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VM O2 boosts mobile with mini antenna at street cabinets

Annie Turner
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VM O2 boosts mobile with mini antenna at street cabinets

The poles are powered by the fixed network and could expand and improve 4G and 5G service across the UK

Virgin Media O2 says it has successfully trialled a new way of improving and expanding mobile services. It combined its fixed network infrastructure with new smart poles which are much smaller than mobile phone masts.

Electricity is supplied by Virgin Media’s fibre network, rather than the energy grid, using what it calls “digital electricity” technology. This transmits power from on-street cabinets in the local area along fibre optic cables.

The smart poles house small cell technology at the top of the pole. They do not require planning permission and can be installed in less than a day to boost mobile coverage in busy areas.

The trial was carried out in collaboration with one if its parent companies, Liberty Global.

Leveraging converged infra

Virgin Media O2 says the trial demonstrates how it can leverage its converged network, reducing cost and complexity as there is no need for separate backhaul or dedicated electricity supply. It also avoids the typically time-consuming planning process. 

Virgin Media O2 currently operates around 25,000 street cabinets across the UK, all of which are connected to the National Grid and which could power these new smart poles, helping meet demand for mobile sites in urban areas for years to come. 

Smart city infrastructure, including electric vehicle (EV) chargers, can also be built into the poles providing new opportunities for Virgin Media O2 to further monetise its network in future.

New revenue streams

Jeanie York, Chief Technology Officer at Virgin Media O2 (pictured), said, “As we continue investing to upgrade and expand our network, we’re always looking for new ways to work smarter and deliver more for our customers. Ground-breaking trials like this can help boost mobile coverage and bring next generation services to even more customers.

“[Using] existing national fixed network to backhaul and power small cells could be transformational – helping us save time and money, open up new revenue streams, support smart city technology and fully leverage the benefits of our scaled converged network.”

Trade union representing DT employees want 12% rise

Annie Turner
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0
Trade union representing DT employees want 12% rise

The Union argues that the German operator’s 70,000 strong workforce should benefit by at least €400 per month

Verdi, the trade union representing Telekom Deutschland’s 70,000 employees, is preparing to ask for a 12% rise according to a report in Welt [translated from the German]. Verdi’s (for Vereinte Dienstleistungsgewerkschaft which translates as the United Services Trade Union) decision was taken last Friday by the Union’s collective bargaining committee.

The collective bargaining begins on 19 March and the agreement will last 12 months. Verdi justified the demand citing inflation and staff shortages.

Verdi referred to the operator’s consolidated net income of €17.8 billion for 2023. The union’s chief negotiator, Frank Sauerland, said “Now it is time to give the employees participation and appreciation for these good results. They have earned it.”

The Telekom Group – the name of Deutsche Telekom’s opco within Germany – consists of 22 companies, defined by collective agreement. Each has its own collective agreement. All bar three end on 31 March. Verdi is now arguing that that the collective bargaining for all group companies to be conducted together.

Verdi represents 1.9 million service workers across a range of industries and welcomed 193,000 new members in 2023 – a nett gain of 40,000 and with rising interest from younger people.

Germany has suffered a wave of strikes since the start of the year because, for example, Verdi is calling for similar or higher increases in pay and improved working conditions for the 90,000 public transport and 25,000 aviation workers it represents

i3Forum forms group to target spam calls and texts internationally 

Simon Dux
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i3Forum forms group to target spam calls and texts internationally 

National Regulatory Authorities fight the good fight domestically but struggle to contain the tsunami of unwanted calls and texts from abroad 

The telecoms industry has taken a small but positive step in the fight illegal and unwanted voice calls and messages originating from abroad. The i3Forum – international IP interconnection for those asking – has launched the One Consortium, a not-for-profit organisation specifically designed for the international communications ecosystem to join forces and cooperate with Telecommunications Regulators (NRAs) globally.  

The rationale is clear: fraudulent calls and messages are a global problem, and many current initiatives are focused at a national level. According to its Global Call Threat Report, Hiya flagged 7.3 billion suspected spam calls in Q4 2023 (up from 6.55 billion spam calls in Q3 2023). That’s 81.1 million unwanted calls every day. 

The One Consortium is part of the i3Forum’s Restore Trust initiative which will try to get National Regulatory Authorities (NRAs) globally to facilitate a worldwide, structured dialogue between industry – assuming not the ones making lots of money from spam – and telecommunications regulators on restoring trust. 

The loss of public trust in communications is driven by the proliferation of unwanted/illegal voice calls and messages (e.g. spamming, spoofing, robocalling or texting). While every country has moved to implement mitigations, and a number have done bilateral deals with other countries, the challenge is even greater when it comes to combating nuisance communications originating from abroad.  

GSMA and others aboard 

One Consortium is supported by industry organisations such as the GSMA, the Global Leaders Forum (GLF) and the Global Solutions Council (GSC). It will work to agree and drive adoption in the international communications ecosystem of a range of vendor-neutral solutions to fight nuisance communications.  

Potential approaches may include a global traceback mechanism, call certification, management/verification of national CLIs on international trunks, improved Know Your Customer / Know your Traffic (KYC/KYT) mechanisms, trusted trunks and more. 

Philippe Millet, founder and chairman of the i3Forum said the launch was the first tangible milestone for The Restore Trust initiative. “One Consortium was brought to life in under six months by an incredible team of over 50 dedicated people representing 30 organisations of the ecosystem.”  

ATIS president and CEO Susan Miller said: “ATIS is pleased to contribute to this important initiative addressing fraudulent calls at the international level…By taking a broad perspective that incorporates diverse, proven approaches, One Consortium will show how different strategies complement each other to combat this growing problem.” 

“As we are reinventing ourselves in the new digital landscape we need to continue ensuring trust and security for our customers. Collaboration and experience concerning fraud are fundamental and will be critical in delivering ways to reduce, and ultimately eradicate, fraud from our telecom business,” said Orange Wholesale International CEO Emmanuel Rochas. “That’s why Orange Wholesale supports the One Consortium industry initiative.”  

“Trust arrives on foot, and leaves on horseback,” said Eli Katz, CEO & founder of XConnect. “Both the voice and messaging industries are suffering from significant fraud, scams and spoofing. Collaboration across both industry, trade associations and national regulators is essential to address these challenges especially on a global basis, as the fraudsters have no regards for national boundaries.”  

“Nuisance voice calls and messages threaten trust in communications. The i3Forum One Consortium initiative is a promise: to foster collaboration and earnest communication among industry, associations, and regulators to combat fraud and restore that trust. BICS has been actively contributing to i3Forum since its inception and is proud to join this initiative,” said BICS head of fraud and security Katia Gonzalez.  

Yahsat signs e& as first direct-to-device telecom partner   

Simon Dux
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Yahsat signs e& as first direct-to-device telecom partner   

The satellite operator is set to merge with Bayanat later this year and the combined entity will be worth $4.1 billion

Al Yah Satellite Communications Company (Yahsat) has signed an MoU with e& UAE that will see the operator become the first telecom partner of Yahsat’s new direct-to-device strategy the satellite operator launched last month. As part of the partnership, the two will explore voice, texting, and data satellite connectivity for standard smartphones as part of Yahsat’s Project SKY. 

In the first stage of the project, the operators plan to offer voice and messaging capabilities this year – before releasing texting and IoT capabilities on smartphones in 2025 – using Yahsat’s Geostationary Earth Orbit (GEO) satellites including T2, T3 and T4, which is expected to be launched later this year. While GEOsats have a higher latency than competitors like low Earth orbit (LEO) constellations, they are still suitable for less delay-sensitive traffic.  

The second phase planned by the companies, called Project BlueStar, aims to enable full direct to device connectivity through a “scalable and sustainable satellite network.” The two companies are joining forces using Yahsat’s planned LEO D2D system, which the satco said is designed to provide seamless connectivity (including voice, texting, and data) for standard smartphones.  

The company has not elaborated on what this stage two will look like in detail. However, it does have access to L-Band holdings. Also, as proof that a year is a long time in telecoms, the company last year said it would not make an early investment in a LEO-orbit constellation – except possibly a low-cost IoT play or a direct-to-device venture – until it was satisfied that constellations were sound businesses. 

Yahsat is set to merge with Bayanat later this year, pending shareholder and regulatory approvals, creating a satco called Space42. Bayanat is developing a constellation of at least five Synthetic Apeture Radar (SAR) low Earth orbit (LEO) satellites to provide a consistent data stream for end-to-end solutions for SAR applications. 

Rude health 

In its latest results, earlier this month, the Yahsat demonstrated it was still in rude health. Thre company experienced revenue growth across all operating segments of the group for the first time since its IPO in July 2021. Having the UAE Government as anchor customer helps keep the business in good flow. 

Revenue grew 6% year-on-year to a AED1.7 billion ($457 million), EBITDA was up 3% to AED977 million ($266 million) and net income jumped 68% to AED405 million ($110 million) for the full year ended 31 December 2023. The company has set new guidance for 2024 with AED1.6-1.7 billion ($440-460 million) for revenue, AED936-1,010 million ($255-$275million) and for EBITDA, AED 441-514 million ($120-140 million). 

It is procuring two new satellites, Al Yah 4 and Al Yah 5, and has the upcoming launch of Thuraya 4 in the second half of 2024 on the cards. 

“We are delighted to announce our MoU with e& UAE, a leading global telecom operator, as the first of many agreements we hope to reach with key industry players as part of our D2D strategy,” said Yahsat Group CEO Ali Al Hashemi, speaking of the link-up with e& UAE. “We are discussing a whole host of areas where we aim to collaborate, which includes developing the ecosystem as part of our recently launched D2D strategy – Project SKY.” 

“This partnership with Yahsat unlocks a new era of global connectivity,” said e& UAE CEO Masood M. Sharif Mahmood. “We’re proud to be the first operator to join Yahsat’s D2D vision and leverage our networks to bring seamless, anytime-anywhere connectivity to people everywhere. This is a significant step towards bridging the digital divide and realising our shared vision of a connected future.” 

Vodafone’s ‘reshapes’ European footprint and overall group into five divisions

Annie Turner
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0
Vodafone’s ‘reshapes’ European footprint and overall group into five divisions

Ten months after becoming CEO of Vodafone Group, Margherita Della Valle puts her stamp on the operator, including boardroom changes

Vodafone Group has announced a reorganisation of its business into five divisions and a shake-up at CxO level. The new divisions are: Germany; European Markets; Africa; Vodafone Business; and Vodafone Investments.

Rightsizing Europe

Vodafone Group has entered into a binding agreement for the €8 billion sale of Vodafone Italy to Swisscom. It describes this as the final step in its “rightsizing” strategy for Europe. The strategy was announced by Group CEO Margherita Della Valle (pictured above left) in May 2023. Spain and Italy were high on that agenda because Vodafone could not achieve a return on capital employed (ROCE) higher than the cost of capital.

Della Valle said in a press statement, “Today, I am announcing the third and final step in the reshaping of our European operations. Going forward, our businesses will be operating in growing telco markets – where we hold strong positions – enabling us to deliver predictable, stronger growth in Europe. This will be coupled with our acceleration in B2B, as we continue to take share in an expanding digital services market.”

She added, “Our transactions in Italy and Spain will deliver €12 billion of upfront cash proceeds and we intend to return €4 billion to shareholders via buybacks, as part of our broader capital allocation review.”

The operator group is selling its business in Spain to Zegona Communications for €5 billion. It received approval from the European Union to proceed in February and is now awaiting the go-ahead from Spain’s authorities. It is expected permission will be granted.

The operator group is also awaiting regulatory approvals for Vodafone UK to merge with Three UK although the press statement seems to assume the UK deal will go ahead.

The press statement read, “All telecom markets within the new geographic footprint have been growing over the last 3 years and we will now accelerate our performance where we can create value. In the near-term, the new footprint with the sale of Vodafone Spain and Vodafone Italy, will also result in a step-up of Vodafone Group ROCE of more than 1 percentage point.”

This is significant, given that ROCE of members of the European Telecommunications Network Operators (ETNO) has fallen sharply: in 2017 their ROCE was 9.1% but 5.8% in 2022.

Exiting Italy, closer ties to Swisscom

Although the sale to Swisscom is described as a “full exit from Italy”, under the terms of the deal, Vodafone will continue to provide certain services to Swisscom for up to five years. The annual charge for these Group Services for the first year after completion is estimated at €350 million.

Should Vodafone subsequently enter an agreement for an alternative transaction involving Vodafone Italy within 12 months, Vodafone is to pay Swisscom a break fee of €150 million.

Vodafone and Swisscom are also exploring “a closer commercial relationship to enable collaboration across a broad range of areas, beyond Italy” which include “IoT, enterprise services and solutions, procurement, operational shared services and roaming”.

Vodafone says this aligns with its strategy of commercialising shared operations and broadening partnerships.

Partner power

From 1 April, most of Vodafone’s central operations will start to move towards “a fully commercial model”. This programme is expected to complete in financial year 2025, opening platforms and services to third parties, offering them the opportunity to access shared operations such as procurement, roaming, IoT and other business platforms.

These offerings will be extended to partners including To better serve our own markets and telecoms partners Swisscom in Italy and Zegona in Spain.

B2B engine for global growth

Vodafone sees its biggest growth opportunity in B2B, stating that “demand for digital services is strong and we are particularly well positioned to support SMEs and public sector customers, as their strategic partner in transitioning to the cloud and generative AI”.

In the analyst briefing today, Della Valle said when asked about capex and reinvestment that “There are definitely two areas of our business in which standing back from capex and just thinking of financial resources, we have made shifts”. The two areas of highest prirority for financial resources will be B2B and improving customer experience across the board.

Group CFO Luka Mucic (pictured above right) added, “when it comes to the B2B side…most of those investments are more on the opposite side of the house. We are investing in sales coverage, in demand generation, in building up the product portfolio, so most of that is more opex. B2B has a very nice feature to it, especially the fastest growing parts of the portfolio of cloud, IoT, and beyond connectivity solutions. They have a very low capital intensity, and therefore are very attractive from a returns perspective.”

B2B service revenues grew 5% in Q3 of the financial year 2024 and the operator claims it is “gaining share against all our primary competitors”. It plans to improve and expand its range of platforms and capabilities through investments and new partnerships such as with Microsoft.

From 1 April 2024, Vodafone’s new IoT company plans to extend its “global leadership position” by entering new markets and creating a platform-as-a-service to support other telcos.

Obviously leadership can be defined in a number of ways, but last week, Telefónica was been recognised for the tenth consecutive time as a Leader in the 2024 Gartner Magic Quadrant for Managed in IoT Connectivity Services, Worldwide report via its subsidiary Telefónica Tech.

Africa

There seemed to be little new in the announcement regarding Africa apart from continuing to “drive growth at attractive returns through mobile connectivity, fixed connectivity and financial services”. And a note that its fintech platform serves more than 75 million customers with double digit growth.

Changes at the top

Vodafone has also announced extensive changes at CxO level. At the Group Executive Committee, the following changes will be effective from 1 April 2024.

Ahmed Essam will become Executive Chairman Vodafone Germany and CEO European Markets. He will have responsibility for markets across Europe, including the UK, Albania, Czech Republic, Greece, Ireland, Portugal, Romania and Turkey. Essam joined Vodafone in 1999 and has held a number of roles including CEO Other Europe, Chief Commercial Operations and Strategy Officer and most recently CEO UK.

Serpil Timuray has been appointed CEO Vodafone Investments with responsibility for Vantage Towers, Vodafone Ziggo, Vodafone Idea and TPG Telecom plus for partnerships with telecom operators, including Partner Markets. Timuray joined Vodafone in 2009 as CEO Turkey. Subsequent roles have included Regional CEO AMAP, Chief Commercial Operations and Strategy Officer and most recently CEO Other Europe.

Philippe Rogge, CEO Vodafone Germany, is to leave the company. Germany is Vodafone’s biggest market and has put in a less than stellar performance, dogged by changes to the law that gives people within multi-tenanted dwellings the right to chose their own service provider. Previously TV and internet connections were seen as central services that were provided by a single company and charged for by the landlord or lady.

Since buying the cable company in

Group Executive Committee composition from 1 April 2024

• Margherita Della Valle, Group Chief Executive

• Luka Mucic, Group Chief Financial Officer

• Ahmed Essam, Executive Chairman Vodafone Germany and CEO European Markets

• Aldo Bisio, Chief Commercial Officer and CEO Vodafone Italy

• Shameel Joosub, CEO Vodacom Group

• Giorgio Migliarina, Interim CEO Vodafone Business

• Serpil Timuray, CEO Vodafone Investments

• Scott Petty, Chief Technology Officer

• Alberto Ripepi, Chief Network Officer

• Leanne Wood, Chief Human Resources Officer

• Joakim Reiter, Chief External and Corporate Affairs Officer

• Maaike de Bie, Group General Counsel and Company Secretary

In-country CxO changes

Marcel de Groot will become CEO Vodafone Germany, reporting to Essam. de Groot joined Vodafone Germany in 2022 as Consumer Business Director and “has been instrumental in the recent commercial improvements in Germany”. Previously, he was Chief Commercial Officer and Director of the Consumer Business Unit at Vodafone Ziggo and Director of Consumer in Vodafone Ireland.

Max Taylor is the new CEO at Vodafone UK, reporting to Essam. Taylor is currently Chief Commercial Officer of Vodafone UK, having joined in 2019.

West and Central Africa suffer subsea cable outages 

Simon Dux
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West and Central Africa suffer subsea cable outages 

Already hit by East coast outages in the Red Sea, the continent now suffers multiple cable outages on the West coast

At least four subsea cables running along the West African coast have failed or are suffering significant faults as operators across the continent scramble to secure capacity on unaffected cables. The outages are compounded by the fact that at least nine of the countries impacted only have a single cable running to them. Microsoft has confirmed the four cables impacted – WACS, MainOne, SAT3 and ACE – which the company said has reduced total capacity supporting its regions in South Africa. 

The latest faults have reportedly occurred close to the Ivory Coast near Abidjan and have an eerie similarity to the cables in the Red Sea incident traversing the seabed, which was recently bottom trawled by a crippled ship’s anchor, cutting four cables – Seacom, TGN, AAE-1, EIG. The resultant cuts had an estimated 25% impact on traffic.  

According to the Encyclopaedia of the World’s Coastal Landforms, Ivory Coast’s concave south-facing coastline is bordered by a narrow continental shelf: the 120 m isobath, below which the slope plunges to abyssal plains, is only 10 nautical miles from the coast off Abidjan and reaches a maximum of 20 nautical miles off Sassandra. The narrow shelf is interrupted only at one point, off the Vridi canal, where the submarine canyon of the Trou sans fond, which probably follows a fault line, begins immediately offshore. 

Depending on where the cables run, this canyon may be the culprit if there was a rockslide like the Congo Canyon incident last August. However, Ivory Coast has not had an earthquake in the past year so a typical trigger event would typically need to be river mouth flooding.  

Microsoft told South African customers: “We have determined that multiple fibre cables on the West Coast of Africa — WACS, MainOne, SAT3, ACE — have been impacted which reduced total capacity supporting our regions in South Africa. In addition to these cable impacts, the ongoing cable cuts in the Red Sea — EIG, Seacom, AAE-1 — are also impacting capacity on the East Coast of Africa. This combination of incidents has impacted all Africa capacity – including other cloud providers and public internet as well.” 

Seacom confirmed it has redirected customer traffic onto the Equiano cable after its West African Cable System services were down. Vodacom posted on Twitter “Certain customers are currently experiencing intermittent connectivity issues due to multiple undersea cable failures affecting SA’s network providers, including us. We apologise for any inconvenience caused.” 

Equinix company MainOne confirmed the fault on the MainOne network and outage impacting multiple cable systems. In a statement it said: “We are working with cable systems that are not affected by this incident or previous outages to secure restoration capacity and our technical team is working assiduously to begin the restoration of services, subject to availability of capacity and service configuration specifics. We will also provide incremental updates on the root cause and efforts to repair the submarine cable as soon as those details become available.” 

Cloudflare logged faults moving north to south 

Internet firm Cloudflare said in a blog post that major internet disruptions were ongoing in Gambia, Guinea, Liberia, Ivory Coast, Ghana, Benin and Niger – and a total of 11 countries have been impacted. It added that there seemed to be a pattern in the timing of the disruptions, impacting from the north to the south of Africa.  

It began south of Senegal, with The Gambia, Guinea, and Liberia experiencing disruptions around 05:00 UTC. In The Gambia and Guinea, the disruptions lasted about 30 minutes, while in Liberia, the disruption has lasted more than 12 hours. Moving south, around 07:30 UTC, disruptions were observed in Côte d’Ivoire and Ghana. Niger, a landlocked nation in Central Africa, experienced a disruption at 09:15, lasting just over two hours. Nigeria, Benin, Cameroon, and Togo followed and face ongoing disruptions.  

France’s FTTH rollouts are slowing down – Arcep 

Simon Dux
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France’s FTTH rollouts are slowing down – Arcep 

The French regulator said the overall rate of FTTH deployment decreased by more than 25% between 2022 and 2023

At the end of last December, of the 44.1 million premises in metropolitan France reached by operators, 38 million were passed for fibre to the home (FTTH), but more than six million still needed to be covered. Optical fibre coverage increased by two points during the quarter, to 86%. French regulator Arcep revealed the numbers in its latest fixed broadband and superfast broadband market scorecard.  

Over the course of Q4 2023, one million additional premises were passed for FTTH – or 25% fewer than in Q4 2022. Overall, the pace of FTTH rollouts also decreased by 25% between 2022 and 2023. Throughout 2023, 3.5 million additional premises were passed for FTTH.  

The regulator said 2.4 million premises in lower density, public-initiative areas were rendered eligible for fibre access, which marked a 20% decrease YoY. The decreased pace of deployment in lower density, public-initiative areas observed in 2022 continued through 2023, with only 600,000 additional premises passed for FTTH – marking a close to 40% drop YoY. 

Close to 400,000 additional premises were passed in those areas covered by calls for expressions of local interest (called “zones AMEL” in French), a rate comparable to 2022. Lastly, the rate of deployment in very high-density areas continued to slow over the course of the year, with fewer than 200,000 additional premises passed, or 40% fewer than in 2022. 

As of 31 December 2023, 39.8 million premises were covered by fixed superfast broadband services, which translates into a 90% rate of coverage. 

Monitoring operators’ compliance  

Arcep also reported on the operators’ legally binding FTTH rollout commitments. At the end of 2023, in parts of the country where the government has issued a call for investment letters of intent (“zones AMII”), around 90% of the premises Orange made a commitment for had been made eligible for fibre access, while around 96% of those in municipalities where SFR has made a commitment had been made eligible for fibre access. 

Superfast, saturated nation  

The regulator reported that the total number of superfast broadband subscriptions stood at 24.2 million as of 31 December 2023, or 75% of all broadband and superfast broadband subscriptions in metropolitan France (up 8% YoY). The quarterly growth for superfast subscriptions (up 645,000 in Q4 2023) was below the 835,000 increase of the previous year, which the regulator attributed to slower growth for fibre plan subscriptions. 

The pace of new subscriptions to FTTH plans slowed but remained steady – up 835,000 in Q4 2023 compared to 965,000 in Q4 2022. The number of FTTH subscriptions stood at 21.4 million at the end of 2023, representing more than 66% of all broadband and superfast broadband internet subscriptions. 

The steady decrease in the number of “classic” or DSL broadband subscriptions continued through the fourth quarter of 2023 (down 565,000 in Q4 2023 versus 770,000 in Q4 2022). Their numbers dropped to 8.1 million as of 31 December 2023. The total number of broadband and superfast broadband subscriptions stood at 32.3 million at the end of 2023. The pace of growth for these subscriptions increased slightly – 80,000 subscriptions in Q4 2023 compared to 65,000 in Q4 2022. The year-on-year growth stood at up 1% compared up 1.4% in 2022. 

Navigating the challenges of the telco to techco transition

admin and Ahmed Soliman
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Navigating the challenges of the telco to techco transition

Partner content: This metamorphosis from one to the other of these two distinct business models is a complex undertaking

In the ever-evolving telecommunications industry landscape, traditional telecommunications companies (telcos) are embarking on a transformative journey, seeking to redefine themselves as technology companies (techcos), specifically as technology services companies.

This metamorphosis has its challenges, as the fundamental characteristics of these two distinct businesses present hurdles that demand careful navigation. Many telcos are pursuing this transition by tapping into the rich technology ecosystem.

However, a common misconception exists that the shift can be achieved solely through acquiring tech talent or signing partnerships with technology giants to develop and offer new technology services. In this article, we delve into the intricacies of this transformation, emphasising the critical importance of addressing core business structures and cultural nuances.

While the allure of acquiring tech specialists is undeniable, true transformation requires a holistic approach beyond the surface level.

Core business model

A crucial element for any business is how it employs its assets to generate revenue. A brief analysis of the financial statements can provide valuable insights. Let’s start with the balance sheet. A company’s balance sheet is a financial statement that provides a snapshot of its financial position at a specific time. The balance sheet comprises three main sections: assets, liabilities, and shareholders’ equity. Here’s a brief overview of the primary two to consider for our argument:

Assets:

• Current assets represent resources anticipated to be converted into cash or utilized within a year, encompassing cash, accounts receivable, and inventory.

• Non-current assets are expected to provide benefits over multiple years, including property, plant, equipment, and investments in long-term securities.

Liabilities:

  • Current liabilities, like accounts payable, short-term debt, and accrued expenses, must be settled within one year.
  • Non-current liabilities are long-term obligations, such as long-term debt, pension, and deferred tax liabilities.

The balance sheet follows the fundamental equation: Assets = Liabilities + Shareholders’ Equity. It reflects the company’s financial health, liquidity, and ability to meet short-term and long-term obligations.

How telcos’ balance sheets differ

The balance sheet of a telecommunications (telco) company and a technology (tech) company may have some similarities, but they also exhibit notable differences due to the nature of their businesses. Here are vital distinctions:

Assets composition

  • Telco: Telcos typically invest substantially in physical infrastructure, such as networks, cell towers, and data centres. These assets are categorized as non-current assets.
  • Techco: Tech companies often focus on intellectual property, software, and research and development. Their assets may include patents, copyrights, and significant investments in intangible assets.

Liabilities

  • Telco: Telcos may have significant long-term debt due to the substantial capital expenditures required for infrastructure development. This debt is usually considered a non-current liability.
  • Techco: Tech companies may have lower long-term debt levels if their business relies less on physical infrastructure. Instead, they might have liabilities related to research and development or software development costs.

Working capital

  • Telco: Telcos often have higher working capital needs due to the ongoing maintenance and expansion of their physical networks, which can require substantial short-term investments.
  • Techco: Tech companies may have lower working capital needs as their business models often revolve around software development and intellectual property, which may require less ongoing capital expenditure.

Revenue streams

  • Telco: Telcos derive a significant portion of their revenue from subscription services like mobile plans, internet connectivity, and landline services.
  • Techco: Tech companies may generate revenue from a diverse range of sources, including software licensing, advertising, e-commerce, and hardware sales.

Risk profile

  • Telco: Telcos often face regulatory and competitive risks due to the highly regulated nature of the telecommunications industry and the competition among providers.
  • Techco: Tech companies may face rapidly changing market dynamics, technological disruptions, and intellectual property challenges.

In summary, while telco and tech companies have balance sheets that follow the same accounting principles, their asset compositions, liabilities, working capital needs, revenue sources, and risk profiles can differ significantly due to the distinct nature of their businesses.

Vodafone Group’s Return on Assets
Source: Finbox

Accenture’s Return on Assets
Source: Finbox

The cultural dynamics

Let’s recall that most telcos traditionally functioned in monopolistic or oligopolistic markets at worst, shaping culture and perception in and among customers that differ from those forged in fiercely competitive markets for technology services companies. This culture influences every facet of the business, from the business model to the types of talent the company attracts. Here are some fundamental cultural differences:

Innovation focus

  • Telco: While also valuing innovation, telcos may have a more regulated and traditional approach to product development due to the need for network reliability and compliance with industry standards.
  • Techcos prioritise innovation and rapid product development, fostering an environment where workers are encouraged to take risks, experiment with new ideas, and embrace a culture of continuous improvement.

Hierarchy and bureaucracy

  • Telco: Telcos may have more hierarchical structures and bureaucratic processes, given their legacy and regulatory requirements. Decision-making can be slower due to thorough planning and compliance.
  • Techco: Tech companies tend to have flatter organisational structures focusing on agility. Decision-making can be decentralised, allowing employees at various levels to contribute ideas and make decisions more quickly.

Work environment

  • Telco: Telcos may have more traditional office-based work environments, varying depending on the specific company and its location.
  • Techco: Tech companies often offer more flexible work environments, including remote work options and flexible schedules, to attract and retain top tech talent.

Talent and skills

  • Telco: Telcos require a mix of technical and operational expertise, including network engineers and customer service professionals. They may also have a strong focus on compliance and regulatory knowledge.
  • Techco: Tech companies attract a diverse range of talent, including software developers, data scientists, and engineers. They highly value technical skills, creativity, and problem-solving abilities.

Customer-centricity

  • Telco: Telcos often prioritise customer service and reliability as their core values, given that customers rely on their services for communication and connectivity.
  • Techco: Tech companies may prioritise user experience and customer feedback but can strongly emphasise rapid growth and market disruption.

Regulatory compliance

  • Telco: Telcos operate in a heavily regulated environment, so compliance with industry regulations and government policies is a fundamental aspect of their culture.
  • Techco: While tech companies must also comply with various regulations, they may have more freedom to disrupt traditional markets and experiment with new technologies.

It’s important to note that these are generalisations, and the culture within individual telco and tech companies can vary widely. Some telco companies may adopt a more tech-oriented culture, especially if they diversify their services into digital technology. In contrast, some tech companies may have a more conservative approach to certain aspects of their business. Culture is shaped by leadership, industry dynamics, and each organisation’s specific values and goals.

Charting the complex path

The blurring lines between telcos and tech companies signify a broader industry trend where adaptability and technological prowess are central to sustained relevance. As telcos face challenges of the complexities of this metamorphosis, the imperative lies in embracing change holistically, incorporating technological advancements, fostering a culture of innovation, and strategically addressing business fundamentals. The success of telco to techco transformation hinges on navigating these challenges while capitalizing on opportunities presented by a tech-centric future.

In conclusion, the journey from being a traditional telco to embracing the identity of a techco is a multifaceted transformation marked by challenges, strategic shifts, and cultural evolution. As telcos navigate this transition, they must redefine their service offerings, operational structures, and core cultural values. Integrating technology, innovation, and agility becomes paramount in fostering success in an increasingly dynamic business landscape.

About Intellias

Intellias is a global technology partner to Fortune 500 enterprises and top-tier organizations, helping them accelerate their pace of sustainable digitalization. Intellias empowers businesses operating in Europe and the US, as well as the MENA and APAC regions, to embrace innovation at scale. The company has been featured in the Global Outsourcing 100 list by IAOP, recognized by Inc. 5000, and acknowledged in Forbes and the GSA UK Awards. With two decades of experience, Intellias is geared towards ensuring the sustained success of clients on their value journey. For more information, visit www.intellias.com.

Cloudcos dropping data egress fees is more marketing than true openness

Annie Turner
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Cloudcos dropping data egress fees is more marketing than true openness

The conditions AWS, Google and Azure attach to waiving the fees do little to make data portability free or simple

Microsoft has followed rivals AWS and Google in deciding it will no longer charge customers an egress fee for removing their data from its Azure cloud. AWS and Google announced their decisions earlier this year, ahead of the European Data Act

coming into force in September next year.

One of the aims of the Act is to remove inhibitors to competition, including attempts by vendors to lock customers in, such as by charging them to remove their data.

Not free data portability

However, cancelling egress fees does not mean free or simple data portability. Google announced the end of data egress fees in January, but they are only waived when customers stop using Google Cloud and move their data elsewhere.

AWS has allowed the free transfer of 100GB of data since 2021, which the firm claims is more than enough for 90% of its customers. If a customer needs more for a migration, things get complicated. AWS provides data transfer out (DTO) credits but customers have to contact support to apply for them first.

AWS says this is because it cannot tell “if the data transferred out to the internet is a normal part of your business or a one-time transfer as part of a switch to another cloud provider or on-premise.” If approved, AWS applies DTO credits, customers then have 60 days to complete the move. Repeated migration requests will face “additional scrutiny”.

Fees waived for quitters

Now with Azure, according to this blog egress fees are waived if customers take their data out of the Azure infrastructure via the internet to switch to another cloud provider or an on-premises data centre.

Azure is only waiving fees for customers who are ceasing to use its cloud. It too already offers the first 100GB/month of egressed data for free to all customers in all Azure regions around the world but customers have to contact support to claim credits etc.

In other words, as this blog by Forrester explains, the overall message is that egress fees are waived on permanently exiting data only, not for repeated comings and goings such as for regular communications between clouds and on-prem, recovery or migration.

The Azure blog ends saying, “The exemption on data transfer out to the internet fees also aligns with the European Data Act and is accessible to all Azure customers globally and from any Azure region.”

Letter not the spirit

Which feels a lot more like it is sticking to the letter than the spirit of the proposed Act and focus on egress fees in isolation is missing the target.

The EU is not the only party scrutinising the practices of cloudcos regarding anti-competitive behaviour.

Last October, the UK’s Competition and Markets Authority (CMA) announced it is to investigate egress fees as part of a wider probe into the big cloudcos’ practices after a referral by the telecoms watchdog Oftel. The CMA is looking into practices that restrict or discourage customers from switching cloud providers or adopting a multi-cloud approach.

The CMA expects its investigation will be complete by April 2025.

Orange gets the final green light to acquire MásMóvil 

Annie Turner
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Orange gets the final green light to acquire MásMóvil 

Spain’s government has authorised the merger; last month the European Union gave its consent with remedies

Orange has cleared the final hurdle to merging its Spanish opco with MásMóvil when the Spanish government approved the deal this week. The transaction values the combined entity at about €18.6 billion and is expected to complete by the end of this quarter.

The merger was announced in July 2022. Orange and Masmovil are Spain’s second and fourth largest telecom operators respectively and together will be larger than former state monopoly Telefonica.

Orange has more than 17.1 million mobile customers and 4.6 million fixed customers.

MásMóvil Group’s fixed network covers 18 million homes with ADSL and over 26.8 million with fibre. Its 4G mobile network covers 98.5% of Spain’s population and the Group has over 14.7 million mobile customers.

After the merger, the combined entity will become Spain’s biggest operator with more than 30 million mobile customers, according to José Luis Escrivá, Spain’s Minister of Digital Transformation and Civil Service, reported by Reuters. 

The Minister was also quoted saying at the news conference that there is an industrial plan in place for the combined entity that includes hefty investments in fixed and mobile infrastructure.

In February the European Union approved the merger, but insisted on remedies to protect competition in the Spanish market.

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