The following is a guest post by TC2 Senior Consultant Sreeni Katta, who is based in Singapore.

I was in Mumbai recently to meet with India's major Telecommunication solution providers in conjunction with a procurement project for one of our clients. Vodafone's team, who were one of the invitees to the meetings, surprised all of us in the room by announcing their new offerings. Apparently Vodafone now offers National Private Leased Circuits (NPLC) in India, and expects to offer International Private Leased Circuits (IPLC), Internet Leased Lines, and even MPLS networks soon.

The first question that came to my mind was: Why on earth did a major global wireless service provider decide to venture into the untested waters of enterprise networking services -- and in India, no less?

In fact, Vodafone's historical (although admittedly recently softening) policy of religiously disposing of fixed line assets that it acquired incidentally through various acquisitions throughout the world, made this announcement particularly surprising. But once we'd reflected a little, we realized that in many ways it makes a lot of sense.

Firstly, enterprise customers continuously strive for a one-stop shop for all of their telecommunication needs, and a pure wireless focus leaves Vodafone behind some of its key competition. Secondly, India is at the heart of the huge growth potential in Asia Pacific. In fact, India has one of the world's largest mobile phone user markets, with 10 million new subscribers signing up every month.

Vodafone does have a very well established emerging market strategy. And over the years it has disposed of ownership interests in a number of saturated western markets in order to invest in emerging markets instead. So making a move into wireline services in a growth market, rather than in one of its more established western markets (where growth is limited and strong incumbent competitors already exist), makes good sense for Vodafone.

It also turns out that Vodafone will be able to leverage its existing wireless network backbone. It won't be building infrastructure from scratch in order to offer wireline services, rather simply upgrading and building on its existing in-country wireless network backbone. This is consistent with other carriers that offer integrated service offerings on a single platform to cater to telephony, data and video solutions.

Although a common and consistent procurement objective of enterprise customers is indeed to reduce their number of service providers, this objective is often based on little more than "telecom suppliers are a pain to deal with" and therefore the fewer the better. There can be clear efficiencies to having less, not more suppliers, but many carriers have not yet come up with much more than limited bundled discounts to reward customers who buy both wireline and wireless services.

But slowly the advantages should become more pronounced, not least as fixed to wireless integration and unified communications bring wireline and wireless solutions and technologies closer together. If Vodafone begins to establish itself as a supplier able to offer wireline and wireless services, it will be well placed to take advantage of such trends.

Vodafone also has some experience in managed services that it may be able to leverage as it moves into wireline services (not least in a disparate region such as Asia Pacific).

For a number of years Vodafone's Global Enterprise (VGE) group has been offering large global enterprise customers a one-stop shop for all a customer's global wireless needs. For countries where Vodafone does not have a wireless network, or one of its partners does not offer services, Vodafone will manage a third party supplier on the customer's behalf. Vodafone will also take care of migrating current suppliers' services to its, or its partners', network.

Vodafone established this service offering as a solution for customers desperate to deal with a reduced number of suppliers, despite global wireless services being the most fragmented global telecom market of them all. Not all customers have found it to be a compelling offering (the detail can fall short of the marketing), and extending this model to wireline services will present a different set of challenges -- particularly for global MPLS services where having a single supplier has technological advantages. But in a region as fragmented as APAC, if Vodafone is able to build on its experience in the wireless market to be able to present a similar offering to customers on the wireline side, then this could be a distinct differentiator.

So we regard this as a welcome move by Vodafone in India, and wonder if it is a sign of a wider drive by Vodafone into wireline services in Asia Pacific and beyond. In Asia Pacific in particular, Vodafone will come up against some familiar faces (not least BT but also the other main global providers of AT&T, Orange and Verizon) as well as newer players emerging from APAC such as Reliance and Tata that are investing heavily to win more customers. It will help drive more competition in this burgeoning and high-growth market, and it gives additional options to enterprise customers. We will be watching these developments carefully to see how they unfold.

The following is a guest post by TC2 managing director Ben Fox, who is based in London.

BP is struggling to stem the oil leak in the Gulf of Mexico, and BA is battling the ongoing impact of an Icelandic volcano's ash cloud. But yesterday BT bucked the trend of these British brand names by announcing that it has turned its losses around into a £1bn profit in the year to March 31st.

In the last couple of years BT has rather retrenched from aggressive global deals and managed services to focus more on its core UK businesses and on a comprehensive cost cutting drive that has included laying off around 35,000 staff. Ian Livingstone, BT's CEO who succeeded Ben Verwaayen in June 2008, inherited very significant problems with BT's Global Services division. Verwaayen had aggressively pushed BT to pursue large outsourcing and global contracts, but by 2009 it was clear that major mistakes had been made on some of BT's largest contracts and the Global Services division was hemorrhaging cash, to the extent that Global Services was dragging down the performance of the rest of the company.

But yesterday's announcement may represent the start of a new resurgence by BT in the global enterprise market, and the confinement to the history books of the mistakes of the Verwaayen era. On the back of yesterday's better than expected results, Livingstone announced that BT is again looking to bolster the presence and capabilities of its Global Services division and expects the unit to return to profitability in 2011-12.

Livingstone also announced that Asia-Pacific will be a core focus for growth in the next three years, and it would seem that BT sees Asia-Pacific as the route to success for the Global Services division.

BT has long been obsessed with forming new incarnations of its global services arm, but has suffered a number of failures of which the last couple of years was just the most recent (e.g. everyone remember BT's ill fated "Concert" joint venture with AT&T?). London's financial markets tend to react skeptically whenever BT proudly announces its latest global aspirations, in particular if there is any hint of investing in the U.S. market where BT has resolutely failed to gain a foothold.

Indeed, in 2004 when BT announced it was to acquire Infonet, the London analysts initially took a poor view of the acquisition, because they naively interpreted the purchase of the Californian registered company as a sign that BT was trying to enter the U.S. market again. In fact, acquiring Infonet was all about shrewdly boosting BT's presence in Latin America, which BT had largely lost in the break-up of the Concert venture.

Given a long history of underachieving in the US, and the fact that BT is already relatively strong in both Latin America and of course closer to home in Europe, BT's announcement that Asia Pacific is expected to drive growth in the next few years seems to make sense, and of course the huge economic growth in Asia Pacific is a wave that all businesses want to ride. But Asia Pacific is a very complex market, covering a huge geographic area with a diverse mix of cultures, business practices, markets and, not least, local competitors. It will be fascinating to see how BT deals with these challenges, and whether or not this time it can meet the aspirations it has set for itself.

More generally, it is very encouraging to see BT announce a renewed vigour for global contracts. Ever since Global Services' problems became apparent, BT has been a subdued player on the global stage, not least because BT had become very cautious in its bids and RFP responses, seemingly overcompensating for the lack of caution that had led to some of its most unprofitable contracts from the Verwaayen years.

Winning large global deals, especially managed services/outsourcing contracts, always requires suppliers to accept a degree of risk and to take a long term view; BT has underperformed against its competitors in the last couple of years. But the global telecoms market needs more competition, and a resurgent BT will be very welcome. We will keep you posted as to whether or not BT's latest global aspirations translate into greater success when competing for new global contracts.

In the following guest post, TC2's London-based managing director Ben Fox continues his comments about the Mobile World Congress in Barcelona.

Besides the increasing momentum for establishing LTE as a global mobile broadband standard, the other very interesting announcement from Barcelona came from Verizon Wireless and Skype. The two companies reported that, beginning in late March, Verizon Wireless will allow subscribers to use Skype's IP voice application over its network.

By downloading the Skype application to their Verizon Wireless smartphones, end users will be able to call other Skype users around the world for free. This represents a significant change of heart from a carrier (and indeed an industry) that to date has been very territorial in terms of allowing users to take advantage of applications that could reduce its own revenue.

So what's in it for Verizon Wireless? The answer is data revenues. As I noted last month, Verizon Wireless' strategy is currently focused on driving the penetration of data services. And for Verizon Wireless users to be able to use Skype, they will need to subscribe to a voice and data plan.

No doubt Verizon Wireless has calculated that the lost voice revenues from Skype usage will be more than offset by the increased data plan revenues and by the increased adoption of the smartphones that will be needed to use Skype, which typically drive increased average revenue per user (ARPU) compared to more basic devices. Perhaps they're even anticipating a further compensation for lost voice revenues in the increased revenue from the higher ETFs associated with these types of devices and plans!

Skype and Verizon Wireless stated that their agreement is "exclusive", although it is unclear what that really means, since the Skype application has been available for some time on AT&T Mobility's network via the iPhone. Perhaps Verizon Wireless's thinking is that AT&T users have so far only been to use Skype over WiFi, not 3G, access. But a version that operates on GSM/HSPA is supposed to be pending.

Of course Skype does not tend to be an application that large enterprises actively roll out and support for their end-users, so this might have limited initial relevance to business users. However, using Skype (and similar VoIP applications) on a smartphone whilst roaming on WiFi networks to save money, compared to paying $1+ a minute to roam on a GSM network in a foreign country, is a far more intuitive and "traditional" phone experience than using a soft phone (Skype or otherwise) on your laptop. So there is certainly money-saving potential in this area for enterprise customers.

But the more important takeaway for the business user from this Skype/Verizon Wireless announcement is the continuing shift in focus for wireless carriers all around the globe from voice revenues to data revenues, driven by the evolution of all cell phones into smartphones. Similar announcements in 2010 already include Google's Nexus One, Windows Phone 7 for mobiles, the Wholesale Applications Community mobile application alliance, and carriers announcing increased after-sales support for smartphone users. These all demonstrate the importance of smartphones to the carriers and the pressure that all carriers, manufacturers and software developers are under to get ahead of the pack and differentiate their smartphone service offerings.

Although much of the initial adoption of the more innovative services (such as the iPhone and Apple's application store) has been driven by consumers, the carriers, manufacturers and software developers now have business users firmly in their sights. Google has already been talking about a version of its Nexus One aimed at business users, and in the UK, Vodafone is specifically targeting business users in its iPhone adverts.

The bottom line is that we are already seeing business end-users at our clients pressuring their telecoms departments to offer an increasing array of smartphone devices, not the least of which is the iPhone, as well as a rich variety of new services and applications. A BlackBerry that only provides voice calling, email, calendar and contact directory functions is no longer enough! Mobile device management, rather than getting easier, will become exponentially more challenging.

On the other hand, when the world ultimately moves to a single global mobile standard -- LTE -- the job of managing your enterprise's global mobility requirements should become somewhat easier, though I'm afraid that the impact of LTE will be a ripple on the ocean compared to the tsunami of challenges presented by user demands for an ever increasing range of smartphone applications and functionality.

The following is a guest post by TC2 managing director Ben Fox, who is based in London.

This week's 2010 Mobile World Congress in Barcelona has been the setting for a number of significant developments in the global mobile marketplace. One of the most significant for enterprise users is the announcement that China Telecom, KDDI and Verizon Wireless, three of the world's largest CDMA operators, have joined the GSM Association (GSMA).

The force that is bridging the CDMA and GSM worlds is the worldwide adoption of the Long Term Evolution (LTE) 3+G (or 4G, depending on the day) standard.

This week's GSMA announcement is further proof that the world is moving to a single global mobile standard, which would bring benefits to all parties, including mobile device manufacturers, carriers and end-users. All parties, that is, except those who don't adopt the standard!

Device manufacturers will be able to focus all their efforts on a single technology platform. Carriers will be able to seamlessly interwork with each other -- even Verizon Wireless and Vodafone, whose incompatible technologies have made them strange bedfellows up until now. And ultimately, we hope, end users won't need to worry about their Verizon Wireless smartphone not working when they travel to Europe (although they will undoubtedly still need to worry about the cost of international roaming).

U.S. users also should not overlook the importance of China Telecom and KDDI joining at the same time as Verizon Wireless. China Telecom is the largest state-owned telecom operator in China, and KDDI is Japan's second-largest cellular operator. We're going to be watching China Telecom's next steps in this space very closely, because historically Chinese carriers have specifically avoided adopting western technologies and instead sought to develop their own solutions. This could signal the beginning of the end of that policy.

Of course the elephant in the room that the announcement ignores is WiMax, the competing 4G technology. Despite being first to market, WiMax does not appear to reach the projected speeds of LTE and, much more importantly, has far less backing from heavyweight global carriers.

Thus describing it as an elephant is probably far too generous. WiMax no doubt has a future in certain key areas such as fixed wireless and greenfield infrastructure builds, but the fact is that the major players are all lining up behind LTE, which makes LTE the hot favourite for the future global mobile standard.

In fact, in a number of ways the world's leading carriers are either acknowledging or finally catching up to technological reality, and this isn't the only announcement from Barcelona that bears this out. Verizon Wireless and Skype have announced that Verizon Wireless will enable Skype calling over its network. I'll have some thoughts about that for the enterprise segment tomorrow.

The following is a guest post by TC2 Senior Consultant Mark Sheard, who is based in London.

Did 2009 mark the end of overcharging for text messaging and data applications while roaming in Europe? You might think so because of last year's European Union roaming caps on texting and data and video applications, as well as an accompanying overall mechanism designed to put a brake on soaring mobile bills.

But that's only part of the story. European and multinational enterprises can only get the full benefit of these measures to solve the chronic problem of runaway mobile charges if they take additional steps. These corporate 'bill shocks' (as the EU put it) might not be as immediately obvious as those, for example, on my teenage daughter's mobile, but close inspection could be more shocking than you thought!

Telecom managers with responsibility for users traveling through Europe should remember the unique aspect of mobile cost management within the EU. The "single market" paradoxically can make it more difficult to keep costs under control. Roaming charges often begin at every national boundary even as users freely move about the continent.

Viviane Reding, the EU Telecoms Commissioner, was addressing this when she described the EU's objective in enacting mobile caps: "What we want to achieve is simple: sending text messages or downloading data via a mobile phone while being in another EU country should not be substantially more expensive than at home. This is the logic of the borderless single market."

Accordingly, since July 1st of 2009, roaming charges for SMS (text messages) have been capped by the EU at a retail cost of €0.11, which compare very favorably with the average cost of a "roamed" text message in the EU between October 2007 and March 2008 of €0.29. The key elements of the regulation are as follows:

-- Limits the price for sending a text message while abroad at €0.11. Receiving an SMS in another EU country remains free of charge.

-- Reduces the cost of surfing the web and downloading movies or video programs with a mobile phone while abroad by introducing a maximum wholesale cap of €1 per megabyte downloaded. This limit will be decreased each year.

-- Further reduces prices for mobile roaming calls with a maximum tariff of €0.43 for making a call and €0.19 for receiving one.

-- Introduces per-second billing after the first 30 seconds for calls made and immediately for calls received.

But these regulations are only a start. Most businesses of scale should be securing competitive rates that are better than the regulated capped rates. If a quick review of your contracts shows that you haven't got better rates, yet you have many roaming users, it is time to plan for a review of your wireless telecoms spend. This should start with an early interview with your incumbent provider's account manager.

In negotiated custom corporate wireless contracts, market leading pricing for roaming usage tracks substantially below the regulated price caps. The significance of the roaming rates cannot be underestimated -- for many MNCs roaming spend can be 50% or more of their mobile costs. Hence, securing competitive rates for voice, data and SMS (texting) is crucial.

Determining whether you have good rates for voice, SMS and data might start with a look at the EU provided information on tariffs. The EU site will give you rates for roaming across Europe. Some might find it a useful starting point to see whether or not their negotiated rates are any better than standard supplier pricing.

Remember that this site is restricted to European countries and published rates. As good as it is to see efforts to provide more open information to consumers, spotting whether you are securing rates commensurate with your corporate spend is not in reality possible from the EU's site. But an interesting exercise is to click on the little timeline down the side of the rate tables and see the differences in prices over time. Immediately, it shows the continued downward trend in charges that telecoms managers should be seeking to emulate for their own contracts.

For one thing, it illustrates that operators really do need some help and encouragement to pass on price reductions to the consumer. Note particularly the drop in voice pricing in 2007 when EU regulation was first brought in! Would these have dropped so significantly without regulation?

For SMS and data, the recent step change down is initially likely to mean some stagnation in the rate of change, but in reality for most MNCs, the recent regulation should have a pull through effect on roaming data pricing. But negotiating improved SMS and data roaming rates in isolation may not be straightforward. Ideally, a structured competitive process will bring the greatest returns in terms of cost reduction, and typically the greatest opportunity for the provider to give you the best deal will be if you widen the scope of the procurement.

Mobile SMS and mobile access to the Internet and corporate networks are growing exponentially, and whilst the EU capping on roaming charges is very good news the caps should be regarded as the starting point for your negotiations, not the end.

The following is a guest post by TC2 Asia-Pacific managing director Joe Schmidt, who is based in Singapore.

Mobile Device Management (MDM) is a conundrum for enterprises that provide smartphones and other mobile devices to their employees, or who allow employees to access company resources using mobile devices. At TC2 we've been advising clients to pay attention to this burgeoning support requirement and to take steps to implement a solution, or risk exposing the enterprise to security breaches and support issues down the road.

It's certainly a major consideration in the more-developed regions of Asia, where wireless device deployment is almost universal and user demand for mobile business applications functionality is pervasive. As a result, last week's Mobile Device Management Asia conference in Hong Kong, where I spoke, was heavily attended by handset manufactures like Nokia, regional service providers such as Optus from Australia and Maxis from Malaysia, and third party MDM software and service providers. And it provided a great window into what's coming down the pike globally, especially as smartphone use displaces older devices in many vertical industry markets.

What was clear from the presentations and my discussions with attendees is that MDM is being targeted at the enterprise market. But one key hinge point I'm watching is whether the service providers and device manufacturers are using MDM more to support the enterprise or more to grow their own revenue by selling applications and value-added services.

After the founder of the Device Management Forum gave his opening remarks, he launched into a presentation on the evolving landscape of MDM in the enterprise. The main points of his talk were that in order for MDM to deliver business and end user benefits, it must be able to acquire, configure, deploy, secure, and maintain mobile devices.

He went on to say that the key players that have emerged in the MDM market are the mobile service providers, device manufacturers, and third party software houses and integrators. Many of those players followed on with presentations on the latest developments in MDM.

These presenters explained how MDM can provide over-the-air software updates and how their products and solutions can remotely lock a device or wipe it clean if necessary. The MDM providers elaborated on the level of information that can be loaded and maintained for a device, including a device's operating system, the applications loaded on a device, how the applications are used, and even the location of where a device is used.

But one service provider openly explained how it is using the massive amount of data it captures to build life logs of each subscriber. It then uses the logs to create marketing campaigns and promotions targeted at the subscribers. That's fine for them, but what does it do for you? Well, one of the reasons the conference producer invited me to speak was to "keep it real" and to let the audience know what enterprises really want when buying mobile services and to provide the enterprise's view on MDM.

I told the audience that mobile services are indeed strategic to enterprises and that demand would continue to grow, thanks to the proliferation of smartphones and the expansion of high-speed wireless networks. I said that MDM ranks very low on an enterprise's list of requirements when initially buying mobile services, but that MDM does hit the radar screen once a deal is done. I explained that enterprises grapple with tough questions when they consider supporting an enterprise mobility program, such as:

-- How can enterprises permit user choice while enforcing corporate governance?

-- Are mobile applications productivity enhancers or security threats?

-- Where should MDM stop and user privacy start?

My takeaway from the conference and what I've seen while helping clients procure mobile services around the world is, like it or not, if you're an enterprise that uses mobile services, you're going to need to understand MDM and eventually you'll need to implement a solution. But before you do, make sure you define your mobile strategy, then develop and implement mobile policies that address corporate vs. employee liable plans, entitlement and reimbursement, acceptable use, demand management, support, and security.

If you take these steps first, you'll have a better understanding of the type of MDM solution that works best for you and your users -- and that enables most of the benefits you're paying for to flow in your direction. We'll be keeping tabs on this key emerging support requirement and invite your comments as well.

The following is a guest post by TC2 managing director Ben Fox, who is based in London.

The relationship between Vodafone and Verizon Wireless is a constant source of interest for TC2's clients. Many global companies have significant relationships with Verizon Wireless in the U.S., and with Vodafone in Europe and beyond. However, despite the major equity relationship between Vodafone and Verizon Wireless, this has rarely translated into any benefits for end-customers.

Let's start with some history. Verizon Wireless began as a joint venture in 2000 between Vodafone (which held US wireless network assets through its earlier merger with Airtouch Communications) and Bell Atlantic (which later became Verizon Communications). The ownership split was Vodafone 45% and Verizon Communications 55%, where it still stands today.

Vodafone has grown massively over the last decade, initially fueled through multiple acquisitions led by its ambitious CEO Christopher Gent, who headed the company from 1997 to 2003, and more recently through a strategy to focus on emerging markets. In 2009 Vodafone is a global wireless service provider with networks in 20 countries and wireless partners in 44 more countries. And of course Verizon Wireless has also grown hugely, now accounting for fully 58% of Verizon Communications' revenue.

Yet, despite all this success separately, Verizon Wireless and Vodafone struggled to find an approach to go to market together. Indeed, to all intents and purposes, it was as if Vodafone's relationship with Verizon Wireless was no more than an equity interest -- they seemed like a silent partner in the joint venture.

There seemed to be two key barriers to any kind of deeper connection:

-- Vodafone and Verizon Wireless had incompatible technologies. Almost all of Vodafone's networks were GSM whereas Verizon Wireless had a CDMA network. Thus, even when Vodafone's users were in the U.S., they were not even able to roam on Verizon Wireless' network, because Vodafone's mobile devices do not work on a CDMA network. (Even now, Vodafone tends to be relatively expensive for users roaming in the U.S. compared to other service providers.)

-- Vodafone and Verizon Wireless are both huge companies that are market leaders in their respective territories. To approach global companies with a joint market proposition, one of the service providers was going to need to take the lead, but neither seemed content to play second fiddle.

This rather dysfunctional relationship between Vodafone and Verizon Wireless reached a low point in 2004 when Vodafone made public overtures to acquire AT&T Wireless. AT&T Wireless' network was built on GSM technology, offering a much better fit for Vodafone, and it would have had a controlling interest, not a 45% stake. Ultimately, the US wireless company then known as Cingular beat out Vodafone for AT&T Wireless, an especially important milestone because Cingular at the time was owned by two US "Bell" companies. One of those Bell companies was SBC, which ultimately also bought the venerable AT&T wireline business and then renamed itself AT&T, rolling up all these businesses into one giant competitor to Verizon.

Perhaps partly as a result, more recently, and slowly but surely, Vodafone and Verizon Wireless have been working on their relationship. Vodafone has made significant investments in its Vodafone Global Enterprise group, including basing much of its sales team in the U.S. (much to the bewilderment of some of Vodafone's European customers who have an account manager based on a different continent). And the two service providers seem to have worked out an approach to the market. Verizon Wireless will now agree to participate in Vodafone contracts that span multiple countries by providing US services under a Vodafone master agreement, thereby at some level providing global companies with a single contract with Vodafone/Verizon Wireless. And importantly, when Vodafone and Verizon Wireless join forces to respond to a Global Wireless Request for Proposal, or some other sales initiative, you don't get the impression that the Vodafone and Verizon Wireless teams only just met in the lobby before the sales presentation.

Going forward the relationship should continue to improve, in particular because Vodafone and Verizon Wireless are finally going to overcome the technology barrier that exists between them when they both deploy LTE based 4G services. It will take some time for this technology to become mainstream, but Vodafone and Verizon Wireless clearly (and I think correctly) see this path to having a common technology platform as crucial to building their relationship.

Overall, Vodafone and Verizon Wireless finally seem to have embraced the concept that their relationship is a differentiator for global customers, are now starting to work together to service those customers, and, in the longer term, have a technology strategy that will pull them closer together, not push them apart. Ultimately though, Vodafone and Verizon Wireless still have much work to do; there remain many challenges for global customers wanting to do global and regional wireless deals (with any supplier), and users need to be wary of sales teams that over-promise and under-deliver.

The Telegraph newspaper out of Britain is reporting over the weekend that Deutsche Telekom has hired Deutsche Bank to evaluate a possible acquisition of Sprint Nextel Corporation.

This report presents a fascinating set of cross-currents between the likely public discussion of such a prospective deal and the actual enterprise impacts as we see them.

We could see lots of press reports analyzing how Deutsche Telekom pulling together T-Mobile (its currently owned subsidiary) with Sprint and Nextel would create a mobile voice/data behemoth. And of course, a DT-Sprint merger would accomplish that from a corporate standpoint.

But from an operational standpoint, it's actually not obvious where there are immediate synergies. T-Mobile (GSM), Sprint (CDMA), and Nextel (iDEN) operate on three different wireless protocols. Long rumors of a possible merger between Vodafone and Verizon Wireless (who already share an ownership interest) have foundered on the fact that they mix GSM and CDMA user bases. And the Sprint/Nextel merger itself has had enough problems dealing with two protocols. Three protocols in one shop doesn't necessarily buy corporate users anything in the immediate term.

On the other hand, we may see few press reports about a DT-Sprint merger impact on wireline enterprise networks. But in our view at TC2, that's where the real story might be found.

Sprint, through its almost exclusive management focus on the wireless business, has been running the risk of ultimate irrelevancy in the enterprise market -- where for so many years it was an important player in corporate data networks, long distance, and call center services. But DT has a strong motive to reverse this trend at Sprint.

Right now, when multinational corporations, especially those based in the U.S., put out a global RFP, they tend to solicit bids from a "Global Big Four" -- AT&T, Verizon, BT, and Orange Business Services out of France. Deutsche Telekom has long been known to covet a place at this multinational RFP table, and one reason it hasn't been there is that a long-ago loose alliance with Sprint fell apart and its assets, and customers, scattered to the winds.

But owning Sprint outright would reconnect this channel in a firm way, give DT by far the best remaining U.S. corporate user base that's available (while it still exists at Sprint), and combine important assets globally.

We have long said that Sprint is likely to be sold in one piece or in parts, and that it may actually be best if such a deal takes place soon, and involves someone (like DT) that actually knows something about Sprint's history and user base in frame/ATM, MPLS, IP networking in general, and basic long distance outbound and inbound platforms.

That sort of deal is likely to have a far different complexion than if either a private equity firm, or a foreign state-owned venture capital arm (as we see in some Asian countries) comes in to buy Sprint with little or no history invested in America's No. 3 carrier.

Now, this is only the first step. For Germany's biggest telecom carrier to hire Germany's biggest bank to evaluate the acquisition of a company with whom it had a prior alliance is not terribly surprising, and doesn't pre-suppose a final result. Deutsche Bank would have to evaluate all of the above factors -- and then figure out how to make the deal pay off, given the fact that Sprint has a greater debt load than its entire stock market valuation. That means that DT (or anyone) would have to pay more than twice Sprint's actual equity valuation to pull off the deal, although as we have also said before, we believe that factor is already discounted into Sprint's stock price.

But there's no question that the global mergers and acquisitions field is opening back up, and that DT has a lot of energy and motivation for deals -- witness its just-signed joint venture with Orange UK for its T-Mobile UK mobile operations. It may be time for this sort of activity.

Other players may even come in for a play on Sprint. But our focus in following this will be on the impact on enterprises, because the name of the buyer -- and the method (full acquisition, piece-parting, or joint venture)-- will have a huge difference on the Sprint Nextel customer base in all its forms.

The following is a guest post by TC2 managing director Ben Fox, who is based in London.

Deutsche Telekom and France Telecom announced today that they intend to merge their UK mobile operations (T-Mobile and Orange respectively) into a 50:50 owned joint venture. The joint venture would combine the networks, operations and retail outlets of the two network providers, with the announcement touting significant expected cost savings and improvements to network coverage, quality and customer support.

The marketing strategy for the joint venture appears to be unclear with the announcement stating that the Orange and T-Mobile brands will co-exist whilst the joint venture's management spends its first 18 months developing a new branding strategy. (You can see where they might struggle -- "Orange-T" isn't going to sound very appetizing to the tea-drinking British public...)

It is no secret that Deutsche Telekom has been looking to off-load its struggling UK operation for some time -- all three of the UK's other main networks have been flaunted in the press as potential buyers over the last few months. Analysts seem to regard the planned joint venture (as opposed to an acquisition by France Telecom) as a good deal for both Deutsche Telekom and France Telecom -- Deutsche Telekom avoids the major write-downs that it looked to be facing from selling T-Mobile UK, and France Telecom ends up with a stronger mobile market position without significant cash investment or increase in debt. The joint venture is, of course, subject to regulatory approvals.

So what might this mean for business customers? T-Mobile seemed to enter the business market slightly later than O2, Vodafone and Orange, and hence was always playing catch-up. One result of this was that over the past few years T-Mobile led the UK mobile market in terms of driving down prices for business customers as it tried to grow its enterprise business. However, that pricing aggression did not necessarily result in winning new business, and often the incumbent supplier simply improved their pricing enough to retain their business. T-Mobile (probably unfairly) was also often regarded as the weakest of the four UK mobile network providers in terms of coverage and network quality, a hangover of its origin from the One2One network which telecom managers had difficulty forgetting.

On the pan-European stage, Orange and T-Mobile already collaborate as the main members of the FreeMove Alliance. When FreeMove participates in a pan-European procurement or negotiation, the UK divisions of Orange and T-Mobile do not compete with each other -- typically, whichever of Orange and T-Mobile has the closest relationship with the customer provides the UK component of the pan-European bid. So Orange and T-Mobile already have a track record of working together in the UK market which should stand them in good stead for the proposed joint venture. This also means that for pan-European procurements, these events will have little impact since users have typically only been receiving three bids for the UK market for some time (from FreeMove, Vodafone and Telefonica-O2).

However, there has to be a concern that the joint venture will damage ongoing price competition in the UK business mobile market, because there will no longer be a hungry and highly competitive T-Mobile looking to win business with its market leading pricing. We also anticipate the normal concerns with M&A-style events in terms of reduced customer focus whilst the parties work out how to merge their networks and operations -- and lay off staff in order to realise the announced cost saving synergies. However, medium and longer-term savings should also come from the new shared infrastructure where significant rationalization should be achievable.

But we could also see an analogy with the U.S. telecoms market, where AT&T and Verizon Business are still fiercely competing for national business even as they're creating an emerging duopoly via mega-mergers. Likewise, this joint venture could result in a re-energised Orange/T-Mobile in the UK with a burning desire to capitalise on now being the UK's largest mobile network provider by aggressively pursuing Vodafone and O2's business customers, just as T-Mobile has done in past years. Perhaps this could also invigorate Vodafone and O2 in responding more strongly to the "new" threat.

This is very much the early days of this story; Deutsche Telekom and France Telecom do not expect to finalise the joint venture until November, and much scrutiny from the regulatory and competition authorities will occur before then. I commented in April on the pricing pressures then that were pushing European mobile carriers to extend initiatives to share infrastructure with their competitors in order to reduce costs. Today's announcement is far more significant than those initiatives, but is driven by the same price pressure points.

Such pricing and cost pressures across the whole telecom industry, not just mobile, mean that today's news is also likely the first of a number of M&A-style events that will occur in the European and global telecom markets over the next one to two years. We will bring you updates as they unfold.

As I write this, it takes $1.43 to buy 1 Euro, or put another way, the dollar is worth 0.69 euros. So tell me: Will the value of the dollar strengthen later this year, or weaken further?

That's okay, I don't know either.

But here's what I do know: If you have any global business, somebody in your company does care what the answer is. Or, more precisely, somebody cares whether the answer is going to have a material impact on your company's results, particularly if your stock is publicly traded.

Like the value of everything else -- stocks, bonds, real estate, oil, you name it -- the value of currencies has swung wildly and is likely to continue doing so. And if this prospect creates a material risk of variable results, then it's something that your financial shop has to make known in its disclosures.

That's why you, as a telecom professional, have to be keenly aware of the way your suppliers view this issue. I'm not talking so much about who's going to "profit" in terms of speculation about currencies going up or down. I'm talking about who's going to take the risk in the first place. Depending on how international carrier services are structured, the carrier could be taking the risk of currency fluctuation (and thus, in theory, the potential reward). Or it could be pushing the risk off on you.

Example: If you're a U.S.-based multinational corporation, and you negotiate a cost in U.S. dollars for international rate elements (such as ports and class-of-service packages for MPLS services), then you have a predictable dollar cost for the monthly recurring charge (MRC) of that element for the life of the contract. In theory, if the dollar strengthens and you could have paid the same rate element in a cheaper local currency, you could have "made money." But you don't know whether that's what your company wants. They may not want the risk of such variability, either as a matter of corporate philosophy or because of disclosure issues.

Now here's the kicker: The actual service you buy may not give you this choice, at least not easily. MPLS and its evolving platforms over the past few years, especially at AT&T, provide a great example of this.

You could pair up competing MPLS services from AT&T and Verizon Business in a competitive procurement and find that the default billers for the two are in conflict -- one wants to bill everything back to the U.S. in USD, and one wants to bill most of the foreign rate elements locally in local currency. Even odder, two MPLS service platforms at the same carrier may approach this issue from two completely opposite default billing assumptions -- you know, due to "product house" issues, as we've seen forever in the telecom industry.

Wrestling with this issue so that two competing offers you receive carry the same characteristic -- USD billing throughout or local billing in local currency wherever possible -- is a technical matter that may be subject to negotiation. But the far more important factor is what happens at the front end in your procurement planning. In our experience, currency issues are a critical, almost emotional, factor in the surrounding "baggage" that enterprises bring to the procurement process. When senior management finds that a supplier who's been down-selected cannot comply with the currency-risk requirements that they believed would be taken care of in a purchasing process, it can be one of those "oh boy" last-minute issues that scuttles a good deal, wastes all your invested time, and gives your shop a reputation for inability to move away from incumbent carriers and services. In short, a real leverage-killer.

It doesn't have to be this way. If currency matters are crucial, they should be described qualitatively and teed up quantitatively from the beginning in your RFP or other procurement process. Then, even if account teams think their default billing systems aren't geared correctly, they're the ones motivated to take the risk to "work the issue" to win the deal. When it comes to all the items that you should review with senior management at the beginning of your procurement process, this one is just about at the top of the list, so make sure to put it there.