What’s up with… T-Mobile US, HPE, O-RAN Alliance

• T-Mobile US boasts improved UScellular synergies, unveils BSS upgrade costs
• Juniper helps HPE’s Q3 sales jump by 19%
• The O-RAN Alliance has a new chairman

In today’s industry news roundup: T-Mobile US provides an improved cost synergies outlook related to its recent $4.4bn acquisition of UScellular assets and reveals that a billing platform transition will result in costs of $350m; the recent acquisition of Juniper Networks helped HPE to achieve quarterly revenues of more than $9.1bn; Deutsche Telekom’s head of RAN disaggregation is the new chairman of the O-RAN Alliance; and more!

T-Mobile US has published “updated guidance for its recently closed acquisition of UScellular and shared details on additional actions as part of the company’s ongoing transformation”. The US operator completed the $4.4bn acquisition of UScellular assets, for which it received the green light from the US Department of Justice in July after ditching its diversity, equity and inclusion (DEI) policies, on 1 August and has now provided an update on the cost synergies it expects from that deal. “T-Mobile now expects the UScellular transaction to yield approximately $1.2bn in total annual run rate cost synergies upon integration, an increase of 20% from the original approximately $1bn run rate synergy guidance, now comprised of approximately $950m in opex [operating expenditure] and approximately $250m in capex [capital expenditure] run rate synergies,” noted the operator. In addition, “the integration is now expected to be achieved in approximately two years, an acceleration from the original three-to-four-year expectation.” The cost to integrate UScellular will be about $2.6bn, “within the original guidance range”. In the third quarter of this year, T-Mobile US expects the acquired UScellular business to generate service revenues of $400m and adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of $125m, while costs associated with the integration will be about $100m. 

T-Mobile US also noted in its update that it “continues to strategically invest in the business to drive further differentiation across its unique value proposition of best network, best value and best customer experiences. This includes thoughtful decisions to enable the company’s successful ongoing digital transformation efforts and ongoing investments by the Lumos and Metronet joint ventures as they continue to ramp on fibre deployment.” As part of that plan, the telco is “accelerating its move to a more streamlined and dynamic billing technology stack. As a result of the acceleration, the company expects to recognise approximately $350m in predominantly non-cash costs associated with its digital technology transformation, including non-cash impairment expense and accelerated depreciation related to the retirement of software as part of its shift to a more streamlined and dynamic billing technology stack enabling the company’s rapid digital transformation, and personnel costs primarily associated with technology modernisation.” Such back-office upgrades are painful and expensive but absolutely necessary. 

HPE has reported a bumper fiscal third quarter thanks in part to its acquisition of Juniper Networks, though the latter’s revenues only hit HPE’s top line for the final month of the quarter that ended 31 July. HPE reported revenues of $9.14bn, up by 19% year on year. The vendor’s operating profit dipped by 55% year on year to $247m due in part to M&A-related costs, though that was a marked improvement on the $1.1bn operating loss recorded for its fiscal second quarter. “HPE delivered record-breaking revenue and improved profitability this quarter as we marked a major milestone by closing our acquisition of Juniper Networks,” boasted HPE’s president and CEO, Antonio Neri. “Customer demand stretched broadly across our portfolio and was particularly strong in our server and networking segments. As we enter a new chapter at HPE, we are focused on capturing the tremendous market opportunity through execution that delivers strong, consistent shareholder value.” The vendor’s CFO, Marie Myers, added: “In Q3, we delivered on our commitments, generating record revenue, as well as improved sequential operating profit with major contributions from our three largest segments. Acquiring Juniper Networks has already added to our results, with more profit accretion expected as we work to quickly capture planned synergies and drive new market opportunities.” 

The O-RAN Alliance has a new chairman, but the post remains with Deutsche Telekom, as the German telco’s senior VP of RAN disaggregation and enablement, Thomas Lips, is succeeding the operator’s group CTO (and soon to be DT board member for technology and innovation), Abdu Mudesir. Lips is not only responsible for the development and commercial introduction of disaggregated RAN across the group but also oversees DT’s “patent management and active participation in global standards bodies, including the O-RAN Alliance and 3GPP. With over 25 years of experience in the telecommunications industry, Thomas has held numerous strategic and leadership positions, including serving as CTIO and board member of T-Mobile Poland and CTIO of Deutsche Telekom IoT,” noted the Alliance in this announcement. 

Echostar has cut 500 jobs from its Boost Mobile headcount following the recent agreement to sell most of its spectrum licences to AT&T for $23bn, MSN has reported. According to the report, Echostar confirmed in an email to the media that the layoffs were the direct result of the transaction with AT&T. “With elements of our network to be decommissioned over time, the company will eventually not house a wireless network deployment workforce. After thorough review of our business operations moving forward, we have made the difficult decision to reduce our network deployment workforce,” the operator noted. As part of its deal with AT&T, Boost Mobile is to offer its services over AT&T’s network and so will be decommissioning the radio access network (RAN) it had deployed over the past four or so years.

– The staff, TelecomTV