to a full house now ..... I think some of the news has been mishandled and not worried ....



Buy orders Sell orders
Num(%) Num Vol(%) Vol VWAP Vol Vol(%) Num Num(%)
1% (52.00%) 13 (53.28%) 2,919,950 54.29 - 55.14 2,560,251 (46.72%) 12 (48.00%)
5% (53.13%) 17 (57.12%) 5,209,750 54.04 - 55.42 3,910,251 (42.88%) 15 (46.88%)
10% (46.15%) 24 (45.58%) 5,433,950 53.97 - 56.06 6,486,951 (54.42%) 28 (53.85%)
15% (40.00%) 30 (45.16%) 5,726,950 53.78 - 56.26 6,954,071 (54.84%) 45 (60.00%)
50% (40.79%) 31 (45.18%) 5,731,850 53.78 - 56.26 6,954,071 (54.82%) 45 (59.21%)
100% (40.96%) 34 (45.00%) 5,751,970 53.71 - 56.35 7,029,763 (55.00%) 49 (59.04%)
all (40.48%) 34 (44.99%) 5,751,970 53.71 - 56.40 7,033,763 (55.01%) 50 (59.52%)

Can you post L2 for VOD also? What did you topup at & what you looking to sell.

Looking for a swing trade rather than intraday - close to 54p




14:01 GMT: ROUNDUP mmo2 posts 10 bln stg loss in wake of 3G writedowns
LONDON (AFX) - Mobile phone operator mmo2 PLC reported a huge 10 bln stg loss as it wrote down the value of its third generation licences bought at the height of the teleom boom three years ago.
The company reported a 10.2 bln stg loss for the full year, reflecting an exceptional charge of 9.66 bln stg.

Around 5.9 bln stg of the charge came from the write-down of 3G licences, 2.4 bln on past acquisitions and 1.4 bln stg on the sale last month of its loss-making O2 Netherlands arm.

British Telecom paid 4 bln stg for mmO2's 20-year UK 3G permit and 5.2 billion stg for its German license before it demerged its wireless arm, then called BT Cellnet, in November 2001.

mmo2's assets are now worth about 10 bln stg.

Analysts expect the move by mmo2, widely flagged by weekend press reports, will lead other mobile operators, like Vodafone, to follow suit.

"There is a recognition that too much was paid for 3G licences three years ago at the top of the market, and since then, time in which to recoup that investment has shortened," chief executive Peter Erskine told reporters on a conference call.

This is because the launch of 3G has been delayed, in part due to the shortage of "unreliable and expensive" handsets.

The huge write-off masked a strong rise in the group's core earnings.

Earnings before interest, tax, depreciation and amortisation (EBITDA) rose to 859 mln stg in the year to March 31 from 433 mln in the prior year, coming in at the upper end of expectations.

Total revenue rose 14 pct to 4.874 bln stg.

Analysts were impressed by the strong performance from O2 Germany and the prospect of a deferred tax credit from the 2.1 bln stg write down of its UK third generation licence.

Broker Cazenove put the maximum value of this tax shield at 630 mln stg.

mmo2 said its average revenue per user (ARPU) target growth of 4 to 8 pct had been achieved with ARPU in the UK up 6.9 pct to 247 stg for the year and ARPU in Germany ahead 12.3 pct to 219 stg.

mmo2 improved its customer base by 11 pct to 19.4 mln at the year end.

The company added 98,000 UK customers in the last three months of its fiscal year, giving it 12.1 mln subscribers.

In Germany, it signed 236,000 new subscribers, taking its total to 4.81 mln. Erskine said mmO2 would consider any offers for O2 Germany if they were "good".

But he declined to comment on stock market rumours that mmo2 is in talks to sell O2 Germany to Dutch telecom operator Royal KPN, owner of German mobile firm E-Plus.

tim.farrand@afxnews.com

Buy orders Sell orders
Num(%) Num Vol(%) Vol VWAP Vol Vol(%) Num Num(%)
1% (47.83%) 11 (42.40%) 2,165,492 54.41 - 55.12 2,941,940 (57.60%) 12 (52.17%)
5% (54.55%) 18 (53.90%) 5,018,141 54.08 - 55.37 4,291,940 (46.10%) 15 (45.45%)
10% (47.17%) 25 (43.97%) 5,391,141 54.02 - 56.00 6,868,640 (56.03%) 28 (52.83%)
15% (42.31%) 33 (44.18%) 5,805,341 53.79 - 56.19 7,335,760 (55.82%) 45 (57.69%)
50% (43.04%) 34 (44.20%) 5,810,241 53.79 - 56.19 7,335,760 (55.80%) 45 (56.96%)
100% (43.02%) 37 (44.03%) 5,830,361 53.72 - 56.28 7,411,452 (55.97%) 49 (56.98%)
all (42.53%) 37 (44.02%) 5,830,361 53.72 - 56.33 7,415,452 (55.98%) 50 (57.47%

Buy orders Sell orders
Num(%) Num Vol(%) Vol VWAP Vol Vol(%) Num Num(%)
1% (55.71%) 78 (48.48%) 11,945,684 119.08 - 120.28 12,694,577 (51.52%) 62 (44.29%)
5% (55.49%) 101 (42.99%) 13,599,334 118.94 - 120.63 18,035,920 (57.01%) 81 (44.51%)
10% (54.25%) 134 (45.53%) 20,473,088 117.96 - 121.36 24,494,252 (54.47%) 113 (45.75%)
15% (46.93%) 153 (41.03%) 21,738,098 117.67 - 122.96 31,238,804 (58.97%) 173 (53.07%)
50% (45.30%) 164 (39.36%) 21,867,212 117.59 - 123.76 33,690,044 (60.64%) 198 (54.70%)
100% (42.75%) 177 (38.74%) 22,050,548 117.37 - 124.43 34,867,344 (61.26%) 237 (57.25%)
all (41.75%) 177 (38.71%) 22,050,548 117.37 - 124.62 34,912,144 (61.29%) 247 (58.25%)

0-1% (55.71%) 78 (48.48%) 11,945,684 119.08 - 120.28 12,694,577 (51.52%) 62 (44.29%)
1-5% (54.76%) 23 (23.64%) 1,653,650 118.94 - 120.63 5,341,343 (76.36%) 19 (45.24%)
5-10% (50.77%) 33 (51.56%) 6,873,754 117.96 - 121.36 6,458,332 (48.44%) 32 (49.23%)
10-15% (24.05%) 19 (15.79%) 1,265,010 117.67 - 122.96 6,744,552 (84.21%) 60 (75.95%)
15-50% (30.56%) 11 (5.00%) 129,114 117.59 - 123.76 2,451,240 (95.00%) 25 (69.44%)
50-100% (25.00%) 13 (13.47%) 183,336 117.37 - 124.43 1,177,300 (86.53%) 39 (75.00%)
100%- (0.00%) 0 (0.00%) 0 117.37 - 124.62 44,800 (100.00%) 10 (100.00%)

starting to recover

now + on day with massive 159 million trded

What did you topup at? When you say close to 54 I thought the lowest was 54.5 for size. So does that bring your hldg to 50k now? What price are you holding BT from?

This was a little brfore lunch time and in a sets dip when they were around 54/54.5 ....... I hold around that sort of figure in total ..... may well sit until 60p again - depends on the market.

My holdings in BT were bought at different prices and I hold a core as well as trade a few .... sitting on very useful profits at this time. I still think they will be the sector winners and the pension thingy isn't as bad as it seems imho.



ains

ains

I think it was last Sunday that the Telegraph on Sunday and The Business both ran large articles on BT

if you can get hold of copies i believe that they would be of interest

The Business also had a large article about MMo2 and its offerings to the emergency sector - it estimated new deals from that would be worth 6p per share

Thanks dick .... I did read the stuff in the Telegraph but not the Business - think I know where I can find a copy ..... OOM are doing well will a number of peeps like the police and I thinnk are demonstrating that BT was holding them back in many ways. There was a long piece on MW today by a writer they call the Sceptic and even he admitted they warrant a premium for the likely bid factor as well as the progress they are making.


ains

MmO2 counts cost of 3G as losses spiral to 10.2bn
By Liz Vaughan-Adams indy
22 May 2003


The mobile phone operator mmO2 admitted yesterday its third-generation mobile phone licences were no longer worth the 10bn they were bought for as it wrote down 5.9bn of their value.

"In hindsight, 4bn [the price paid for its 3G licence in the UK] was too much to pay and I don't think I'm alone [in thinking that]," Peter Erskine, the chief executive, said.

The 5.9bn write-down, plus a further 2.4bn asset write-down and the previously announced 1.4bn loss on the sale of its Dutch business, pushed mmO2 deep into the red for the 12 months to 31 March. Pre-tax losses swelled to 10.2bn for the year - the second-biggest corporate loss ever reported by a UK company - compared with an 873m loss the year before.

Vodafone reported the UK's biggest-ever corporate loss last year when it posted a 13.5bn loss after a 6bn write-down and a 13.5bn goodwill amortisation charge.

David Varney, mmO2's chairman, insisted, however, that the business was making good ground operationally. "In these year-end results, the size of the exceptional charges we have taken has masked the strong underlying performance delivered in our first full year as an independent company," he said.

MmO2 also reckoned the benefits that would come from the 3G licence write-down, including a tax advantage and a lower annual amortisation charge, could see it make an operating profit, before exceptional items, this year. Shares in the company closed up 0.5p, or 0.9 per cent, at 55.75p.

BT, mmO2's former parent, spent close to 10bn buying 3G licences, mainly in the UK and Germany, when markets were flying high during the year 2000. MmO2 now values the UK licence at 1.9bn, compared with its 4bn purchase price, and the German licence at just 1.3bn - a 74.5 per cent fall from its 5.1bn purchase price.

It is the second of the UK's five operators to have taken a 3G licence writedown. Deutsche Telekom, which owns T-Mobile - formerly One2One in the UK - now values its UK licence at about 2.4bn after taking a 2.2bn (1.56bn) write-down. The move will put both Vodafone and Orange under increasing pressure to follow suit although neither is currently thought to be keen to take the step.

Mr Erskine insisted, however, that he was still "confident" about the prospects for 3G - a service which mmO2 plans to launch commercially in the second half of next year.

City analysts were impressed with the company's performance. On an underlying, or Ebitda, basis, mmO2 reported a profit, before exceptional items, of 859m - almost double the 433m of a year before. Sales were 4.87bn, up from 4.28bn. "MmO2 has released a decent set of numbers ... turnover was a little light and Ebitda beat our numbers," analysts at Dresdner Kleinwort Wasserstein said.

One area of disappointment, however, was customer numbers. MmO2 added 301,000 new users in the final quarter of the year, boosting the total to 19.37 million. It won another 98,000 in the UK, bringing the total to 12.05 million, and another 236,000 in Germany, taking the total there to 4.8 million.

Another area of weakness remains the German business, which made an operating loss of 235m in the year although that is an improvement on the 399m loss a year before. Mr Erskine reiterated that mmO2 was not in talks about selling the unit.



Outlook: MmO2 gains brownie points for acknowledging reality on 3G
GlaxoSmithKline; MPC divided
By Jeremy Warner
22 May 2003


"A red herring" is how one City analyst yesterday described the massive 10.2bn write-off of assets announced by the mobile phone company mm02, if only because the stock market has thought them valueless for some years now and reflected this in the share price. But although this is just an accounting adjustment and not a cash item, he's wrong to think it an irrelevance. That 10.2bn represents real money spent in the madness of the bubble on acquisitions and the rush for now redundant spectrum. It's all gone down the pan after one of the greatest speculative investment booms of all time.

Three years ago today, the 3G licence auctions were still in full swing, and I can still vividly recall Sir Peter Bonfield, then chief executive of BT, incredibly claiming that the business plan remained "robust" as the price of each licence was bid up through the 5bn mark. He must have known he was playing Russian roulette, for within months it was clear what a ghastly mistake everyone had made.

Yesterday's write off amounts to final recognition of the management failure that allowed such profligacy to run riot as the boom reached its zenith. It's much easier for mm02 to grasp the nettle than Vodafone, because those ultimately responsible have long since gone. At Vodafone, the management is still largely the same, so the humiliation of writing off 3G licences will be that much greater. We'll know next week, when Vodafone announces figures, whether they've managed to swallow their pride. It will be interesting to hear the explanation, for there are tax and amortisation advantages in taking the hit, if they haven't.

Perhaps significantly, even mm02 continues to believe the licences are worth something, if only a fraction of what was paid for them. Despite the fact that Peter Erskine, chief executive of mm02, is much more sceptical than any of his rivals about 3G's mass market appeal, he's keeping a little over 40 per cent of their value on the books. That may be a good sign, for it suggests that even if 3G never lives up to the high hopes once placed in it, some use for the spectrum, perhaps as just an overspill for ever growing mobile voice telephony, might eventually be found.

Brokers were impressed by the strong performance from O2 Germany and the prospect of a deferred tax credit from the 2.1 bln stg write down of its UK third generation licence. "Germany business is performing extremely well, perhaps further reducing the pressure for consolidation, although 3G cash drain will now increase," said Cazenove in a research note.

As widely reported in the weekend press the company took exceptional charges of 9.66 bln stg, including a 5.9 bln stg write down in the value of its third generation (3G) licences. "The large writedown in goodwill and licence fees is already more than fully discounted and may bring forward UK tax credits," added Cazenove. The broker put the maximum value of this tax shield at 630m. The company posted an EBITDA of 859m for the year to March 31 2003, against a stock market consensus estimate of 842m. Cazenove said it would raise its EBITDA estimates by about 3% but also increase capex by 20% for the current financial year.

In a research note Morgan Stanley said the results are above consensus on revenues and EBITDA. The broker also highlighted the likely UK tax credit and the prospect of consolidation in Germany. mmO2 said it would consider any offers for O2 Germany if they were good.

LONDON (AFX) - Shares in mm02, the UK mobile phone operator, are expected to be active in opening deals, with brokers divided on the near-term direction of the stock in the wake of yesterday's figures.
Goldman Sachs was bearish on mm02's share price performance in the near-term, cutting its rating back to 'in-line' from the previous 'outperform'.

But other brokers were much more upbeat.

Merrill Lynch repeated its 'buy' advice and hiked its target price to 68 pence from the previous 66 pence. And another leading broker reiterated its 'overweight' stance and increased the price aim to 75 pence from 73 pence -- saying it remains a buyer in the 53-60 pence range.

nm/vjt/

Durlatcher has them as a trading 'dont care' as they say charts indicate a range of 52/59p aand no clear direction until they hit one of the guides .... looks okay to me and more than happy to hold

Thu 22 May 2003


LONDON (SHARECAST) - Telecoms company BT is to reveal a record 8bn black hole in its pension fund, reports the Guardian. Millions of pounds a year will have to be put away to safeguard retirement payments for more than 350,000 former staff.

Vodafone is expected to stand by the 14bn it has spent on third generation mobile licences next week, despite mmO2's to write-off 6 billion of similar investment, writes The Times.

The prospect of another rate cut increased yesterday when the Bank of England said its monetary policy committee had voted narrowly to keep rates on hold earlier this month, adds the Telegraph.

L2? BT did well, wish I got some, missed out. Did you offload this am or holding?

decided to hold - thought they might go through 2






Buy orders Sell orders
Num(%) Num Vol(%) Vol VWAP Vol Vol(%) Num Num(%)
1% (43.75%) 7 (76.30%) 2,170,632 56.08 - 57.28 674,370 (23.70%) 9 (56.25%)
5% (54.17%) 13 (84.96%) 4,020,632 55.84 - 57.31 711,970 (15.04%) 11 (45.83%)
10% (48.57%) 17 (81.27%) 4,256,357 55.78 - 57.84 980,790 (18.73%) 18 (51.43%)
15% (57.14%) 28 (73.72%) 5,392,236 55.01 - 59.76 1,922,369 (26.28%) 21 (42.86%)
50% (54.55%) 30 (73.69%) 5,597,236 54.83 - 59.95 1,998,061 (26.31%) 25 (45.45%)
100% (57.63%) 34 (73.78%) 5,622,256 54.75 - 59.95 1,998,061 (26.22%) 25 (42.37%)
all (56.67%) 34 (73.74%) 5,622,256 54.75 - 60.13 2,002,061 (26.26%) 26 (43.33%)

0-1% (43.75%) 7 (76.30%) 2,170,632 56.08 - 57.28 674,370 (23.70%) 9 (56.25%)
1-5% (75.00%) 6 (98.01%) 1,850,000 55.84 - 57.31 37,600 (1.99%) 2 (25.00%)
5-10% (36.36%) 4 (46.72%) 235,725 55.78 - 57.84 268,820 (53.28%) 7 (63.64%)
10-15% (78.57%) 11 (54.68%) 1,135,879 55.01 - 59.76 941,579 (45.32%) 3 (21.43%)
15-50% (33.33%) 2 (73.03%) 205,000 54.83 - 59.95 75,692 (26.97%) 4 (66.67%)
50-100% (100.00%) 4 (100.00%) 25,020 54.75 - 59.95 0 (0.00%) 0 (0.00%)
100%- (0.00%) 0 (0.00%) 0 54.75 - 60.13 4,000 (100.00%) 1 (100.00%)

L2? Why's this stubbonly not moving despite BT & VOD moving higher and a +ve US?
What did you get your BT at? I suppose you were fortunate enough to get at lows? It's ticked up again despite allowing me to get on board I again failed to buy it.