- Ericsson fesses up to ‘serious breaches’ of compliance and ethics in Iraq
- TIM (Telecom Italia) is mulling a restructuring plan that would cut 8,000 jobs
- Millicom is the latest operator to line up a towers spin-off
A smoking gun and a share price nosedive for Ericsson, talk of potential major job cuts at TIM (Telecom Italia) and a new business plan that includes a towers spin-off for Millicom are at the front of today’s news queue.
Ericsson has further updated on a renewed probe into its historical business in Iraq, which has been prompting various enquiries from Swedish and international media in recent weeks, and it seems those questions are making the vendor’s management and compliance team wonder if they know exactly what their staff were up to in the Middle East country. “We continue to invest significantly to understand these matters fully,” notes Ericsson in a statement issued on Tuesday. “As in all investigations we cannot exclude the possibility that we may not have found all the underlying facts. Ericsson takes any allegation of impropriety extremely seriously and welcomes any new facts brought to light as a result. This allows us to sharpen our processes further and target any wrongdoing. We reiterate our commitment to investigate and take action as appropriate to address any new information, in line with our Code of Business Ethics and under the terms of our 2019 Deferred Prosecution Agreement (DPA), with US authorities.” Of most concern is that the vendor’s investigation has uncovered “serious breaches” of its compliance rules and its ethics code, including all manner of dodgy payments, some of which might have found their way into ISIS pockets, and attempts to obstruct the investigation, though the vendor notes the “investigation could not identify that any Ericsson employee was directly involved in financing terrorist organizations.” Investors are now getting very nervous: Ericsson’s share price is down by 14.4% today to SEK99.11 on the Stockholm exchange, wiping out the recent gains that came with positive operational and financial progress during 2021. This is starting to look more and more like a smoking gun for Ericsson. For the full statement from Ericsson, see this announcement.
Italy’s national operator TIM (Telecom Italia) is considering a restructuring plan that could see a headcount reduction of 8,000 staff in Italy, about 20% of the telco’s domestic workforce, according to a Bloomberg report. The potential job cuts, much of which would come through voluntary redundancy schemes, would be part of a program to revitalise the operator under new CEO Pietro Labriola, who is tasked with coming up with a business strategy that will help TIM remain independent: It is currently sitting on a €10 billion takeover offer from private equity firm KKR. Labriola is looking at lots of ways to revive the operator, which ended 2021 with a series of profit warnings. Job cuts would not be popular with the Italian government, but neither is the acquisition of the natioal telecoms operator by a private equity firm. According to TIM, the new CEO has been sharing ideas with the operator’s board about how it should focus more on servicing the needs of large enterprise customers and on further growing its business in Brazil. The operator has also announced it has appointed a new CFO, Adrian Calaza, to help develop the new business strategy. Read more.
Millicom, the operator that now operates mostly in Central and Latin America under the brand Tigo, is the latest company to unveil plans to spin out its mobile towers into a separate entity as part of a new three-year strategy. About 10,000 towers will be included in the assets of the planned independent towers unit, which will seek to attract external investors. The creation of the towers company is expected to take place in the next 12 to 18 months. Read more.
The O-RAN Alliance says it has 22 demos of Open RAN capabilities prepared for the upcoming MWC22 event in Barcelona, plus a further 24 planned for the Alliance’s virtual exhibition. Among the companies involved in the demos at MWC22 include Ericsson, Intel, Juniper Networks, Mavenir, NEC, NTT DOCOMO, Parallel Wireless, Qualcomm, Rakuten Symphony, STL and many more. Read more.
- The staff, TelecomTV
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