Access Evolution

What’s up with… Telefónica, the chip sector, Nokia

By TelecomTV Staff

Dec 4, 2023

  • Telefónica job cuts to be deeper than expected
  • Silver linings for the semiconductor sector
  • Analyst suggests Nokia could lose RAN role at AT&T

In today’s industry news roundup: Telefónica could cut more than 5,000 jobs in Spain over the next three years, according to trade union; the chip sector is expected to bounce back in 2024; industry rumours suggest a late-year hammerblow for Nokia in the US; and much more!

Telefónica’s Spanish workforce had already braced itself for job losses following the news last week that as many as 2,500 roles could be culled by the giant telco as it looks to reduce its annual operating costs, but it seems the cuts may go a lot deeper, according to a Reuters report that cites trade union UGT (Unión General de Trabajadoras y Trabajadores). The number of roles affected is to be around 5,100, according to a UGT spokesperson, almost 25% of its circa 21,000 domestic workforce, though the union is hoping that some of those affected may be able to transfer to other roles and that it can settle on a lower number with the telco. Negotiations between the telco and the union have begun, according to the report, with further talks set to take place next week. Telefónica has confirmed that a workforce “adjustment” is underway but has not disclosed any numbers. During the telco’s recent capital markets day presentations, chairman and CEO José María Álvarez-Pallete noted that Telefónica – one of the world’s largest operators, with almost 385 million connections across its European and Latin American markets and annual revenues of more than €40bn – is expecting an annual revenue growth rate of about 1% and earnings before interest, tax, depreciation and amortisation (EBITDA) growth of 2% for the 2023-26 period, but he added that the company wants to channel more of its earnings towards shareholders. To do that it needs to shrink costs and, while it is partly doing so by cutting its annual capital expenditure over the next few years, with its capex-to-revenues ratio dropping below 12% from about 14% currently, it also needs to reduce its operating expenditure (opex) – and one way to do that is to lower the company’s headcount.

It might be a while before the power of AI really kicks in for the semiconductor market. According to Gartner’s latest forecast, global semiconductor revenue will decline by 10.9% year on year in 2023, to $534bn. Alan Priestley, VP analyst at Gartner, noted that the strong demand for chips to support AI workloads, such as graphics processing units (GPUs), “is not going to be enough to save the semiconductor industry from double-digit decline in 2023”, due to the reduced demand from smartphone and PC customers, as well as weak datacentre and hyperscaler spending. Not all is lost, though: Gartner expects the market will experience a “bounce-back year” in 2024 when global revenue is predicted to grow by 16.8% year on year to $624bn. Increases are prognosed for all chip types, and the market is expected to be driven by double-digit growth in the memory segment. Recently, another research house, Omdia, highlighted AI as a main contributor to recovery signs in the market, as in the third quarter of 2023 it marked its consecutive quarter of growth after a prolonged downward trend – see AI drives chip sector recovery.

The rumour mill is suggesting a major blow for Nokia in the US mobile network infrastructure sector. The giant telecom equipment vendor was already replaced at Verizon by Samsung Networks in 2020 and now, according to industry sources cited by Earl Lum, president at EJL Wireless Research, it is about to fall out of favour and be replaced as a major radio access network (RAN) equipment supplier at AT&T, though there’s no chat about which other vendor might fill the Nokia-size hole at the giant US telco. “Various sources we have spoken to imply that AT&T is the next wireless operator customer to remove Nokia from their RAN vendor list. Since AT&T Wireless’ other RAN vendor is Ericsson, this would imply either another RAN vendor to replace Nokia OR Ericsson wins 100% of the entire AT&T wireless RAN network,” noted Lum in this LinkedIn post. There has been no confirmation or comment from any of the relevant parties but, as Lum points out, this speculation is reminiscent of the chat that preceded Nokia’s ousting at Verizon. This is some scuttlebutt that’s certainly worth tracking as we head to the end of the year…

Dutch telco KPN has agreed to acquire local internet provider Kabeltex to beef up its fibre rollout efforts. The deal, which is of an undisclosed amount, is aligned with the operator’s goal to cover around 80% of the Netherlands with fibre by the end of 2026, a joint mission with fibre broadband network joint venture Glaspoort that it established with APG in 2021. After completion of the takeover, KPN will add the fibre networks of Kabeltex to its wholesale services portfolio, a move it claims will allow “a wide range of market parties to be active on these networks, giving end users a broad choice of various providers and suppliers”. Currently, Kabeltex connects approximately 18,000 homes across the Netherlands. This announcement comes shortly after KPN unveiled its new strategy, ‘Connect, Activate & Grow’, focused on network enhancements, including a boost in fibre deployments – see KPN targets sustainable growth with AI-enabled automation.

Canada has raised CAN$2.16bn (US$1.6bn) from its latest 5G auction in the 3800MHz spectrum. The Canadian government has awarded a total of 4,099 licences to around 20 applicants. The 3800MHz band, it noted, has previously been used to provide fixed wireless access (FWA) services, but this spectrum has since emerged as “key for 5G networks” due to its ability to deliver “both coverage and capacity for a wide array of new applications, as well as for rural connectivity”, the government noted in a statement. The big spender in the auction was Telus, splashing CAN$620m (US$458m) for an average of 72MHz of 3800MHz spectrum. With this purchase, Telus argued in a statement, the operator now has approximately 100MHz of “prime 5G mid-band spectrum nationally” that will help it deliver not only improved network speed, coverage and reliability but also help to bridge digital divides in the North American nation. Bell Canada was the second-highest bidder, setting aside CAN$518m (US$383m) to obtain a total of 100MHz spectrum in the existing 3500MHz band and the newly purchased 3800MHz spectrum. The Canadian telco noted that by operating its 5G network on the new frequency band, it will be able to provide faster wireless speeds and to deliver greater capacity for managing more devices with lower latency, which it said would mean “real-time communication and immersive experiences can take place with lightning-fast response time”. Rogers has invested CAN$475m (US$351m) for 40.5MHz in the 3800MHz spectrum band, a move it argued will help it provide Canadians “with even more coverage, speed and capacity” on its 5G network. According to a Bloomberg report (available here via BNN Bloomberg), the 5G auction, which is the third to take place in the country, has attracted significantly less revenue than analysts forecast due to high levels of debt in the industry.

China Unicom has appointed Chen Zhongyue as its new chairman and CEO, with effect from 2 December. Chen, who had been the Chinese operator’s president since early 2021, fills the post left vacant by Liu Liehong, who stepped down in July to become the head of the country’s state-run national data bureau. Chen is now the head honcho at an operator that, at the end of September, had more than 332 million mobile customers and 111 million fixed broadband customers, though that means it is still smaller than its giant domestic rivals, China Mobile and China Telecom. In the first half of this year, Unicom’s revenues grew year on year by 8.8% to 191.8bn Chinese yuan (CYN) (almost $27bn) and net profit rose by 13.1% year on year to CYN12.4bn ($1.74bn). 

Singtel has secured its first green loan for its datacentre subsidiaries DC West (DCW) and DC Kim Chuan (DCKC). In the form of a five-year green loan totalling $535m Singaporean dollars (around US$401m), the proceeds will be used to refinance borrowings and support the operations of the two datacentres. As part of the obligations for the green loan, the Singaporean telco will need to obtain at least a Green Mark GoldPlus certification from the country’s Building and Construction Authority. The green loan has been provided by DBS, OCBC, Standard Chartered Bank and UOB, and is part of the operator’s aim to “build on the success of our sustainability-linked loans, bonds and other efforts, to further expand our portfolio of green financing initiatives under Olives, Singtel Group’s sustainable financing programme”, noted Arthur Lang, Singtel group CFO. He added that the company will explore ways to employ technologies such as liquid cooling and AI, to further enhance the efficiency of all of its datacentres. Find out more.

South African telco group MTN has beefed up its presence in the fixed wireless access (FWA) domain, having partnered with local telecoms software company WIM Technologies to enhance FWA offerings for customers. The tie-up will see MTN introduce a service called Unison FWA to its home broadband subscribers that delivers “a superior and unrivalled experience characterised by reliability, consistency, and personalised service”, the operator noted in a statement unveiling the move. The new offering will provide “intelligent coverage” and capacity-based analytics, with the aim being for customers to access “optimal service” at competitive prices. “Our collaboration with WIM Technologies exemplifies our dedication to providing customers with exceptional FWA services. With enhanced network governance, personalised package recommendations, and optimised network performance, MTN’s customers can anticipate a superior home internet experience,” said Amith Maharaj, executive network design and planning at MTN. Read more.

- The staff, TelecomTV

Email Newsletters

Sign up to receive TelecomTV's top news and videos, plus exclusive subscriber-only content direct to your inbox.

Subscribe

Cookies

TelecomTV uses cookies and third-party tools to provide functionality, personalise your visit, monitor and improve our content, and show relevant adverts.