Mobile Network Comparison

Vodafone seems to be trying to cheat its way out of paying UK tax once again. Margaret Hodge, Labour MP for Barking in London and head of the public accounts committee, has called for the HMRC to urgently take action to avoid British taxpayers losing out once more. After all, Vodafone are probably the most infamous mobile operator in the country when it comes to avoiding their tax liabilities.

It was only this summer that it was revealed that Vodafone have failed to pay anything into the public purse whatsoever for the last two years. This is despite the fact that their CEO, Vittorio Colao, got a pay packet of £10 million and that their market price is rising with shareholders being given dividends totalling millions of pounds due to their £3 billion profit.

Margaret Hodge is requesting that government official take action now because it has been reported that Vodafone are in the midst of a $130 billion deal to sell its stake in US telecoms company Verizon Wireless. The board have been in talks this week brokering the deal and have been taking advice from Goldman Sachs and UBS.

The deal comprises almost 50% of the value of Verizon and is set to bring back billions to the British economy. In fact, the amounts involved are so massive they are comparible to the artificial injections that form the Bank of England’s quantitative easing programme aimed at kickstarting the UK economy.

However, by rights Vodafone should be paying about $40bn in tax on the deal although insiders have suggested that they will use loopholes to reduce their payment eight-fold to only about $5 billion. The precise con they will be using is known under British law as the “substantial shareholdings exemption” and minimises the amount of capital gains tax that the UK public would usually benefit from. Of course, any UK shareholders expecting dividends from the sale will be paying tax on their income.

It appears that Vodafone’s plan is to process the sale though an overseas holding company so it does not have to pay as much tax in Britain. And it’s because of this that Hodge is getting involved and the deal is so controversial.

What do you make of this news? Is there a gap in the law that allows Vodafone to get away with this? How do you feel about them avoiding paying their taxes on a deal this big? And is Margaret Hodge correct in urging Treasury ministers to prevent Vodafone getting away with it?

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So it’s now been several days since the shock announcement that Microsoft are acquiring Nokia. And we’ve had plenty of time now to hear opinions from talking heads and industry experts as well as let the news sink in. But now it’s time to look back and what exactly happened, why and what it means for consumers and all companies involved in mobile technology. This is final part (part 1, part 2) in our in-depth look and the background and future of the historic £4.6 billion deal.

The future for Nokia (and Blackerry)?

But what does the deal mean for the future of Nokia? Outgoing Microsoft CEO, Steve Ballmer, has maintained that the company is still committed to Nokia’s Finnish employees. However, you don’t have to be too cynical to assume that it’s only a matter of time before more redundancies, and many roles are outsourced by the American company.

There are also ethical concerns as Nokia were well-regarded as by far the most morally sound of mobile phone manufacturers. Apple’s contractors such as Foxconn have long been in the new for their appalling labour conditions and most smart phones and smart phone parts are manufactured in the Far East where workers’ rights are far from the standard expected in Western Europe.

It remains to be seen how long Nokia’s ethical credentials will last under the guidance of Microsoft. It only seems a matter of time before manufacturing is moved completely to China. It’s also been alleged that they will now aim to cut costs by sourcing metals used in their phones from illegal mines in Africa.

The deal also shakes up the entire smart phone market. Now, there really are only three big players left with a chance in terms of mobile software – Google with its Android operating system, Apple with iOS, and Microsoft with Windows Phone.

Previously, Canadian manufacturer BlackBerry (formerly RIM) had also been in the running although, like Nokia, its fortunes have also significantly fallen in recent years . With this new alliance forged between Nokia and Microsoft, it’s hard to see a place for BlackBerry in the future of smart phones. It has recently seen its revenue and sales fall off a cliff edge so much so that it has been desperately trying to find a buyer. With Microsoft choosing Nokia over BlackBerry, it’s hard to see how they’ll be up to compete with the new big three of Google, Apple and Microsoft.

As for the future of Microsoft and its aim to have a meaningful presence in the mobile market, it’s really too early to tell now. The duopoly of Android and iOS seems incredibly solid at the moment and it’s hard to see how Microsoft will be to chip away at their market share. However, it is clear that they are willing to spend and do whatever it takes to have a chance to be one of the major players in this business.

Having said that, the underlying dynamics that have meant Windows Phone has not been the success Microsoft hoped are not changing in any way with this acquisition. The strategy has been failing so far, as hard to see how ploughing even more money into it is likely to change any of the fundamental reasons why they haven’t been successful so far.

The purchase of Nokia by Microsoft was far from unseen by industry insiders. However it’s certainly a major event in the saga of the smartphone era. In many ways, this bold move was an entirely necessary gamble for Microsoft if they are to have any hope of maintaining a foothold. In the broader picture, Microsoft have been struggling to keep up as a technology company in the age of mobile and it really needs to make mobile phones an integral part of its business plan if it is to maintain any of its dominance it enjoyed in the 90s and early 21st century.

So, over to you, our readers. What do you make of this shocking development after reading all three parts? Do you think Nokia’s ethical manufacturing processes will suffer all that staff will be laid off in the coming months? And, most importantly of all, how will it affect the balance between the three major mobile operating systems in the coming years?

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Is Apple’s famous 1984 advert being taken too seriously in Cupertino these days? We’re sure you all remember that classic video and at the time Apple used it to claim that they would ensure that the future would not resemble George Orwell’s chilling dystopian vision.

In his keynote speech, Steve Jobs portrayed Apple as the only company to “ensure future freedom”. However, we have seen new Apple patents that would allow covert police or government operations to remotely prevent wireless communication whenever they want and impose blackout conditions. The patent allows government agencies to transmit a special kill signal to all Apple devices in a given area and prevent them from recording videos or taking photographs.

The scary implications of this are not hard to imagine. The rise of the mobile phone has been a great equaliser and has help the public reign in and publicise police brutality. Mobile phone footage has been a fantastic tool for popular protesters during the Arab Spring and in alerting the Western world to atrocities committed in Syria. And who can forget this chilling footage from London of balaclava-wearing police attacking an unarmed bystander causing him to die:

The news about this new patent has led many to fear that authorities could order a blackout during public protests to allow them to get away with police brutality, abuses of power or even cover-up large-scale injustices. Governments would have the final say on when these powers could be used and it has been reported that they only need to claim that a situation is “”sensitive” and that it needs to be “protected from externalities” to flip the killswitch.

Apple have also made statements alluding to the fact that this technology could be used to allow intelligence agencies to cover-up illegal state activity such as the PRISM surveillance programme revealed by Edward Snowden. What would governments be able to get away with if they had control over these powers?

It’s not yet clear whether Apple will implement this intellectual property into its products now what checks and controls will be in place to govern its use. However, it is somewhat alarming that a company who warned consumers about being enslaved by technology is actively promoting ideas like this.

What do you make of this news? Can preventing people from making recordings in public ever be justified? Will Apple introduce this technology soon? If so, how confident are you that its use won’t be abused? Finally, quis custodiet ipsos custodes?

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