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Telecom Italia rebuffs KKR takeover due to its cagey conduct over bid terms

Nick Booth
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Telecom Italia rebuffs KKR takeover due to its cagey conduct over bid terms

KKR can’t see the books until it tables a serious bid

Telecom Italia (TIM) rebuffed a takeover approach from KKR on Thursday, reports Reuters, whose sources say the telco refused to let the US private equity company see its accounts without confirming its bid terms.

KKR first approached TIM last November with a non-binding offer valuing the company at €10.8 billion but TIM only agreed to open talks last month. Many of the telco’s executives quit the company at the prospect of a KKR takeover. In a statement after a board meeting, TIM said that it cannot grant KKR access to its data as the fund did not validate the terms of its initial €0.505 per share approach, according to Reuters.

“Should KKR submit a deliverable, complete and attractive offer … the TIM Board of Directors would be open to reconsidering its decision in the interest of all shareholders,” TIM said in statement. The biggest TIM shareholder Vivendi had originally insisted that the KKR bids were too low, though, as Reuters points out, it is well above the current price of €0.31.

TIM’s rebuff comes as new boss Pietro Labriola is pressing ahead with a strategy to revamp the company centred around a split of its wholesale network operations from its services business. Details of the Labriola’s plan, to discover the telco’s hidden potential, would be fleshed out by the summer.

In accordance with the plan, TIM has signed a non-disclosure agreement with Italian state lender CDP to discuss a merger of its network infrastructure with that broadband rival Open Fiber. This government-approved deal would call for infrastructure and private equity funds, including KKR’s.

“KKR ultimately confirmed its interest in exploring any other transactions in the interest of the company, its shareholders and Italy,” TIM said in its statement. KKR already owns some of TIM’s last-mile fixed-line network, having invested €1.8 billion in a 37.5 per cent stake in FiberCop. KKR could use that influence to block TIM’s ambitions to launch a network company. CDP holds a 10 per cent stake in TIM and a 60 per cent stake in Open Fiber and it wants full control of any combined network entity, according to Reuters’ sources.

Other private equity fund companies are assessing their options for investing in TIM, which must be an attractive destination for investment funds.  At the end of March more private equity bidders emerged and one, CVC Capital Partners, made a non-binding offer for 49 per cent of Telecom Italia’s new enterprise services unit. According to Reuters a number of private equity companies, including Apollo and Apax Partners, have expressed interest in Italy’s telco flagship. TIM promised to discuss CVC’s non-binding bid in a board meeting scheduled for yesterday (April 7th) after the company’s annual general meeting.

Telecoms Sans Frontieres needs support to help displaced Ukranians stay connected

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Telecoms Sans Frontieres needs support to help displaced Ukranians stay connected

Some 4 million refugees have fled their homes and desperately need to stay in touch with loved ones and be aware of developments in the war.

The ongoing conflicts in Ukraine have caused over four million refugees to flee Ukraine in hope of seeking refuge in Ukraine’s neighbouring countries. A lack of connectivity makes an already distressing situation even worse as they are essentially going into a warzone blind – with no information on what to expect and no news of the family they were forced to leave behind.

NGO Télécoms Sans Frontières (TSF) has launched the Ukraine Crowdfunding Campaign to bring connectivity to desperate people. In situations like these, a little goes a long way, for example a donation of £8 will pay to put a power supply for a Wi-Fi router on a bus If donations are made before Friday 8th April, they will be eligible for a 50% match as part of the April 2022 Little by Little Campaign.  

The buses have been set up by the International Organisation for Migration which allows refugees to be transported safely from Ukraine to Bucharest. TSF is also providing free Wi-Fi in transit shelters within Ukraine where refugees are hosted for a short time i preparation for their next move.

Open RAN Alliance releases PAS for the ETSI, an OTIC site and two Plugfests

Nick Booth
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Open RAN Alliance releases PAS for the ETSI, an OTIC site and two Plugfests

O-RAN plan to expand does not impress John Strand

The Open Ran Alliance has announced a recipe of directives for its members to follow but one analyst has predicted that the word salad may not be to everyone’s tastes.

In a statement O-RAN announced it has released version 002 of its Minimum Viable Plan which aims to enable an [unexplained] Open RAN Intelligence function. The statement also announces that 40 O-RAN specifications have been published since November 2021. In other news, there are two O-RAN Global PlugFests planned in 2022 to extend the testing and integration. Dates were not given.

The most significant news is that the First O-RAN specification has been submitted to become a Publicly Available Specification (PAS) for the European standards organisation ETSI. 

Paul Smith, director network analytics & automation at AT&T Labs told LightReading that O-RAN is very much a work in progress. “I think, all in all, we’ve made a lot of good progress so far,” said Smith, who is also co-chair of O-RAN’s WG1, a group that handles much of the alliance’s core work on O-RANs, including network architecture, network slicing and use cases.

“This is becoming an actual standard that the industry is working toward, which I think is really important,” Smith said of the O-RAN Alliance’s first batch of ETSI specifications. ETSI handles a vast range of telecom specifications, from SIM cards to satellites.

Smith said the O-RAN Alliance plans to significantly expand its testing and integration efforts, a key element of the association’s overall goal of making interoperable networking components. The alliance now has six Open Testing and Integration Centers (OTICs), which provide open and impartial working environments for open RAN vendors. Four are in Europe, one is in Taiwan and one in China. Expect one in North America this year, said Smith, though he refused to specify where.

However, analyst John Strand, of Strand Consult, issued a briefing that questions if the pace change is convincing. “Everyone talks about OpenRAN; no one buys it,” began Strand’s analysis.

“When you hear smaller players like Mavenir and Parallel Wireless, it is clear that they are panicking that they are not getting the orders that they have probably promised their boards,” said Strand, who has released a review of O-RAN’s performance at Mobile World Congress.

“After some years, OpenRAN has yet to notch a major commercial success. If OpenRAN gets the growth its proponents predict, it will account for less than 1 percent of the 5G mobile sites in 2025,” said Strand. By 2030 this would represent around three per cent of 5G’s installed base. “It looks like OpenRAN is too little, too late to make a difference in a world where operators deploy 10,000 classic 5G sites every month,” said Strand.

Estonia welcomes four auction bidders for three 5G spectrum licences

Nick Booth
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Estonia welcomes four auction bidders for three 5G spectrum licences

Regulator says consumers will benefit from competition

Estonia’s regulator, Tarbijakaitse ja Tehnilise Jarelevalve Amet (TTJA) has received four applications for its forthcoming spectrum auction of three 3.5GHz licences for 5G services. 

As expected, the three incumbent mobile network operators (MNOs), Telia, Elisa and Tele2, have bid. The fourth applicant is something of a wild card, Lithuania-based telecoms and media firm Bite Group.

Bite Group’s activities in Estonia so far have concentrated on its TV channel TV3 and streaming platform Go3, so a successful bid for a 5G licence would bring additional competition to the country’s telecoms sector.

Andres Suti, Estonia’s Minister of eEnterprise and Information Technology, welcomed the competition. Whereas in many markets mobile operators, such as Vodafone in the UK and Orange in France, are calling for consolidation, Suti said having four firms chasing three licences will be good for consumers. “I am glad that four companies are interested in the competition, and one of them is a newcomer,” said Suti. “This shows that companies have a definite interest in the development of the Estonian communications market and also gives confidence that 5G services will reach the market as soon as possible. Estonian consumers can only win from the competition, because this way the service will be of higher quality and the prices more reasonable.”

The public tender for three concessions in the 3410 Mhz to 3800 Mhz range was initially announced on 19 February 2019 and then postponed later that year. Under the new auction terms, the starting price for each licence will be €1.597 million ($1.75 million). 

TTJA, the nation’s consumer protection authority in addition to being its technical regulator, said it expects to begin the bidding process towards the end of April and to be completed by June 2022.

Three UK and BT EE on train to BAI’s hyper connected London as Vodafone and O2 quibble over ticket price

Nick Booth
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Three UK and BT EE on train to BAI’s hyper connected London as Vodafone and O2 quibble over ticket price

Fibre optic express is moving along London underground

Infrastructure firm BAI Communications (BAI) has completed the first leg of its of fibre optics journey across the London Underground as it builds a 5G-ready backbone. The fibre optic express is travelling from Canning Town in the East of London on the Jubilee line and has reached Westminster, in central London, the tube stop for Britain’s Houses of Parliament. 

Some early adopters have been impressed. “I can confirm I got full whack 4G couple of weeks ago when I went to [trade show] BETT. I am with EE and got well over 200 meg on speed tests!!” said Sam Perry, on an ISP Review comment section. However, to date only users of BT EE and Three UK can use the link. [Update] Pilot services with Vodafone and Virgin Media O2 (VMO2) will continue while the two operators are in discussions with BAI on access agreements for permanent services.

In June 2021 Transport for London announced the award of a 20-year concession deal to global mobile infrastructure firm BAI to build a fibre optic network and wholesale it to the mobile network operators (MNOs). The objective is to line every track with fibre before 2025, so that passengers on trains and platforms can get 5G. Over 2,000 kilometres of cabling need to be laid and linked up.

The deal followed a successful trial on the eastern limb of the network, where the Jubilee Line was embued with neutral host distributed antenna systems (DASs) that are now supported by hundreds of kilometres of fibre optic cable laid in tunnels for data capacity. All four MNOs took part in that trial, but so far only EE and Three UK have reached an agreement on using the final network.

There is now good mobile coverage between Westminster and Canning Town. The cable’s journey has gone into the Elizabeth line (which isn’t serving any train passengers yet) and at tourist hot spots Oxford Circus and Tottenham Court Road, financial services commuter hub Bank and northern rail hub Euston station and fashionable Camden Town. All are expected to arrive by the end of 2022.

“We’re pleased to announce this first major delivery milestone on our journey to transform London’s connectivity,” said Billy D’Arcy, CEO of BAI Communications UK, “Customers of our launch partners, Three and EE, will be able to enjoy permanent access to uninterrupted mobile connectivity whilst travelling on the eastern Jubilee Line. This will provide a massive boost to the passenger experience.”

“It’s great that following our successful pilot over the last two years, BAI Communications will now be permanently providing 4G coverage to the eastern section of the Jubilee line,” said TfL CTO Shashi Verma, “we look forward to coverage being extended to more stations and tunnels in the coming years, which will provide greater connectivity to customers and support London’s economic recovery.”

Vodafone is running late, as it said in 2021 that it expected to sign-up to the new mobile network in January 2022. ISP Review telecoms engineer Mark Jackson predicted that users should “expect O2 to follow at some point, although they haven’t yet broadcast a solid expectation”. Vodafone and VM-O2 are still active on the original pilot service and said to be continuing their discussions with BAI on access agreements.

Ericsson’s Laurin quits a week after row over ISIS payments on expenses

Nick Booth
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Ericsson’s Laurin quits a week after row over ISIS payments on expenses

Is ISIS crisis a case where ‘deputy heads must roll’?

Ericsson’s Senior Vice President and Head of Business Area Managed Services Peter Laurin has decided to leave Ericsson on August 15, 2022 to pursue ‘opportunities outside the company’, the equipment maker has announced. Laurin will take over as CEO of production automation specialist Piab. 

Peter Laurin has been a loyal servant to the company since 2001 was appointed to Ericsson’s Executive Team in 2017. The successor to the post of Head of Business Area Managed Services has not been arranged yet. 

“Peter has been instrumental in turning around and transforming our Managed Services business and successfully led Ericsson’s digitalisation and IT journey. He is a valued member of the Ericsson leadership team and I wish Peter all the very best in this new role as CEO of Piab,” said Ericsson’s President and CEO Börje Ekholm.

The resignation comes after a shareholder revolt at Ericsson’s AGM in which shareholding activist Cevian Capital voted against granting discharge to either Ericsson’s board members or its president Börje Ekholm.

Cevian has previously complained about the way the company is run but the outstanding issue is alleged liability for Islamic State payments based on “unusual expense claims in Iraq” dating back to 2018. At the time, Laurin was Ericsson’s head of business area managed services. As a result of this decisions over payments, top execs could be held personally liable under Swedish law.

Both Ericsson Chairman Ronnie Leten and Ekholm said they could not give any further information about the ongoing investigation by the US Department of Justice.

Is MTN Group about to spin off fintech business?

Nick Booth
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Is MTN Group about to spin off fintech business?

Momo and M-Pesa have stimulated many African economies

Africa’s largest phone company MTN Group has had such great results with its MTN Momo mobile banking apps that is looking to create a separate financial technology business. Bloomberg has reported that the mobile operator group is working with advisers at JP Morgan Chase for a strategy to split the business.

At the end of March the carrier said to Bloomberg sources that it aims to complete a ‘carveout’ of the business by the end of the first half of 2022. It will then seek funds from outside investors later in the year. Last year, Nedbank Group estimated the fintech arm could be worth about $6 billion.

MTN is considering a variety of options, including bringing in partners for some of its businesses. Alternatively, it might list certain units in the future, to unlock value and pay down debt. The carrier is also exploring ideas for its data centre business, according to Bloomberg’s secret sources.

Meanwhile, in its core telco operations, the firm is working separately with FTI Consulting to find ways to boost revenues from its wholesale business and roaming agreements across the national markets it’s involved in. Shares of MTN have doubled in Johannesburg in the last 12 months, giving the company a valuation of $22.3 billion. Sources say that at present there is no certainty in the direction of MTN Group’s futures and options speculations, with deliberations said to be ‘ongoing’. There has been no comment so far from MTN, JPMorgan and FTI. 

In 2020 MTN Group said it wanted to raise 25 billion rand (€1.6 billion) from asset disposals over the medium term. It agreed in November to sell a portfolio of wireless towers in its home market of South Africa for 6.4 billion rand (€400 million) and was reportedly biding to take over rival Telkom. MTN also has a stake in towerco IHS Holding. 

Fintech has helped millions of Africans get their first bank accounts through their mobile phones. According to The World Bank, annual remittances in Africa amount to $40 billion dollars, but the cost of the money transfers is the highest in the world. 

Lack of access to credit can severely hinder business growth and in Nigeria, only 7 per cent of businesses have taken out a formal loan. Fintech slashed the cost of credit risks assessments and in Uganda, where less than a third of the population has an account at a financial institution, lenders use First Access software to screen potential clients and match them with the right financial products. Digital microloans are also becoming extremely popular as an alternative to family loans. In Nigeria for example, several fintech companies offer small loans of as little as $150 in 24 hours.

Vodafone’s M-PESA is the largest payments platform on the African continent with 50 million customers as of September 2021, according to Business Insider Africa. Vodafone’s African subsidiaries such as Vodacom and Safaricom, which bought the M-Pesa brand in 2020, process over a billion transactions every month and operate in Kenya, Tanzania, Lesotho, Democratic Republic of Congo, Ghana, Mozambique and Egypt.

In March 2022 the M-Pesa service launched Super Apps to allow businesses to create their own fintech systems. About 25 per cent of all M-PESA customers have access to a smartphone – a figure that is growing by 10 per cent annually, according to the GSMA.

Mobile publishers to be taxed on content compliance under EU Digital Services Act

Nick Booth
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Mobile publishers to be taxed on content compliance under EU Digital Services Act

Platforms to pay thousandth of net income on content cops

Mobile operators and other online publishers will have to pay the EU face a yearly fee up to 0.1 per cent of their annual net income to cover the costs of complying with new European Union rules on policing content, according to Reuters.

In a speech about the new Digital Services Act (DSA) EU antitrust chief Margaret Vestager said the rules are likely to be agreed between EU countries and lawmakers this month. The tax is a first for the European Commission, the executive body of the EU.

The Commission needs new sources of revenue to fund regional, green and digital economies, said Reuters, and the scheme would create jobs because it would need scores of experts to enforce the new tech rules, admitted Vestager. “The overall amount of the annual supervisory fees shall be based on the estimated costs the Commission incurs in relation to its supervisory tasks under this Regulation,” Verstager said, in the published account of the speech.

“The fee shall not exceed 0.1% of the global annual net income of the provider of very large online platforms (or very large search engine) in the preceding financial year,” said Vertsager. The fee will be proportionate to the size of the service as reflected by the number of its recipients in the EU. The Commission defines very large online platforms subject to the DSA as those with 45 million or more monthly active users.

The fee could raise €20 to €30 million a year from the likes of Meta and Twitter, an insider told Reuters. Not-for-profit providers of very large online platforms and very large online search engines will be exempt from the fees, so Wikipedia and research bodies wil not be liable. Vestager’s proposal is likely to be approved on April the 22nd when member states and EU lawmakers are scheduled to meet for the fourth round of negotiations, which is ‘widely expected to result in a deal’, according to Reuters.

“We believe it is possible, we see progress,” said EU lawmaker Christel Schaldemose, who is steering the DSA in the European Parliament. Commission sources said it’s no different from the fees imposed by telecoms regulators and the European Securities and Markets Authority on the operators under their supervision.

“We want the implementation of the DSA to be a success, and support supervisory fees that are proportionate, backed by a detailed methodology, and commensurate with industry standards,” said a Google representative.

Vodafone Portugal appoints Mavenir as strategic 5G core cloud native guide

Nick Booth
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Vodafone Portugal appoints Mavenir as strategic 5G core cloud native guide

Digest legacy programmes then energise core with concise code

Vodafone Portugal has gone cloud-native with a containerised converged packet core from network software specialist Mavenir in a bid to mobilise its software across multiple systems. The commitment confirms Mavenir as the telco’s ‘strategic 5G Converged Core supplier’, according to a joint release.

The culture conversion will take place within the software vendor’s MAVcore system which is built from bog-standard computing hardware running Mavenir’s software which runs breaks down telecoms functions into smaller, interchangeable units and raises the fluidity, speed and versatility of the telco.

A combination of COTS (commercial off the shelf) hardware, container coding and cloud native sensibilities create a converged core of data packets that can work with any generation of mobile network, from 2G to 5G, according to Paulino Correa, the network director at Vodafone Portugal. This frees up time for mobile operators to plan for future growth and worry about security and reliability. Digesting huge chunks of software and breaking it down into small energising units that can be absorbed easily by all the organs of the telco’s body has boosted growth and simplified network transformation.

“The industry defines several steps for 5G,” said Correa, “but it is the second step, the 5G stand alone core, that brings the more powerful technology revolution in terms of use cases.”

Vodafone Portugal had worked on 5G SA with Mavenir in its lab for a year and is now confident that the two can transform the telco’s network and launch ‘powerful applications’ in response to ‘differentiating’ use cases as 5G evolves. “We are delighted to be part of their core network under the Spring 3 Cosmos programme,” said Stefano Cantarelli, Mavenir’s chief marketing officer.

French shoot down Starlink satellite with legal loophole

Nick Booth
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French shoot down Starlink satellite with legal loophole

Elon Musk’s satellite company loses right to provide broadband

Starlink’s license to connect French regions with broadband has been revoked on a legal technicality, after national regulator Arcep was accused of a compliance failing. The original decision to grant two frequency bands to Elon Musk’s satellite internet company Starlink has been over-ruled by France’s highest administrative court. On Tuesday The Conseil d’Etat agreed with an appeal that the country’s telecoms regulator Arcep had made legal misjudgements.

In February 2021 the French regulator granted Starlink the right to operate on two radio frequencies in order to provide people with internet access on all French territories. However on Tuesday the court heard appeals from two activist groups to revoke Arcep’s ruling. The grounds for the activists’ objections were not publicised but the Conseil d’Etat has temporarily ruled in their favour. 

The EU has plans of its own for closing the digital divide. In February 2022 the European Union announced two space initiatives. One is a new satellite system, which it described as “a regulation on a space-based secure connectivity”. The total cost is estimated at €6 billion. The Union’s contribution to the Programme from 2022 until 2027 is €2.4 billion at current prices.

The funding will come from different sources of the public sector (EU budget, Member States, European Space Agency’s (ESA) contributions) and private sector investments. The supreme court said the decision to grant the licences to Starlink “could impact the market of access to high-bandwidth internet and affect the interests of end users”.

There has been speculation that Starlink could be used to close the digital divide between urban and rural areas in the UK and a possible deal with Vodafone was mooted in October 2021. In November it was announced that UK telco BT has commissioned UK-based satellite operator OneWeb to beam broadband networks from its low earth orbiting (LEO) comms clusters.

OneWeb could deliver global coverage by June 2022 through a constellation of 648 LEO satellites and is poised to deliver services from the North Pole to the 50th parallel, covering the entire UK, later this year.

The EU argues that the development of its own infrastructure would provide a gross value added of between €17 billion and €24 billion, plus additional jobs in the European space industry. It said in a statement, “Today’s initiatives will help safeguard the efficiency and security of our current assets while developing European cutting-edge space technology to the benefit of our citizens and economy”.

The French groups that challenged the Arcep decision are Pour Rassembler, Informer et Agir contre les Risques liés aux Technologies ElectroMagnétiques and Agir pour l’Environnement.

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