EoW May 2011

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EuroWire – May 2011 30
Transat lant ic Cable
As noted by Zacks Investment Research (24th March), nearly
55 per cent of the steel produced by minimill operator
Nucor Corp (Charlotte, North Carolina) is under long-term
price contracts, which should help maintain profitability for
the company during even a prolonged economic recovery.
Nucor’s Castrip technology, Zacks said, “will structurally
lower its cost of production and lead to meaningful long-
term savings.”
Another firm mentioned by the ratings and advisory service
was AK Steel Corp (West Chester, Ohio), which for first-
quarter 2011 expected a seven per cent production increase
(to 1.45 million tons) as well as an eight per cent increase in
its average per-ton selling price. The company, which also
posted strong results for the last quarter of 2010, attributed
its brightening outlook to a better product mix and
anticipated higher contract and spot market prices.
❈ The World Trade Organization on 25th March agreed to rule
on the legality of Chinese dumping and countervailing
duties applied in 2009 to more than $200 million of
imported American-made flat-rolled electrical steel products.
The US had complained to the WTO that China failed to
disclose the facts on which its conclusions rely and to
explain its method of calculating penalties as high as
25 per cent.
In brief . . .
❈ Citing “significant and relentless cost increases in raw
material feedstocks,” Dow Wire & Cable on 18th March
announced a price increase of $567 per metric ton on its
wire and cable compounded products and elastomers in
Europe, Russia, Africa and the Middle East. The Horgen,
Switzerland-based business unit of Dow Chemical Co
(Midland, Michigan) said the increase took effect with
1st April shipments.
Telecom
How the advent of the iPhone helped derail
Deutsche Telekom’s American project
When AT&T on 20 th March announced that it had agreed to buy
T-Mobile USA from Deutsche Telekom for $39 billion, it proposed
a deal that will greatly alter the mobile telephone industry
in the United States. The merger would combine the nation’s
second- and fourth-largest cellular carriers and bring together
AT&T’s 95.5 million wireless subscribers with T-Mobile’s
33.7 million customers.
Immediately the proposed transaction raised alarms about
higher prices for American consumers. Only three major
cellular carriers would remain standing: AT&T, Verizon and the
much smaller Sprint, which might then be forced to look for a
merger partner of its own. The deal characterised by Randall
Stephenson, AT&T’s chairman and CEO, as “a major commitment
to strengthen and expand critical infrastructure for our nation’s
future”must be approved by regulators in Washington.
One certainty is that, except for an eight per cent equity
stake that it will hold in AT&T, Deutsche Telekom is no longer
in the picture, and Kevin O’Brien of the International Herald
Tribune has a theory about that. The title of his DealBook
blog for 21st March says it all: “How the iPhone Led to the Sale of
T-Mobile USA.”
Until Apple introduced its highly popular touchscreen device
in 2007, Mr O’Brien wrote, the German company had been
generating “decent” sales from its American operation, with
growth in some years surpassing that achieved at home.
But the iPhone, which famously would go on to become the
world’s leading smartphone, was an omen for Deutsche Telekom
from the beginning.
“After the iPhone became available, sold exclusively at first by
AT&T in the United States,” noted Mr O’Brien, “T-Mobile USA
began to lose its most lucrative customers.” These were the
subscribers on fixed monthly plans who defected to AT&T
and later to Verizon Wireless, which began selling the iPhone in
February 2011.
According to T-Mobile USA’s annual reports, the percentage of
the company’s contract customers fell from 85 per cent in 2006
to 78.3 per cent in 2010. In 2010 alone, T-Mobile USA said, it lost
390,000 contract customers to rivals.
GOODWIN MACHINERY LTD
Please visit our website
or contact us directly at
for more information
Goodwin machinery, based in the UK, specialise in the
worldwide sale of second hand machinery for the wire and
cable industry.
Either single machines or purpose designed lines can be
supplied from stock.
Complete turnkey projects, from removal, to installation
and commissioning using specialised electrical and
mechanical staff with many years experience in the cable
industry can be provided.
Recent new additions to the Goodwin portfolio include
for the continued service and repair of all equipment
manufactured by the following companies.
B&F Carter Ltd
Winget Syncro
Hanson and Edwards
Babcock Wire Equipment
Goodwin Machinery have also taken on board the gearbox
repair and refurbishment service from CMS. This will
continue to be carried out using the same skills and
commitment as before with the added experience of
Goodwin’s own staff.