All of a sudden, the mobile telecommunications industry in France and Germany began to enter a bloody storm.
O2 Telecom not only launched family packages, but also has a variety of options including couple packages and individual packages. In just one week of launch, the number of users in Germany and France has increased by 1 million. This is just the beginning...
At least half of the 1 billion pounds of pre-charges they received from users in the UK will be invested in the French and German markets, bringing great pressure to the telecom companies in these two countries.
It is no exaggeration to say that within the shortest possible time, O2 Telecom logos and advertisements could be seen everywhere in major cities in both countries...
…
"The U.S. dollar has risen to a multi-month high as investors gain confidence in the U.S. economic outlook and are pessimistic about the European economy..."
In his office at the Devonshire Financial Center, Barron heard Daisy say to him:
"Since May, the US dollar has risen by nearly 10%. In May, the US dollar exchange rate fell to a low of 1.1933 US dollars per euro. Now, 1 euro can only be exchanged for 1.09 US dollars, and the US dollar continues to appreciate against the euro..."
"So this is your opinion as well?"
"Economic changes are always cyclical. At the end of July 2001, the exchange rate of the euro against the US dollar was only 0.8764. In May of this year, it reached a high of 1.1933, a full increase of 36%. I think this has reached the cyclical high point. Next, the US dollar is likely to be strong, while the euro will depreciate against the US dollar, and the exchange rate will fall below 1..."
After hearing Daisy's analysis, Barron shook his head:
"The Fed will not just watch their exchange rate against the euro continue to rise, and will definitely take action to devalue the dollar next..."
"Why?"
"In order to avoid inflation, the Federal Reserve raised interest rates six times in a row. However, since last year, they have begun to cut interest rates. According to my prediction, by the end of this year, the federal funds rate will be able to drop to 1%..."
"1%? That would be the lowest point in 45 years!"
"Yes, if that's the case, the interest rate in the EU will be higher than that in the US. By then, it is highly likely that the euro will appreciate and the dollar will depreciate..."
Daisy's advantage lies in this. After thinking about it, she said to Barron:
"If you insist that this situation will happen, then I agree with your point of view."
"So according to my estimation, by the end of the year, the exchange rate of the euro against the dollar will reach above 1.25, which is nearly 15% higher than now. In the next few years, the appreciation of the euro against the dollar will continue to be the mainstream."
The reason for this conclusion, of course, is that Barron knew that in the original time and space, at the end of 2003, the exchange rate of the euro against the US dollar did exceed 1.25, and by the end of the next year, it was close to 1.4, and on June 15, 2008, it reached a peak of 1.599.
Of course, the rise during this period was not one-sided, there were always fluctuations, but the appreciation of the euro against the US dollar was the mainstream.
Therefore, now is also a very good opportunity to go long on the euro in the foreign exchange market. In just over four months, the euro will be able to appreciate by 15% against the U.S. dollar. With the massive trading volume in the foreign exchange market, they are fully capable of mobilizing billions or even tens of billions of funds to operate!
They just need to use leverage, borrow dollars at this time, and exchange them for euros.
Wait until the euro appreciates against the US dollar, then convert the euros into US dollars and you will eventually make a profit.
This time, DS Capital is ready to use 1 billion pounds, with a maximum leverage of 20 times, to make a big move!
On the one hand, they still have a lot of funds in their own accounts, and on the other hand, O2 Telecom's user deposit fees. Although the 1 billion pounds will be invested in the renewal and deployment of facilities in the UK, Germany and France, this money does not need to be spent immediately, so it is no problem to use part of it temporarily.
Although Barron had always made the right judgment before, this time was different. The principal for the foreign exchange market alone was as high as 1 billion pounds, and through leverage, the amount of funds operated was as much as 20 billion pounds!
When Barron made the decision, Daisy even felt a tremor all over her body - this kind of excitement, nothing can compare to it.
…
"We can see that due to high charges, many people have to shorten their mobile phone talk time as much as possible. On the other hand, the update and iteration of mobile communications requires telecom companies to invest huge amounts of money in the deployment of facilities. For their economic interests, many telecom companies will only deploy signal base stations in densely populated areas, which leads to a waste of social resources as a whole."
"It was at this time that O2 took the lead in significantly reducing its tariffs and upgrading its signal base stations to increase coverage, which attracted an investigation from the regulatory authorities. This inevitably makes people wonder whether the British people should not be able to get relatively cheap mobile communication services that cover more areas?"
This is a special report in the latest issue of The Independent. The reporter investigated the current mobile communication charges in the UK and interviewed many ordinary users. In the end, he questioned why the regulatory authorities investigated O2, which took the initiative to reduce mobile communication charges...
Yes, the background of this report is that after O2 Telecom implemented a series of measures and took the initiative to launch a "price war" in the fields of mobile communications and personal broadband, telecom giants including Vodafone and BT responded quickly - the UK Competition and Markets Authority (CMA) has just stated that it will investigate whether O2 Telecom is suspected of unfair competition.
As a result, newspapers under the Independent Press Group directly published this series of reports, which caused a great response in British society. Many people who learned the inside story cursed the "evil deeds" of CMA and other telecom companies, which also put great pressure on CMA.
"Yes, Your Highness, the CMA officials came to our place today. Their attitude has changed. They politely said that it was just a routine investigation and there is no definitive conclusion yet, and it will not have a negative impact on the company..."
O2 Telecom CEO Barry Trelles told Barron's over the phone.
In Baron's opinion, the CMA will not really do anything to O2 about this matter. Although BT and Vodafone are very powerful, O2 is not a pushover either.
The most we can do is give them a warning through CMA.
But how could he possibly accept this? In this matter, O2 Telecom occupies the moral high ground and will embarrass CMA first.
As for whether CMA will be unhappy and come to O2 to make trouble?
What is he thinking? Barron hopes that they will make a big fuss, which will be a good opportunity for O2 Telecom to promote and advertise.