What’s up with… Telecom Italia, NGMN, Vodafone

  • Salute! Telecom Italia completes €22bn NetCo sale
  • NGMN gives more green advice to telcos
  • Vodafone calls for European ‘connectivity union’

In today’s industry news roundup: Telecom Italia’s NetCo sale saga is finally over; industry body the NGMN Alliance has identified 16 ways in which network operators can reduce their energy consumption; Vodafone continues to bang the drum for a revamp of Europe’s telecom regulations; and much more!

After more than two years of negotiations and holdups, and despite very vocal opposition from its biggest single investor Vivendi, Telecom Italia (TIM) has finally completed the sale of its NetCo fixed access network unit for up to €22bn to a consortium led by private equity firm KKR. The move will help the national Italian operator reduce its debt pile by €13.8bn after various costs and adjustments, taking its net debt (excluding leases) to €6.5bn. However, after other working capital requirements and financial charges, Telecom Italia expects its net debt (after leases) to rise to €7.5bn by the end of this year, though that is still about one-third of the debt pile prior to the NetCo sale and there is still the potential for further reductions in debt if the telco is successful in its efforts to sell its international operation, Sparkle. While the network assets have now been sold, Telecom Italia still needs to use them to carry on delivering services to customers, so as part of the deal the telco has agreed a 15-year ‘master service agreement’ to have access to and use the network, a deal that is then renewable for another 15 years. The agreement leaves Telecom Italia to focus on its mobile network and services, as well as its enterprise services business, in its domestic market. According to the operator, the completion of the NetCo sale “provides TIM with the opportunity to adopt a new business model that will allow the group to compete more effectively in the consumer and enterprise markets in Italy, thanks to a stronger focus on the industrial and commercial aspects of its business and thanks to a solid financial structure.” CEO Pietro Labriola noted in this announcement: “The completion of the transaction with KKR and the Italian Ministry of Finance is the result of two and a half years of intense work, during which we have improved the management of TIM and identified industrial and financial solutions that will enable us to meet future challenges. We reached a milestone that is also a new starting point: We have done so by meeting all targets within the announced deadlines. We intend to continue along this path, further increasing the trust of our employees, our customers and our shareholders. As the first European mover, we chose to separate the fixed network infrastructure services from the other services we provide to ensure the best, sustainable and fastest possible development of TIM. TIM will remain the reference telco in Italy and will continue to be the country’s most infrastructure-rich operator, offering innovative services, across both fixed and mobile services, serving families, the public administration and businesses.” That said, it will soon face increasing competition from Vodafone Italy, which is in the process of being acquired by Swisscom and merged with Italian broadband network operator Fastweb, and will continue to face intense competition from aggressive altnet Iliad, which vowed to “strengthen its positions in Italy and fiercely pursue market share gains across all segments” following a failed attempt to merge with Vodafone Italy. Struggling Wind Tre is the other main service provider in Italy.  

A new report by the Next Generation Mobile Networks Alliance (NGMN) has identified 16 energy-saving techniques and solutions to make telco networks more energy efficient, and looks in detail at their potential and how long they take to implement. The alliance found that AI is “a key tool” in estimating and predicting energy consumption, and that it can limit the amount of data collected and transferred throughout the network. It found machine learning (ML) could help with network planning and management, allowing telcos to ensure operational capacity matches the predicted traffic volumes. The report also found that AI algorithms can help operators make “improved energy-saving decisions” and, to this end, recommended that standards organisations define methodologies to transfer and update AI models at the nodes where network configuration and parameters are controlled. It predicted that telcos may soon look to new hardware and software mechanisms to support AI-based network energy-efficiency modelling and optimisation. In the report, the NGMN also urged telcos to share part of their wireless infrastructure in order to reduce component duplications, and to jointly use network resources through radio access network (RAN) sharing to limit energy consumption and carbon emissions. The alliance also suggested other ways to improve energy efficiency, including process optimisations, and engineering and operational improvements. “Finding ways to reduce energy consumption and meet our climate goals is of utmost importance to the industry. The solutions span multiple domains: better network planning and engineering, improved network management, the application of artificial intelligence and machine learning, and the development and use of new technologies. Only by working together and collaborating within industry alliances, such as NGMN can we achieve these goals,” stated Laurent Leboucher, a board member of the NGMN Alliance and group CTO at Orange. Find out more.

Vodafone has called for the creation of a ‘connectivity union’ to help Europe achieve its digital ambitions and better compete globally. The telco group believes 5G is “key to unlocking the potential of the industrial internet for Europe, transforming the way businesses operate”. It estimates that the impact of digitalisation in the manufacturing sector alone could be worth some €2tn globally, and that Europe has the opportunity to “regain its leadership” in this space. “But the lack of a connectivity union risks impacting Europe’s wider economic competitiveness. Vodafone believes the incoming European Commission now has a unique opportunity to drive change and looks forward to working together with all key stakeholders on this exciting journey,” the operator noted. The region’s businesses will be able to capitalise on the industrial value of the internet and technologies, such as AI “only through 5G standalone”, according to the telco. “The EU cannot reclaim its digital competitiveness and retake a leadership position without an urgent reset of Europe’s telecoms policy regime. That’s why we’re now calling for a new connectivity union that would bring together the commission, governments, and industry to more aggressively tackle the shortcomings in Europe’s connectivity sector before it is too late,” said Vodafone’s chief external and corporate affairs officer, Joakim Reiter. The company also outlined five policy pillars for a new European framework to “end the piecemeal policy approach to telecoms and lay the foundation for the connectivity union”. These include focusing on scale by ensuring investment competition in mobile and fixed markets; the enforcement of pro-investment spectrum policies; a policy framework that promotes technological innovation; risk-based, proportionate and vertically harmonised security requirements; and assurances around sustainability, economic and societal responsibility. Find out more.

A total of €174.4m has been raised in the latest 5G auction in the Netherlands through the sale of the 3.5GHz spectrum band to the country’s three main telco players – KPN, Odido and VodafoneZiggo. According to KPN, it spent €58.4m for “an attractive spectrum package” of 100MHz spectrum in the 3.5GHz band, with a licence valid until 2040. The operator believes this will help it “take the next step in 5G and to cope with the growing demand of mobile data in the coming years.” While Odido did not disclose the amount it paid for its “desired frequencies” in the 3.5GHz band, it said in a statement that the new spectrum will allow it to further expand the capacity of its 5G network which, in turn, would lead to enhanced network experience and connectivity speeds. “Companies and consumers can soon count on higher data speeds, more capacity and a wide variety of innovative applications,” said Johan van den Branden, chief network and operations officer at Odido. Finally, VodafoneZiggo announced it acquired 100MHz of 3.5GHz spectrum for a total cost of €57.5m to further strengthen its existing mobile network position and support future innovation opportunities. The telco said the new spectrum will unlock the benefits of low-latency and high-speed 5G. The mobile operators have between two and five years to achieve a certain geographical coverage with the new frequencies, which will start being used this summer, according to the Dutch Authority for Digital Infrastructure rules.

Canadian telco Bell Canada (BCE) has urged its shareholders not to approve an unsolicited below-market mini-tender offer from TRC Capital Investment Corporation. The proposal from TRC was to purchase up to 2.5 million shares of BCE’s common stock at CAN$43.40 (US$31.61) each, a price that is approximately 4.43% lower than the telco’s closing price on the Toronto Stock Exchange and 4.44% lower than the closing price of the shares on the New York Stock Exchange on 24 June. “BCE does not endorse this unsolicited offer, has no association with TRC Capital or its offer, and recommends that shareholders do not tender their shares to this unsolicited mini-tender offer,” the company argued. TRC made a similar below-market unsolicited offer for up to 3 million Verizon shares in August 2023.

- The staff, TelecomTV

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