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Let’s get TIM split done – Colao

Nick Booth
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Let’s get TIM split done – Colao

We can’t afford free infrastructure market says minister

Telecom Italia (TIM) is splitting its landline network from its service operations to maximise asset value for all shareholders and cut its debt, CEO Pietro Labriola told economic event in Trento in northern Italy on Sunday.

Italy’s former phone monopolist is restructuring its business by isolating its domestic fixed network assets to focus on consumer and commercial activities. While TIM’s network assets are to be combined with those of state-backed broadband rival Open Fiber to create a single national network company majority-owned by Italian national development bank Cassa Depositi e Prestiti (CDP). 

The new network entity would write off a significant portion of TIM’s debt and domestic staff. TIM’s top investor, French media giant Vivendi said it would be ready to evaluate other opportunities if the network value is not recognised in the single broadband plan. Its support is crucial in getting any proposal approved by the board. “The most important thing is to maximise the value of all assets in the interest of all shareholders,” said TIM CEO Pietro Labriola.

Speaking at an economic event in Trento in northern Italy, Labriola declined to say whether TIM was considering a full exit from its landline network business with an outright sale but stressed that any spin-off would be designed to cut TIM’s €23 billion ($25 billion) net debt.

“It seems all parties [involved in the single network project] are interested in understanding quickly enough if the plan is feasible,” Labriola said. The creation of a single fibre network could be completed in 12-18 months.

An infrastructure engineer by trade, Labriola took the helm of the company in January and is due to present an updated version of the original three-year business plan. The new version, presented on July, will be focused on the break-up of TIM’s operations.

The Italian government is keen to create a national wholesale network champion independent from any broadband service provider, as it energises the fibre rollout, by removing obstacles in the road, avoids the duplication of investment and prioritises efforts more effectively.

The success of such a plan will depend on “goodwill of foreign investors”, including Vivendi, and infrastructure funds holding minority stakes in Open Fiber and TIM’s grid, Italy’s Innovation Minister Vittorio Colao said.

Private equity stakeholder KKR has joined the TIM-CDP project after TIM rejected it €10.8 billion proposal to gain control of TIM and delist it before splitting its fixed and services assets. Reuters’ sources say it still has reservations on the deal.

The critical issue is that any combination of TIM’s network assets with those of Open Fiber would need to win regulatory approval as it would recreate a near monopoly. But meeting this criteria might put a spanner in the words for no reason said Colao, a former Vodafone boss, speaking at the same event in Trento: “Ideally, we would love to have infrastructural competition, but at this stage Italy seems not able to afford it,” said Colao.

Telefónica auctions village networks as slices of private equity

Nick Booth
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Telefónica auctions village networks as slices of private equity

That’s show how to monetise rural life

Telefónica has admitted Allianz Global Investors and Canadian pension fund CDPQ to the final stages of its auctioning of a slice of its rural fibre network in Spain, which serves three million homes in small villages. French investment firm Vauban Infrastructure Partners has also been shortlisted to carry out due diligence on the unit, which has been valued at €2 billion ($2.15 billion), Reuters’ has said. Meanwhile, Dutch pension fund PGGM may ally itself with Allianz as part of a consortium, as Vauban seeks a bidding partner, other Reuters sources have divulged.

Funds for fibre

Telefónica, advised by BBVA and AZ Capital, is selling a minority stake of about 45% of the business, which operates in towns with fewer than 20,000 inhabitants. The stake sale will free up much-needed cash for debt-laden Telefónica to fund the rollout of new broadband infrastructure in rural areas in Spain, as well as in Germany and Brazil where the telecoms giant aims to reach a market penetration of up to 97% by 2024. Telefónica is already partnering with Allianz and CDPQ to offer similar fibre services to scarcely populated areas in Germany and Brazil, respectively.

More equity vicario?

Private equity and infrastructure funds have been investing heavily in Spain’s fibre network, with U.S. buyout fund KKR and European rival Ardian clinching deals last year for Spain’s biggest dark fibre operator or Reimtel and fibre player Adamo, respectively. In May, consultancy Axa Partners and Swiss Re bought neutral wholesale fibre operator Lyntia Networks, which controls a 43,000 km fibre network in Spain.

Intelsat to launch software defined satellite

Nick Booth
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Intelsat to launch software defined satellite

Tightly synchronised with 5G, roams easily

Intelsat could be about to launch a new acronym, according to its SVP of global sales for media and networks, Jean Philippe Gillet. Speaking at a Fierce Wireless private wireless virtual event Gillet hinted Intelsat and Microsoft had defined their own private wireless network demonstration purposes but this exercise established a blueprint for private LTE and 5G networks over satellite to enterprise locations around the world.

Locally defined IoT

The pact has been working on locally defined IoT connectivity, according to Gillet. At the same time Intelsat is working on a software-defined satellite service that can allocate throughput according to demand. The traditional fixed beams will become a lot more flexible and will be “really integrated into a pure 5G network” said Gillet. They’d be cheaper to integrate and consequently easier to roam with Intelsat’s services.

Liberation

Integrating Intelsat’s satellites with terrestrial 5G networks would be a liberation, freeing connections for easy roaming between space-based services and the terrestrial services. This type of network would be of immediate interest to maritime and aviation enterprises, which often aren’t connected to terrestrial networks. In March, Intelsat said it was working with the vendor Marlink to offer increased Ku and C-band satellite connectivity to maritime customers in the cruise ship and merchant shipping sectors.

Orange Mali

Intelsat is also working with Orange Mali to bring 3G and 4G connectivity to hard-to-reach areas in Mali, the eighth largest country in Africa. Gillet said for countries such as Mali the problem is closing the digital divide where there isn’t much fixed infrastructure in far-flung places. “How do I expand in a quicker way?” he said. “A satellite link is deployed in a day or so, versus waiting for connectivity that would require either microwave or terrestrial solutions.”

IHS Towers buys 5,701 masts from MTN South Africa

Nick Booth
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IHS Towers buys 5,701 masts from MTN South Africa

IHS enters Africa’s most industrialised economy

IHS Towers has bought 5,701 towers in South Africa from mobile operator MTN South Africa for R6.4 billion rand (€385 million).

Under the agreement, IHS Towers will provide power management services (PMS) to MTN SA on nearly 13,000 sites, including the acquisition portfolio, across South Africa. The acquired assets and provision of power services are expected to deliver R3bn (€181 or $192 million) and (€79 million or $85 million) respectively, in the first full year of operations. This transaction has been approved by the South African Competition Commission.

Ralph Mupita, MTN Group President and CEO, explained the rationale: “We built the best network in the country and IHS [has] the necessary experience and expertise to maintain and enhance this critical part of the business. This international partnership also brings foreign investment into the market to create greater competition.”

The PMS component of the transaction is aligned to IHS Towers’ existing service offering in other African markets. The service will be delivered to the acquired sites, as well as to other third-party sites on which MTN SA is present. This service will primarily involve power systems and security at sites.

IHS Towers will own 70% of the South African Towers business with the remaining 30% to be owned by a broad-based black economic empowerment (B-BBEE) consortium, a programme provides a legislative framework for the transformation of South Africa’s economy. The acquisition gives IHS a presence in eleven emerging markets with seven in Africa, four in Latin America and the Middle East, with a global tower count of nearly 39,000 towers.

IHS was founded in Africa and the region continues to be a key anchor for the company, according to Sam Darwish, IHS Towers Chairman and CEO. “Through this transaction, IHS has now entered the most industrialised economy in Africa as South Africa’s largest independent tower operator. MTN Group have been a long-term partner of IHS and we will expand that collaboration and facilitate mobile connectivity to meet South Africa’s increasingly sophisticated data demands and expedite the roll-out of new technologies.”

Safaricom is Kenya’s top service, Airtel got better, Telkom still second

Nick Booth
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Safaricom is Kenya’s top service, Airtel got better, Telkom still second

Regulator’s latest report into telco service quality

Safaricom provided the best service to Kenyans last year, followed by Telkom Kenya and finally Airtel Kenya. However, even the ‘worst mobile cellular service’ in the year to June 2021 has showed a remarkable improvement on the previous, reports Kenya’s daily newspaper, The Nation.  

A quality of service report by the telecoms regulator the Communications Authority of Kenya (CA) found that Airtel showed the most improvement among peers, but still remains in last place. It is coming up fast on the rails, however. Airtel posted a service quality score of 65.45% last year, up from 52 percent in the year ending June 2020.

The regulator has set an 80 percent service quality compliance threshold for the service providers. Airtel Kenya’s ability to raise its game may be linked to several improvements to its network to meet the regulatory minimum threshold on the quality of calls across the country. Last year revealed that 270 sites were upgraded from 2G and 3G sites to 4G while more than 400 sites were added in ‘upcountry towns’ and highways, said the Nation.

Airtel upgrades

Some of the locations that benefited from the Airtel upgrade and installation of new sites include Kilifi, Marsabit, Bungoma, Nyeri, Siaya, Kakamega, Nyandarua, Turkana Bomet and Uasin Gishu, said Airtel Kenya Managing Director, Prasanta Das Sarma.

The CA report found Telkom Kenya to be second-best service provider in the year to June 2021. The quality of service from Telkom Kenya is going in the wrong direction. Last year it fell to 67.5%, down five and a half points from its 73% in 2020. It was the only telco to get worse in 2021.

Telkom slipping

Kenya’s largest operator Safaricom retained its ranking as the best mobile service provider. In the year to June 2021, the telco posted a service quality score of 92.7%, a slight improvement on the 92% score the previous year. This made it the only compliant service provider.

Telcos falling short of requirements on the quality of calls and other service outages risk a fine of up to 0.2 per cent of their revenues, which could run into millions of dollars, according to The Nation.

Safaricom first

“The authority monitors the quality of mobile cellular services provided by mobile network operators to ensure that consumers are protected. The authority monitored the quality of service for the three mobile network operators across 44 counties,” CA said.

The assessment examines how an operator performs on eight key parameters in different parts of the country. These include the call set-up time; completion of calls, call set-up success rate, the number of attempts needed; speech quality and unexpected terminations. Other criteria include the call handover success and the strength of received.

Telia sells towers and telco, buys its own shares

Nick Booth
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Telia sells towers and telco, buys its own shares

Sell tower biz, sell Telia Latvia, buy back shares

Sweden’s Telia Company has sold its 49% stake in its own domestic mobile tower business to a consortium of infrastructure investment firms comprising Brookfield and Alecta, for €524 million (5.5 billion Swedish kroner or $562 million). It also announced the sale of subsidiary Telia Latvia to Tet following an open auction process with the sale of ‘100 percent of the shares’ raising €10.75 million. In another release, it has outlined details of a Share Buy Back programme.

Strategy

“We are delivering on our strategy to both develop and crystalise the value of our digital infrastructure, and I am delighted that we have Brookfield and Alecta as our tower partners in Norway, Finland and now in Sweden,” said Allison Kirkby, Telia Company President and CEO, about the divestment of mast assets. The price of the Telia Latvia sale represents an enterprise value (EV) of over ten times the earnings before interest, taxes, depreciation, and amortisation (EBITDA), whereas the EV/EBITDA for the S&P 500 has typically averaged between 11 and 16 over the last few years.

Tet

The agreement to sell Telia Latvia to Tet was announced on January 4, 2022. “With this acquisition, Tet strengthens its position within the enterprise segment given Telia Latvia’s network, technology assets and highly skilled employees,” said Andreas Ekström, Telia Company’s  head of Latvia. “Latvia is an interesting ICT market and Telia remains committed to continue contributing to the digitalization of Latvia through our engagement in Tet and LMT.”

Shares buy back

The Telia buy-back programme will be managed by an investment firm/credit institution that makes independent trading decisions over the timing of the purchase of Telia Company’s shares, said Telia. Under the scheme repurchases will be made on Stockholm Nasdaq in accordance with its Rule Book for Issuers, MAR and the Safe Harbour Regulation. The share repurchases will start on June 15, 2022, and purchasing will be finalised by February 28, 2023, at the latest. The maximum amount to be used for repurchases during the period is €520 million (SEK 5.4 billion). Payment for the shares will be made in cash.

Mandate

The investor mandated by Telia Company to execute the repurchases on its behalf will be budgeted to carry out repurchases for a minimum amount each full calendar month that the repurchase programme is ongoing. A maximum number of shares may be repurchased so that Telia Company’s total holding at any time does not exceed 10 per cent of Telia Company’s total number of issued shares. The total number of issued shares in Telia Company currently amounts to 4,089,631,702. Telia Company’s holding of own shares were 312,837 as per May 31, 2022.

Vivendi aghast at idea of TIM’s asset fire sale

Nick Booth
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Vivendi aghast at idea of TIM’s asset fire sale

Apex investor says TIM is undervaluing its infrastructure 

The sale of Telecom Italia’s (TIM) fixed network could be blocked by its apex investor, French media group Vivendi, which says that the telco’s infrastructure assets are being sold off too cheaply.  

Arnaud de Puyfontaine, the CEO of the French media group, said Vivendi would be ready to assess other options rather than a cheap sell off that undermines the value of the investor’s stock. “I want to be clear on the subject of the value of the network,” de Puyfontaine toldn Italian newspaper la Repubblica in an interview published on Wednesday. “Vivendi will never support the sale of the network at analysts’ estimated value [between €17-21 billion] and this is in the best interest of TIM.”

TIM and Italy’s publicly owned merchant bank Cassa Depositi e Prestiti (CDP) formally committed to a plan  on Sunday to create a domestic broadband champion. The scheme  would compel TIM to spin off its landline grid before it is merged with the network of broadband rival Open Fiber, which is owned by CDP. 

“If the real value (of TIM’s network) is not recognised, given we are a long-term industrial investor, we are ready to evaluate other opportunities,” de Puyfontaine said. “Tim’s governance needs to be improved to protect the market and we hope it will happen soon,” said de Puyfontaine.

TIM had priced its assets at  20 billion including debt on the landline grid, said two of Reuters’ sources. 

De Puyfontaine argued that the long-awaited plan to combine TIM’s fixed line with that of Open Fiber was ‘the main road’ of business strategy for TIM, but ‘not the only one’.

The pact would create the single broadband network that TIM CEO Pietro Labriola has tried to mastermind since being mooted a chief executive by the board. Labriola’s turnaround plan was built on splitting the group’s landline grid from service operations.

The boards of directors of TIM and CDP met on Sunday to approve a framework agreement and negotiate a binding deal on a network tie-up with Open Fiber with a deadline for completion of October, a Reuters source said. 

Will WEF or Meta make the Metaverse?

Nick Booth
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Will WEF or Meta make the Metaverse?

World Economic Forum wants to define ethics and inclusivity?

The World Economic Forum (WEF) is muscling in on the metaverse and looking to define its future, according to a report by campaigner Didi Rankovic of Reclaim the Net. WEF Research claims the metaverse will be worth €9.3 billion ($800 billion) by 2024. Who will benefit from it, asks the analyst. 

WEF’s ‘multi-stakeholder initiative’ wants a leadership role in defining and building the metaverse, according to Facebook (Meta) president of global affairs Nick Clegg. The initiative it detailed in a post on the Davos event’s website, giving its guidance on how to create ‘an ethical, inclusive, economically viable metaverse,’ while representing the interests of businesses, regulators, civil society, and academia from both the private and public sectors.

Metabolics

The Defining and Building the Metaverse statement aims to focus publicity on producing governance principles for it and to define the concept of  ‘societal value creation’. The initiative’s first key area is supposed to determine ‘safe, interoperable and inclusive’ technology and environments for the metaverse, while what ‘value creation’ means is not explained. Who will pay for this technology? 
The argument does not describe the risks and incentives to businesses, society and individuals. It does propose to outline how ‘value chains may be disrupted, industries may be transformed, new assets could be created and rights protected’. “The WEF appears to want to get involved in the creation, “ said Reclaim The Net, “and through governance and regulation, [to] ultimately [gain] control of the metaverse in the early stages of its development.”

Civil versus cyber society?

 The concept could go in any direction and the WEF would like to direct it. Currently, there is a substantial influence carried by ‘Big Tech’ companies, such as Meta, Microsoft, HTC and Sony Interactive. Big telcos hold much less sway, if any. The 60 or so WEF ‘founding fathers’ who will forge the Metaverse Constitution aremostly technology and corporate giants, the but there are start-ups, academics and representatives of civil society represented, the WEF said. The WEF is to give industry a toolkit for building the Metaverse, that it claims is ethical and responsible in nature, said Meta’s Nick Clegg, who claimed that the future metaverse will represent ‘a force for inclusion and equity.’

Accountability

However, Meta doesn’t want to be held too accountable for anything it publishes. “It mustn’t be shaped by tech companies on their own. It needs to be developed openly with a spirit of cooperation between the private sector, lawmakers, civil society, academia and the people who will use these technologies,” said Clegg.
“It’s unclear from the WEF document how exactly people who will use these technologies are represented as stakeholders,” said Didi Rankovic, from Reclaim the Net. 

BT and Ericsson to build industrial strength private 5G in Belfast

Nick Booth
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BT and Ericsson to build industrial strength private 5G in Belfast

Three year multi million contract for outstanding networks

Ericsson has reached a multi-million Euro deal with UK telco BT to build private 5G networks for UK industries.

The project will blend BT’s expertise in building converged fixed and mobile networks with Ericsson’s 5G engineering experience. The ‘standalone sectors’, industry speak for the industries that could use network slicing, were identified by BT as manufacturing, defence, education, retail, healthcare, transport and logistics.

BT is investing almost £100 million over the next three years in its Division X unit to shape technologies such as 5G, the internet of things (IoT), edge computing, cloud services and artificial intelligence around the way industries work.

BT and Ericsson have a long-standing partnership and previously collaborated to install private 5G networks at Belfast Harbour. Working with Ericsson on this project is a huge milestone and will play a major role in transforming business, said Marc Overton, BT’s managing director for Division X, who claimed it was “ushering in a new era of hyper-connected spaces.”

“Our skill and expertise at building converged fixed and mobile networks [combined] with Ericsson’s leading, sustainable and secure 5G network equipment will be [an] attractive to many industries,” said Overton. 5G private networks will create new ‘smart factory processes’, Overton said, promising that the advancement of Industry 4.0 can realise significant cost savings and efficiencies for manufacturers.

Unlike a public network, a private 5G network can be configured to a specific business’s needs, as well as by individual site or location, Overton explained. Private networks also provide the foundation to overlay other innovative technologies such as the IoT and AI, as well as virtual and augment realities, opening up a multitude of possibilities,” said Overton.

The surgery’s online, the doctor is Orange

Nick Booth
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The surgery’s online, the doctor is Orange

Orange Business Services’ Enovaco buys telemedic Exelus

Orange Business Services (OBS) is to buy French telemedicine specialist Exelus to complement its health subsidiary Enovacom. 

Exelus created Nomadeec, a system that provides ‘state-of-the-art tools’ for medics ranging for ‘on call’ medics ranging from district nurses, through paramedics to doctors. It provides a virtual clinic for remote consultations, assessments and care appointments. It can also be used for emergency telemedicine, such as triage by telephone or video, as well as the admin of electronic Patient Care Records. The benefits claimed are better regional cooperation and streamlined patient care pathways, which are achieved through simple and effective digital tools tailored to each user’s profile.

Nomadeec is already used in 25% of emergency medical service organisations in France, 200 health and social care centres and 151 ambulance companies. The coverage has created a complete regional network that provides a single solution for all these new uses of telemedicine, according to OBS. This system will complement Enovacom’s portfolio of systems for healthcare professionals.

With the weight of OBS behind it the system could be pushed further in France and extended abroad. Enovacom will apply the screen-side manner, through its telemedicine skills, while OBS will provide the venue, equipment and tools. OBS will triage the various calls across the network slices of 5G and the range of medical machinery attached to the Internet of Things. OBS will also provide the ‘infection control’ needed for cyber security, while theatre managing for interoperability and data security.  

“Telemedicine is an essential part of the health system and we will benefit from the strength and expertise of the Orange Group,” said Xavier Maurin, CEO and Co-founder of Exelus. Their many synergies will accelerate the roll out of Nomadeec in France and abroad, Maurin said.

“From within Orange Business Services, Enovacom will offer a unique telemedicine solution to the market,” says Laurent Frigara, Deputy CEO and Co-founder of Enovacom.

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