What’s up with… Tarana, Arm, INCA

  • FWA specialist Tarana raises $50m
  • Arm’s IPO is priced at the top of its range
  • UK altnet group INCA has a pop at BT

In today’s industry news roundup: Fixed wireless access (FWA) vendor Tarana Wireless raises $50m to fuel further growth; Arm sets its IPO price high; UK altnet group INCA accuses BT of charging more for its broadband services in areas where it doesn’t have an independent rival; and more!

Fixed wireless access (FWA) technology specialist Tarana Wireless has raised $50m in a funding round led by Digital Alpha. The funds will be used to accelerate the company’s sales and deployment growth as well as fuel the ongoing research and development programme at Tarana, which last year gained a valuation of more than $1bn after it closed a $170m funding round. Digital Alpha is convinced that Tarana can continue to ride the current wave of interest in FWA services and technology. “Tarana’s G1 platform supplies the key missing ingredient in enabling wireless ISPs to offer highly competitive broadband, take share, and grow value in their businesses – at a months-not-years deployment pace competitive technologies just cannot match,” noted Rick Shrotri, founder and managing partner at Digital Alpha. According to Tarana, the G1 platform is now deployed by more than 270 service providers in 19 countries, and in 41 of the 50 states in the US, while revenues in G1’s first full year of sales (2022) were nearly $100m, and orders as well as sales have continued to grow this year. Tarana’s CEO, Basil Alwan, noted: “Digital Alpha knows our customers’ business intimately, which has provided early insights into ngFWA [next-generation fixed wireless access] and the momentum building in our business. This investment, along with those in our customers, makes them a natural and great partner. Our rapid growth has created more opportunities along with higher working capital requirements; this financing will play an essential role in maintaining our trajectory, supporting our customers’ continued growth, and expanding our reach globally,” he added. Read more.

SoftBank is set to raise about $5bn from the IPO on the Nasdaq exchange of shares in Arm, the UK chip design company it has owned since 2016 when it acquired the firm for $32bn. Arm has set the price of the shares it is making available via the IPO process at $51, the very top of the range that it announced last week. The share price values Arm at $54.5bn, though that is still some way short of the $64bn valuation at which SoftBank acquired the 25% of the chip design firm it didn’t already own from the Vision Fund that SoftBank also controls. The stock, in the form of American depositary shares (ADRs), starts trading on the Nasdaq today, so let’s see what happens to the price once the market opens, but all the indications are that it’s going to rise very quickly as soon as trading begins.   

INCA, the UK’s Independent Networks Cooperative Association, says BT is charging subscribers up to 30% more a month in areas where broadband competition is non-existent. It claims the prices are considerably lower where the incumbent British telco faces real competition from rivals offering cheaper services. INCA was formed back in 2010 as a co-operative trade body, with the goal of deploying new digital broadband networks across the UK and Ireland to provide meaningful competition to BT at better prices. In the new report, Securing long-term benefits for broadband customers - embedding infrastructure competition in the UK, Tim Stranack, INCA’s chairman and the co-founder of Community Fibre, a London-based, London-focused ISP that now provides broadband access in all 32 of the capital’s boroughs, wrote, “The fact that consumers and businesses in 18 million UK premises can access fibre broadband today, is a direct result of government opting to encourage infrastructure competition. Without “altnets” and the resulting competitive pressure on BT Openreach, the UK would still languish near the bottom of international fibre league tables, and consumers and businesses would suffer the consequences with the inevitable impact on UK productivity and efficiency.” He added that, “The UK government policy for fibre investment is on the brink of success, but [the national regulator] Ofcom’s approach…and the inertia of ISPs to use altnet infrastructure put this achievement at significant risk.” The report says Ofcom implements regulation that directly “assists” BT (to the detriment of its altnet rivals) by significantly discounting its broadband prices in areas where there is infrastructure competition, the result being that undiscounted prices apply in areas where BT has a broadband monopoly. In effect, customers that are forced to use BT pay top dollar whilst, for those with choice, BT effectively charges close to a third less for the same products. As Stranack pointed out, “In the UK, altnets now provide broadband service to 8 million premises while BT fibre provides access to 10 million subscribers”. He says BT has been forced to build out its fibre network because of the “presence and competitive threat of the altnets” adding that “no regulatory intervention can replicate the impact of real competition, and this has been proven in recent years in UK telecoms. The government adopted the right policy, the market responded with enthusiasm… The differences between government policy statements and Ofcom actions are putting these benefits, to businesses and consumers, at risk.” In essence, demand for altnet fibre is being held back by the big ISPs, which control 90% of the retail market and are distinctly loth to move subscribers over from BT Openreach network. INCA says the solution is for Openreach to be structurally and legally separated from the BT Group. Currently, the two bodies are more like conjoined twins than individual entities. Indeed, BT has actually stated publicly that it will never use another network provider other than Openreach, but Ofcom continues to allow the two companies to remain semi-detached and mutually dependent. In response to the INCA report, BT claimed, “The UK broadband market is highly competitive. Even in areas where Openreach is the only network provider, there remains huge competition at a retail level, with over 600 companies able to provide services over their network.” Over the years there have been frequent demands that BT fully divest Openreach but nothing has happened. It is entirely possible, indeed altogether likely, that INCA’s report will prove to be just one more cry in the dark as the feeble and inert Ofcom approaches its annual winter hibernation after dozing away yet another summer.

The mills of the EU may grind slowly but they also grind exceedingly finely, hence the news that after years of bureaucratic wrangling that would have been enough to make a grand-vizier to a Byzantine emperor tear his hair out in despair, the EU has agreed to what it describes as “an ambitious text” that will now become the basis of the introduction of harmonised telecoms rules and regulations across all 27 member states of the European Union. The intent is to ensure that all European citizens will have access to gigabit connectivity by 2030. The Industry, Research and Energy (ITRE) Committee of the European parliament has finally agreed on a “compromise” text for the Gigabit Infrastructure Act. It will go forward for approval by the Parliament on Tuesday next, 19 September 2023. You might think that approval, which is almost certain to be forthcoming, would be substantive enough to get things onto the statute books, but no, any “inter-institutional negotiations” will not begin until the Council of Ministers finish their leisurely discussions on the compromise text and determine whether or not to send it back for revision and rewriting. After all, there are still seven years to go to meet the 2030 deadline; long enough to wrap-up half of that time internecine squabbles and inter-departmental nit-picking, and still present it as a triumph. Members of the European Parliament (MEPs) long ago decided that the 2014 Broadband Cost Reduction Directive had been ineffective in supporting the rollout of state-of-the-art high-speed telecoms and accepted the proposition of the European Commission that it should be replaced with an overarching legislation to harmonise EU rules. The aim was simple enough – to provide a legal framework that will encourage public-private partnerships to build out high-capacity connectivity to every citizen of every member state. Thus, in under-populated areas where there is no incentive for for-profit enterprises to deploy high-speed infrastructure, local authorities would be allowed to deploy networks paid for by taxpayers’ money. Thereafter, telcos and ISPs would be precluded from laying a parallel network but would be able to connect to the public network on payment of fees. Not exactly rocket science, is it? But, from the way it is framed, you’d be forgiven for thinking it’s more complex than quantum cryptography. Much is being made of the removal of costs that are applied to intra-EU calls on top of roaming fees. The Romanian MEP, Alin Mituta, the European parliament’s rapporteur on the harmonisation text, told Euractiv.com, the pan-European news website specialising in EU policies, “There is no technical barrier to eliminate the extra fees for the citizens, it is a political choice and we should have the courage to take a bold step to create a single market in the telecom sector”. His proposal got full support from the EC’s legislative arm but the Council of Ministers, which has long and repeatedly opposed abolishing the fees, remains adamant in its position. Go figure. The net result is another wrangle between the parliament and the council. Mituța points out that “The future development of our society and economy is increasingly dependent on the broad coverage with very high-capacity networks. The slower we are in taking measures, the more we lag behind.” He’s right, but many in the EU bureaucracy seem to be much more interested in watching paint dry.

​​What’s happened to the edge? For years we’ve been told that demand for low-latency services and cached content delivery would drive investment in more distributed datacentres as application providers looked to shorten the distances between server and user. But while there has been much toe-dipping and plenty of manoeuvring, testing and trialling, as well as the development of edge-specific infrastructure by potential providers, we’ve yet to see explosive edge market growth, much less any rollicking merger and acquisition (M&A) land grab of the sort we’ve witnessed with the consolidation of cell towers and fibre networks. Might that change in response to new growth opportunities, such as the sudden emergence of large language model-enabled AI applications? Since a processor-hungry model is likely to run better on edge datacentres rather than at a large centralised facility, some observers think generative AI might be just the thing the edge is looking for. But it’s more likely that the growth of the edge will happen gradually and steadily without any land grabbing and investment bubbling. The global edge size – while still low compared to large datacentre or hyperscale cloud installations – appears to be on a steady climb. One market forecast sees the value of the edge datacentre market growing from $10.4bn this year to be worth $29.6bn by 2028. So while there’s unlikely to be a “scramble for the edge”, there has, just recently, been an interesting M&A move that might throw some light on the way edge resources might develop – not through expensive new facilities (although there might be a few of those) or dramatic takeovers but gradually, through the adaptation and repurposing of existing facilities, or even public cloud extensions to private premises using platforms such as the Outpost and Dedicated Local Zone capabilities provided by Amazon Web Services (AWS). The recent acquisition of UK-based Proximity Data Centres by global infrastructure investor nLighten (terms undisclosed) offers a case in point. nLighten styles itself as a leading pan-European edge datacentre platform with 26 datacentres, 53 megawatts of potential capacity and 130 employees, and has now established itself in Germany, France and the UK. One of the interesting things about Proximity’s emergence was its conversion of existing purpose-built datacentres owned and operated by banks and utilities, as we highlighted in this article. These companies were open to the idea of offloading their datacentre facilities (which are underused due to shrinking compute infrastructure requirements) to a specialist and then leasing back space through long-term agreements, providing Proximity with valuable anchor tenants for its edge business as it tapped the regional datacentre opportunity. This included offering low-latency services for online games providers while providing connectivity hubs for the UK’s burgeoning fibre network operators – that’s one clear example of edge and regional datacentre expansion without the greenfield build expense.

UK fibre broadband altnet Broadway Partners, which has been building networks in rural areas of Wales and Scotland in recent years but went into administration at the end of May this year, is on the cusp of being acquired by Tiger Infrastructure Partners and Macquarie, according to this Sky News report. Both are already investors in the UK’s broadband sector – Tiger Infrastructure last year invested £75m in Rural Broadband Solutions Holdings, while Macquarie Capital is the majority shareholder in rural broadband service provider Voneus. According to Sky News, the acquisition of Broadway Partners will be structured as a takeover by Voneus. The UK broadband altnet sector still has scores of active companies, but the long anticipated market consolidation process is in full swing: Earlier this month, Nexfibre, the fibre broadband network company co-owned by InfraVia Capital Partners (with a 50% stake), Telefónica (25%) and Liberty Global (25%), announced the acquisition of Upp, which has been building out its network in the east of England for an undisclosed cash sum. 

Telecom Italia (TIM) is claiming to be the leading telco in the Refinitiv Diversity and Inclusion Index, which ranks companies based on 24 parameters relating to diversity, inclusion, people development and dispute management. The index ranks more than 12,000 companies globally and includes the top 100 in the index. According to Telecom Italia, its Latin American operation TIM SA (Brazil) is ranked fourth in the world in the index, while TIM Group is ranked at number 24. 

- The staff, TelecomTV

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