Home Blog Page 114

Vodafone rejects Iliad Group’s offer to merge Italian units

Iliad revised the public offer it made on 18 December 2023 – Vodafone says it will continue talks with other parties

Iliad’s offer was publicly made on 18 December 2023 and subsequently revised. The French group proposed a merger of iliad Italia and Vodafone Italia to create “the most innovative telecom challenger” in Italy.  

Vodafone Group has rejected the offer according to a statement from Iliad. 

The revised offer omitted the option for Iliad to assume total control of the new, combined entity over time. It also upped its cash offer to €6.6 billion from the original offer of €6.5 billion. Iliad also lowered what it receive, from €500 million to €400 million.

The parties would have still stood to gain €2 billion from a shareholder loan and half each of the new entity.

Best offer?

The iliad Group said it is confident that the offer presented was the best possible business combination to benefit a struggling Italian market and telecommunications industry.

Vodafone is clearly not of the same mind. It issued a statement today saying it is no longer in negotiations with Iliad but “our discussions with other continues”.

Vodafone is known to have entered into discussions about a possible merger with or divesting some of its assets to Fastweb, Swisscom’s Italian unit. It has 34% market share of the enterprise segment and supplies internet technology to the public sector, but does not have any mobile network.

Vodafone Group’s CEO, Margherita Della Valle, is keen to address the European markets that are not earning above the cost of capital, which are Italy and Spain. It is in the process of offloading its entire Spanish business to investment firm Zegona for €5 billion.

What now for Iliad Italia?

Two years Vodafone rebuffed an offer from the French group to buy Vodafone’s entire Italian operation for more than €11 billion.

After the latest rejection, iliad Group said in a statement that it “will therefore pursue its stand-alone strategy building-on its great track record”. It points to the 10.5 million mobile subscribers it has signed up since entering the Italian market in May 2018.

It also says has more net broadband net additions than the other four main operators and reported more than €1.0 billion revenues in 2023 with an operating free cash flow at break-even levels.

iliad added it “will continue to strengthen its positions in Italy and fiercely pursue market share gains across all segments”.

Allianz Trade and Sace Group give Open Fiber a €550m line of credit 

Surety guarantee relates to PNRR funds tied to the “1 Giga Italy” plan

Italy’s fibre infrastructure operator Open Fiber has obtained a line of credit for the issuance of surety guarantees to support the advance of 30% of the National Recovery and Resilience Plan (PNRR) funds – equating to approximately €550 million – connected to the public tender of the “1 Giga Italy” plan.  

The move was organised by Allianz Trade as manager and issuing body with the support of the SACE Group and a pool of national and international insurance companies. The “1 Giga Italy” plan is one of seven plans under the government’s ‘Italian Strategy for Ultra Broadband Towards the Gigabit Society’. In May 2021 the European Commission approved Italy’s plan and allocated $7.93bn to provide gigabit connectivity nationwide by 2026.  

“1 Giga Italy” was allocated $4.5bn with aims to offer download speeds of up to 1Gbps and upload speeds of up to 200 Mbps to 8.5 million out of 26 million households by 2026. In May 2022, the government awarded a $3.48bn contract to Open Fibre for fibre-optic network deployments in almost 3,900 municipalities across the country. 

The insurance guarantees relate to the Puglia, Tuscany, Lazio, Sicily, Emilia Romagna, Campania, Friuli Venezia Giulia, Veneto and Lombardy lots and have a three-year duration. According to La Stampa, this is one of the largest surety operations carried out to date as part of the advances of the PNRR funds. The pool led by Allianz Trade, and with the support of SACE, which counter-guaranteed approximately 30%, saw the following insurance companies participating: Axa Assicurazioni, Generali Global Corporate & Commercial Italia, HDI Insurance, Helvetia Insurance, QBE Europe SA/NV, Reale Mutua Assicurazioni, S2C Spa, SACE BT, Tokyo Marine Europe SA, Vittoria Assicurazioni, Zurich and others. 

“The operation that we have finalised with a pool of primary insurance companies facilitates the process of building a fundamental infrastructure to ensure ultra-fast connectivity and the use of digital services for citizens of areas who do not have it,” said Open Fiber CEO Giuseppe Gola. “Open Fiber is at the forefront in contributing to the digitalisation of the country in large cities as well as in villages and in the most remote areas.” 

“It was a one-of-a-kind operation in terms of magnitude and management of the counterparties involved. The insurance market responded positively, giving a signal of support important to Open Fiber in a strategic project for the digitalisation of the country of Italy,” said says Allianz Trade Mediterranean Countries, MEAA head of surety Dario Locatelli.  

“We at the SACE Group are proud to have contributed to the success of this operation, among the largest in the PNRR field, strategic for Open Fiber and for the country, in the awareness that digitalisation is a fundamental tool for ensuring social connection and access to growth opportunities,” said SACE director of custom business solutions Randa Morgan.  

Ultra broadband 

Open Fiber recently carried out an analysis of regulator AGCOM’s Observatory rollout figures and said that about 60% of those who have an FTTH network are surfing on Open Fiber infrastructure – as of 30 September. More than €8bn of investment by the end of 2023, 120,000km of FTTH infrastructure already in place and more than 14.5m homes, businesses and public administration offices connected to FTTH. 

Of the approximately 120,000km of infrastructure already in place, 46,000km run through the so-called Black Areas – the most densely populated – and as many as 74,600km through the so-called White Areas, the least densely populated. However, take-up of FTTH in Italy is around 22%, well below the European average (52%). 

As of 31 December, Open Fiber reached 74,600km of built infrastructure – 83 % according to the company’s coverage plan. More than 17,300km of infrastructure was built from January 2023 to December 2023 alone. Of the 6,232 municipalities under the Infratel concession, 4,774 have been completed, 77% of the total said the telco. 

Tech association CCIA hits back at ETNO’s digital network arguments  

CCIA urges EU policymakers to embrace “forward-thinking solutions” rather than focussing on incumbent players’ “doom and gloom” 

Tech trade association the Computer & Communications Industry Association (CCIA) has countered ETNO’s recent paper, instead urging EU policymakers to adopt an approach that empowers the entire connectivity sector – rather than picking favourites, winners, and losers. A war of the papers has erupted ahead of the European Commission’s upcoming connectivity package – Digital Networks Strategy (DNS) on the future of telecom networks and infrastructure – due next month. Although the DNS will be a non-legislative package, it might prepare the ground for possible regulatory action by the next Commission. 

CCIA points out that during the Commission’s consultation last year there were heated debates about big telecom companies’ demands for payments from online content and application providers, which it said “subsequently were rejected by a vast majority of stakeholders and Member States.” The upcoming DNS will include a Commission white paper, which among other things will look at the status of the digital single market and the creation of pan-European telecom operators. 

With a major overhaul of telecom rules in 2025 on the cards, CCIA is presenting six proposals it said will help achieve the EU’s 2030 connectivity targets. These include measures to diversify broadband supply through satellites and Open RAN, supporting CDNs and subsea cables and to create market demand for 5G to foster market driven network deployments. CCIA also wants open peering policies for more efficient internet connectivity, more transparency and control over European connectivity funding and sustainable networks.  

“Europe should not race blindly towards targets that may no longer even be valid. Stakeholders with vested interests will always keep arguing they need more money to achieve connectivity goals,” said SVP and head of CCIA Europe, Daniel Friedlaender. “The discussion to date has only focused on supporting one part of a much wider sector and has ignored whether or not there is sufficient consumer demand or interest.” 

He added: “A toll road operator doesn’t want to invest in empty lanes that no one uses. You need to meet actual consumer demand in order to grow and invest. Rather than discussing how the EU can convince investors to give money to certain telecom operators, we should be talking about how we can drive consumer demand for all connectivity services first.” 

Some good, some not-so good 

CCIA’s proposals will draw some smiles and some exasperation in Europe’s telcos as solutions like satellite don’t always scale – either in capacity or cost – as access technologies and many regulators globally look at these technologies as complementary rather than substitutes. In addition, there is no hard evidence yet that a live, large-scale Open RAN network delivers fundamental savings many suggest, particularly if network elements have already been virtualised.  

On the other hand, CCIA is right to state the “access network data traffic growth is not manageable” argument is on thin ice – data centre interconnect is a different market. As the association points out, CDNs and compression technologies are already making waves here. On 5G, CCIA’s suggestion of “nurturing a pro-innovation regulatory environment that encourages content and applications providers to deploy new products and services for which 5G can offer significant user-experience improvement” should be a priority over imposing network usage fees.  

DT Group’s Chief Operating Officer joins BT’s board as new CEO takes helm

Raphael Kübler, Chief Operating Officer at DT, will become a Non-Independent Non-Executive Director at BT, replacing fromer head of T-Systems, Adel Al-Saleh

A new representative from Deutsche Telekom (DT) is to join BT Group’s board of directors this week, as new CEO, Allison Kirkby, takes the helm of the UK operator.

Raphael Kübler, Chief Operating Officer at DT (pictured), will become a Non-Independent Non-Executive Director at BT, replacing DT’s Adel Al-Saleh who stepped down from BT’s board at the end of last year. As part of his responsibilities, Kübler has been appointed to the Nominations Committee.

Al-Saleh was CEO at T-Systems International, DT’s ITC services provider from 2018 but from February will be the CEO of satellite operator SES.

Arguably Kübler  is a better fit for the UK operator. It is in the throes of transformation and has oversight of “overall strategic transformation” of the DT group where he has worked for almost three decades. During that time, he has held a number of senior roles.

During his five years in charge, BT’s outgoing CEO, Philip Jansen, saw BT’s share price halve as of the H1 earnings report last November.

The CEO of DT Group, Tim Höttges, said in an interview with the Financial Times [subscription needed] that his “biggest mistake” was accepting BT shares as payment for selling DT’s stake in ee in 2015.

The interview took place in April 2023. At that time the drop in BT’s share price had cost DT £4 billion on paper.

DT is BT’s second biggest shareholder, with 12%, behind Patrick Drahi’s Altice Group with 24.5%. Altice does not a board representative although another space will be available on the board after Jansen’s departure at the end of January.

Proximus NXT and az groening hospital to pilot private 5G network

They say it’s the first hospital in the Benelux region to have such a network and part of the government’s drive to promote 5G solutions across many sectors

az groeninge in Kortrijk and Proximus NXT are proposing a pilot project that involves testing 5G applications in a live hospital environment. The aim of building the network on the hospital campus is to prepares the health care sector for the future.

Belgium’s federal government has established a framework to award grants and encourage such ventures, calling for 5G pilot projects.

The expansion of a private 5G network on the hospital campus is in line with the government-backed H.E.A.L.T.H. project, which stands for High-speed Enabled Advanced Life-Saving 5G Technological Hospital.

The pilot’s aims

Proximus NXT and az groeninge are to test and implement 5G use cases in different domains. The hope is the knowledge and expertise stemming from this could form an exemplar for other hospitals.

Applications will focus on remote care and clinical communication, as well as data and training.

It will test the potential for robotic surgery, monitoring the condition of patients using biosensors and alerts for nurses and health care providers.

The project also supports applications that underpin medical imaging. For example, putting X-ray images into an AR/VR environment. It will also promote the exchange of knowledge by streaming operations for consumption by colleagues, trainee doctors and institutions.

The project includes training, such as how to deal with aggression and to better prepare health care staff for unforeseen situations. With the help of AI and machine learning on a private edge cloud infrastructure, the training sessions can gradually be refined and tailored to specific training needs.

Other partners in the project include VIVES University of Applied Sciences to support knowledge exchange, Mediventures to stream operations, Televic to provide alerts and One Bonsai to enable the virtual training environment.

H.E.A.L.T.H background

At the end of 2023, Belgium’s federal government selected the H.E.A.L.T.H project for funding, within the framework of a call for projects. This framework was initiated by Minister De Sutter and the Federal Public Servcie Economy to promote the roll-out and implementation of 5G in Belgium, and encourage digitisation for Belgian companies and citizens.

The focus is on supporting 5G test environments by funding pilot projects that pioneer solutions for different industrial sectors.

After an initial allocation round at the beginning of 2023, eight additional projects were selected in November, resulting in joint funding amount of around €5 million. The successful pilot projects were chosen on the basis of maturity, innovation, contribution to awareness of 5G, general sustainability and service improvement, as well as the use of AI and edge computing.

In addition to the H.E.A.L.T.H. project, another four Proximus NXT projects were allocated grants:

  • Development of SafeAlert, a digital tool with subsidiary Be-Mobile which uses real-time traffic and route data for risk analyses, sending out alerts to improve road safety.
  • Expansion of FacThory in Genk, a smart manufacturing campus that has ‘research infrastructure’ to facilitate the digitisation and automation of production processes.
  • Providing digital tools for prisons to make guards’ working conditions more efficient and safer, and promote the reintegration of prisoners into society.
  • Progress a remote navigation system, in collaboration with Seafar, to make maritime transport safer in an urban environment.

Norway clamps down on operators’ failure to protect the vulnerable

Regulator found only two of the country’s service providers correctly handle anonymised numbers when users switch provider

Norway’s National Communications Authority (Nkom) carried out a notified inspection of how seven mobile operators handle anonymised subscriber numbers. Only two did so correctly, Telenor and NextGenTel

Anonymous phone numbers are designed to protect people in difficult circumstances, such as those at risk of violence or harassment. Their numbers are not shown on the recipient’s screen when they make phone calls.

Serious violations

Kamilla Sharma, Department Director for Market and Services at Nkom (pictured), commented, “It is…very worrying that the audit revealed serious violations of the regulations. It can pose a danger to life and health, which is also why we have asked the mobile operators who do not follow the law to clean up [their act] quickly.”

Sharma also said, “We are surprised that the discrepancies are so extensive, and we encourage all those who have a secret number to check with their mobile company whether the service they have received has been handled correctly.”

The inspection

Nkom sent a letter on 20 October 2023 to all companies that offer telephony in the private market giving notice of the upcoming inspection and and the criteria against which they would be measured. The criteria to be inspected covered about 95% of those who have purchased the anonymous number service in Norway.

For the inspection, the regulator set up subscriptions with anonymous numbers then transferred the subscriptions to another service provider. In all cases the number should have remained anonymous after the switch.

The inspectorate uncovered breaches of the requirements for hidden number display and forwarding. Discrepancies were found both with the mobile companies that are passing the subscription to a new provider and those taking on the subscription.

Breaking the law

After the test, the regulator found that operators Fjordkraft, Telia, Happybytes, Iplink and Primafon did not perform as they are obliged to by law.

The mobile companies have been given a short deadline to correct faulty processes and at document how the processes are being tightened.

Service providers that were not part of the inspection will be asked to document the processes for following regulations for the service.

Nkom said the supervisory report and its conclusions are preliminary and may be disputed by the mobile companies. The regulator chose to publish the information out of concern for those who  are supposed to have the protection of the “secret number” service, but do not.

Court tells Maroc Telecom to pay Inwi $636m in antitrust case

The Royal-backed number three telco claimed unfair competition practices

A Moroccan commercial court has ordered incumbent Maroc Telecom (Itissalat Al-Maghrib IAM-MT) to pay compensation of 6.36 billion dirhams ($636 million) to its competitor Wana Corporate, trading under the brand name Inwi, for unfair competition practices.

Inwi, the third-largest telecom operator in the country, brought the case in 2021, accusing Maroc Telecom of abusing its dominant position in the market. The telco is not a listed company and is majority controlled by the royal family’s holding company Al Mada.

According to Reuters, the fine exceeds Maroc Telecom’s annual 2022 profit of 5.82 billion dirhams.

Abuse of dominant position

In 2020, Morocco’s telecom regulator (ANRT) fined Maroc Telecom 3.3 billion dirhams for abusing its dominant position in the market by hindering competitors’ access to unbundling on its network and the fixed market. The initial fine imposed by the ANRT on Maroc Telecom was to penalise behaviour constituting an “abuse of a dominant position”. 

This decision prompted Inwi to temporarily withdraw its complaint in the hope of seeing fair competition restored to the market. However, the legal saga did not end with the withdrawal of the complaint and was brought to a head this week.

Maroc Telecom, which is also listed on Euronext Paris, is 53% controlled by the UAE’s Etisalat, with the Moroccan state owning 22%. Besides Morocco, Maroc Telecom operates subsidiaries in Benin, Burkina Faso, Ivory Coast, Gabon, Mali, Mauritania, Niger, Chad, Togo and the Central African Republic. Shares of Maroc Telecom, the second-largest company on the Casablanca stock exchange by market capitalisation, fell almost 10% following the first instance verdict.

A lawyer familiar with the case told Reuters the telco has the right to appeal and the telco released a statement saying it would as soon as it is notified.

ETNO laments the sorry state of digital communications  

Report from the European telco lobby group concludes financial health of the sector is far from improving

ETNO has renewed calls on Big Tech to help pay for the roll-out of 5G and broadband after releasing its latest State of Digital Communications 2024 report, based on research by Analysys Mason. The latest data showed Europe trailing the US and Asia in several technology areas, cloud computing, investments and revenues. The comments come as the European Commission readies a proposal on digital networks and infrastructure on 21 February. 

The EU telecoms industry’s hopes of getting Google, Amazon, Netflix, Meta and Microsoft opens to help pay for the rollout of 5G and broadband were dashed last year after the Commission decided not to propose legislation to this effect but to leave it to the next team in 2025. 

The report found that telecoms investment reached a record €59.1bn, while six out of 10 Europeans had access to FTTH by the end of last year. However, only 10 out of 114 networks in Europe were 5G standalone (5G SA) last year and the continent was lagging both Asia and North American on edge cloud offers.  

Lead or lose

Describing the current situation as “lead or lose”, ETNO’s report found that significant additional investment in 5G roll-outs is still needed. In 2023, 5G in Europe reached 80% of the population, up from 73% the previous year. However, Europe still trailed all its global peers: South Korea (98% 5G coverage), the US (98%), Japan (94%), and China (89%).

The European median mobile downlink speed of 64.1Mbps was lower than that in the US (97.1Mbps), in South Korea (121.1Mbps) and in China (171.6Mbps). Europe also has lower mobile usage: in 2022, Europeans used an average of 14.2GB/month, compared to 17.5GB/month in South Korea, 16.2GB/month in Japan and 15.6GB/month in the US. 

When it comes to fixed networks, Europe’s gigabit-capable coverage reached 79.5% in 2023, as opposed to 97% in South Korea, 89.6% in the USA and 81.4% in Japan. On the flip side, Europe’s FTTH coverage of the population (excluding FTTB) reached 63.4% in 2023, up from 55.6% the previous year. However, also this year, Analysys Mason confirms that at the end of the decade, around 40 million people in the EU will still have no access to a fixed gigabit connection. 

In 2023 Europe counted 4 commercialised edge cloud offers, all from ETNO members. Despite this, Europe trailed both the Asia-Pacific region, which counted 17 offers, and North America (9). Similarly, in the same period, we counted 59 operative edge nodes in Europe, as opposed to 159 in North America. 

Weak fundamentals  

ETNO said the delays in deployment, which affect users, are mirrored in both suboptimal investment per capita and the overall weak financial health of the sector, which are cause of concern in terms of competitiveness. In 2022, telecom capex per capita in Europe stood at €109.1, lower than in South Korea (€113.5) and far lower than in the US (€240.3). In absolute terms, however, European telecoms investment reached €59.1bn in 2022, up from €56.3bn the previous year, with 60 to 70 % being dedicated to mobile and fixed network rollout. 

The revenues of the sector, measured with average revenue per user (ARPU), remains the weakest of all global peers: In 2022, mobile ARPU was €15 in Europe, as opposed to €42.5 in the US, €26.5 in South Korea, and €25.9 in Japan. The same is true for fixed broadband ARPU, which was €22.8 in Europe, as opposed to €58.6 in the USA and €24.4 in Japan. Only South Korea was lower (€13.1). 

Absorbed inflation

The report found that European operators have in effect absorbed inflation on behalf of their customers, meaning that revenue decreased in real terms. EU telecoms retail revenues rose in 2021 and 2022 by only 0.7% and 2.1% respectively, growth figures that are more than offset by inflation, which stood at 2.9% in 2021 and 9.2% in 2022. 

This is mirrored in the fact that the return on capital employed (ROCE) of ETNO members has almost halved in the recent past: in 2017 ROCE was 9.1%, while in 2022 it was 5.8%, signalling that it is increasingly difficult for European telcos to generate adequate returns on their investment. This happens against a scenario in which European retail markets remain uniquely fragmented and a real European telecom single market remains unaccomplished.

The report found that in 2023 Europe counted 45 large mobile operating groups with more than 500.000 customers, as opposed to 8 in the USA, 4 in both China and Japan, and 3 in South Korea.

Elephant in the room 

The study reminded EU regulators of the Rights and Principles Declaration from 2022 which says that all market actors benefiting from the digital economy should make a “fair and proportionate contribution” to digital network investment. “The debate will shape the longer-term strength of the European telecoms sector, as well as its overall investment capacity,” the report said. 

“Users are expecting new networks and Europe’s competitiveness relies on innovative connectivity. This is why we must take urgent policy action to help strengthen the European telecom sector,” said ETNO director general Lise Fuhr. “The status quo – both in terms of investment and of policy – will not deliver the levels of innovation that are so desperately needed to sustain growth and deliver on the Open Strategic Autonomy.”  

BT faces first class action in an English court with £1.3bn claim

The operator is accused of overcharging 3 million landline customers, many of them elderly

The first class action to reach an English courts begins today against the UK’s largest operator and former incumbent, BT. It is accused of abusing market power to charge “excessive” prices for landlines. BT says will robustly defend itself against the charges.

The case is under scrutiny as the first to take advantage of the Consumer Rights Act passed in 2015 which permits collective action against apparent breaches in competition law. Others in the pipeline include against Mastercard.

BT’s case will be heard over the next eight weeks in the Competition Appeal Tribunal in London. Affected individual are automatically represented unless they opt out. The case follows an Ofcom review, held in 2017.

The background

IT concluded, provisionally, that BT had a “significant market power” in the landline segment and was considering price controls. Instead BT dropped its prices by £7 a month from April 2018.

Critics said this did not compensate for previous overcharging and nor was compensation offered to those who bought broadband and landline services separately. The 3 million consumers concerned stand to gain up to £400 each.

BT has said the issue was a technical one resolved by Ofcom in 2017.

Harbour Litigation Fund has committed “an eight-figure amount” to bringing the case which is led by Justin Le Patourel, who formerly worked at regulator Ofcom on projects aimed at empowering and protecting consumers.

Test case in more ways than one

It is also in the spotlight after a TV drama, Mr Bates vs the Post Office, caused national outrage. It revealed that hundreds of people who ran Post Offices had been prosecuted for theft and fraud when in fact faulty Fujitsu software was responsible for the errors. It was known that the system was not fit for purpose back in the 1990s.

A cover-up by the Post Office – which runs its own investigations – and Fujitsu allowed this situation to continue for more than two decades. Innocent people were jailed and forced to repay money they did not owe. This led to some bankruptcies and suicides, and left hundreds of people with their lives and reputations in tatters.

The hero of this sad story is Alan Bates, who fought the Post Office for years almost single-handedly despite multiple attempts to obstruct and discredit him, and an ocean of detail. And that most commonly wielded weapon by corporations against individuals, non-disclosure agreements (NDAs). Bates was backed by litigation funders.

The chances of success in future David-and Goliath-fights for justice through the courts was dealt a blow by a Supreme Court ruling last summer. A truck haulage company PACCAR brought a technical challenge which exploited a loophole in badly drafted legislation.

The Supreme Court’s decision in the PACCAR case means that in future, it will be more difficult for those funding such actions to recoup their costs from the damages awarded. The UK Government has promised to change the law to overturn this situation as a matter of urgency.

South Africa’s regulator mulls changes to address blackouts

So far the operators have carried the burden of providing alternative power supplies to avoid network outages

South Africa’s Independent Communications Authority of South Africa (ICASA) is considering regulatory steps to help telcos address load shedding. This is the term used to describe the frequent, widespread power cuts across the country.

ICASA is to carry out a survey on the impact of load-shedding on the ICT sector, a pillar of the country’s digital infrastructure and economy.

Mobile operators, and especially MTN and Vodacom, have invested billions of rands to keep their networks functioning despite the outages. And in fact during blackouts, the demand for data surges.

South Africa’s Sunday Times says the survey will probably be followed by an inquiry and possibly new regulations aimed at easing operators’ the burden regarding loadshedding.

The problem is so severe that last June, MTN in South Africa announced it would become an independent power producer, using multiple technologies. They range from solar to gas and battery energy systems, at one plant at its headquarters in Fairlands, Johannesburg.

- Advertisement -
DOWNLOAD OUR NEW REPORT

5G Advanced

Will 5G’s second wave deliver value?