What’s up with… Swisscom, China Telecom, internet access in Africa

  • Swisscom secures Vodafone Italia deal for €8bn
  • China Telecom buys into quantum-safe networking
  • Cable cuts off the west coast of Africa disrupt internet access services

In today’s industry news roundup: Swisscom secures Italian expansion deal; China Telecom takes major stake in quantum-secure networking specialist; subsea cable cuts off the west coast of Africa are affecting the continent’s internet access; and much more!

As expected, Swisscom has sealed a deal to significantly expand its non-domestic operations with the €8bn cash purchase of Vodafone Italia: The prospect of a deal first emerged on 28 February, but now a binding agreement between the parties has been struck. The deal will come as a relief to the Vodafone Group management under CEO Margherita Della Valle as it enables the operator to focus on its growth markets and spend less time wondering how to extricate itself from underperforming countries: What this means for Vodafone is covered in our lead news article today. For Swisscom, though, this marks a new chapter in its strategy. While it has been active in Italy for more than 15 years through its subsidiary Fastweb, it has always been a relative minnow focused on the development of a fixed broadband network and associated services. But once the Vodafone Italia deal is complete, due in the first quarter of 2025, it will become the second-largest service provider in Italy (behind only Telecom Italia), with almost 21 million mobile customers, more than 6 million fixed broadband customers (based on the most recent available data), annual sales of more than €7bn and with adjusted earnings of more than €2bn. “Swisscom has been operating successfully in Italy since the acquisition of Fastweb in 2007. Over this period, we have built a strong track record of investment and profitable growth in Italy,” stated Swisscom CEO Christoph Aeschlimann. “The industrial logic of this merger is very strong. Fastweb and Vodafone Italia are an ideal fit to create high added value for all stakeholders. As a result, private and business customers will benefit from the most comprehensive offer. Swisscom will also be strengthened as a whole, allowing us to continue making significant investments in the Swiss and Italian market.” The news was greeted favourably by investors, as Swisscom’s share price gained almost 5% in value to reach 528.4 Swiss francs on the Swiss stock exchange. For more details about the deal and the savings that Swisscom believes it can make, see this extensive announcement.

China Telecom is to take a major stake in QuantumCTek, a Chinese developer of quantum-secure networking technology, by agreeing to acquire 24.1 million new shares in the company for about $265m. Once the translation is completed, China Telecom Quantum Information Technology Group will hold a 23.08% stake in QuantumCTek, which was spun out of the quantum information research team at the University of Science and Technology of China  more than a decade ago, reports Caixin Global. In addition, China Telecom Quantum struck an agreement with the company’s current major shareholder, USTC Holdings, that will result in China Telecom holding 41.36% of the company’s voting rights. QuantumCTek provides quantum secure communication network equipment, application products, core components and network management software that can be used to build quantum-secure metro, intercity and even international quantum-secure networks. Quantum-secure networking is still in its infancy but is set to become a significant focus of R&D in the telecom sector in the latter half of this decade.

Internet access in multiple countries in sub-Saharan Africa has been impacted by subsea cable disruption off the west coast of the continent near Côte d'Ivoire, according to multiple reports, including this one from the BBC. It’s not yet clear which submarine cables have been affected or what the cause of the problems might be, but pan-African operator MTN noted that its subsidiary Bayobab (formerly MTN GlobalConnect) has acknowledged “ongoing disruptions affecting connectivity services in several West African countries, due to breaks in multiple major undersea cables. Recognising the critical importance of consistent internet and communication services, we are fully committed to swiftly addressing these disruptions. To mitigate the impact on our customers in the affected countries, our operations are actively working to reroute traffic through alternative network paths and engaging with our consortium partners to expedite the repair process for the damaged cables. Leveraging our robust and resilient network infrastructure, we aim to minimise service interruptions and maintain connectivity.” While the issues persist, the race is on to find alternative routes to the rest of the world, a move made more difficult currently by the cable cuts and service disruption in the Red Sea that is already having an impact on internet access in African markets. Angola Cables, for example, is positioning itself as a data service provider that can offer an alternative route to Europe and North America for network operators and other companies that need international connectivity. “Whilst the cause of the reported cable breaks off the Ivory Coast of West Africa has not yet been confirmed, Angola Cables is ensuring that the impact on Angola and other African countries is being minimised by redirecting international data and traffic to the SACS [South Atlantic Cable System] cable, which connects Angola directly to Brazil and from there to the United States and Europe,” the company noted in an email alert. “Angola Cables has network backup and restoration solutions available through cables that have not been affected by the faults off the Ivory Coast. Our technical team is currently diligently working with industry partners to stabilise international connectivity and to ensure that we can provide support and guarantee the stability of services to African network operators and entities that need it.”

Neville Ray, the former president of technology at T-Mobile US who retired after 23 years at the telco, has landed a new role as a director at American Tower. Ray, who left the US operator in 2023, is expected to bring in “a fantastic contribution” to the cellular tower provider’s board, as “we execute on our core principles, and drive increasing shareholder returns, strong, sustainable growth and a unique value proposition for all our stakeholders,” said Steve Vondran, president and CEO of American Tower. At the start of 2024, Ray was also elected as a member of the board of directors at digital media and internet company Ziff Davis. He is also on the US President’s National Security Telecommunications Advisory Committee (NSTAC).

It seems the Australian telecoms industry is on a slow but steady growth path and is well enough placed to survive and surmount any foreseeable problems, despite the fact that the Lucky Country is facing a major economic downturn. New government figures show the Australian economy grew by a mere 0.2% in the fourth quarter of 2023. Thus, Australia is already in a “per capita recession”, with the economy being propped up by mining and migration. There are hopes for a “soft landing” thanks to tax cuts and wage increases. Meanwhile, the telecom sector is doing better than the national economy, but not by a vast amount. The newly published Australia Telecoms Industry Report 2024-2031 from Idem Est Research shows that during this year and until the end of 2031 the sector is set to grow at a steady pace and generate revenues of AUS$45bn (US$29.5bn) by 2031. Not a stellar figure but better than a poke in the eye with a burnt stick as they say in Wee Waa, New South Wales, Bong Bong, Queensland, and elsewhere throughout the land of Oz. What’s more, by 2031, 5G and 6G subscribers will account for 90% of all mobile subscribers in Australia. In 2023, things changed in Australian telecoms with mobile subscriber numbers continuing to grow strongly while the fixed broadband market stalled with the NBN (National Broadband Network – the wholesale access data network that spans the enormous country) losing customers for the first time. The total number of mobile subscriptions is forecast to grow by an average of 2.3% between now and 2031, whilst uptake by fixed broadband subscribers will increase by an average rate of just 1.4% during the same period. Traditionally, Telstra has dominated the telecom service sector with TPG Telecom, Optus, and Vocus Group making up most of the remaining market. However, change is underway: Telstra’s share of telecom revenues has been in decline for the past five years.

Flexing their combined muscles following the merger of their respective operations in Indonesia, Ooredoo Group and CK Hutchison have unveiled plans to jointly explore opportunities in areas such as roaming, procurement, and the development of advanced internet of things (IoT) and 5G solutions. In terms of roaming, the two players will aim to increase traffic on their networks “while prioritising quality of service” by improving response times and addressing any issues “promptly”. For procurement, the pair will work on optimising operations to drive business efficiency. And in terms of technological developments, they will examine new practical applications of IoT and 5G technology to allow them to diversify their customer offerings with “cutting-edge technologies tailored to meet evolving needs”. Read more.

Telenor Group has expanded its partnership with Cisco to include efforts to improve digital skills and environmental sustainability, and to jointly offer managed services for defence and public safety. They will continue to co-invest in digital skills and raising awareness of cybersecurity for the younger generations and small and medium-sized enterprises (SMEs) in emerging markets.The pair also aim to “engage and elevate green digital skills in strategic markets”, although Telenor’s statement on the move does not provide specific details of the plan or define what it means by ‘green digital skills’. Telenor and Cisco also plan to work together to use technology to improve power efficiency and reduce carbon footprints. Beyond sustainability-related initiatives, the pair will introduce security solutions that are “easily consumable and available to the mass-market to ensure everyone – consumer or business – has access to secure and reliable connectivity”. They will accelerate and simplify the management of cloud connectivity by tailoring it to the needs of businesses, and aim to offer managed services to the defence and public safety sectors. To back the new initiatives, each of the companies has appointed senior level executives in the areas of sustainability, product development and cybersecurity. The relationship between Telenor and Cisco dates back to 2017 when they entered into a joint venture called Working Group Two (WG2), before it was fully acquired by Cisco last year.

The University of Surrey in England has been chosen to lead an £8m initiative to train telecoms workforces in secure AI-era networks. As part of a project funded by the UK government’s Engineering and Physical Sciences Research Council (EPSRC), the university’s 5G/6G Innovation Centre (which is considered to be Britain’s largest telecoms innovation research centre) will lead a new initiative, called the Centre for Doctoral Training in Future Open Secure Networks (FORT). The plan is for more than 50 postgraduate researchers to be trained over the next eight years, to become experts in wireless communications, cybersecurity, networking and AI. According to the University of Surrey, the project will also help students to research “new and better ways to build communication networks that are safe, reliable, and ready for the future”. Additionally, the educational institution claimed, “FORT is committed to conducting responsible, ethical research in cybersecurity, AI technologies, and future networks, with a strong societal focus”. The initiative is in collaboration with the Centre for Secure Information Technologies at the Queen’s University Belfast’s (QUB). More than 21 industry partners will also join the endeavour, including Amazon Web Services (AWS), Ericsson, Hewlett Packard Enterprises (HPE), Intel, InterDigital, Keysight Technologies, Nvidia, Qualcomm, Virgin Media O2 (VMO2) and Viavi Solutions. This is the second significant announcement made by the EPSRC recently related to investments in AI-focused developments, with the government unveiling last week that it will splash a £100m investment in the Alan Turing Institute (The Turing), the UK’s national institute for data science and AI.

- The staff, TelecomTV

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