What’s up with… Vodafone and Three, BT, Pharrowtech
- Vodafone and Three aim to become one, according to the FT
- BT’s numbers shrink but its outlook is a bit brighter
- Pharrowtech raises Series A to develop mmWave chips
The latest UK M&A action, BT’s latest numbers and investment for a European mmWave chip developer are the topics at the front of today’s news grid.
Vodafone is in talks to combine its UK operations with those of Three UK, according to the Financial Times. The news will not come as a major surprise to anyone following the UK mobile operator market or Vodafone: The potential combination has been mooted on a number of occasions during the past few years, most recently at the start of this year, just as activist investor Cevian Capital was pressuring the Vodafone management team into more aggressive M&A activity. That prompted Vodafone CEO Nick Read to address the issue head on during the operator’s fiscal third quarter trading update in early February, when he noted that various industry consolidation discussions were underway, before adding that there “isn’t much we can say on in-market [consolidation].” And now, according to the FT, the discussions between Vodafone and Three UK’s owner, CK Hutchison, are well and truly underway. Such a combination would create a stronger rival to BT’s EE mobile division and Virgin Media O2, but leave the UK with just three infrastructure-based mobile operators.
Still in the UK… BT has been something of a headline magnet today, as it finally announced a joint venture agreement for its BT Sports unit and announced its earnings for the full financial year that ended 31 March. You can read about the BT Sport JV agreement here. As for its financials, BT’s group revenues dipped by 2% year-on-year to £20.9 billion but its profit before tax was up by 9% to £2 billion and it reconfirmed its outlook for sales growth in the current financial year, all news that, along with the BT Sport agreement, helped BT’s share price to edge up slightly by 1.1% to 178.4 pence on the London Stock Exchange. For the full details on BT’s financials, see this announcement.
For those keen to see home-grown networking and communications chip innovation in Europe, here’s some good news! Belgian wireless networking chip developer Pharrowtech has raised €15 million in its Series A funding round to help accelerate its work on mmWave hardware and software for applications such as fixed wireless access, 5G backhaul and more. “Despite the challenges brought by a global pandemic, Pharrowtech was able to move rapidly from imec R&D Prototypes in 2019 to scaling up production of an exceptionally advanced 60 GHz RF solution by 2022,” noted CEO Wim Van Thillo. “Our agility and capabilities have kept us ahead of the curve, delivering solutions that will shape the future of ubiquitous connectivity… With the next phase of our growth underway, we are committed to providing RF solutions to multi-GHz links to enable low-cost infrastructure and consumer applications.” Read more.
UK operator Virgin Media O2 has started the process of replacing its cable broadband access infrastructure with fibre, a move it first unveiled in July last year and which will result in the upgrade of the fixed line infrastructure passing 14.3 million premises across the UK. “Following the completion of FTTP upgrade pilots in Q1, the company has now moved to deployment of full fibre across its entire fixed network at a cost of £100 per home with completion in 2028,” noted the operator in its first quarter financial report. The move is being pitched as a seven-year project, so that works out at just over £200 million on average per year to complete the upgrade if all goes to plan and on schedule. At the same time, the operator is continuing with its Project Lightning build, which is a greenfield FTTH rollout that’s been underway for a few years and which now passes 2.8 million premises. The operator generated revenues of about £2.5 billion during the first three months of this year and ended March with 24 million mobile customers (of which almost 16 million are contract customers) and 5.6 million broadband customers. For further details, see this announcement.
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