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.

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.

yes .... I bought low on BT - some less than 145p but average a bit higher


I think peeps are confused on oom and the write offs are seen as bad but they are factored in and the company looks more likely than ever to be a bid target.

Sector is up 1.27% - oom up 0.9%


ains





Buy orders Sell orders
Num(%) Num Vol(%) Vol VWAP Vol Vol(%) Num Num(%)
1% (58.06%) 18 (56.11%) 2,724,050 55.94 - 56.76 2,131,219 (43.89%) 13 (41.94%)
5% (55.00%) 22 (57.66%) 3,499,492 55.83 - 56.88 2,569,619 (42.34%) 18 (45.00%)
10% (50.94%) 27 (56.80%) 3,678,992 55.77 - 57.04 2,797,719 (43.20%) 26 (49.06%)
15% (54.41%) 37 (55.03%) 4,794,871 54.91 - 58.28 3,917,618 (44.97%) 31 (45.59%)
50% (56.34%) 40 (56.09%) 5,004,771 54.70 - 58.28 3,917,618 (43.91%) 31 (43.66%)
100% (55.13%) 43 (55.72%) 5,024,891 54.62 - 58.41 3,993,310 (44.28%) 35 (44.87%)
all (54.43%) 43 (55.69%) 5,024,891 54.62 - 58.50 3,997,310 (44.31%) 36 (45.57%)

0-1% (58.06%) 18 (56.11%) 2,724,050 55.94 - 56.76 2,131,219 (43.89%) 13 (41.94%)
1-5% (44.44%) 4 (63.88%) 775,442 55.83 - 56.88 438,400 (36.12%) 5 (55.56%)
5-10% (38.46%) 5 (44.04%) 179,500 55.77 - 57.04 228,100 (55.96%) 8 (61.54%)
10-15% (66.67%) 10 (49.91%) 1,115,879 54.91 - 58.28 1,119,899 (50.09%) 5 (33.33%)
15-50% (100.00%) 3 (100.00%) 209,900 54.70 - 58.28 0 (0.00%) 0 (0.00%)
50-100% (42.86%) 3 (21.00%) 20,120 54.62 - 58.41 75,692 (79.00%) 4 (57.14%)
100%- (0.00%) 0 (0.00%) 0 54.62 - 58.50 4,000 (100.00%) 1 (100.00%)

newmediazero, 21 May 2003

Battle commences for mobile traffic revenue
Justin Pearse
The next battle for the mobile content industry looks likely to be a struggle for a share of the standard traffic revenue generated when consumers start to interact with premium services.
Major content owners are generating increasingly large volumes of SMS traffic from consumers who want to interact with their brands, but at the moment all the revenue this generates is being kept by the mobile network operators.
Industry pundits believe the day will soon come when major content owners such as media and sports companies will exercise their power to demand a cut of traffic revenues.
'Call time has never been on the table but when organisations like UEFA flex their muscles, operators won't be able to keep it off the table,' said FT circulation and content sales manager Nigel Stockton.
Revenue share has for a long time been a contentious issue. Although operators do offer a share of premium SMS, content owners complain the percentage offered is too small. The huge volume of traffic being generated by content owners means this argument is spreading toward non-premium traffic.
'I think it'll have to move in that direction in time,' said Granada Sports and Interactive mobile manager Jane Crossley. 'With premium revenue share, awareness has picked up among operators that this has to be a collaborative process.'
Operators have to date firmly refused to countenance such a move. 'We don't do revenue share on traffic because we don't do revenue share on traffic,' summed up Vodafone Live! music business and content manager Edward Kershaw recently.
However Mike Short, VP O2 and chairman of the Mobile Data Association, was more positive. 'If there's as big a market with non-premium rates, we need to look at the sales incentives to suit,' he said.
But the increasing volumes that are generated by content owners mean that increasing pressure is now being applied.

L2 seems to have improved?

Buy orders Sell orders
Num(%) Num Vol(%) Vol VWAP Vol Vol(%) Num Num(%)
1% (48.57%) 17 (67.31%) 4,580,021 56.41 - 57.24 2,223,845 (32.69%) 18 (51.43%)
5% (54.00%) 27 (73.07%) 6,677,305 56.26 - 57.30 2,461,445 (26.93%) 23 (46.00%)
10% (52.24%) 35 (72.27%) 7,206,030 56.18 - 57.52 2,765,065 (27.73%) 32 (47.76%)
15% (57.32%) 47 (69.29%) 8,361,709 55.62 - 58.60 3,706,644 (30.71%) 35 (42.68%)
50% (55.68%) 49 (69.37%) 8,566,709 55.48 - 58.72 3,782,336 (30.63%) 39 (44.32%)
100% (57.61%) 53 (69.43%) 8,591,729 55.43 - 58.72 3,782,336 (30.57%) 39 (42.39%)
all (56.99%) 53 (69.41%) 8,591,729 55.43 - 58.82 3,786,336 (30.59%) 40 (43.01%

L2 strong still? Really would like this to close 58+ today. Would be really great!

there you go ..... all is well that ends well - outperforming sector now






Buy orders Sell orders
Num(%) Num Vol(%) Vol VWAP Vol Vol(%) Num Num(%)
1% (34.38%) 11 (51.00%) 2,199,652 57.00 - 57.66 2,113,188 (49.00%) 21 (65.63%)
5% (42.50%) 17 (61.87%) 3,489,283 56.76 - 57.67 2,149,988 (38.13%) 23 (57.50%)
10% (49.18%) 30 (71.51%) 6,069,322 56.37 - 57.87 2,418,108 (28.49%) 31 (50.82%)
15% (58.23%) 46 (68.50%) 7,304,201 55.68 - 58.95 3,358,387 (31.50%) 33 (41.77%)
50% (56.47%) 48 (68.62%) 7,509,201 55.52 - 59.09 3,434,079 (31.38%) 37 (43.53%)
100% (58.43%) 52 (68.69%) 7,534,221 55.46 - 59.09 3,434,079 (31.31%) 37 (41.57%)
all (57.78%) 52 (68.67%) 7,534,221 55.46 - 59.19 3,438,079 (31.33%) 38 (42.22%)

0-1% (34.38%) 11 (51.00%) 2,199,652 57.00 - 57.66 2,113,188 (49.00%) 21 (65.63%)
1-5% (75.00%) 6 (97.23%) 1,289,631 56.76 - 57.67 36,800 (2.77%) 2 (25.00%)
5-10% (61.90%) 13 (90.59%) 2,580,039 56.37 - 57.87 268,120 (9.41%) 8 (38.10%)
10-15% (88.89%) 16 (56.77%) 1,234,879 55.68 - 58.95 940,279 (43.23%) 2 (11.11%)
15-50% (33.33%) 2 (73.03%) 205,000 55.52 - 59.09 75,692 (26.97%) 4 (66.67%)
50-100% (100.00%) 4 (100.00%) 25,020 55.46 - 59.09 0 (0.00%) 0 (0.00%)
100%- (0.00%) 0 (0.00%) 0 55.46 - 59.19 4,000 (100.00%) 1 (100.00%)

L2 strong? Really wish I'd topped up/avg down yesterday. Would've been abs great!

Buy orders Sell orders
Num(%) Num Vol(%) Vol VWAP Vol Vol(%) Num Num(%)
1% (48.57%) 17 (75.03%) 4,547,594 57.08 - 57.72 1,513,257 (24.97%) 18 (51.43%)
5% (47.62%) 20 (70.06%) 5,481,868 56.96 - 57.96 2,342,699 (29.94%) 22 (52.38%)
10% (51.61%) 32 (75.49%) 8,040,557 56.61 - 58.11 2,610,819 (24.51%) 30 (48.39%)
15% (60.00%) 48 (72.31%) 9,275,436 56.03 - 59.08 3,551,098 (27.69%) 32 (40.00%)
50% (58.14%) 50 (72.33%) 9,480,436 55.90 - 59.20 3,626,790 (27.67%) 36 (41.86%)
100% (60.00%) 54 (72.38%) 9,505,456 55.85 - 59.20 3,626,790 (27.62%) 36 (40.00%)
all (59.34%) 54 (72.36%) 9,505,456 55.85 - 59.30 3,630,790 (27.64%) 37 (40.66%

L2 strong? +ve end on Wall Street - O2 perfoming well. Let's hope 60+ reached today.

Buy orders Sell orders
Num(%) Num Vol(%) Vol VWAP Vol Vol(%) Num Num(%)
1% (42.86%) 6 (64.07%) 1,767,500 58.75 - 59.41 991,149 (35.93%) 8 (57.14%)
5% (40.00%) 8 (63.79%) 2,245,704 58.62 - 59.55 1,274,749 (36.21%) 12 (60.00%)
10% (38.46%) 10 (68.62%) 2,920,634 58.33 - 59.61 1,335,749 (31.38%) 16 (61.54%)
15% (46.51%) 20 (58.87%) 3,427,834 57.89 - 61.06 2,394,614 (41.13%) 23 (53.49%)
50% (48.89%) 22 (64.55%) 4,361,007 56.84 - 61.06 2,394,614 (35.45%) 23 (51.11%)
100% (54.90%) 28 (65.72%) 4,591,027 56.43 - 61.06 2,394,614 (34.28%) 23 (45.10%)
all (53.85%) 28 (65.68%) 4,591,027 56.43 - 61.21 2,398,614 (34.32%) 24 (46.15%)

L2 weak? +ve start but now weakness after strength of Euro hits mkts. Still holding. I hope I have not made my usual mistake of not off loading this am. US Fut flat now.

Still looking okay - sector is up 1.41% - oom up 2.61% - market down 0.32% - intraday graph looks like they are trying for another go at 60p






Buy orders Sell orders
Num(%) Num Vol(%) Vol VWAP Vol Vol(%) Num Num(%)
1% (35.90%) 14 (59.39%) 3,990,882 58.77 - 59.52 2,728,619 (40.61%) 25 (64.10%)
5% (30.77%) 16 (46.02%) 4,469,086 58.71 - 59.75 5,242,219 (53.98%) 36 (69.23%)
10% (34.85%) 23 (49.86%) 5,315,616 58.49 - 59.78 5,345,819 (50.14%) 43 (65.15%)
15% (41.38%) 36 (46.93%) 5,795,816 58.23 - 60.34 6,554,684 (53.07%) 51 (58.62%)
50% (43.33%) 39 (50.71%) 6,743,140 57.49 - 60.34 6,554,684 (49.29%) 51 (56.67%)
100% (46.88%) 45 (51.55%) 6,973,160 57.20 - 60.34 6,554,684 (48.45%) 51 (53.13%)
all (46.39%) 45 (51.53%) 6,973,160 57.20 - 60.40 6,558,684 (48.47%) 52 (53.61%)

0-1% (35.90%) 14 (59.39%) 3,990,882 58.77 - 59.52 2,728,619 (40.61%) 25 (64.10%)
1-5% (15.38%) 2 (15.98%) 478,204 58.71 - 59.75 2,513,600 (84.02%) 11 (84.62%)
5-10% (50.00%) 7 (89.10%) 846,530 58.49 - 59.78 103,600 (10.90%) 7 (50.00%)
10-15% (61.90%) 13 (28.43%) 480,200 58.23 - 60.34 1,208,865 (71.57%) 8 (38.10%)
15-50% (100.00%) 3 (100.00%) 947,324 57.49 - 60.34 0 (0.00%) 0 (0.00%)
50-100% (100.00%) 6 (100.00%) 230,020 57.20 - 60.34 0 (0.00%) 0 (0.00%)
100%- (0.00%) 0 (0.00%) 0 57.20 - 60.40 4,000 (100.00%) 1 (100.00%)