What’s up with… KPN, Verizon, SES and Intelsat

  • KPN to splash €200m on Dutch MVNO
  • Verizon claims slicing success
  • SES and Intelsat end their M&A engagement

In today’s industry news roundup: Dutch national operator KPN is hoping to snap up Youfone to give it a strong position in the budget mobile and broadband service sector; Verizon says it has successfully tested end-to-end 5G slicing services; satellite giants SES and Intelsat have ended their merger talks; and much more!  

KPN is clearly in M&A mode! Having announced the acquisition of fibre access network assets from Primevest Venture Capital earlier this week, it is now splashing out €200m to acquire the Dutch operations of budget service provider Youfone, an MVNO (mobile virtual network operator) and ISP that has 540,000 mobile and fixed broadband customers in the Netherlands, offering its services over KPN’s infrastructure (so the Dutch national operator knows it well). “With this acquisition, KPN materially strengthens its position in the mobile and broadband markets, especially in the faster-growing no-frills segments,” noted KPN in its announcement about the deal. “KPN and Youfone expect to achieve further growth in the coming years by continuing the efficient operating model that Youfone has been able to successfully implement. The Youfone organisation will continue to operate independently within KPN to ensure that current and future Youfone customers continue to be served in the way they are used to,” added KPN. But while a deal has been agreed, it is far from sealed: The move needs to be approved by the competition authorities, which will look closely at just how much additional market power it would give KPN, and you can be sure that VodafoneZiggo and T-Mobile Netherlands will be raising objections. 

The slicing on the cake… US mega-operator Verizon claims to have successfully demonstrated network slicing over a commercial 5G network (its own network, natch – there’s no point in having one at home and then demonstrating your slicing skills on someone else’s equipment and systems). Commenting on the experiment, Adam Koeppe, senior vice president of technology planning at the telco, said: “Verizon recently established connections and passed data over multiple network slices in a completely commercial 5G environment. Matching network performance characteristics to specific application requirements, network slicing promises differentiated customer experiences to efficiently provide our customers with the type of service they need to complete the task they want to complete on our network and provide them an exceptional experience. The field demonstration shows initial capabilities of end-to-end, dynamic network resource provisioning on a 5G network.” In essence, the demo registered “a commercially available 5G smartphone” (Verizon is coy about the brand used) to multiple network slices and passed data, end-to-end, across the entire network via commercially available virtualised and non-virtualised RAN kit and Verizon’s own multi-vendor standalone core. The telco noted: “The test successfully accessed network slicing capabilities from the device and validated the ability for the device chipset, operating system, application, radio network base station, and the core of the network to work in harmony to demonstrate a full end-to-end path for data to travel on a virtual network slice.” In due course, Verizon added, network slicing will be made available to its customers as its cloud-native, containerised standalone core continues to evolve. The question, though, is “will it be better than sliced bread?”

Plans for a $10bn merger of satellite giants SES and Intelsat have been abandoned, with SES simply stating that “discussions regarding a possible combination with Intelsat have ceased.” The two companies confirmed in late March that they were in talks to create a single satellite operator with annual revenues of about $4bn, but said all along that there was no certainty that a merger agreement would be reached. SES shareholders appear relieved at the news, as the company’s stock is trading up by more than 5% at €5.10 on the Euronext exchange. Intelsat has been a private company since it emerged from Chapter 11 bankruptcy protection in February 2022. 

UK operator BT has struck a multimillion-pound deal (of an undisclosed amount) with the British Army, which will see it deliver a managed Wi-Fi service across 162 new military sites. For the next five years, BT will provide its service, called MOD Wi-Fi, across all buildings at the new sites, including offices, hangars, training facilities, technical accommodation and workshops, as well as recreational spaces. The telco noted that the move serves a “huge digital infrastructure boost, with a managed firewall built-in for enhanced security”. It is also believed it will pave the way for the rollout of “smart bases” across the UK, which is set to begin in the next 12 months, improving the digital experience for military personnel while “maximising building occupancy for more efficient energy consumption”. In the future, the service could expand to other military forces of the UK, including the Royal Air Force (RAF) and Royal Navy. BT has also been managing 200 sites of the UK Ministry of Defence (MoD) in the UK, Cyprus and Germany. Read more.

Already embroiled in a long-running divestiture saga revolving around its NetCo (fixed access and international networks) division, Telecom Italia (TIM) is also revisiting its option to sell a minority stake in the enterprise services unit of its ServCo division in order to raise the cash it needs to reduce its €25bn-plus debt pile. Early conversations with some potential suitors, including private equity firm CVC Capital, were held last year, and now TIM’s CEO Pietro Labriola is testing the waters again to see if there are any willing takers for a stake in a growing unit that is valued at around €6bn and offers cloud, datacentre and security services to business users, according to Bloomberg.  

Former Vodafone CEO, Nick Read, has joined digital infrastructure firm EXA Infrastructure as its new chairperson. In its announcement, the company stated that Read and his vast telecoms industry experience will support its strategy to become “the undisputed leader in the pan-European and trans-Atlantic datacentre-to-datacentre connectivity business.” He is also expected to help with the network expansion plans of EXA, which describes itself as “the largest dedicated digital infrastructure platform connecting Europe and North America”, with a fibre network of 125,000 km spanning 34 countries. EXA Infrastructure’s CEO, Martijn Blanken, said Read is “a titan in our industry,” adding “I am convinced that his extensive leadership and technology experience will be invaluable to execute our ambitious growth strategy.” On his appointment, Read noted that he is joining EXA “at a pivotal time for the telecoms industry where we are seeing significant investment in digital infrastructure and market growth.” Read resigned from Vodafone’s top-job at the end of 2022 over pressure from investors amid slow transformation of the telco’s international portfolio and a net debt of €45.5bn – see Vodafone CEO Nick Read quits as investor pressure takes its toll. Meanwhile, Exa has been steadily growing its presence, especially in eastern Europe, which its CEO described in a TelecomTV interview as a region that is “very high on the list of priorities” – see How EXA Infrastructure rises to growing data demand challenges. Its most recent move involved the acquisition of Croatian telco Unitel.

In Indonesia a digital avatar by the name of Nadira is now “reading” the news on television. The management of the popular and influential channel tvOne called the avatar a “metahuman”. Indeed, there are three such AI-supported, ostensibly female, quasi-hominids currently “working” for the channel, with more planned. Nadira’s un-nuanced blank-faced expression remains rigidly fixed, regardless of whether the news she is reading is good, bad or indifferent. Indeed, she is, by her very nature (or, more probably, lack of it), utterly indifferent to whatever words she is programmed to speak, because she is not real. Her required very-well-rendered hijab and other clothing always remain absolutely pristine, as does what is visible of her elaborate coiffure. What’s more, she can speak perfectly modulated received pronunciation (RP) English, generic American English and flawless Bahasa Indonesian. The two other avatars in the metahuman conglomerate have been “crafted” to represent a specific Indonesian demographic, hence the Chinese-Indonesian-looking Sasya and Bhoomi, who/which is described as a curly-haired East Indonesian. They speak Chinese and a variety of local dialects, including Javanese and Sundanese. Nadira itself is modelled on a flesh-and-blood female human newsreader, Fahada Indi, who has been a news anchor at tvOne for the past four years. Her avatar speaks with Fahada Indi’s voice and mimics her movements. According to the news site Rest of World, Fahada Indi regards having an avatar modelled directly on her human characteristics as “an honour” rather than weirdness. Increasingly, the real woman reports live from across the length and breadth of Indonesia while her avatar sits behind a virtual desk in a studio speaking in her voice. Unfortunately, the AI-rendered metahuman cannot interact either with her real-life counterpart or with studio guests, which rather limits the gimmick, to say the least. The CEO of tvOne, Taufan Eko Nugroho, accepts and admits that the avatars are far from perfect and are conspicuously lacking aspects of “the human touch”, such as the all-important meaningful eye-contact and natural empathy that human newsreaders project and avatars just don’t. Nonetheless, metahumans are now a small but significant and growing part of daily life in Indonesia, with avatars based on singers and entertainers now positioned as important brand “influencers” in lifestyle advertising. Meanwhile, Nugroho of tvOne assured Rest of World that the station’s avatars have not replaced any human staff at the channel and there are no plans for them to do so. He didn’t add the word “yet”, but the future for all mankind is more of a creeping dystopia with every passing day. (PS. As you can probably tell, this was written by a human journalist, not some form of AI, unless you count the gratuitous input from my robot vacuum cleaner…). 

The European Commission has approved the creation of the economy of things joint venture, announced in early May, that is being set up by Vodafone Group and Sumitomo. Vodafone, which will hold an 80% stake in the venture, has already developed an economy of things platform, called Digital Asset Broker, which it will transfer into the new business, along with related intellectual property, contracts, technology and software. Sumitomo will invest in the new business and work with Vodafone to attract additional investors, partners and customers. For more on why Vodafone believes there’s a great business opportunity in the economy of things, see Is the economy of things a new telco revenue opportunity? Vodafone thinks so…

Deutsche Telekom has brokered 5G roaming agreements with more than 120 telcos in 60 countries, including France, Spain, Italy, Switzerland, Canada and Turkey. Read more.

- The staff, TelecomTV