What’s up with… Casa Systems, net neutrality, Telecom Italia

  • Capex crunch bites Casa Systems
  • FCC heralds the return of US net neutrality rules
  • Telecom Italia’s €1bn windfall

In today’s industry news roundup: Casa Systems is selling parts of its portfolio through a bankruptcy court process in order to help shore up its finances; the FCC is set to vote later this month on the reintroduction of net neutrality rules in the US; Telecom Italia is expecting to recoup €1bn in licence fees following the completion of a 15-year legal dispute; and more!

Casa Systems has fallen foul of the network operator sector capex crunch and higher interest rates: The vendor has entered into court-supervised Chapter 11 (bankruptcy protection) process to manage the sale of its key product lines. The company has reached an agreement to sell its cable network technology business to fixed access network technology specialist Vecima Networks as part of a “stalking horse” divestment process that will see the bankruptcy court solicit other bids ahead of a planned auction in mid-May. In addition, Casa has agreed to sell its 5G mobile core and radio access network (RAN) assets to Lumine Group for an undisclosed sum and is hoping to complete that transaction by the end of April. Michael Glickman, who took over as the vendor’s CEO last September, stated: “Like many in our sector, Casa has experienced a significant decline in revenue and profits due in large part to industry-wide downward capital investment and procurement trends in the cable and telco markets. We also have incurred significant investments to bring our 5G mobile core and RAN products to market. We believe the sales of our businesses through a Chapter 11 process will maximise value, preserve jobs and minimise disruption for our customers.” Once the asset sales are completed, the vendor’s business will be wound down. The company’s industrial IoT and home networking product lines are part of the company’s Netcomm Wireless unit, which began a voluntary administration process last month in Australia. Casa’s sales have been shrinking for a few years: For the nine months to the end of September 2023, the company reported revenues of $165.4m, down 18% from the same period a year earlier, and a net loss of $108.4m, almost half of which was due to interest and debt management costs. The company’s decline will come as a concern to many others in the industry, as Casa has more than 470 customers, including big names such as AT&T, Liberty Global, Lumen, Rogers Communications, Verizon and Vodafone, and more than 800 staff. Lumine Group, which has been building up a broad portfolio of communications networking software systems as a result of multiple acquisitions for several years, has just completed the acquisition of Nokia’s device management and service management platform businesses which comes with about 500 staff – that deal was announced in December 2023.

The US Federal Communications Commission (FCC) will vote on a proposal to restore net neutrality rules that were removed in 2017 during Donald Trump’s administration. The announcement regarding the vote, which will take place on 25 April, was made by FCC’s chair, Jessica Rosenworcel, who has been a strong advocate for its reinstatement. According to her proposal, mobile and fixed broadband services would be considered as an essential resource under the oversight of FCC. Net neutrality is the notion that ISPs should treat all data equally, regardless of what it is or where it is going, therefore removing the option for broadband providers to block, slow down or create “pay-to-play internet fast lanes”. “The pandemic proved once and for all that broadband is essential,” commented Rosenworcel. “After the prior administration abdicated authority over broadband services, the FCC has been handcuffed from acting to fully secure broadband networks, protect consumer data, and ensure the internet remains fast, open, and fair. A return to the FCC’s overwhelmingly popular and court-approved standard of net neutrality will allow the agency to serve once again as a strong consumer advocate of an open internet”, she added. The inclusion of net neutrality legislation on FCC’s agenda has been made possible after the commission filled its fifth seat after around two and a half years, appointing Anna Gomez from the Democratic Party as a commissioner in September 2023 – see Gomez fills FCC’s fifth seat. FCC commissioner and Republican Brendan Carr opposed the step, claiming restoration of net neutrality is set to “hit Americans in their pocketbooks” and would “hold broadband builders back”. Carr added that the plan would result in higher costs for broadband builders and will also “stifle innovative, pro-consumer like 5G network slicing”. According to the commissioner, the return of net neutrality, as per the plan of President Joe Biden, will act as “a big gift to big tech” because in his words, these rules exempt these players from heavy regulation while imposing such on their competitors. The return of the rules will also not be very popular with network operators – expect this move to result in some public reactions from the major telcos, cable operators and their associated lobby groups.

Telecom Italia (TIM) says it’s about to start the process of recouping €1bn in licence fees after the Rome Court of Appeal ruled in its favour following a 15-year legal dispute. “The amount due is equal to the original licence fee, just over €500m, plus revaluation and accrued interest for a total of approximately €1bn. The ruling is immediately enforceable, and TIM will immediately start procedures to recover the amount in question,” the operator noted in this statement. It’s a rare piece of good news for the telco, which is in the process of selling multiple assets in order to reduce its debt pile. But, this plan is facing challenges during its forthcoming shareholders’ meeting as some investors have proposed alternative board members, and even a new CEO, to the ones that the Italian national telco itself nominated previously, as we reported earlier this week.

As expected, the UK’s Competition and Markets Authority (CMA) has referred the planned merger of Vodafone UK and Three UK “for an in-depth investigation,” the watchdog confirmed on its website. The CMA noted last month that a Phase 2 review was required – see Vodafone/Three UK merger on a ‘knife-edge’.

Beleaguered Indian telco Vodafone Idea has been given the go-ahead by its shareholders to draw up plans to issue new stock valued at 200bn rupees ($2.4bn): The move will be discussed during a board meeting to be held on 6 April, reported Live Mint. The move is part of the operator’s plans to raise $5.4bn to fund its network and business plans, as reported in late February

Still with Vodafone Idea… The operator has teamed up with French firm CareGame to launch a mobile cloud gaming service called Cloud Play. “The gaming industry has witnessed a massive growth in India on the back of mobile-first phenomenon. Industry reports suggest gaming is likely to become a billion-dollar market in the country and cloud gaming will be the next frontier in the world of gaming,” stated the telco in this announcement.

It’s a time for reflection for Rogers and Shaw. One year since completing the merger of their operations, the two Canadian telcos bragged about their achievements during the past year, including expanding 5G with new coverage that spans 20,000 square kilometres and reaching 90,000 more homes with high-speed internet. Rogers further claimed that the combined entity has continued to invest in innovative solutions, such as satellite-to-mobile and wildfire detection technology. “We increased competition and choice by introducing bundled internet and mobile phone plans in the West. In the past year alone, wireless prices in Canada have come down 26% while other goods and services have gone up with inflation”, the operator stated. It also touted expansion of its internet programme aimed at low-income users, as well as investments made into digital infrastructure and communities, contributing “billions in GDP across the West” and creating new jobs. Read more.

- The staff, TelecomTV

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