Weekly Digest Issue No. 491
Digiweb to absorb Smart Telecom | Twitter and LinkedIn: a taste sensation?
Online betting jobs hint at positive forecast
Bookmaker Paddy Power brightened up Thursday morning with the news that it is to create 250 new jobs at its base in Tallaght as it expands further into the online sports betting market. Initially, the firm will recruit 50 new staff with IT skills as a result of a deal with French betting firm PMU, which will see Paddy Power provide its bet pricing and risk expertise to PMU. As it looks for more overseas opportunities such as the deal with PMU, Paddy Power said it will be recruiting 200 other staff with tech and/or e-commerce skills. The global online betting market has an estimated current turnover of EUR50 billion, and that figure is set to double in the coming years. Meanwhile, Derry had some good news of its own on Wednesday when Northern Ireland Enterprise Minster Arlene Foster announced that Indian business process outsourcing (BPO) company FirstSource intends to create 150 new jobs in the city. The new jobs include customer support advisors and operations management positions. Also on Wednesday, Irish enterprise software implementation company Aspera Solutions said it had signed seven multi-year enterprise resource planning (ERP) contracts worth more than EUR2 million in the UK and Ireland in the last quarter. As a result of the new contracts, the firm said it is currently in the process of recruiting 10 new employees. There was one grey cloud in among the good news this week, as Beru Electronics in Tralee, which manufacturers electronic components for car manufacturers, announced plans to lay off 80 of its 200 workers. These redundancies follow on from 40 job cuts announced earlier in the year by Beru. In a statement, Beru said its Tralee plant is currently loss-making and the redundancies were necessary to avoid a possible closure of the plant.
Digiweb to absorb Smart Telecom
Embattled telecoms firm Smart Telecom is to emerge from court protection after announcing this week that Digiweb is to acquire its customers and assets. Smart went into examinership in August with debt of around EUR70 million. As part of the proposed takeover by Digiweb, Smart's debt holders are set to write off around EUR50 million in loans. Under the terms of the scheme proposed to creditors, Smart's senior debt holders would only receive about EUR20 million of the total owed. This money, payable at maturity of the original loans in 2014, was loaned to Smart by a number of bondholders, including US groups Avenue Capital and Plainfield Asset Management. Other creditors are owed about EUR10 million. It is understood these will be offered less than EUR0.10 for every euro they are owed. Looking forward, the combined Smart and Digiweb entity would have around 46,500 broadband, data and telephone customers, as well as 48,000 web hosting and datacentre clients. Smart will form part of the Digiweb group, but the Smart brand will be retained. While the figures tot up nicely to create a strong player in the telecoms market, it'll be interesting to see what kind of strategy will be employed by the firms. The consumer market in particular is becoming increasingly competitive thanks to efforts from the likes of Imagine Broadband. The firm released pricing for its WiMAX product on Monday, saying it would provide a phone line and broadband for EUR25 per month, half the price of Eircom's equivalent offering. We'll have to wait and see whether Digiweb and Smart shift focus to the business and government markets, or make a concerted play for residential market share.
Vodafone outlines cost-cutting plans
Mobile giant Vodafone is preparing for a fresh round of cost-cutting. While releasing its interim results on Tuesday, CEO Vittorio Colao announced a plan to deliver its STG1 billion cost-cutting programme a year ahead of schedule. He also said that the firm would make a further STG1 billion in cost savings by 2012. The Vodafone Group reported a solid batch of first-half results with revenue, earnings and adjusted operating profits in line with forecasts. EBITDA was up 2.9 percent to STG7.5 billion, while revenues were up 9.3 percent to STG21.8 billion. In Ireland, the mobile operator said it gained an extra 106,816 customers during the third quarter, giving it a total of 2.12 million mobile subscribers. Following on from its deal with BT earlier in the year the firm now has 177,607 fixed-line and DSL business customers. In all, the firm has over 251,000 broadband customers (this figure includes DSL and mobile broadband) and a 24 percent share of combined mobile broadband and DSL subscriptions, making it a real player in the Irish broadband market. Meanwhile, Vodafone is also poised to crank up the pressure in the mobile market as it gears up to launch the iPhone in the new year when O2's exclusive contract to sell the handset expires. However, consumers hoping for a price war are likely to be disappointed, according to reports, which suggest that cut-price deals for the device will not materialise. This follows on from Orange's launch of the iPhone in the UK with tariffs that are broadly in line with O2's prices.
Twitter and LinkedIn: a taste sensation?
In a somewhat surprising move this week, Twitter announced that it had hooked up with business networking site LinkedIn. As part of the link-up, LinkedIn users who update their status on the site will also be able to simultaneously tweet it as well, and vice versa. The features have been launched on both sites. At first glance it appears relatively straightforward -- here's information on how to get started. LinkedIn is the largest business networking site in the world with a reported 50 million members. The site is primarily used by people to post work-related information about themselves, such as CVs, or to help find jobs or employees. There is an element of social networking to the site also, but this is secondary. The deal seems like a real coup for LinkedIn, which will be able to gain exposure and potentially increase its user base. Meanwhile, Twitter co-founder Allan Blue said the micro-blogging site "wants to take advantage of the strong identity in LinkedIn to make… professional tweeters more successful." Twitter and LinkedIn differ fundamentally in that anyone who signs up for a Twitter account can do so without revealing their true identity. LinkedIn, on the other hand, is based on the social networking idea that people put their identities on the web. Reid Hoffman, co-founder of LinkedIn, and Biz Stone, co-founder of Twitter, have likened the partnership to "peanut butter and chocolate". Is that a taste abomination or a tasty treat? We'll see.
Oracle hits Sun block in Europe
Oracle's proposed USD7.4 billion acquisition of Sun Microsystems has run into some difficulty in Europe as competition authorities officially objected to the proposal this week. The European Commission's 'statement of objections' wasn't entirely unexpected since it had already voiced its concerns about potential harm to the database market from an Oracle-Sun tie-up when it launched a formal antitrust probe of the deal in September. For its part Oracle said it would "vigorously oppose" the European Commission's position. Oracle said the Commission's case "reveals a profound misunderstanding" of the software markets, and that a deal of this kind had not been blocked on either side of the Atlantic "in decades". The Commission's decision has sparked a row of sorts between competition watchdogs in the US and Europe. In August, the US Department of Justice signed off on the merger without asking for any concessions. This week it published a formal statement claiming that the merger was unlikely to be anticompetitive as "customers would continue to have choices from a variety of well-established and widely accepted database products". This statement didn't go down well in Europe, with a competition spokesman responding that it wasn't normal for a regulator to comment on proceedings elsewhere. "I cannot recall any instance when the Commission has remarked on an ongoing investigation in another jurisdiction," he said. "We have our methods, they have theirs. We apply European merger control rules, they apply US merger control rules." European Competition Commissioner 'Steelie' Neelie Kroes has said that the statement of objections doesn't necessarily mean that Europe will block the Sun-Oracle deal. According to a report in the Wall Street Journal, Kroes said "Let's be optimistic."