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Amdocs deepens relationship with Google Cloud 

Simon Dux
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Amdocs deepens relationship with Google Cloud 

The fallout from the Azure for Operators implosion continues as Amdocs follows Nokia with a Google Cloud tie-up

Microsoft’s decision to retrench Azure for Operators is causing some interesting realignments in previous partners. Amdocs, which already has deep relationships with operators around the world, has joined Nokia in announcing a deeper partnership with Google Cloud that will see Amdocs’ AI and Data Platform (previously DataOne) now use Google Cloud’s unified AI-ready data platform to provide business decision support for telcos.  

While Nokia’s tie-up was more about API development, Amdocs wants is incorporating the Google Cloud Architecture Framework to create a layered and service-based architecture to provide telcos with a unified real-time data source that integrates information from various systems across the business.  

The talk of telco operating systems is no more although it is hardly surprising. Implementing cloud-based solutions in telcos is tough. Operators often have legacy systems that require extensive integration efforts, which can be costly and time-consuming. In addition, concerns around data privacy, control and dependency on a single vendor would have had operators baulking at signing up. Microsoft sealed Azure for Operators’ fate when it made its broader strategic shift towards AI which led to reallocating resources away from less successful ventures.  

Google’s gain 

Google’s strength has always been analytics and the Amdocs tie-up gives this a turbo-boost. Amdocs already provides a standardised business model but now, the combined scale of the Amdocs platform and Google BigQuery allows customers to process large volumes of data without manual scaling operations. 

The platform allows telcos to integrate Amdocs Logical Data Model on BigQuery. This, says Google, maximises existing investments in tools and processes, ensuring a “cohesive and cost-effective data management strategy that enhances overall productivity”.  

Amdocs, which already had deep relationships with Google [and the other hyperscalers] gets a way to continue operator cloud migration discussions with customers. Amdocs’s cloud-based platform uses a data mesh architecture to provide a unified and continuously updated view of customer data and related transactions. It also utilises the Amdocs Logical Data Model (aLDM) to standardise data taxonomy, thereby simplifying data governance and enhancing security. This approach, says Amdocs, helps enterprises efficiently manage their data assets while ensuring compliance and protecting sensitive information. 

The standardisation brought by aLDM enhances application flexibility as well. The platform supports real-time and non-real-time data requirements, enabling seamless data streaming from any Business Support Systems (BSS), Operational Support Systems (OSS), or network sources. It also is SaaS-based and cloud native which helps scalability. Additionally, the platform’s standardised business taxonomy facilitates efficient data representation and usage, improving both operational and analytical data layers.  

“Our collaboration streamlines the integration of diverse data sources, enabling real-time decision-making and personalised customer experiences,” said Google Cloud telco industry director Vivek Gupta. “This joint approach empowers CSPs to accelerate new revenue possibilities aligned with significant insights coming from their business.”   

“Data is the foundation of any AI-powered experience, including the burgeoning world of generative AI experiences,” said Amdocs group president of technology and head of strategy Anthony Goonetilleke (above). “Yet, data is complex, and accessing it in a scalable, performant way that enables high-value insights is challenging.  We are therefore excited about our collaboration with Google Cloud to simplify the process for service providers, helping them develop a competitive edge and deliver real-time, AI-driven outcomes based on enterprise-scale data readiness.” 

Nokia, Google Cloud to help developers create 5G apps with telco APIs 

Annie Turner
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0
Nokia, Google Cloud to help developers create 5G apps with telco APIs 

They plan to provide developers anywhere in the world with software tools to accelerate the adoption of the APIs, starting with healthcare use cases

The Finnish equipment vendor has announced the Nokia Network as Code platform with developer portal will run on Google Cloud. The aim is to “[enrich] the developer experience via Google Cloud data and generative AI solutions and capabilities, including Vertex AI and Gemini 1.5 Pro”.

The companies are to promote specific use cases to the Google Cloud developer community, starting with healthcare. Google Cloud stresses it developers cover “all major industries and geographies”.

The cloudco also says that its developer community will gain access to standardised 5G network capabilities around the world, exposed through Nokia’s Network as Code platform with developer portal, giving them the technical tools required to quickly create new applications for their customers.

Network as Code

Nokia states that its platform provides developers with software development kits (SDKs); network API documentation, a sandbox in which to create software code and simulate its deployment for particular use case and testing. It also provides code snippets that can be included in new applications to speed the process.

The platform shares revenue between developers, operators and Nokia. Since its launch in September 2023, the vendor has signed collaboration agreements with 13 network operators and ecosystem partners in Europe, North and South America.

Ankur Jain, VP, Google Distributed Cloud and Global Telco Industry at Google Cloud, noted, “Through this important collaboration with Nokia, we are enabling our global developer community to tap into the greenfield opportunity that 5G networks provide. Our developer community is a strong innovation driver globally, and we believe the telecom space offers significant value creation opportunities through new applications.”

Raghav Sahgal, President of Cloud and Network Services at Nokia, added, “We are excited to expand our collaboration with Google Cloud, enabling thousands of Google Cloud developers to tap into our network capabilities so that they can create value for their customers faster.”

du contracts Comarch to update OSS

Annie Turner
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du contracts Comarch to update OSS

Greater automation and standardisation are two of the main goals in the drive to improve operational costs and agility

A contract between Comarch and du covers resource inventory and catalogue, OSS auto-discovery and reconciliation, and OSS mediation. du is part of the Emirates Integrated Telecommunications Company (EITC) and says the system is now operational, acting as its network’s core inventory.

The partnership aims to modernise the OSS to gain more agility and flexibility, incorporating infrastructure automation, asset management, and dynamic topology stitching of infrastructure and refresh in near real-time.

The Comarch solution consists of commercial off-the-shelf modules from Comarch’s OSS portfolio, part of its Resource Management designed to manage all kinds of logical and physical resources in the network environment.

Multi-vendor, multi-tech

Comarch’s multi-vendor, multi-technology inventory for du covers the RAN for 5G, 4G, 3G, and 2G, plus transport (SDM, WDM, IP), mobile and fixed core, fixed access (GPON, Ethernet) and passive components. Comarch recently added data centre management and virtualisation to the products.

The Resource Management is intended to improve operations by providing an overview of all the network elements and their configuration, the use of wizards, and the data collected during the migration and reconciliation process.

All this is enabled by reliable, dynamic datafrom live network elements and vendor-specific network management systems. The system will stay up to date because of annual improvements, Comarch says, to ensure the most recent vendor releases in the du ecosystem are supported and usable.

Expected benefits from the OSS overhaul include: saving money in network inventory and operation; synergy in tracking new assets; simplified planning processes and tools; shorter time to market; automating new network technology; better use of network resources; and streamlining the IT environment.  

Power of data

However, according to Comarch, the main advantage is the reporting and analytical Business Intelligence (BI) Point. It enables the use of network resources, site development, and data quality to be measured and monitored, and past data from these areas to be reviewed,

“The successful implementation of this solution brings us closer to achieving du’s strategic vision of digital agility, reduces our time to market, and empowers us to deploy emerging technologies faster than ever before,” said Saleem Alblooshi, CTO at du.

Paweł Workiewicz, Head of Business Development Division APAC & MEA, commented, “Our comprehensive OSS portfolio allows us to provide du with modules that enable increased automation and standardization, and will support the customer in rolling out new technologies such as 5G and NFV, enhance their data synchronization and integrity, and reduce the costs of creating and operating the transport network.”

Telenor, iliad beef up cybersecurity operations 

Simon Dux
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0
Telenor, iliad beef up cybersecurity operations 

Telenor launches new unit with Nordic ambitions, while iliad announces cyber centre of expertise in Toulouse

The head of the European Union Agency for Cybersecurity (ENISA) Juhan Lepassaar recently said that cyber-attacks have doubled in the European Union in recent months with many of these linked to Russian-backed groups. And cyber warfare is not only virtual. At the end of last year, Estonia’s prosecutor general confirmed that the Hong Kong-registered NewNew Polar Bear container vessel was the primary suspect in an investigation of damage to two subsea telecoms cables linking Estonia to Finland and Sweden. 

This week, the European Commission, ENISA and EU countries are meeting to discuss the proposed cybersecurity certification scheme (EUCS) for cloud services which will decide among other things, whether US cloud giants will have unfettered access to European data so the stakes are high, and increasing. 

No time to wait 

Europe’s telcos are not hanging around given they are on the front line of the cyber-attacks. A range of initiatives have been announced with the latest being Telenor. The operator announced plans to cybersecurity company Telenor Cyberdefence to protect Norwegian businesses and public sector organisations. According to a survey conducted by Norstat, 1 in 5 business leaders reported having experienced cyberattacks in the past year – that’s 130,000 Norwegian companies. 

“We have never experienced cyber threats as frequent and severe as we do today. The business digital landscape is under constant attack, making robust cybersecurity more critical than ever. Telenor has decided to build on its experience and expertise as one of the Norway’s strongest security players and is establishing a new cybersecurity company with Nordic ambitions,” says Telenor CEO and president Sigve Brekke. 

The newly formed company will become part of Telenor Amp. Today, Telenor Amp’s portfolio is comprised of 15 fully- or partially-owned companies with a combined value of NOK 10-12 billion. Thomas Kronen (above) has been appointed CEO of the new company. 

“The exponential growth of data and the increasing digitalisation of society are providing criminals with a larger digital landscape to attack. This is a challenge we are taking seriously by establishing Telenor Cyberdefence, and purposely focusing on digital security,” said Telenor Amp head and EVP Dan Ouchterlony. “This will enable us to develop advanced security products for the business market more rapidly and more effectively meet market needs.” 

Specialist expertise 

Telenor Cyberdefence will offer businesses a Security Operations Centre (SOC) for 24/7 monitoring, prevention, detection, and response to all types of cyber threats and incidents. The company will also provide specialist expertise through consultancy services and testing of IT systems and infrastructure. 

“The Norwegian SOC market is worth around NOK 3 billion annually, according to our own analysis. Telenor Cyberdefence has ambitions to expand its operations across all Nordic markets, presenting a significant opportunity for rapid growth and establishing a strong market position,” said Kronen. He added that the new company has ambitions to build a position across the Nordic region. 

The establishment of Telenor Cyberdefence involves the transfer of approximately 50 security personnel from Telenor Norway to the new company. The company will also assume responsibility for Telenor Norway’s existing SOC customers, resulting in Telenor Cyberdefence commencing operations with a customer base of around 70 Norwegian businesses. 

This Nordic expansion follows a recent strengthening of the internal security environment within Telenor Norway. The incumbent owns and operates critical infrastructure, and as a result, it has over the years established a robust security environment. 

Considering the evolving security landscape and the increasing prevalence of cyber-attacks, Telenor has further strengthened this environment through the establishment of a new and dedicated internal Cyber Security Operation Centre (CSOC). This center will focus on Telenor Norway’s extensive and intricate IT and telecom infrastructure. 

iliad opens ITrust’s new head office in Toulouse 

iliad Group’s B2B subsidiary specialising in cybersecurity ITrust inaugurated its new head office in Labège, on the outskirts of Toulouse, at the heart of the new Enova innovation hub. In opening this new head office, the Group has installed its cyber center of expertise in Occitanie, in a move that it said demonstrates its aim of building a major industrial group specialised in data to serve businesses and public authorities.  

Acquired by the iliad Group in April 2023, ITrust has been working since then with Free Pro on bringing cybersecurity within the reach of all businesses and organizations through an offer dedicated to SMEs. This work led to the creation of Cyber XPR, a solution which is currently being taken up by two SMEs every day and has won 650 new customers over the past year. ITrust now has a total of 1,200 customers. 

The inauguration of ITrust’s new head office in Labège means that the Group’s cyber HQ is now firmly rooted in the Occitanie/Midi-Pyrénées region. This cyber centre of expertise brings together the wide range of – often long-standing – IT security skills from the Group’s various B2B and B2C entities. More than 100 people from Free Pro, Scaleway and ITrust are now working together daily in Labège, and around 40 new hires are in the pipeline for between now and the end of the year. 

The Group wants to draw on the capabilities of ITrust and ifuse with expertise from Free in France and Play in Poland to secure its cloud services, backed by a platform of data centers based throughout Europe in its Opcore subsidiary. 

 

Africa Data Centres secures $109.6m to expand  

Simon Dux
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0
Africa Data Centres secures $109.6m to expand  

The Cassava Technologies group will use the funds to increase its capacity in South Africa

Cassava Technologies subsidiary Africa Data Centres (ADC) has secured ZAR 2 billion ($109.6 million) funding, arranged by RMB, o expand data centre capacity and meet the growing demand for cloud computing services in South Africa. The operator already has nine data centres in six countries – South Africa, Kenya, Togo, Rwanda, Ghana and Nigeria – and an IT capacity of 54 MW. 

“This funding is a significant milestone in the growth of Africa Data Centres,” said Cassava Technologies president and Group CEO Hardy Pemhiwa. “It underscores our commitment to growth and our confidence in the future of the South African data centre market. The additional funding will allow us to support the digital transformation journeys of our customers. Data Centres are key to delivering on our vision of a digitally connected future that leaves no African behind”. 

The financing will enable Africa Data Centres to accelerate expand its hyperscale data centre capacity by an additional 20 MW. RMB acted as the coordinator, initial mandated lead arranger and bookrunner on the ZAR 2 billion facility.  

“The data centre space presents a significant digital infrastructure opportunity, as there is currently a large deficit of supply versus demand. With the exponential growth in demand for data centre capacity in Africa, we are proud to partner with Africa Data Centres as they facilitate digital transformation across the continent,” said RMB head of corporate client group Nana Phiri. “We see this funding as part of RMB’s mandate of financing the development of a sustainable digital economy in South Africa.” 

Building the channel 

In April Africa Data Centres launched its channel partner programme, ADC Channel to establish colocation and ecosystem partnerships with service providers and even the hyperscalers.  

“Our facilities are designed with the needs of hyperscale, wholesale & enterprise clients in mind, catering to their technical, operational and commercial requirements,” said ADC CFO Finhai Munzara. “Whether it’s greenfield projects, built-to-suit facilities, powered shells, dedicated halls, or hybrid colocation, we offer flexible, scalable and sustainable solutions that suit partners of every kind.” 

Partners will also enjoy seamless access to data centre experts, continuous commercial and technical support, and regular, complimentary training for their sales and product teams. ADC emphasised that partners face no financial risk, as participation in the channel programme requires no investment and entails no capex for building data centres. The data centre operator has also developed ADC Marketplace for partners to showcase their services and for customers to explore offerings, fostering collaboration and visibility within the African tech community.  

Neutral colo facilities will attract the attention of hyperscalers with AWS, Google and most recently Microsoft all announcing big investments in South Africa and the wider African continent. Resilient connectivity has also come into focus after several recent subsea cable failures that impacted many sub-Saharan nations’ nascent cloud services. ADC’s sister company Liquid Intelligent Technologies has already teamed up with Google to build an Africa-Australia cable for example in the quest to boost the continent’s resilience.  

Vi to issue $294m in shares to Nokia and Ericsson, sell towerco stake

Annie Turner
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0
Vi to issue $294m in shares to Nokia and Ericsson, sell towerco stake

The Indian operator, in which has Vodafone has an almost 23% holding, is under increasing pressure as it strives to pay off $42.17bn debt

Vodafone Idea (Vi) is to issue shares worth INR24.58 billion (€294.2 million) to network equipment vendors Ericsson and Nokia. In a statement, the Indian telco said it’s part of its strategy to clear net debt which stands at $42.17 billion. This includes INR2.03 trillion to the Indian government, INR 40.4 billion rupees to financial institutions and INR135 billion to equipment vendors and Indus Towers.

Vi said it will issue 1.66 billion shares to the two vendors. Nokia Solutions will receive 1.03 billion shares worth INR15.20 billion and 633 million shares to Ericsson India worth INR9.38 billion

This will give Nokia a 1.5% stake in Vi and Ericsson a 0.9% holding.

Efforts to steady the ship

Vodafone and Idea Cellular formed Vodafone Idea (Vi) in August 2018. Both were struggling after the huge and rapid success of Reliance Jio in the market, and with the Indian authorities’ apparently abrupt changes in the way they calculated tax, interest, penalties and shifted parameters.

In July 2020, Vi reported the biggest loss ever by an Indian firm and Vodafone threatened to shut up shop in India. As the stand-off between Vodafone and the authorities continued, the government took a majority shareholding of 35.8% in Vi in February 2023, converting outstanding liabilities into equity. The value of its holding had risen almost a third in the last year, as of May.

A follow-on public offer in April 2024 reduced the government’s shareholding to just under 25%, as Vi raised $2.16 billion through offering new shares. Vodafone Group is the second largest stakeholder with 22.87%.

Outstanding debt

Despite this, the financial fallout has continued for Vi, which is behind on payments to its tower and equipment vendors, owing them a total of INR135 billion.

Vi owes Indus Towers $1.2 billion. It is India’s biggest towerco and one of the largest in the world. Indus has almost 220,000 towers and offers power, space and green solutions for tower equipment.

Earlier this month, Indus’ Chair, Sunil Bharti Mittal, told Vi to pay up or lose access to the towers and lag even further on 5G deployment. India’s second biggest telecom firm, Bharti Airtel, is also a shareholder in Indus. Airtel is the flagship company within Bharti Enterprises, of which Mittal is founder and chair.

Vi is yet to launch a 5G network, but both its rivals, Bharti Airtel and Reliance Jio are in the throes of implementation.

Hard to sell Indus stake?

This is not the first time Mittal has threatened action if Vi didn’t pay what it owes. Vi first announced it would sell off its holding in Indus Towers in 2022 in response to Mittal’s demands for payment. Since then, it has reduced its stake from 28% to 21.5%, finding limited appetite among investors, including other operators, to buy its shares.

Vodafone’s owns its stake in Indus via various entities within the group, which was valued at $2.3 billion at the end of last week.

For the quarter that ended in March 2024, Indus’ net profit rose 20% to $221 million although revenue stayed flat at $860 million, according to regulatory filings.

The Reuters story cites unnamed stories and when it became public caused the share price of Vodafone Idea (Vi) in which Vodafone has a minority share to rise almost 5%, but it had little effect on Indus Towers.

Private equity giant KKR and Canadian fund CPPIB were investors in Indus, but sold their entire stakes in February.

INWIT looks to purchase 51% of Boldyn Networks Smart City Roma

Annie Turner
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0
INWIT looks to purchase 51% of Boldyn Networks Smart City Roma

Italy’s biggest towerco has options to buy the other 49% of Boldyn Networks unit that won the contract to build wholesale 5G infra across Italy’s capital just six months ago

INWIT has formalised an agreement giving it the option to buy an exclusive, controlling share (51%) of Boldyn Networks Smart City Roma. INWIT is Italy’s largest towerco, which also builds and operates infrastructure for distributed antenna systems (DAS) and small cells, aka neutral host networks.

Boldyn Networks Smart City Roma was awarded the concession for the Roma #5G project at the end of last year. The project was a joint venture between the neutral host infrastructure specialist, and Roma Capitale, the city’s administrative authority and provider of public services.

Scale and scope

The project’s scope is to build 5G infrastructure in the city, available to all mobile operators on a wholesale basis. The public-private partnership comes with a 25-year concession for the construction, management, operation and maintenance of an infrastructure. Overall, the envisages more than €€90 million investment in the infrastructure over the next five years, part of which will come from the public sector.

The project includes: coverage of all metro lines; installation of more than 2200 small-cells; public Wi-Fi with 850 access points in 100 squares; installation of 1800 IoT sensors; and 2000 5G CCTV cameras.

The plan is to provide connectivity in all of Rome’s busiest locations, increase public safety and enable smart services for the city’s 3 million residents and more than 15 million tourists annually. This number of visitors is expected to rise to 32 million next year due to Jubilee 2025.

The infrastructure is intended to enable a range of digital services offered by Roma Capitale.

Importance of the Italian market

Boldyn Networks said at the time it entered into the arrangement for Networks Smart City Roma that it would be working “with all industry players for the benefit of all citizens and visitors to Rome” and that the project “represents the importance of the Italian market for the expansion of Boldyn’s presence in Europe”.

So why is it bailing out six months later? We’ve asked the question and will update if and when we receive a response.

The new agreement with Boldyn includes an option in favour of INWIT to acquire the remaining shares, under certain conditions, and a right of sale in favour of Boldyn Networks Italia, subject to certain conditions.

These options for the purchase of the other 49% of Boldyn Networks Smart City Roma could be acted on after the official test (or ‘collaudo’) of the project.

Consistent with strategy

INWIT said the agreement is consistent with its 2024-2026 business plan and strategy which envisages investments in neutral host infrastructure to support the network plans of telecommunications operators. It expects growing demand from its operator customers for integrated digital infrastructure, macro-grid and micro-grid, outdoor and indoor. The latter is particularly in significant smart city projects.

If INWIT actions all the options, the transaction is expected to close in the third quarter of 2024. This is subject to approvals from the relevant authorities and “to termination and suspensive conditions in line with market practices”.

Rivals urge CMA to block merger of Vodafone and Three UK

Annie Turner
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0
Rivals urge CMA to block merger of Vodafone and Three UK

The competition authority has published the responses it solicited from third parties, including a 40-pager from BT arguing against it

The UK’s Competition and Markets Authority (CMA) has been urged by a number of parties with vested interests to block the proposed merger of Three UK and Vodafone. The two announced they were in talks to merge in 2022 then announced they had agreed terms for the deal in June 2023.

A major motivation is to achieve the greater scale they say they need to invest sufficiently in infrastructure, an argument that they also hope will find favour with regulators.

At the time of that announcement, they pledged that the merged entity would reach 99% of the UK’s population with its 5G standalone network. Also, that the combined business will invest £11 billion in the UK over 10 years which is expected to give customers up to a six-fold increase in average data speeds by 2034.

Third parties have their say

The proposed merger is in the second, deeper phase of the investigation by the CMA which includes wider consultation with the industry. It has just published the submissions it has received. The regulator is concerned that allowing the two to merge will ultimately raise prices for consumers and businesses, and reduce competition and choice.

The former state-owned incumbent BT is arguing in its submission that the merged entity would have a “disproportionate share of capacity and spectrum, unprecedented in UK and Western European mobile markets, which will substantially lessen competition and deter investment.”

Further, that it will inhibit BT’s ability to compete.

Emphasis in the wrong place?

Many critics of competition policy for telecoms in the UK and Europe, including Strand Consult, would argue that the focus on choice and prices to end users is wrongheaded. Rather the policy makers should also take into account operators being able to run sufficiently profitable businesses to invest in infrastructure for national and regional economies to compete better.

And adjacent to that, some national treasuries should not extract huge amounts of money from mobile operators off for spectrum licences.

The CMA is schedule to publish an initial ruling by 12 October.

United Internet hits pause on Tele Columbus investment 

Simon Dux
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United Internet hits pause on Tele Columbus investment 

United Internet has opted out of further investments in the cableco following a significant dilution of its stake in March

Germany’s United Internet – which owns 1&1 – announced it has decided not to make further investments in Kublai GmbH, which holds around 95% of second-largest cable network operator Tele Columbus – which sells services under the PŸUR brand. In November, Tele Columbus looked set to gain a new €200m cash injection, plus a debt maturity extension until 2028, initially from United and Morgan Stanley, which added to around €100m of funds previously committed. 

In its interim statement Q1 2024, United Internet reported that Kublai had conducted a capital increase in the first quarter of 2024 to provide Tele Columbus with equity, in which United Internet did not participate in the end. Hilbert Management, an indirect subsidiary of Morgan Stanley Infrastructure (MSI), subscribed to the full amount of the capital increase totaling €300 million. This resulted in a dilution of United Internet’s stake in Kublai to around 5% (previously 40%) and a subsequent non-cash impairment loss of approximately €185 million for United. 

United Internet had the option until today, to increase its stake back to 40% by acquiring shares from MSI for €120 million. However, United instead released a market statement claiming it is convinced that the valuation of Tele Columbus AG on which the capital increase is based is significantly too low and that the dilution of the shares held by United Internet is therefore too far-reaching. 

“However, its majority of votes at the shareholders’ meeting enabled MSI to conduct the capital increase on the basis of a valuation determined by MSI,” the company stated. “United Internet will now initiate the contractually stipulated anti-dilution proceedings and arrange for an arbitration court to review MSI’s valuation. If the court follows United Internet’s opinion based on a valuation commissioned prior to the capital increase, United Internet is entitled to a compensation amount of approximately €300 million. 

“The decision not to invest further in Kublai is due to a disagreement between MSI and United Internet regarding Kublai’s future financing,” added the company.  

Tele Columbus had to raise 

Without that raise, ratings agency Fitch had already warned last year that Tele Columbus’s fibre strategy to spend €2bn over 2021-2030 to upgrade its HFC infrastructure to fibre “significantly exceeds” the operator’s current organic EBITDA generation. In March, Fitch downgraded Tele Columbus and announced it would no longer cover the company. 

In its parting research note, Fitch said amendments to the German telecommunication law are likely to put pressure on bulk TV revenue from mass provision of basic TV programming. Under the amended law, which will come into effect in mid-2024, housing associations will no longer be able to pass on TV fees to end-users. Revenue from analogue TV accounted for 37% of Tele Columbus’s total revenue in 2022.  

Earlier this month, Tele Columbus began disconnecting TV households with collective housing association contracts ahead of the change in the country’s law that will see this practice banned. The operator said it would deactivate homes that fail to switch to individual contracts to avoid unauthorized use of the signal when the contracts become null and void on 1 July – risking a large churn event. 

As a result, Fitch believes the execution risk for the company remains high. “In contrast to many of its larger cable peers, Tele Columbus’s footprint extends to only a few regions in Germany, with access to around 9% of German households. It has a significantly smaller operational scale than most nationwide cable peers who benefit from larger footprints and sustained strong FCF,” stated Fitch.  

UK altnet Netomnia to merge with Brsk 

Simon Dux
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0
UK altnet Netomnia to merge with Brsk 

UK fibre altnet market takes continues consolidating as the merged entity is set to become one of the largest challengers to Openreach

Two of the UK’s largest fibre altnets Netomnia (Youfibre) and Brsk have announced plans to merge – a long awaited move first being speculated on in April this year. The consolidation of the fibre market is widely expected given that analysts have found that two or more FTTP networks now covered 7m UK premises in Q1 2024 and the overbuild only results in one outcome.  

The mergers follows similar moves by CityFibre announcing it would acquire Lit Fibre and Virgin Media O2 doing the same to Upp last September. According to the FT (subscription), the deal will involve Brsk moving under the umbrella of Netomnia’s parent holding company, Substantial Group, but it will be run as a separate entity with Giorgio Iovino, Brsk’s chief executive, staying put for now.  

Importantly the announcement revealed the merged company will form a new wholesale arm that will be tasked with acquiring other altnets. Last month, consultancy firm Eight Advisory highlighted the problem for UK altnets which are shifting from building networks to filling them with end customers and a key part of the problem to why altnets lag Openreach in takeup is that the UK wholesale model is broken.  

 The UK consumer broadband market is highly concentrated on five big ISPs, four of which buy wholesale broadband from Openreach. One of the issues identified by the consultancy is that the proliferation of multiple small networks makes it costly and complex for the larger ISPs to work with altnets. Netomnia/Brsk will improve its ability to be more effective in doing wholesale deals. Timing also comes into this because Virgin Media O2 has promised to open up its network to wholesale in 2025 so the altnets are already jockeying for survival.  

Jeremy Chelot, chief executive of Substantial, Netomnia and ISP  YouFibre will lead the merged entity. “By merging our network expertise and resources, we are creating a powerhouse to deliver an unparalleled internet experience for our customers, driving innovation and further consolidation among altnets,” he said. “The additional capital from our investors and support from our lenders is a powerful endorsement of our vision and ability to execute at the highest level… Today we become the second largest altnet in the UK with 1.5m premises ready for service and a plan to deliver 3m by the end of 2025.” 

Brsk CEO Giorgio Iovino said: “The merger is a testament to our shared entrepreneurial spirit and experienced teams that can deliver even more. Together, we are set to deliver a fibre network that is not only fast and reliable but also futureproof, ensuring our customers benefit today and tomorrow. Our joint platform will be where the most powerful internet lives.” 

The full-fibre services provided by the two companies will be available to 1.5m premises with 140,000 customers connected already. The group plans to use up to £900m of debt to reach 3m premises and about 500,000 customers by the end of 2025. 

In March, Netomnia successfully completed its latest fundraise of £230 million in committed debt financing from a group of six bank lenders, comprised of HSBC UK, ING, NIBC, RBC, Standard Chartered, and UKIB. Its current backers include DigitalBridge and Soho Capital, plus Advencap which is also an investor in Brsk. Happily for investors, the two have not overbuilt each other’s network.  

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