In the 1980s, British radio presenter Steve Wright used to stage phone-ins to his show from a ranting imaginary listener, “Mr Angry from Purley”.
Well, the phone lines from Purley are burning up, judging from some of the reactions to Vodafone’s agreed £1bn cash takeover of Cable & Wireless Worldwide, which was created by the demerger from Cable & Wireless in 2010. It’s rare to find a deal that has got up so many people’s noses.
Underwater: C&W – privatisation to demerger*
Investors may be happy with a 38p-a-share bid, compared with the 19.8p at which CW&W stock languished in February before an approach was made. But they are angry about the drop in CW&W’s share price since demerger, and those who enjoyed the growth spurt of the late 1990s are even angrier about the overall decline of the once-mighty Cable & Wireless group, a descendant of the Victorian consortium that laid the first submarine cable across the Atlantic . One City fund manager told the FT recently that Cable & Wireless Group was “the worst stock he ever bought“. Read more
Fujitsu’s plan to enter the European smartphone and tablet market has a 1980s ring to it. By the early part of that decade, Japanese companies had already grabbed large shares of the markets for televisions, hi-fi units, calculators, electronic toys and digital watches. These days, Europeans are more used to hearing about new Chinese, Taiwanese and South Korean entrants.
But in phones, Japanese manufacturers have largely concentrated on domestic consumers, using country-specific technology and features. It will be interesting to see how many of these features travel, and how many have to be tailored to local tastes, as Japanese phone makers break out of their national silo. (There have been reports that Panasonic is also planning to launch a mobile phone for the European market* and Sony Ericsson – already present – is, as of last week, wholly owned by Sony.) Read more
I’ll say one thing for co-chief executives: two scapegoats are better than one. Since Research in Motion’s fortunes took a sharp turn for the worse last year, its dual-leadership structure has taken a beating. With the BlackBerry-maker’s decision last week to revert to one chief executive, the double-edged knives really came out for Jim Balsillie and Mike Lazaridis.
The initial noises out of the shake-up at Research in Motion, although it was more far-reaching than had been expected, are not especially encouraging for the investors and analysts who want radical action.
Mike Lazaridis and Jim Balsillie, the joint chairmen and chief executives of the maker of BlackBerries, have relinquished both roles. But they have handed over to an insider who looks determined to stick to the same course.
Thorsten Heins, the new chief executive, told the FT:
“I want to maintain the focus on enterprise, but we need to communicate a bit more with our consumers. We need to do more marketing.”
It’s more common to cite strategic than structural differences as a reason for resignation. But Carla Smits-Nusteling – one of the most prominent women in Dutch business – is quitting KPN, the telecoms group, because, in the words of Tuesday’s statement, “she does not agree with the internal governance of the company in the new executive structure”.
Ms Smits-Nusteling, KPN’s finance director, sat on its management board (which is itself overseen by a supervisory board, in the continental European style). KPN has expanded that board from three people to 12, by bringing in all the divisional heads.
This could be about power. After all, a one-third say in decisions about a company’s operational direction is different from a one-twelfth say. Jos Versteeg, an analyst at Theodoor Gilissen, a Dutch bank, told Dow Jones:
The new management structure might compromise some of [Ms Smits-Nusteling's] executive authorities, handing over more power to the CEO, which could be the reason for her dissatisfaction.
AT&T has spent the past few weeks denying that it was about to drop its bid for T-Mobile USA, despite the heavy regulatory opposition. It has now done precisely that.
I was originally against the deal, arguing in March that:
The US performs badly in fixed-line broadband services in terms of price and speed compared with other countries, hurt by Verizon and AT&T having shrugged off the imposition of competition. The last thing the US now needs is AT&T, which already has mobile operating margins of more than 40 per cent, pulling that trick again.
Come on, DoJ. Just say no.
The US Department of Justice subsequently came out against the deal, along with the Federal Communications Commission. AT&T has taken the medicine, paying the proposed deal’s $4bn break-up fee and going back to square one. Read more
American Airlines finally plummeted into bankruptcy last week, eight years after workers’ wage concessions seemed to have helped parent AMR plot a route out of disaster. Managers hadn’t wrung enough from the workforce in 2003, some claimed. The staff hadn’t pulled their weight since, said others. Many concurred that the “discipline” of bankruptcy would have been good for American.
The news that AT&T is taking a $4bn charge to cover the break-up fee it will owe to Deutsche Telekom if its takeover of T-Mobile fails is concrete evidence of how badly it has done in its campaign to convince regulators. To which I say, good.
I have been against the AT&T and T-Mobile deal from the start, arguing that it would enable AT&T and Verizon to replicate in mobile the duopoly that they and the cable companies enjoy in fixed line telephony and broadband. Read more