Telefonica

Operators are well aware of the threat that OTT presents, although some of their views--for example, that subscribers only use OTT apps because they are cheap--may be slightly off kilter. Nevertheless, if operators are still in any doubt about the severity of the threat, two reports this week provided some stark figures to illustrate how big a threat OTT is set to become.

Telefónica is selling 40 per cent of its business in Central America for $500 million (€379 million) Guatemalan-based Corporacion Multi Inversiones (CMI), as the Spanish operator continues to seek ways to reduce its heavy debt burden.

Pace's transition from being another set-top box maker into a full-service pay TV provider is expected to pay off in first half of the year with a revenue boost.

France Telecom this week clearly spelled out its hopes for LTE as the operator reported a drop in revenue in the first quarter and described as 'ferocious' the ongoing price war in France's mobile market. Will LTE bring everything that Europe's operators are hoping, however? EE's first quarter suggests it's far from an easy ride, while one report also doubts that LTE will restore pricing power in Europe. Moving to LTE may be a 'no brainer,' but as is always the case in mobile, creating value and service differentiation to drive up revenue will be hard to do.

The telecoms market in Europe continued to face macroeconomic uncertainty (particularly in Southern Europe) price-driven competition and further regulatory impacts in 2012. However, some positive stories emerged during the year: mobile data revenue grew solidly and the fixed revenue mix improved further as broadband penetration continued to rise.

Dutch operator KPN said it will cancel its dividend for 2013 and 2014, at the same time confirming plans to press ahead with a €3 billion rights issue that was approved by shareholders earlier this month as a measure to reduce debt.