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    Beware the seven deadliest customer experiences – Foundever

    Nick Booth
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    Beware the seven deadliest customer experiences – Foundever

    Repetition, ratings and rude robots

    You can tell a CEO who’s spent too much time ‘in the cloud’. They believe their own customer satisfaction surveys. Either that or they are deliberately gas-lighting us. To improve customer experience, Mobile Europe sought simple ‘people pleasing’ advice for telcos from people who really know the customer. In the first of an occasional series, Maria Harju, Foundever’s Chief Revenue Officer for Europe, the Middle East and Africa, describes The Seven Deadliest Customer Experiences and how mobile network operators can avoid them.

    Repetition.

    Repeating your story to multiple people is enough to make 57% of Europeans hang up. Yes, some problems demand escalation, but if you’re moving your customer across an omnichannel platform it’s omni stupid not to move the information from channel to channel too. A CX should systematically do that. This averts another massive frustration, disregard for the customer’s history. How can you pretend to care about the customer experience when you show you are demonstrably oblivious to it? All the information across all channels is captured and should be correctly stored and retrieved so that your agents can do their best jobs.

    Rate your experience.

    OK, we need performance feedback, but customers are suffering from survey overload. Every trip to the toilet now involves an invitation to rate the experience. There are better ways to learn how customers feel about service and how they perceive your brand. Speech and text analytics are instant, less obtrusive and more accurate.

    Chatnots.

    If you don’t acknowledge your chatbot’s limitations, you’re setting your brand up for a CX failure. If your customer knows it’s an automated system, they’ll treat it as such and adjust their expectations accordingly. But when the bot goes beyond its domain intelligence it must hand off to a live representative and pass on the information shared up to that point.

    Chats …. with delayed response. 
    Chat’s rationale is about immediacy and accuracy but long wait times and vague unfocused responses will demolish that advantage. Immediate contextual support can help a customer take action or make a decision. Avoid the temptation to set high chat concurrency targets for agents. The more conversations they handle the less likely they are to resolve complex issues or satisfy each customer. Use your best pre-scripted responses in early conversational stages so that agents have more time to find a resolution. Cross train your CX staff so that they can work across channels based on peaks in demand.

    Undervaluing CX

    If each interaction doesn’t meet expectations it will damage your brand. So stress its value in your proposition. A superior customer experience should be reflected in the price of a product or service. If you’re cheap very hard to hold on to customers, especially in the current economic environment. Here is the value of CX. Three in four consumers will walk after a single disappointing customer experience, yet 42% would pay more for an identical product or service if it were supported by a superior CX. Being in the latter camp starts with understanding who your customers are, their wants, needs and expectations.

    Treating vocal interaction like a necessary evil.

    Test yourself before you test their patience. Voice is about people not managing processes, so IVR should solve customers’ problems, not stress test their patience and short-term memory on the altar of your management processes, said Harju. Most consumers are frustrated by complicated menus then agitated by the agent that takes over. A happy resolution is an uphill battle. An IVR should minimise menu options, as part of the identification or authentication process so that more of the conversation is focused on the customer and their issue, and use it to coach the customer. Rather than playing a message saying the call is important, a message asking if a person has the reference number or other relevant information to hand is going to make everyone’s life easier.

    Network resilience is fundamental to Ukraine’s fight for survival

    Michelle Donegan
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    Network resilience is fundamental to Ukraine’s fight for survival

    Kyivstar’s CEO and CTO talk about the power of grit and operators pulling together

    In a small, quiet meeting room on the sidelines of Mobile World Congress with executives from Ukraine’s largest operator Kyivstar, the discussion was in stark contrast to what was going on at the show. While other European operators talked about fair-share politics and future immersive experiences, Kyivstar provided an update on how it has kept people safe and its network up and running after one year of war. 

    Oleksandr Komarov, Chief Executive of Kyivstar, acknowledged having a somewhat “alien” feeling here as the operator has “very different challenges and priorities” compared to the rest of the industry.

    In an interview with Mobile Europe, Komarov and Volodymyr Lutchenko, Chief Technology Officer at Kyivstar, shared how network resilience challenges have changed dramatically over the last year and how people have pulled together to preserve communications services. (Also see Telecoms in time of war)

    National roaming

    Cooperation among the country’s three operators – Kyivstar, Vodafone Ukraine, and Lifecell – has been “essential” for overall network resilience, and they have been “exchanging capacity and providing equipment to one another,” said Komarov.

    Indeed, one of the first and most important steps the operators took after Russia invaded a year ago was to implement national roaming, so that if network services are down on one network, users are automatically switched to another. National roaming is unusual and difficult, but the Ukrainian operators were able to launch it in about three weeks with support from the national regulator.

    The service is “working well to keep services going,” said Lutchenko. When the country suffered power blackouts in November last year, he said more than 2 million people per day used the national roaming service.

    When the war started, the government also issued additional frequencies free of charge to the operators to give them extra network capacity. Meanwhile, equipment suppliers and local businesses have also rallied to help keep the networks going.

    Komarov cited an example where Ericsson stepped up to support a “very big ambitious project to roll out a national core site in the western part of Ukraine … to mitigate the risks related to the potential loss” of other sites, he said. In peace time, such a project would take 12 to 18 months. But with everyone cooperating, he said they started the project at the start of 2022 and it was completed in early May, taking less than five months for a major deployment.

    Moving targets for resilience

    As the months of war have dragged on, the network resilience challenges have changed. In the first few months, Lutchenko said Kyivstar was engaged in “urgent activities” to keep the network going when the infrastructure was physically damaged by rockets, bombs, mines, and tanks, because the biggest problem is that it is often too dangerous to get to the sites to repair damages.

    “[The sites] could be in occupied territory or on the front line. The area could be under fire or the fields can be mined so that without supervision from the military, you cannot get there … That’s why your network should be very reliable and still work with multiple damages like ours,” said Lutchenko.

    Later in the summer, the resiliency work shifted to “stabilisation” projects. By September, Kyivstar’s network performance KPIs remarkably were “almost on a pre-war level.” Apart from occupied areas where Kyivstar had no access to sites, “the network was really good,” he said. 

    Attacks on energy pose new threats

    The communications resiliency landscape changed in October when Russia started attacking the country’s energy infrastructure. Lutchenko said the challenge is now “really huge” and the “new reality.” In late October, about 20% of Kyivstar’s base stations were affected by power outages. Lutchenko said the worst day was November 24, 2022, when 65% of Kyivstar’s network was without electricity.

    In response, Kyivstar has strengthened energy resilience by adding longer-life backup batteries and diesel-powered generators.

    Here again, cooperation has been vital. In Kyivstar has “crowd-sourced” access to power generators from local businesses, such as a petrol station located near one of the operator’s cell sites. “We asked businesses and invited people to help us with keeping the network up and running,” said Lutchenko, and now more than 600 sites are connected to diesel generators.

    But this is one area where Komarov feels help from the government has been “limited”. Of Kyivstar’s 1500 generators, he said about 40 were provided by the government and the rest were either procured by the operator or acquired from third parties that have “extra power capacity on hand located nearby our sites.” Kyivstar said it has invested around US$5 million just on generators and diesel fuel. 

    Fighting on two fronts

    Kyivstar’s network is under threat from cyberattacks as well as physical attacks. “The Russians want to destroy us not only physically, but virtually as well, so that means we have to fight on two front lines,” said Lutchenko.

    The operator took measures to protect its network by relocating certain equipment away from areas that were likely to come under Russian control. Komarov explained that in occupied territories there was a cyber defense effort underway to ensure that despite not having control of all its network, the operator was not “vulnerable to extra threats.”

    “We streamlined the architecture of our core infrastructure to minimise the number of potential vulnerabilities,” he said. In Kherson, for example, Kyivstar had “just a media gateway and RAN network” and this “decreased the risk of penetration,” he said.

    Restoring liberated areas

    As territories are liberated, Kyivstar works on repairing the destruction to its network. Lutchenko said that about 18% to 20% of the telecom infrastructure in formerly occupied regions is “totally destroyed,” meaning “there is nothing from an equipment or infrastructure point of view.” About 30% to 35% is “heavily damaged” and about 40% has “minor damages.” Kyivstar says it can repair nearly 90% of the network in those areas.

    “We’re waiting for our military to liberate more territory and we are ready to restore everything,” said Lutchenko.

    Losing more than infrastructure

    Kyvistar is worried about losing more county’s critical communications infrastructure: it is also working to keep its 3,800 employees and their families safe. In the initial months of the war, the operator provided instructions for where people could go for safety and converted regional offices into temporary homes with showers and washing machines for displaced families.   

    Around 140 Kyivstar employees have been drafted into the army and thousands volunteer to help the army in various roles. The operator has lost three of its employees in the war and two are missing.

    Kyivstar relies on maintenance and construction suppliers, but their situation is “very much worse” because they cannot protect employees “with the same efficiency as Kyivstar” due to its critical infrastructure status, explained Komarov.

    Lutchenko joined Kyivstar in November 2021 and has been in the telecom industry in Ukraine for more than 25 years. “I don’t think anyone can plan for stuff like this. The most important thing is we have the greatest team in the world.”

    Asked how the war has affected the operator’s business, Komarov said the operator was “in the green” and there is “extremely high pressure on our networks.”

    “But let’s face it, it’s less about business and much more about survival,” he said.

    More techcos step up to support Ukraine

    Annie Turner
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    More techcos step up to support Ukraine

    Microsoft, VMware, Intel, AMD and OneWeb are the latest to stop trading with Russia – and some with Belarus too

    Last week Google blocked Russians’ access to Google Pay and Apple did likewise with its wallet product and product sales in Russia.

    Some have criticised Apple’s move, pointing out it could push people towards using Android phones made in China that are more susceptible to hacking and surveillance.

    However, Apple made the moves after a direct appeal to its CEO, Tim Cook, by the Vice Prime Minister of Ukraine Vice

    Now more big tech firms are following their lead.

    Microsoft has suspended all new sales of Microsoft products and services in Russia.

    The chips are down

    Chip giant Intel said in a statement that it, “condemns the invasion of Ukraine by Russia and we have suspended all shipments to customers in both Russia and Belarus.

    “Our thoughts are with everyone who has been impacted by this war, including the people of Ukraine and the surrounding countries and all those around the world with family, friends and loved ones in the region.”

    Another chip giant, AMD has also stopped shipments to Russia and Belarus.

    VMWare is suspending all its business activities in Russia and Belarus due to the unprovoked attack by Russia. It published a statement that read, “We stand with Ukraine, and we commend the bravery of the Ukrainian people. The human toll is devastating and like other global businesses, we are committed to supporting our Ukrainian team members, customers and partners.”

    It added, “We are also seeking to support non-Ukraine-based employees with family members located in Ukraine with information to access available resources. We continue to support our employees in Russia, as they are adversely impacted by the consequences of their government’s actions.

    “The suspension of operations includes suspension of all sales, support, and professional services in both countries in line with VMware’s commitment to comply with sanctions and restrictions.”

    The board of directors at satellite operator OneWeb has voted to suspend all launches from Baikonur, the Russian cosmodrome in Kazakhstan.

    Social media battles

    Meanwhile social media sites are continuing their battle with Russian authorities, which are keen to control the flow of information and the narrative surrounding the war.

    Facebook, Twitter and YouTube have acted to prevent Russia’s state media making money from ads on their sites. In response, Moscow has said will restrict access to Facebook after its parent company Meta refused to stop fact-checking some Russian media companies’ output.

    TikTok has limited access to Russian state-controlled media accounts in the EU and Reddit has stopped users posting links to Russian state-sponsored media.

    Expect yet more big techcos to act soon.

    Vodafone rises in Africa, despite currency falls

    Annie Turner
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    Vodafone rises in Africa, despite currency falls

    Group profit rises 2.2% despite tough conditions and CEO claims transformation plan is working

    Vodafone Group reported its annual results broadly in line with expectations, posting core earnings of €11.02 billion from revenues of €36.7 billion. The group’s service revenue dropped 1.3 percent, but on an organic basis, increased by 6.3%, with opcos in Europe and Africa, and its Business division all growing. With the exception of Turkey, the Group had service revenue growth of 3.7% (to €29.9 billion) on an organic basis. (Our analysis of Vodafone Group’s results in other regions can be found here.)

    The operator group announced that total revenue in Africa declined by 8.1% to €7.4 billion due to the depreciation of local currencies against the euro. Hence service revenue decreased by 9.2% but organic growth in service revenue grew by 9.2%, with growth in South Africa, Egypt and Vodacom’s international markets.

    In South Africa, service revenue growth was supported by consumers taking up contracts for mobile and price rises to those contracts in the first quarter. Also there was good fixed line growth in Consumer and Business. Growth slowed in Q4 due to a strong prior year comparative, reflecting an acceleration in customer data usage during widespread power outages, and pressure on wholesale revenue. Financial services revenue grew by 7.9% to €156.9 million on an organic basis, supported by growth in our insurance services. 

    Service revenue in Egypt grew strongly during the year and accelerated in Q4, above inflation. The acceleration was supported by sustained customer base growth, price increases in mobile and fixed, robust demand for data and strong growth in our financial services product, ‘Vodafone Cash’. Vodafone Cash revenue more than doubled in FY24 to €95.8 million. 

    In Vodacom’s international markets, service revenue growth was supported by a higher customer base and strong M-Pesa and data revenue growth. M-Pesa revenue grew by 13.4% on an organic basis and now represents 26.8% of service revenue. 

    Adjusted EBITDAaL declined by 11.8% during the year. On an organic basis, adjusted EBITDAaL increased by 6.4%, supported by service revenue growth and cost initiatives, partially offset by an increase in technology operating expenses associated with higher energy costs. The Adjusted EBITDAaL margin decreased by 1.5 percentage points year-on-year (organic: -1.1 percentage points) to 34.2%. 

    Customers 

    In South Africa, Vodafone added 125,000 contract customers in the year, and now has a mobile contract base of 6.8 million. It added 5.7 million mobile prepaid SIMs in the year, supported by our big data led customer value management capabilities which offer personalised bundles to customers. Across its active customer base, 81.5% of mobile customers now use data services, an increase of 3.3 million year-on-year. The VodaPay super-app continued to gain traction with 5.8 million registered users. 

    In Egypt, Vodafone added 437,000 contract customers and 2.4 million prepaid mobile customers during the year, bringing the total to 48.3 million customers. ‘Vodafone Cash’ now has 8.2 million active users with 2.8 million users added during the year. 

    In Vodacom’s international markets, the operator added 4 million mobile customers and its mobile customer base is now 54.2 million, with 63.5% of active customers using data services.

    Vodafone’s annual profits up 2%, CEO says recovery on track

    Annie Turner
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    Vodafone’s annual profits up 2%, CEO says recovery on track

    Is progress fast enough to keep investors happy with dividend halved from next year?

    Vodafone Group reported its annual results broadly in line with expectations, posting core earnings of €11.02 billion from revenues of €36.7 billion. The group’s service revenue dropped 1.3 percent, but on an organic basis, increased by 6.3%, with opcos in Europe and Africa, and its Business division all growing. With the exception of Turkey, the Group had service revenue growth of 3.7% (to €29.9 billion) on an organic basis.

    Vodafone’s operating profit decreased by 74.6% to €3.7 billion, but the fall was largely due to business disposals over the 2023 financial year, most notably, the €8.6 billion it gained from divesting Vantage Towers.

    Undervalued?

    Shares in Vodafone have fallen 22% in the last 12 months and by 44% since 2019. It only rose slightly after the earnings announcement, propelled by the promise of a €2 billion share buyback by the company. Vodafone said it would pay ¢9 dividend per share for 2024, but would halve this going forward to invest in its networks.

    Net debt, not taking into account the sales of opcos in Spain and Italy, remained flat at €33.2 billion.

    James Beard at the Motley Fool makes an interesting case for why the share price should be 87% higher here. He also writes, “With regards to profitability, selling Spain and Italy is likely to improve the company’s ROCE [return on capital employed] by ‘at least’ one percentage point. This might not sound very much. But in FY23 it would have been worth another €1.1bn (7.7%) of operating profit.”

    Good news and bad

    Top-line growth in the final quarter was boosted by gains in Germany – its biggest European market – and the UK. Over the year, Vodafone’s service revenues from Germany grew by 0.2% but accelerated to achieve 0.6% in the fourth quarter. However, adjusted core earnings fell 5.8% due to higher energy costs and other inflationary factors.

    It is also braced to lose 4 million customers in Germany, at an estimated cost of €400 million, when a regulatory change comes into force in July. Until now, people in multi-tenancy buildings had to accept the TV and broadband service provider their chosen by the owner. Now each unit within the building will have the right to choose their own.  

    Vodafone acquired about 8.5 million customers within multi-tenancy buildings when it bought Liberty Global’s German operating company, along with those in the Czech Republic, Hungary and Romania for €18.4 billion in August 2019.

    Della Valle said that business in Germany was expected to improve and by 2026 “will come back to being an important growth engine for the group”.

    The UK remains a strong market for Vodafone, but the question of whether the £15 billion (€17.44 billion) proposed joint venture with Three UK is allowed to proceed hangs in the balance. In the last financial year, mobile service revenues rose 5.4%, boosted by double-digit price hikes. 

    A better place?

    Vodafone seems to be in a better place than it was a year ago when it reported earnings of €14.9 billion and the CEO laid out her recovery plan.

    Della Valle said in a statement, “A year ago, I set out my plans to transform Vodafone, including the need to right-size Europe for growth. Since then, we have announced a series of transactions and we are now delivering growth in all of our markets across Europe and Africa.

    “We performed slightly ahead of expectations in the financial year, with good organic service revenue growth of 6.3% and organic EBITDAaL [earnings before interest, taxes, depreciation, amortisation, and adjusted loss] of 2.2%.

    “Our Business division – a key growth driver – achieved 5.4% revenue growth in the fourth quarter. Much more still needs to be done in the year ahead. We will step-up investment in our customer experience, improve our underlying performance in Germany and accelerate our momentum in Business, whilst also continuing to simplify our operations thshare

    roughout the group. We are fundamentally transforming Vodafone for growth.”

    Focus on customer service

    Vodafone said it is working to transform customer experience, having reallocated €140 million in new incentives and plans to develop talent. It has started processing customer insights using real-time AI models, feeding into detailed action plans on a weekly basis in all markets.

    Vodafone says frontline tools and improved processes have benefited 70,000 team members, although it also reduced headcount by 5,000 in line with the three-year recovery plan announced by Della Valle at the annual earnings announcement last year. Another 2,000 jobs are due to follow, to reach an overall target of shedding 11,000 jobs by 2026 and cutting operating costs by €1 billion.

    Vodafone’s recovery plan appears to be progressing. Whether it will ultimately succeed remains to be seen.

    UK’s CityFibre acquires Lit Fibre to extend footprint, explore ISP possibilities

    Annie Turner
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    UK’s CityFibre acquires Lit Fibre to extend footprint, explore ISP possibilities

    Lit is a vertically integrated altnet – both a network builder and ISP with a footprint of over 220,000 premises across more than 20 towns

    CityFibre, the UK’s largest independent, full-fibre broadband provider, has completed its acquisition of Lit Fibre from Newlight Partners. The share-based acquisition, announced two months ago, is intended to accelerate CityFibre’s nationwide roll out by up to 300,000 premises.

    CityFibre’s plan is to pass 8 million premises. Newlight Partners join CityFibre as minority shareholders.

    Lit is a vertically integrated altnet – both a network builder and ISP with a footprint of over 220,000 premises across more than 20 towns in Wiltshire, Gloucestershire, Hertfordshire, Worcestershire, Essex and Suffolk. It serves a subscriber base of about 10,000 retail customers.

    CityFibre has worked with Lit’s management team over the last two months to begin the integration of Lit’s 10Gbps XGS-PON network infrastructure into CityFibre’s wholesale network. They expect the integration to be completed later this year, enabling CityFibre’s ISP partners to access the same products, pricing and service experience across the extended footprint.

    As a wholesale-only operator, CityFibre will explore options for the Lit ISP after the integration.

    CityFibre intends to complete Lit’s work-in-progress deployment as well as most of its planned network implementations. In total, the network is expected to reach up to 300,000 premises by early 2025. Lit’s network is built exclusively using existing poles and ducts and so has “a highly attractive build cost per premises”. 

    Lit’s swift network integration will be prioritised: customers’ broadband services will not be affected by it. As a wholesale-only operator, CityFibre will explore options for the Lit ISP after the integration.

    The acquisition of Lit is the first of several deals CityFibre says it expects to close over the next two years. It follows CityFibre’s decision to pursue altnet acquisitions as a strategic growth driver towards and potentially beyond its 8 million premises target. It wants to cement its position as the UK’s third digital infrastructure platform of scale, behind BT and Virgin Media 02.

    Earlier this month, CityFibre reported its own customer connections exceeded 400,000, growing 77% year-on-year and with installations regularly exceeding 1,000 a day. Also, that quarterly revenues are increasing over 30% year-on-year, with a positive EBITDA performance for the first quarter of 2024. It continues to progress towards it 8 million premises passed target, with 6 million already built, in progress, acquired or underpinned by the government’s Project Gigabit contract awards.

    German regulator imposes new conditions on spectrum extensions 

    Simon Dux
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    German regulator imposes new conditions on spectrum extensions 

    BNetzA’s consultation shows it has listened to newcomer 1&1’s complaints around extending existing frequency usage rights for Deutsche Telekom, Vodafone and Telefónica

    German regulator, Bundesnetzagentur (BNetzA), published a new draft consultation on the extension of frequencies in the 800MHz, 1,800MHz and 2,600MHz ranges, which has added new remedies to overcome 1&1’s complaints that extending existing frequency usage rights for Deutsche Telekom, Vodafone and Telefónica was unfair.  

    Germany’s fourth mobile network 1&1 – since December – published a report in January, slamming BNetzA’s September consultation to consider extending existing licences, suggesting it amounted to “an action tantamount to subsidisation in the billions of euros of the three established network operators.” 

    In the new consultation, BNetzA is still minded to extend the licences by five years which it said would align the terms of these rights of use with rights of use that expire later. This will allow more frequencies to be allocated further, and it believes regulation-induced shortages will be avoided. “In addition, market developments can be included in a later procedure. This also applies to the fourth network operator 1&1. A larger procurement framework offers companies more opportunities to gain access to spectrum,” stated the regulator.  

    The frequency spectrum at 800MHz, 1,800MHz and 2,600MHz is to be made available for mobile communications at a later date, together with the rights of use from the 700MHz, 900MHz, 1,500MHz and 1,800MHz ranges, which expire in 2033. 

    Crucial concession to 1&1 

    However, this time the regulator said the extension will be linked to a commitment by Telefónica to continue the transfer of 2x10MHz mid-band spectrum to 1&1. In addition, the three incumbent network operators will be obliged to make at least 2x5MHz of their low-band (sub 1GHz) spectrum available to 1&1 for co-operative, joint use. The agency is calling for corresponding offers on fair terms. 

    “We are open to a co-operative solution. It is important that we can utilise a sufficiently large amount of frequency at market conditions in order to adequately supply our more than 12 million customers,” said 1&1 CEO Ralph Dommermuth (above). “Only then can we fully leverage the advantages of our innovative Open RAN technology and ensure the competitiveness of our daily expanding 5G network.” 

    The regulator said that if 1&1 Mobilfunk is not granted national roaming by a nationwide network operator from 2026 onwards, it reserves the right to order national roaming. 

    Rural emphasis  

    Like its September consultation BNetzA has added several conditions to stimulate rural rollouts. Each of the three incumbent mobile network operators is to have at least: 

    > from 2030, 99.5 percent of the licensed area provided with 50Mbps  

    > from 2029, 99 percent of households in municipalities in rural areas provided with 100Mbps in each federal state 

    > from 2029 all federal highways provided with 100Mbps, 

    > from 2029 all state roads as well as inland waterways provided with 50Mbps 

    > from 2030 district roads provided with 50Mbps 

    Regarding gigabit coverage along railway lines, the BNetzA considers: “a joint approach to the expansion of public mobile communications and the new railway radio to be expedient. To this end, mobile phone and rail network operators are to be obliged to cooperate.” 

    “Our primary goals are to improve the supply for all consumers and to further promote competition. The extension of frequencies is to be linked to ambitious coverage requirements,” said BNetzA president Klaus Müller. “A specific coverage requirement for rural areas and a land requirement can promote equivalent living conditions in urban and rural areas.” 

    He added: “We want to further strengthen competition in the mobile communications market. To this end, the extension is to be combined with special regulations for the fourth network operator and a negotiation requirement for service providers.” 

    Comments on the draft consultation can be submitted until 8 July 2024. 

    Microsoft and Amazon to invest billions in cloud, AI in France 

    Simon Dux
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    Microsoft and Amazon to invest billions in cloud, AI in France 

    Hyperscalers commit to splash the cash on cloud and AI infrastructure at the annual “Choose France” summit

    Microsoft said it will invest €4 billion in cloud and AI infrastructure, AI skilling, and French tech acceleration, aiming to train one million people and support 2,500 AI startups by 2027. The announcement came as President Macron hosted business leaders for the annual “Choose France” summit at Versailles Palace.  

    The announcement follows the news over the weekend that Amazon would invest €1.2 billion to boost its logistics as well as AWS cloud infrastructure in France, home of AI startup Mistral AI.  

    The man with the biggest wallet in Microsoft, vice chair & president Brad Smith (above, right) said the investment was the company’s largest in France in Microsoft’s history.  

    Microsoft will invest €4bn to expand its next generation Cloud and AI infrastructure in France and bringing up to 25,000 advanced GPUs to the country by end of 2025. The company will expand its data centre footprint across existing sites in Paris and Marseille regions and will also invest in planning a new data centre campus in the Grand Est Region, in Mulhouse Alsace Agglomération. Microsoft’s Cloud and AI infrastructure in France will operate under the company’s recently published AI Access Principles. 

    These investments will help to meet the growing demand for efficient, scalable and sustainable AI specific compute power and the needs of private and public organisations, according to the company. Microsoft’s computational infrastructure and AI platform services will enable organisations to develop, deploy, and use proprietary and open-source AI models and applications. It will also make Microsoft’s own AI-infused services like Microsoft 365 and Microsoft Dynamics more broadly and locally accessible to French customers. 

    Microsoft said it would couple its capital investment by investing in renewable energy and is now pursuing its first renewable energy contracts in France. The company has executed its first PPA this month and it expects to have approximately 100MW of new renewable energy projects online in France by the end of 2024.  

    Training commitment 

    Microsoft will support skilling for 1 million people to help the country embrace the new AI era, with a specific focus on job seekers, students, SMBs and professionals. Microsoft and its partners – government institutions, training services partners, non-profit organisations, universities and higher-education organization – will launch new training programmes focused on building AI fluency for everyone, developing AI technical skills, supporting AI business transformation and “promoting safe and responsible AI development”.  

    The company will expand its “A Vous l’IA” initiative, launched in March 2024, and partner with France Travail to train job seekers with the skills they need to use AI technologies. The programme, accessible through the Emploi Store, will enable job seekers to learn the core concepts of artificial intelligence and generative AI functionality and how to apply it in their job search. Microsoft is also partnering with Kokoroe, a French Ed-Tech company specialized in micro-learning to build this new exclusive content, based on short and easy-to-consume modules, with no technical background required – accessible on the “A Vous l’IA” platform.  

    The company is partnering with higher-education organisations, such as Skema Business School, Rennes School of Business, EDHEC and Efrei, to provide students with the right skillset. To upskill AI professionals Microsoft is collaborating with its professional network of selected Training Services partners, in France – Cellenza Training, ENI, Fastlane, IB Cegos and Skillsoft Global Knowledge, to accelerate the readiness of French organisations through dedicated activations online and in Microsoft Experiences Labs in the regions.  

    More inclusive programmes 

    Microsoft is also launching a pioneering module with Simplon – plus extend joint programmes for 3 further years – aiming at training developers of all backgrounds to better use GenAI, select models and deploy them with state-of-the-art tools, ensuring proficiency across platforms. Microsoft and Simplon will first accelerate on “GenIAles”, their three-day in-person workshop aiming at supporting women’s access to digital tech job roles. They will also keep growing their network of Microsoft AI Schools by Simplon across the country, an initiative launched in 2018 to train jobseekers to become AI developers, a newly recognised job by France Competences in 2020. 

    Finally, Microsoft will set the pace in accelerating AI startups, aiming to engage over 2,500 startups by 2027 through its new flagship programme: Microsoft GenAI Studio. This initiative is designed with a comprehensive package of AI expertise, cloud credits, and support activities, including collaboration with customers and partners. 

    Microsoft GenAI Studio will first translate into a tailored 4-month programme at STATION F that will be run twice a year over three years, aiming at accelerating the adoption of AI by select French startups with technical workshops and technical, access to AI experts at Microsoft and among the programme’s partners. During the programme, the selected startups will also have access to Microsoft’s collaborative workspaces at Station F. Each batch will welcome 15 startups. The first batch will begin next September. 

    “This major investment demonstrates a steadfast commitment to supporting digital innovation and economic growth in France,” said Smith. “We are building state-of-the-art Cloud and AI infrastructure, training people with AI skills, and supporting French startups as they use our technology with confidence to grow in a fair and responsible way.” 

    Amazon to add 3,000 jobs in France 

    While Amazon’s announcement was more about its logistics operations the company’s investment includes increased Amazon Web Services cloud infrastructure in the Paris area to support France’s generative AI endeavours and logistics infrastructure in the Auvergne-Rhône-Alpes to increase delivery speeds and improve sustainable deliveries for customers. 

    The 3000-staff increase is in addition to the 2,000 new permanent jobs already announced for 2024 and takes Amazon to more than 22,000 permanent employees in its offices, across Amazon Web Services’ (AWS) infrastructure in France and in more than 35 logistics sites across the country. 

    The investment in AWS cloud infrastructure aims to meet the escalating demand for AWS services in France, driven by the immense potential of cloud computing and artificial intelligence (AI). According to a report by Strand Partners commissioned by AWS, the number of French companies adopting AI increased by 35% between 2022 and 2023, from 20% to 27%. If France maintains this pace of AI adoption, it could bring €99 billion in additional gross value added (GVA) to the French economy by 2030, according to the commissioned report. 

     “Companies across industries recognize AI’s immense benefits for unlocking growth and boosting productivity,” said VP AWS France & Southern Europe Julien Groues. “With this commitment to expand our cloud capacity, we are empowering organizations in France to fully harness the potential of transformative AI technologies to spur innovation, enhance competitiveness, and create new business value.”  

    This investment by AWS is part of a €6 billion, 15-year investment plan for the period 2017-2031 to develop its cloud infrastructure in France. An AWS economic impact study estimates that this investment plan will contribute €16.8 billion to France’s GDP over this period, while supporting an average of 5,271 full-time jobs annually in the local supply chain. 

    AWS said it also offers several education, training, and certification programmes to help people in France develop their digital skills and use cloud technologies. AWS has trained more than 900,000 people in the EU, and more than 200,000 people in France, in cloud skills since 2017, as part of its commitment to provide free cloud skills training to 29 million people by 2025.  

    Avanti Communications launches LEO services in South Africa

    Annie Turner
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    Avanti Communications launches LEO services in South Africa

    This bolsters the firm’s multi-orbit capabilities and is a step towards the ambition of making Africa its primary market by 2027

    Avanti Communications, the multi-orbit satellite tech provider, is to launch low-Earth orbit (LEO) satellite connectivity across South Africa. To achieve this, it has partnered Q-KON, a satellite engineering firm that operates in southern Africa, which will deliver connectivity from Eutelsat OneWeb.

    Avanti says the deal “significantly bolsters” its multi-orbit solution, enabling it to offer a combination of LEO and GEO services from now on.

    Avanti already has an on-the-ground presence in South Africa, with infrastructure in Johannesburg and more than a fifth of the company’s workforce operates in Africa. The company’s ambition is to make Africa its primary revenue source within the next two to three years.

    Strategic move

    Kyle Whitehill, CEO, Avanti Communications (pictured left, above), commented,“This is a strategically significant move for us in multi-orbit and we hope that this is the first of many LEO partnerships globally.

    “This hybrid model gives our customers in South Africa the assurance that all their unique problems can be solved through our services. This is particularly important for our enterprise customers in South Africa where the need for resilience is key.”

    Dr Dawie de Wet, CEO of Q-KON (pictured above right), added, “We are pleased to support Avanti with our Eutelsat OneWeb customer-centric services, made possible by our proven Smart Satellite Service technologies developed for our Twoobii GEO portfolio.

    “We also look forward to supporting Avanti with our end-to-end and turn-key project supply, delivery and support capabilities.”

    Starlink could reach $6.6bn revenue this year – Quilty Space 

    Simon Dux
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    Starlink could reach $6.6bn revenue this year – Quilty Space 

    Analysts bullish on Starlink’s revenue levels but the company’s cash burn is still a mystery

    Market research and consulting firm Quilty Space has forecast the LEOsat operator Starlink is on track to generate $6.6 billion in revenue for 2024, managing to outperform expectations despite initial scepticism. In a webinar on the operator [registration required], Quilty estimated Starlink had 2.7 million subscribers at the end of March 2024, up from two million in September 2023 when the operator last mast a statement.

    In context, it means Starlink’s subscriber base has surpassed that of established players like ViaSat and Hughes Network Systems, which have been the dominant consumer GEO satellite internet market companies for more than two decades. The two GEO operators achieved a peak combined subscriber base of 2.2 million subscribers in the first quarter of 2020 when Starlink was just starting out. The LEOsat operator achieved that number of subscribers within 36 months.

    ViaSat and Hughes’ subscriber totals decline by 30% since and Hughes’ owner Echostar is struggling with analysts predicting that filing for bankruptcy in the next four to six months is now “the most likely outcome” for the company, according to Via Satellite.

    And with $6.6 billion in estimated revenue, Starlink brings in more revenue than the proposed combination of SES and Intelsat, according to co-founder Chris Quilty. “What Starlink has achieved in the past three years is nothing short of mind-blowing,” he said. “For 2024, we’re forecasting revenues of about $6.6 billion – that would be up 80% over 2023. If you want to put that in context, SES and Intelsat announced they’re going to combine — they’ll have combined revenues of about $4.1 billion.”

    Quilty forecasts Starlink will reach $3.8 billion EBITDA in 2024 and estimates that the operator achieved EBITDA-capex breakeven during late 2023. The report expects that Starlink will post its first free cash flow positive year this year.

    Connecting the relatively connected

    Even with these numbers, it is difficult to gauge what sort of success Starlink has been to date. Early on in its life, Starlink was forecasting 20m users by 2022 but even passing one tenth of that has Quilty suggesting Starlink is heading from wide losses to profits during 2023 to 2024.

    “By targeting consumers first, primarily via a direct-to-consumer sales model, Starlink was able to scale at an unprecedented pace for a satellite operator. Starlink is now evolving and expanding its strategy for enterprise, mobility, and government end markets,” the report said. However, the relative cost of the terminals and service means the biggest success is coming from richer nations that can afford it rather than the unconnected world.

    Quilty reckons 95% of the 2.7 million global subscribers are consumers so there is space for Starlink to expand its enterprise focus – through telco partners in the main – and vertical sectors like aviation, maritime and first responders. Interestingly, the operator is seeing steady uptake in areas that aren’t regional or rural but on less well-connected urban fringes.

    “For the most part, Starlink is servicing consumers and middle- and upper-income countries, as well as premium end markets. This is not connecting the unconnected and that’s a gap that Starlink will probably not be serving in a substantial sort of way anytime in the near future,” said Quilty analyst Justin Cadman.

    Quilty also noted several large-population jurisdictions like India and Indonesia have banned Starlink so this could also boost subscriber numbers if said bans were dropped.

    What about cash burn?

    With Starlink, the numbers aren’t available so there is probably more guesswork going on when measuring the company’s health. However, it was well documented that when the operator launched, it was subsidising terminals to the tune of hundreds of dollars.

    Last month, Bloomberg reported [subscription] Starlink was still burning through more cash than it brings in, citing people familiar with the finances, potentially still losing “hundreds of dollars on each of the millions of ground terminals it ships.” The same people suggested parent SpaceX “often strips out the hefty cost of sending its satellites into space to make the non-public numbers look better to investors”, adding Starlink was ” not actually profitable based on an operational and ongoing basis.”

    Quilty is more comfortable with the terminal situation estimating that SpaceX is somewhere between breakeven and a modest gross margin when it comes to user terminals in the US and enterprise markets, but that is not the case for the rest of the world.

    “They’re now in the enviable position where with free cash flow positive results, they can start to experiment with other means of accelerating revenue growth through programs like incentives, rentals, and other types of equipment programs,” said Cadman. “But key takeaway — terminal subsidies no longer appear to be an issue for Starlink.” except for the fact that Starlink is now growing faster outside the US than inside.

    Airtel Africa to IPO mobile money unit in 2025 

    Simon Dux
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    Airtel Africa to IPO mobile money unit in 2025 

    The telco’s most profitable subsidiary, Airtel Money, will be listed either in the UAE, the UK, Europe or somewhere else…

    Airtel Africa CEO Olusegun Ogunsanya has announced plans to list the telco’s mobile money subsidiary on the stock market in 2025. Bloomberg suggested the unit could be valued at around $4bn. Speaking at the operator’s full year results, the chief executive – who has announced his ‘retirement’ for July – also hinted at the telco plans to enter more markets ahead of the IPO – the service is currently available in 14 markets in sub-Saharan Africa. 

    Airtel Money is the most profitable subsidiary of the operator listed in London and Lagos. Last week, Airtel Africa reported a loss of $89 million after suffering from the devaluation of the Nigerian naira, like every telco operating in that country. The Bharti Airtel-owned operator put the loss down to an “exceptional loss net of tax”.  

    In contrast, Airtel Money revenue grew by 32.8% in constant currency, with a continued strong performance in East Africa of 36% and Francophone Africa of 22.3%. Mobile money EBITDA margins of 52.1% increased 234bps in constant currency, supporting growth of 39%. Ogunsanya said mobile money subscriber growth of 20.7% reflected the telco’s continued investment into distribution to drive increased financial inclusion across its markets. Its mobile money customer base now serves 38 million customers, which represents 24.9% of the operator’s total customer base. 

    Importantly, mobile money saw the transaction value increase 38.2% in constant currency, with an annual transaction value of more than $112bn in reported currency. The chief executive added that increased transactions across the ecosystem reflected the enhanced range of offerings and increased customer adoption, supporting constant currency ARPU growth of 8.6%.  

    In the past year, Airtel has launched new international money transfer routes, as well as new loan products and continued to integrate more partners into its ecosystem.  It also continued to expand its exclusive distribution channel of AMBs and kiosks to ensure availability of services to customers, even in the rural areas. The number of kiosks and mini shops increased by 45% and Airtel Money branches by over 8.7%. The operator’s non-exclusive channel of mobile money agents expanded by 53%, following implementation of its new digital on-boarding journey.  

    As Ecofin points out, the second largest telecom operator in Africa had already announced in 2021 that it was considering a listing of its mobile money division within the next four years. This announcement was made following investments made by the American private equity fund TPG ($200 million) and the payment solutions giant MasterCard ($100 million) in Airtel Money. 

    Mobile money momentum 

    There is no denying mobile money’s impact on the African continent, where more often than not, it replaces non-existent bank infrastructure. A recent GSMA report suggests that despite the positive impact and growth in the past decade, the market is already showing some signs of maturing.  

    Globally, registered accounts grew to 1.75 billion in 2023, a 12% year-on-year increase. However, this is a lower annual growth rate than the 15% seen in 2022 and 19% seen in 2021. Monthly active accounts also grew at a slower year-on-year rate. By the end of 2023, there were around 435 million active mobile money accounts – a 9% annual rise, compared to 13% in 2022 and 15% in 2021. Sub-Saharan Africa is home to almost three-quarters of the world’s accounts and the GSMA suggests mobile money had increased gross domestic product in the region by more than $150 billion or 3.7% between 2013 and 2022. 

    In 2023, over a third of new registered and active 30-day accounts globally were from West Africa. This was more than any other region with Nigeria, Ghana and Senegal the main drivers of growth. West Africa’s vibrant mobile money ecosystem has developed differently from East Africa. For instance, West Africa has seen more non-mobile-network-operator (MNO)-led mobile money services emerge to compete with MNO-led providers. 

    Airtel’s data centre pause 

    Outside mobile money, Airtel quietly mentioned that its capex was broadly flat at $737m and was below the telco’s guidance largely due to “a deferral in data centre investments”. The acknowledgement is interesting given the operator launched its new data centre business Nxtra to great fanfare last December, promising to build one of the largest network of data centres in Africa with high-capacity data centres in major cities located strategically across Airtel Africa’s footprint, complementing its existing edge sites. 

    Government gives security green light to Three UK, Vodafone merger

    Annie Turner
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    Government gives security green light to Three UK, Vodafone merger

    This comes with some conditions – and it is still unclear whether the merger will be permitted by the Competition and Markets Authority

    The saga of the proposed merger of Vodafone UK and Three UK continues. The UK Cabinet Office announced the proposal passed a national security assessment by the government but imposed some conditions.

    A national security investigation is usual for any proposed changes of ownership to any organisation viewed as strategically important to the country, which includes communications infrastructure.

    Concerns about security were raised due to Three UK being an indirect but wholly owned subsidiary of the CK Hutchison Holdings, which is listed in Hong Kong. There are concerns in the UK and many other countries about the Chinese government using Chinese companies for espionage and other security risks. This had led to governmental bans on using Chinese vendors’ equipment in communications infrastructure.

    In January the UK government expressed concern that the 14.6% stake in Vodafone held by the self-styled global technology company e& could be a potential national security risk to the UK. e& had net profits of AED9 billion (€2.255 billion) in 2020. Its headquarters are in Abu Dhabi. The United Arab Emirates government has a 60% stake in the operator, the other 40% is publicly traded.

    Security by committee

    The UK government has investigated these potential risks and green light to the merger on the following terms. The combined entity must set up a national security committee to oversee any sensitive work and “topics relating to cyber, physical and personnel security”. The committee will be required to report to the government regularly.

    There are also conditions regarding the governance of the combined entity and there must be an independent review of its network migration plans.

    However, the merger is not a done deal. The companies are still waiting for a decision about whether their proposed merger can go ahead from the Competition and Markets Authority (CMA). It is expected to announce its decision after concluding its in-depth investigation in September.

    The investigation was launched after a preliminary assessment raised concerns the potential impacts of reducing competition in the UK. If allowed, the joint venture will reduce the number of mobile network operators from four to three. There are also possible ramifications for MVNOs as well as end users.

    Vodafone and Three argue that combining their businesses is essential to achieve the scale they need to make a return on network investment and assets.

    Cameroon and Angola connect their cross-border networks to subsea cables 

    Simon Dux
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    Cameroon and Angola connect their cross-border networks to subsea cables 

    Camtel and Angola Cables act on their agreement to develop business opportunities in West Africa and the Atlantic region

    Angola Cables has partnered with Cameroon’s incumbent telecommunications operator, Camtel to expand digital and connectivity services in Cameroon and the West Africa region.The agreement follows an intent by both companies to develop business opportunities in West Africa to boost redundancy, network resilience and the quality of services (QoS) both nationally and internationally.  

    Taking advantage of the subsea cable connections of SACS, West Africa Cable System (WACS) and Monet within the backhaul network of Angola Cables – and the added connectivity provided by Camtel on the South Atlantic Inter Link (SAIL), the operator said businesses will have extended capacity options with a better traffic access to West Africa local and regional networks through Angola Cables and Camtel’s PoPs. 

    Camtel owns, and operates networks including: a national backbone fibre connectivity with the CEMAC region including Nigeria, Chad, Central Africa Republic, Democratic Republic of Congo, Congo, Gabon, and Equatorial Guinea through its multiple submarine cables (SAIL, WACS, SAT3 and NCSCS) landing at three stations with gateways, a Tier III designed data centre in Yaounde – Zamengoe, and three satellite ground stations. The operator is also working on the West to East Africa initiative – WE-Africa-NA – a high-speed digital corridor connecting the Gulf of Guinea to the Horn of Africa. 

    Transatlantic routes 

    In addition to its subsea connectivity Angola Cables also operates two data centres, AngoNAP Fortaleza Tier III (Brazil) and AngoNAP Luanda (Angola). The operator also manages PIX in Brazil and Angonix Angola – one of the largest Internet Exchange Points (IXPs) in Africa.  

    In January, Angola Cables announced plans to invest up to 400mn reais ($80m) to build a second data centre in Brazil’s Fortaleza, the state capital of Ceará. The operator has two submarine cables landing in the area: South Atlantic Cable System (SACS), launched in 2018, and Monet, activated in 2017 and operated in a consortium with Uruguay’s Antel, Brazilian Algar Telecom and Google.  

    SACS was built by NEC and connects Fortaleza to Angolan capital Luanda through a 6,200km sub-sea route. There, it interconnects with another Angola Cables submarine cable system, the WACS (West Africa Cable System), which links Angola with South Africa and the UK. Monet connects Fortaleza to the Brazilian city of Santos and to Miami, spanning more than 10,000km. 

    West Africa’s WACS cable system was repaired earlier this week after being damaged in a suspected undersea landslide that impacted four cables off the West coast of Africa earlier this year. The WACS cable is the third of the four impacted cables to be restored, with only one cable, MainOne, now awaiting repair. The outages have sent African operators scurrying to build further resilience in their routes. 

    “The partnership once the necessary due diligence has been completed, could transform internet connectivity and data transmission in West Africa,” said Fernando Fernandes, the Nigerian country manager of TelCables West Africa, a subsidiary of Angola Cables. “For users, it will help to secure connectivity, trade, boost economies and help expand as well as grow businesses across the region.” 

    “Our strategic intent is to build on the robust backhaul connectivity of the Angola Cables network, and the existing interconnections we have in place with other submarine cables connecting the region and the world, to provide flexible and secure value added services for our clients and businesses,” said Camtel CEO Judith Yah Sunday Epse Achidi. 

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