Rumoured Mergers could change the face of UK Telecoms Industry

As we move into 2015 the convergence of laptops, mobiles and TV screens has become an ever increasing trend and now it is the turn of the fragmented UK communications industry.

It has been recently revealed that BT is considering buying the O2 mobile network, and is in the early-stages of talks with the UK's largest mobile network, EE. This comes 13 years after BT themselves sold the company that became O2, and marks a dramatic change in policy, which could spark a string of mergers in the telecoms and media sectors. In this respect the UK is actually slightly behind the rest of Europe, as the concept of a communication supergroups offering everything from Premier League football to internet services, is already established on the continent.

“The horse has bolted out of the stable door,” says Deutsche Bank’s telecoms analyst Robert Grindle. “The market now is going down a convergent route. The competitive forces have been unleashed and things are going to have to shake out.”

This convergence will effect consumers in several ways. Not everyone will want all the services a provider can offer bundled together. However, it is likely that the prices of the services will drop as a result of the bundling and competition. Analysts are forecasting a price drop: BT currently give away its BT Sport channels to customers that take its broadband and could soon be adding discounted mobile connections to that package.

BT’s move back into mobile could also help those waiting for a faster internet connection as competitors retaliate. It is possible their main rivals such as Vodafone and TalkTalk may choose to hit back where BT is strongest, by stepping up investment in their own superfast fibre networks.

All the main mobile and media companies are now considering their options, with so many different providers encroaching on each others lines of business, competition will be fierce and this is likely to benefit the consumer. 

Vodafone appears determined to remain competitive in the bundling arms race, it has bought several broadband and TV operators in Europe, and is laying fibre-optic cables in Spain, Portugal and Ireland. In the UK, they're offering their 20 million customers broadband and a TV set-top box if they want one next spring. Vodafone have said that if BT aquire O2 they're going to move more into consumer broadband. 

For broadband, Vodafone will use the fibre it acquired when it bought the UK network built by Cable & Wireless, which so far has been reserved for business customers. This only covers half of telephone exchanges. To reach homes, it may lay its own fibre, or rent them wholesale from BT. For TV, Vodafone is thought likely to join forces with Sky, distributing the satellite broadcaster’s Now set-top box.

Could this lead to a full-blown corporate wedding? Rupert Murdoch would have to part with his 39% stake in Sky. Analysts at Espirito Santo say Vodafone, currently valued at £60bn, would need £20bn to take full control – a 30% premium to Sky’s current valuation.

The UK Telecoms Industry at a glance:

BT
UK customers: 9.8 million for home broadband and phone
Products: TV, broadband, land line

SKY
UK customers: 11.5 million
Products: TV, broadband, land line

VIRGIN MEDIA
UK customers: 4.9 million
Products: TV, broadband, land line, mobile

TALKTALK
UK customers: 4.2 million
Products: TV, broadband, landline, mobile

EE
UK customers: 25 million
Products: TV, broadband, mobile

O2
UK customers: 22 million
Products: mobile

VODAFONE
UK customers: 20 million
Products: mobile, soon to launch broadband and TV

THREE
UK customers: 8 million
Products: mobile

Oil price is skidding towards $80 a barrel

Brent Crude suffered its biggest financial slump in four years in London yesterday, testing the $80-a-barrel mark.

In June, Brent Crude hit $115 but since then the price has slumped by more than 30%. With a 15% decrease this month alone. The price for December settlement, the forward month contract, fell $1.88, or 1.5 per cent, yesterday to $80.46 a barrel.

Traders are braced for further falls today when the Energy Information Administration, the statistical unit of the US Department of Energy, pub-lishes its inventory update, which is expected to show that stockpiles rose by more than 250,000 barrels last week.

Falling crude prices have had little impact on shale oil drilling in the United States, with output from the largest shale fields showing no sign of slowing. Yet if prices fall much farther, production will become less viable because of the high cost of extraction.

Other factors weighing on the energy market include concerns that Opec appears unable to settle on a united plan to cut production that would stop the plunge in crude prices.

The oil producers’ cartel, which will meet in Vienna this month, supplied 31 million barrels a day last month, more than 3 per cent above its target of 30 million barrels, adding to global stockpiles when growth in the big oil consuming nations appears to be slowing. On Monday analysts at JP Morgan slashed its Brent price forecast for 2015 by $33 to $82 per barrel.

According to Opec’s own estimates its share of the global oil market could shrink to 37 per cent in 2017 from 40 per cent last year. That would be the lowest in more than 25 years and far below its peak of 54 per cent in 1973.

Meanwhile, the loading dates of at least four cargoes of Forties crude, the largest of the four North Sea streams that underpin the Brent oil benchmark, have been delayed amid lower-than-expected production. Fifty oilfields are connected to the Forties pipeline.

Ofcom finds 4G Twice As Fast As 3G

4G speeds in the UK are more than double the speed of 3G, according to new data from Ofcom. The average speed was found to be 15.1mbps, 3G averaged 6.1mbps.

Data was collected from mobile networks in five major cities in the UK including London, Birmingham, Glasgow, Manchester and Edinburgh.

London came top of the speed league table for 4G, but was actually the slowest for 3G. Load times were fairly consistent across networks, with Three coming out on top.

Wages To Outpace Inflation By End of 2015

The Bank of England has declared that wages are set to rise significantly faster inflation by the end of 2015. This will mark the end of the longest pinch on living standards in recent times.

Governor of Bank Of England, Mark Carney said in September: “We are seeing the start of real pay growth. We expect this pick-up to accelerate. It’s a welcome development.”

Since the start of 2008 average earnings in the UK have fallen by 7.5 per cent, although accounting for inflation they are no higher than in 2003. Many have felt the squeeze as a result of this despite modest recovery on paper.

Gas glut could see household bills fall

People in Britain may soon be seeing the benefits of a glut in global gas supplies, with average household bills falling despite a growing dependence on imported fuel.

The news of falling bills follows on from disastrous week for global stock markets in the energy sector. Brent Crude suffered its biggest financial slump in four years in London yesterday, testing the $80-a-barrel mark. This is more than a 30% fall this year, 15% of which has been in the last month.
While investors have been watching aghast as billions of pounds were lost to market gyrations, a fuel glut and a slowing global economy have driven the oil price down to a level that could save the world $1.8bn a day on everyday fuel costs.

Sophisticated Attacks Over Hotel Wi-Fi exposed

Russian security firm Kaspersky Lab has discovered that criminals have been exploiting the wifi networks of certain luxury hotels in Asia to steal confidential information.

The group, known as the 'Darkhotel' hackers modified their code in order to target only the machines of those they wished to infiltrate. This indicates they had advanced knowledge of their victims' whereabouts and which hotels they would be staying in.

Can The Eurozone Really Bounce Back From Recession?

Frankfurt, home to the European Central Bank. Here, they are lagging behind The Bank Of England and the Federal Reserve when it comes to taking decisive action to prompt growth, and less creative in its choice of tools to get the job done.

Germany has just narrowly avoided a triple-dip recession, a great relieft, but expectations for Europe's two largest economies are still low. Things are looking slightly more rosy in France, with news that the economy had grown by 0.3%. Don't be fooled though, this growth hides are a more fundamental weakness in the country. This growth was entirely due to the French government's spending, combined with the accumulation of unsold goods.

4G To Receive A Speed Boost In Some UK Cities

The adoption of an improved version of 4G by some UK mobile operators means that many of us could soon be enjoying faster browsing speeds.

Dubbed 4G+ by EE, and 4.5G by competitors Vodafone, the new technology is capable of achieving up to 150 mbps. As we've come to expect, it is unlikely customers will actually reach those kinds of speeds. 90 mbps is a more realistic prediction, and still much faster than existing 4G networks.

Real Wages Shrank More In The Past Five Years Than Any Other Period Since Victorian Times

You may think things are looking up in the UK. You'd be wrong. Just take a look at our nation's GDP. It is 6% lower than it was in 2008. How does that

In the past, British labourers generally insisted on maintaining rising pay. When recessions hit this meant cutting jobs, rather than reducing pay.

With the recent major recession things played out differently. A number of factors including globalisation, the fall of unions and a more conservative fiscal policy led to workers to accept a reduction in pay in return for keeping their jobs.

The plus side of this is that unemployment stayed below rates seen in previous recessions. At it's highest in 2011, unemployment reached 8.4%. This is considerably lower than the peaks of 10.7% we saw in 1993. At present the unemployment rate is at 6.5%. I should point out this includes self employed and part time workers, but it is still a vast improvement on previous years.

Annual wage inflation (excluding bonuses) is down to the lowest level on record at 0.7%, and is well below the overall CPI inflation of 1.9%

The real measure of all this is of course the relationship between wages and inflation, and the cost of living. The numbers here are less rosy. The fall in 'real' wages between 2009 and 2013 of 8% is more drastic than any other period going as far back as 1864.

Where do we go from here? Many have speculated that the real wage growth we have enjoyed in the last few decades was the exception rather than the rule. That is to say, there is no real reason to expect a return to a consistent 2.5% increase plus inflation as was the case since the seventies.

Other economists say that the pressures of globalisation might mean that the long term trend could be closer to 1% increase plus inflation, perhaps even less.

National Grid Looks To The Continent In Its Time Of Need

National Grid recently made clear its intentions to import more electricity from Europe as part of new measures to maintain Britain's power supply and reduce consumer energy bills.

The company said that British consumers would stand to save £1 billion annually as a result of buying cheaper electricity from power stations in continental Europe. National Grid also warned that electricity prices in Britain would remain higher than elsewhere in Europe, where heavy investment in renewables such as solar and wind is continuing to bring prices down.




Energy secretary, Ed Davey, Ofgem, and several energy companies have backed proposals to boost the number of interconnectors, which supply Britain with electricity from the continent.

National Grid revealed in August that it will peruse emergency measures to fend off a full blown energy crisis in the coming two years. This is a result of extremely low energy reserves, estimated to be as low as 2 percent.

The group is also promoting new incentives to big businesses to turn off machinery and lights at peak hours in order to help ease the strain on the network. These measures are entirely optional but National Grid hopes they will go some way to helping alleviate the looming energy crisis.



The government is offering incentives to customers to lower their energy usage as a cheaper alternative to building new power plants. Ministers believe that such measures have the potential to save energy equivalent to that produced by 22 power stations by 2020.

Chief executive of National Grid, Steve Holiday, said that these incentives will become increasingly important as new solar and wind farms are brought on line, to cover the natural lulls in renewable energy production. He added "It is the world we are beginning to move into".

The first subsidies offered to energy companies will be held in December by capacity auction. Energy companies that participate must agree to build new power stations or use their own incentives to save an amount of energy equivalent to that which a power station would generate. These new subsidies are intended to replace the emergency reserve set up by National Grid.

The chief strategy officer of Flextricity, Alistair Martin said that due to the complex structure of the proposed scheme, it is more likely that the big six power companies will opt to build more power stations, despite it being the more expensive option.

“The Big Six’s business models mean that it’s hard for them to get involved in energy consumers’ habits. The details of the scheme have come out more their way than the consumers’ way,” he said.

Chief executive of OfGem, Dermot Nolan said: “The Department of Energy has gone through endless amounts of pain to make sure it works smoothly. But the proof is in the pudding.”

Asda Edges Ahead Of Rivals In The Price War

Disparity in the UK is widening according to Asda chief executive, Andy Clarke. He reports that shoppers in south east England are far more willing to spend on food shopping than those in the Northeast and Northern Ireland.

Quarterly figures show that Asda is winning the price war with Morrisons and Tesco, edging past them with a 0.5% increase in like-for-like sales in the second quarter of 2014.

Mr. Clarke is quick to point out the disparities between the north and the south. "It feels very different in London than in Northern Ireland or the northeast. If you're a family on a budget in those difficult regions, it still feels very challenging out there."

Asda enjoyed a 0.14% increase in market share during the second quarter. The supermarket giant is the second largest in the UK, behind Tesco and just ahead of Sainsbury's. It is the only supermarket of the big four in the UK which is currently gaining market shares and sales. In contrast, Asda's parent company, Walmart have just disclosed details of a disappointing performance in the US with a reduced profit forecast for the year.

Walmart's profits will likely take a further hit with the introduction of President Obama's healthcare reforms. Chief Executive of the chain, Doug McMillon admitted that trading had been "challenging" in recent years. "We need to see stronger comp (comparable sales) in Walmart US and Sam's Club, but both reported flat comp sales.

Britain is one of Walmart's largest overseas markets. Despite the tough climate, Asda is performing better than it's competitors including discounters such as Aldi and Lidl. Just as their advertising campaigns simply state, the company has moved away from promotional offers and loyalty cards in favour of "everyday low prices". Asda's chief executive said he was keen to abandon pricing gimmicks and concentrate on permanent low prices. He added "We're pleased with our market share growth during the quarter."

Asda also said that it's clothing line, George, has been performing very well. Boosted by strong sales of school uniforms, it is now the second best selling range in the UK behind only Primark.

According to public figures listed at Companies House, Asda bosses received £800,000 less in salary and £600,000 less in bonuses from shares. The biggest hit by the cuts was the boss himself, Andy Clarke, who saw his salary including share payout reduced to £440,000.

National Grid To Pay Firms To Use Less Power

National Grid recently announced that it has signed deals with Tata Steel, Flexitricity and 429 other companies, agreeing to pay them to use less power at peak times.

The company, which runs Britain's supply network said the agreement would give it the "tools it needs to balance the power of the grid"

Peak time is defined as between 16:00 and 20:00 on weekdays from November through to February.

Fears have been raised of power shortages due to unexpected plant shut-downs, as a result of these new agreements.

National Grid has so far contracted 319 mega watts of what it has dubbed "Demand Side Balancing Reserve" at 431 sites in the United Kingdom. As and when needed, plants will reduce their demand on the grid, or switch to their own generators. In return, they will receive compensation from the National Grid.

Last month, National Grid said it would be expediting emergency plan asking providers how much additional electricity they could supply in the event of a shortfall, following a recent string of unforeseen problems at various power plants.

A few months ago, National Grid stated that the emergency plan would not be needed this year. That prediction has since changed, following fires at E.On's Ironbridge and SEE's Ferrybridge power plants, and provisionary checks at EDF's Heysham and Hartlepool nuclear plants, following a serious of problems.

The UK is facing a real reduction in the domestically produced power, due to an ageing population of power plants that are slowly shutting down, and the speed, or lack thereof, of new ones starting up.

Rising Power Bills Number One Concern For SMEs

A recent report has revealed that cost of electricity is now the biggest challenge facing small businesses today, overtaking securing finance and the burden of red tape.

Of 2000 companies surveyed, Citizens Advice found that 46% of small business owners expressed concern over the cost of electricity, in contrast, only 16% were more concerned about accessing finance.

Chief executive of Citizens Advice, Ms Guy said: "Regulators, firms and business groups need to pay far greater attention to the ways in which these markets meet the needs of small business."

Small businesses lack the market power of their medium and large business counterparts to negotiate good deals. Greater focus needs to be placed on problems facing smaller companies in dealing with the giants of the power and telecom industries, the charity said.

Investigations into Britain's leading Energy firms has been launched by the competition watchdog after a report from regulator, OfGem. Ms Guy added that, with pressures affecting homeowners as well as businesses, the investigation needed to consider whether the market was working for all consumers.

The confederation of British industry said the government needed to do more to help support small businesses, but also noted that SMEs and business at large needs to be more energy efficient.

A spokesperson for CBI stated “As the economy recovers, businesses still face significant challenges, with rising energy prices an increasing concern. Energy efficiency can help businesses to manage these costs and the Government must ensure that small businesses have the support they need.”

SME owners are often not aware that they have all the same rights as domestic energy users, should they find themselves in difficulty. Struggling SMEs should not be afraid of seeking advice and exploring all available options.

Secure Websites Prioritised By Google

In 2011 the search engine giant moved its own Gmail service to a secure HTTPS connection by default.

Three years later and Google has just announced that from now on it will give preferential treatment to other pages that use HTTPS. Google decided to use this as a ranking signal after seeing positive effects during a recent testing phase.

HTTPS encryption makes websites harder to hack by scrambling data between the website servers and the user's device. You'll likely have noticed a little padlock icon that appears on some websites, this signifies a secure connection. The system is already used by many websites, and following this announcement we are certain to see their numbers increase.

Encryption is essential and makes total sense for many applications such as shopping and email, but what impact will this change have on other websites? Some web masters are concerned that this will mean they are forced to spend additional time and money in order to compete.

Jason Hart from SafeNet said "Previously organisations have shied away from encryption due to fears of slowing website response times, but there are now high speed encryption technologies available that mean cost and speed need no longer be an issue. So there really is no excuse for any data to be transmitted or stored in plain text."

"Every company wants to rank favourable on Google, so it's in their best interests to ensure web pages are encrypted."

Putting some minds at rest, Google has stated that (at least for now) HTTPS encryption will not play a crucial role in how websites are ranked. Google's algorithm currently looks at more than 200 signals to rank websites, these are constantly reviewed and revised in the search engine's quest for the perfect ranking system.

"For now it's only a very lightweight signal - affecting fewer than 1% of global queries, and carrying less weight than other signals such as high quality content - while we give web masters time to switch to HTTPS" Google's Zineb Ait Bahajji and Gary Illyes said in a Google blog post.

"But over time, we may decide to strengthen it, because we'd like to encourage all website owners to switch from HTTP to HTTPS to keep everyone on the web safe."

From a user perspective, more encryption is welcomed, thanks partly to the revelations of Edward Snowden and the growing rate of cyber crime in general.

Sanctioned Mindfulness In The Workplace

“If you want to conquer the anxiety of life, 
live in the moment, live in the breath.” 

Attaining nirvana and exceeding in the world of business might not seem like they go hand in hand, but that is precisely the message your employer may be pushing.

Over the last twenty years we have seen a huge rise in the popularity of traditional eastern practices in the west. Meditation and yoga are now firmly part of the modern lexicon and inevitably businesses have been quick to capitalise on this burgeoning market. Initially, creating products to cater to adherents, and more recently applying it internally, as a way of boosting productivity amongst employees.

So, what is mindfulness? It is quite simply, the state of being 'mindful'. Being fully aware of the moment, living in the moment, and accepting one's feelings and emotions without judgement or resistance. Now, you may be thinking that sounds like some wishy-washy new age gobbledygook, but there are numerous studies showing the benefits of both meditation and yoga.

Meditation has been shown (even in small amounts) to improve focus, reduce anxiety, improve memory, promote creativity and feelings of compassion. These effects aren't short lived either, persisting long after a meditation session. Yoga has similar advantages, also benefiting the immune system, improving quality of sleep and several other health benefits.

A whole host of companies have attempted to leverage these ancient practices. New Balance, Procter & Gamble, General Mills and Unilver have all encouraged employees to roll out the yoga mats and adopt the lotus position. Increasing numbers of business leaders are proponents of meditation and its numerous benefits, too.

The pertinent question here is, does practising mindfulness benefit your work? I think it's safe to say the answer is 'Yes.' In fact, it's hard to think of any downsides to either meditation or yoga. The science speaks for itself.

That is all well and good, but something seems fundamentally disingenuous, sinister even about being prescribed meditation by your employer. It just doesn't sit right in the corporate setting. Teachings of acceptance and placidity translate to not questioning your position or surroundings, not to ask too many questions, not to think too much about the future, or the past, but to simply get on with your work in an efficient manner.

Maybe I'm being cynical, maybe your employer really does have you best interests at heart, but is it really their place to be offering such advice? Practising meditation and yoga and being more mindful are things all of us could benefit from, but it really needs to be discovered and explored on your own terms, and you need to be open to the idea.

Let us also consider that the root cause of your anxieties and stress is likely your job, and it becomes even more perverse that your employer should be suggesting remedies to these symptoms. Rather than offer spiritual guidance under the guise of self improvement, it is more fitting for employers to address the environmental conditions that contribute to these negative feelings in the first place.

The Race For Ultra Fast Broadband

A revolution is quietly taking place in Austin, Texas. The city is the latest to be selected by Google for the launch of its new high speed internet service. Previously launched in Kansas City and Provo, Utah, it has proven popular amongst those living in areas lucky enough to have been chosen.

After much media digging through planning aplpications, it has been discovered by local media that Google has a further 34 American cities targeted for expansion of the scheme including Atlanta, Nashville, Portland, Phoenix, San Jose and Salt Lake City.

What's all the fuss about? Quite simply, speed. Lots of it. Customers can expect to see 1 gigabit per second, that's around 100 times faster than most conventional broadband services in the UK. A secondary appeal is the chance to escape the effective monopolies that cable companies currently have over broadband connections in much of the US. The service is awful and the speeds leave much to be desired.

The broadband infrastructure of the UK is thankfully quite different, and most would agree better than that of the US. IS it possible a similar thing could happen here though? The answer is apparently 'yes'.

Earlier in the year it was announced by TalkTalk Telecom and BskyB that they were joining forces to plan something similar, connecting 20,000 homes and businesses in Yorkshire with a 1 gigabyte service as early as 2015.

In light of the plans, Ofcom has proposed new rules that would ensure BT promotes competition in Britain's superfast broadband market. Specifically, BT would see regulations placed on its own retail prices as well as its wholesale prices to other operators.

This means good news for consumers who will enjoy a more competitive market, and thus cheaper prices, as well as faster broadband speeds.

End To UK Mobile Phone Blackspots

For a small island, we have a lot of blackspots when it comes to mobile signal. It's not limited to rural areas either, you'll find these small dead zones in and around our major cities, too. This could soon become a thing of the past though, thanks to a new plan allowing networks to be shared.

Ministers want to make it possible for users to automatically switch to other networks when they lose signal from their current provider. A kind of 'national roaming' if you will. If it goes ahead will be the first scheme of its kind anywhere in the world.

Operators have previously opposed the plans citing that it reduces incentive for them to put masts in areas with low population. Culture secretary, Sajid Javid has countered this by offering to charge reduced fees for a range of radio frequencies, in return helping to pay for shared networks.

David Cameron has been pushing for increased coverage in reception for rural areas for quite some time. The matter was raised again this year after the PM reportedly lost signal in Norfolk on a number of occasions.

Some networks already have mast sharing arrangements, and there is no reason to doubt the technical feasibility of expanding such operations.

Sources from within Whitehall concede, though, "Why should an operator that has invested a significant amount in providing great coverage in a particular area be forced to share that with a competitor who may come in and offer a cheaper deal? That's the sort of question that needs to be worked through."

One insider at a major mobile phone company warns that national roaming "would be a disaster for consumers", and has been rejected in other countries with good reason. "Rural Britain could be pushed back into a pre-digital dark age as no mobile company would be incentivised to invest in the latest mobile broadband communications. It would take years to work through the regulatory and legal processes as well as adding a layer of red tape for councils."

Another source said "This is bad for customers, bad for the country as a whole and bad for the industry. This may sound easy to do but it effectively builds a network that is designed to drop calls."

The Department of Culture, Media and Sport said "The government has made it clear that it wants to ensure the UK has world class mobile phone coverage as part of our investment in an infrastructure for the long term economic plan. We are investing up to £150 million to improve mobile phone coverage in areas where there is currently no coverage from any of the mobile network operators. Of course we want to look at what can be done in areas with poor coverage."

Despite concerns of call dropping, and causing a 'race to exit' situation, whereby companies would close masts that could be served by another carrier, Mr Javid remains committed to the plans.

Google Glass Prototype To Be Made Available In Britain

Glass, the controversial high tech glasses that caused a stir last year in the US will be arriving on British shores it has been revealed.

The new gadget, a cross between a pair of spectacles and a smartphone, will go on sale at £1,000. The device is described by Google as "a wearable computing device designed to make it easier to bring people the technology they need without distracting them from the world around them."

Glass users have the ability to search online, read messages and perform other commands using a tiny screen that appears in the corner of the wearer's right eye. The device is operated using a mixture of voice commands, eye movement and touching the frame of the glasses.

Initially a few thousand people will be able to road test an early version of Glass. Google will gather information from these early adopters to iron out bugs and flaws in the device before it goes on sale.

Head of Google Glass, Ivy Ross said "We want it to get it better before it goes on sale to a wider audience." He added, most current users are using Glass to record videos and take pictures and get directions through the map feature.

Many are excited about the potential of Google Glass, but we have already seen fierce opposition to the technology. The term "Glassholes" has appeared in the US to describe users of the device who user it in an intrusive, obnoxious or creepy fashion. There have been several cases where people have been told to leave restaurants and other social environments for using the device inappropriately. Others have banned wearing of the Glass outright.

Earlier in the year a ticket was issued to a motorist in California for wearing Google Glass while driving. The case was later dismissed.

Google have released an etiquette guide for users, offering advice such as "standing alone in the corner of a room staring at people is not going to win you any friends". Whether people in the UK will have the same reaction we have seen across the pond is yet to be seen.

Glass will be available in a number of framing options, and can be test driven at Google's new £1 billion UK headquarters near King's Cross, London.