RIM CEO forecasts operating loss in quarter to June 2

Research In Motion (RIM) president and CEO Thorsten Heins said the company is likely to report an operating loss for its next financial quarter, ending June 2, with “lower volumes and highly competitive pricing dynamics in the marketplace” impacting the business.

Heins reiterated that RIM is undergoing a “significant transformation” as it moved towards the launch of the new BlackBerry 10 OS meaning “financial performance will continue to be challenging for the next few quarters."

Heins made the comments during a business update, which is part of his previous pledge to provide “candid and timely updates when possible on the progress and challenges RIM is experiencing."

RIM’s well-documented struggles saw it report a profit of US$1.2 billion for the year ended March 3, 2012, down from US$3.4 billion in the prior-year period. This was on revenue of US$18.4 billion, down from US$19.9 billion. RIM’s Q1 financial results for quarter ending will be published on June 28.

Heins confirmed that the company has enlisted JP Morgan and RMB Capital Markets to help it evaluate various financial strategies, including “opportunities to leverage the BlackBerry platform through partnerships, licensing opportunities and strategic business model alternatives."

RIM is continuing to be “aggressive” as it competes for both enterprise and consumer customers, according to Heins, with its development team "working hard to provide cost-competitive, feature-rich solutions to our global customer base."

The company’s cost optimisation and resource efficiency programme, aimed at achieving US$1 billion in savings by the end of fiscal 2013, will continue to review RIM’s organisational structure and business processes.

Positive areas highlighted by the RIM CEO included encouraging responses to previews of BlackBerry 10 at the recent BlackBerry World conference and the global subscriber base rising to 78 million during the period, with international markets being the main driver for growth. However, this was partially offset by higher churn in the US.

The end of iDEN

USA cellco Sprint announced plans to migrate its business and government customers from its iDEN based Nextel network onto the Direct Connect platform – its CDMA based push to talk service.

Sprint also announced that it plans to cease service on the iDEN Nextel national network as early as June 30, 2013 as part of its Network Vision plan – a series of network updates designed to offer next generation network capabilities to customers.

Sprint will send written notices to business and government customers from next month regarding the iDEN network shutdown. Additional notices are planned for distribution to the iDEN base multiple times over the next year as the shutdown of the iDEN network becomes more imminent.

Sprint’s CDMA based Direct Connect coverage is expected to broaden throughout 2012.

The company is currently carrying out a plan to consolidate multiple network technologies into one seamless network. Network Vision is expected to add net economic value for Sprint from reduced roaming costs, cell site reduction, backhaul efficiencies, more efficient use of capital, and energy costs savings.

Sprint anticipates that the iDEN network push to talk functionality will become inoperable as early as June 30, 2013; however, Sprint CDMA voice and data services on PowerSource devices (dual mode iDEN and CDMA devices) will still be available. The company has already discontinued selling iDEN devices in certain channels. It will discontinue selling iDEN devices in all channels and all brands carrying iDEN Nextel products over the next several months.

iDEN technology has had light exposure in the Middle East, having primarily been rolled out in Saudi Arabia and Jordan. The Jordanian operation, which was branded Xpress, is no longer operational, brought down by difficulties related more to the business case and strategy adopted by the operator’s owners and management.

OTA loses appeal against US$1.3 billion fine over foreign exchange procedures

Orascom Telecom has lost its appeal against a US$1.3 billion fine imposed by the Algerian Courts, although the jail sentences against a senior director has been overturned.

The Algerian Court of Appeal confirmed the judgement handed down by the Algerian Court of First Instance on March 28, 2012 against Orascom Telecom’s subsidiary in Algeria, Orascom Telecom Algerie (OTA).

The judgement relates to a previously disclosed claim brought in 2010 by the Algerian authorities alleging breaches of foreign exchange regulations.

OTA maintains that together with its senior executive the company has acted in compliance with the law and OTA is taking the necessary steps to file an appeal with the Algerian Supreme Court.

The lodging of the appeal should provisionally suspend the judgement.

RIM reported to be set to slash further 12 per cent of workforce

Canada’s Research In Motion is reported to be planning job cuts of up to 2,000 personnel out of its 16,500 worldwide staff.

A person familiar with the company’s plans told a newspaper in Canada that the layoffs may cut even deeper than that. The redundancies are expected to be announced just before the company announces its financial results on the June 2.

The company has already cut its staff from a peak of 20,000. Since the emergence of the Apple and Android products, the company has struggled to retain market share and has lost several executives, as well as making redundancies across the company.

The company has not commented officially on the latest media reports.

Econet Wireless secures US$362 million in funding earmarked for Zimbabwe

Econet Wireless says it has secured a US$362 million loan facility to finance network upgrades, and that 70 per cent of the funding will be spent in its Zimbabwean subsidiary.

A total of US$307 million will be spent in Zimbabwe, of which US$225 million will be used to refinance short-term local loans with cheaper long term loans. The rest will go towards further network upgrades and developing non-voice value added services.

The loan facility was arranged by banks in Germany, France, China, Netherlands, South Africa and Sweden.

Econet is also expected this year to introduce new solar products including one called Home Power Station it introduced last year through its subsidiary, Econet Solar.

Earlier this year, a court in Nigeria upheld Econet Wireless’ five per cent claim to Airtel Nigeria, a cellco to which it was a founding shareholder in 2001. The court sided with the Zimbabwe operator that its stake had been unfairly cancelled, and any decisions since the cancellation are void.

Econet went on to say it is seeking at least US$3.1 billion in damages the dispute.