• Telecom Italia is on the brink of a €1bn windfall
• India’s Vodafone Idea is set for a massive financial reprieve
• Honor gets a new pre-IPO CEO

In today’s industry news roundup: Telecom Italia should soon find out if it will receive a long overdue €1bn payment from the government; Vodafone Idea’s prospects are looking up, thanks to an expected state payments reprieve; Chinese smartphone vendor Honor gets a new CEO from Huawei; and much more!

Telecom Italia (TIM) is on the cusp of being awarded a €1bn payment from the Italian government after the telco failed to reach an out-of-court settlement with the state by a 20 January deadline, according to legal sources cited by Reuters. The payment is linked to a long-running dispute from 1998, when Italy’s telecom sector was liberalised, and in April last year a court ruled that the government should pay the full amount, which includes about €500m in accrued interest. The government wants to delay any final decision until a supreme court examines the case later this year, but if that request for a further hearing is denied, the telco might soon get its cash. That would be good timing for Telecom Italia’s CEO, Pietro Labriola, who presided over last year’s €22bn sale of the company’s fixed access network unit (NetCo) to private equity firm KKR and who is due to present an updated strategy next month. Labriola is keen to reintroduce shareholder payments and make Telecom Italia’s stock more attractive: Its share price currently stands at just €0.26, giving the European telco a market valuation of €6bn.     

It looks as though Vodafone Idea (Vi), long the Cinderella sweeping up the crumbs in the basement of India’s burgeoning mobile telecom sector, has at last found its Prince Charming – once more in the shape of the national government. The Modhi administration is trying to maintain a strongly competitive telecom market in India and does not want to see any operators go to the wall. The current policy is for the sub-continent to have at least three privately owned telcos in competition with one another, as well as state-owned operator BSNL, and Vi is benefitting from that policy. The company’s share price has risen by 30% in the past week to 10.03 Indian rupees on the news that the government is set to forgive it half the due interest and all of the penalties that comprise the adjusted gross revenue (AGR) payments levied on India’s telcos as part of the costs of their licence fees and the charges imposed to use the spectrum granted by their licences. According to the Business Standard, the relief, which will be announced in the upcoming 2025-26 national budget plans, will cut Vi’s dues by a massive 520bn rupees ($6bn), which would be a welcome boost as the company plays catchup with rivals Reliance Jio and Bharti Airtel in India’s 5G sector: Having last year awarded $3.6bn worth of deals to Ericsson, Samsung, and Nokia to improve 4G coverage and roll out 5G, Vi hopes to launch its first commercial 5G services within the next few months. Vi has been in dire financial straits for years and remains so even after the Indian government previously converted the telco’s accrued interest on adjusted gross revenue (AGR) arrears into a 33.4% stake in the company in what was, basically, a part-nationalisation exercise. The government retains the right to increase its holding in Vi to 70% by converting debt into equity but cannot do so until late 2026 when the existing moratorium on spectrum payments expires. In a call with financial analysts, a Vi spokesperson said: “We have kick-started the investment cycle and are deploying the funds from the fundraise towards 4G coverage capacity and for 5G rollout. These, along with the mega deal with equipment suppliers, are all key steps that will make Vi more competitive and ensure that the industry remains dynamic and competitive. With the continued support of the government, I am confident that Vi will stage a smart turnaround to effectively participate in industry growth opportunities.” In another statement on the likely package of government AGR relief that could be in place for at least two years, the Mumbai-headquartered merchant bank ICICI leant into agricultural parlance when it announced, “We await a final announcement by the government, if it fructifies.” Well, they do say, “Time flies like an arrow but fruit flies like a banana.”

The executive who has led smartphone vendor Honor since it was spun out of Huawei in 2020, George Zhao Ming, has stepped down due to personal reasons and has been replaced by Huawei veteran Li Jian, just as the company prepares for an initial public offering (IPO), Reuters has reported. The company’s board acknowledged Zhao’s “outstanding contributions to the company during his tenure” adding that it expects his successor Li to “continue to deliver innovative products and experiences to consumers around the world”. Honor is one of a number of Chinese smartphone vendors that are gaining market share at the expense of global market leaders Apple and Samsung, noted research firm IDC last week. 

The Japan Bank for International Cooperation (JBIC) has agreed to loan €800m to Germany’s United Internet to help fund the greenfield 5G network rollout of United Internet’s subsidiary, 1&1, which in 2021 contracted Japanese vendor Rakuten Symphony to build and manage an Open RAN-based network. The operator noted in its half-year report, published last August, that it had encountered some “disruption” to the network and, as a result, the migration of its 12 million mobile customers, built up over years of being a mobile virtual network operator (MVNO), was proceeding slower than anticipated. Let’s see what 1&1 has to say when it reports its 2024 full year on 27 March.  

TikTok, which suspended its US service for a while over the weekend because of an impending ban, appears to have been given at least a temporary pardon by the incoming Trump administration, Reuters has reported. Influencers everywhere will be thrilled. 

– The staff, TelecomTV