What’s up with… Vodafone, broadband funding, ETSI

TelecomTV Staff
By TelecomTV Staff

Dec 13, 2022

  • Vodafone’s African revamp could spark M&A activity
  • The European Commission has revised its broadband network funding rules
  • ETSI’s got a brand new 6G group

In today’s industry news roundup: Vodafone’s transfer of its holding in Egypt to Vodacom could excite some M&A hopefuls; the European Commission is shuffling the finance chairs to try and enable greater state involvement in fixed and mobile broadband network investments; ETSI starts looking at the prospect of terahertz technologies for the 6G era; and more!  

Vodafone Group has finally completed the long-planned transfer of the 55% stake it holds in Vodafone Egypt to Vodacom, the pan-African operator in which Vodafone holds a majority stake. Vodafone says the deal simplifies the management of its assets and will make it easier for Vodacom to expand its portfolio and gain proper direct access to an “attractive market”. Vodacom has paid €577m and issued 242 million shares to Vodafone, a deal valued at about €2.4bn, to get its hands on the stake in the Egyptian operator, the largest in the country with 44.6 million subscribers and annual revenues running at about €2bn. The issue of the new shares means Vodafone now holds a 65.1% stake in Vodacom. With the asset transferred, this means it might be easier for Vodafone to sell its entire African operations by flogging its Vodacom stake, something that activist investors, such as Iliad founder and owner Xavier Niel who acquired a 2.5% stake in Vodafone Group in September through Atlas Investissement, would like the next CEO to do to shore up the operator’s balance sheet: The stake in Vodacom is currently worth more than €8bn. Vodafone Group’s current CEO, Nick Read, announced last week that he is stepping down at the end of the year, a move largely seen as a reaction to the slow pace of transformative M&A deals and operational performance, especially in the telcos’ largest single market, Germany. With one of the telecom sector’s biggest roles now up for grabs, various names have been put in the frame to replace Read, the latest of which are Telia CEO Allison Kirkby and Virgin Media O2 CEO Lutz Schüler

The European Commission has revised its rules outlining state aid for broadband networks, claiming the new guidelines will allow EU members to invest in areas where “the market does not and is not likely to provide end-users” with a download speed of at least 1Gbit/s and an upload speed of at least 150Mbit/s. Another change will enable member states to support the deployments of mobile networks, including 5G, in instances where “the investment would not otherwise have been undertaken by private operators and is not guaranteed by other measures, such as the coverage obligations attached to the use of some radio spectrum”. Other measures include closing the digital gap through offering incentives to take up broadband services in the form of social and connectivity vouchers, as well as cutting red tape for companies and public authorities when applying the new guidelines – the latter is set to result in reduced costs of wholesale access products. The new rules, which are expected to come into effect in January 2023, are aligned with the EU’s ambition for “gigabit connectivity for everyone and 5G coverage everywhere” across the bloc by the end of 2030. Margrethe Vestager, EVP of the European Commission and in charge of competition policy, described the novel guidelines as “a major step towards a successful European digital transition”, that makes it easier to roll out broadband networks in insufficiently connected areas and reduce the digital divide. Read more.

The European Telecommunications Standards Institute (ETSI) has launched a new Industry Specification Group on Terahertz (ISG Thz) technologies, which have long been earmarked for a key role in 6G architectures. The group, which already has 31 members, will initially focus on two categories of use cases: Mobile applications with high data rate requirements, such as virtual and augmented reality, applications for in-flight and in-train entertainment, and vehicular and satellite communications; and applications requiring both communication and sensing functionalities, such as holographic telepresence, and interactive and cooperative robotics. “ISG THz provides an opportunity for ETSI members to coordinate their pre-standards research efforts on THz technology across various European collaborative projects, extended with relevant global initiatives, a move towards paving the way for future standardisation of the technology,” outlines Thomas Kürner, Chair of ISG THz and a professor at the Technische Universität Braunschweig in Germany. Read more.

Crypto collapse catch-up… Sam Bankman-Fried, the co-founder and ex-CEO of the bankrupt cryptocurrency trading company FTX, has been arrested in the Bahamas after the US Attorney for the Southern District of New York sent a sealed indictment to the Bahamian government. It was acted on immediately and Bankman-Fried (a man with a particularly apposite Dickensian appellation given the circumstances) is in custody and awaits extradition to the US. Today, Bankman-Fried was scheduled to appear (virtually, of course – he certainly wasn’t volunteering to actually leave his island hideaway to appear in person) before the US House Financial Services Committee. The committee members want to ask him a few pertinent questions about how his company went so spectacularly bankrupt so spectacularly quickly. According to his lawyer, Bankman-Fried will not be keeping his virtual appointment, probably because he is banged-up in a Nassau police cell pending a court appearance. Given some of the lurid details that have emerged about the lax management regime at the company, the uber-luxurious lifestyles of some of FTX’s senior management and Bankman-Fried’s arrogant and combative response to events, it comes as little surprise that the US authorities have acted quickly and are moving to hold individuals accountable for the implosion of FTX last month. A trial of the former cryptocurrency billionaire (five weeks ago he had a fortune valued at US$32bn) will follow. He has been charged with wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy, and money laundering. Simultaneously and separately, the US Securities and Exchange Commission (SEC) has charged Bankman-Fried with “violations of securities laws”. Philip Davis, the prime minister of the Bahamas, commented: “The Bahamas and the United States have a shared interest in holding accountable all individuals associated with FTX who may have betrayed the public trust and broken the law. While the United States is pursuing criminal charges against SBF [Sam Bankman-Fried] individually, the Bahamas will continue its own regulatory and criminal investigations into the collapse of FTX, with the continued cooperation of its law enforcement and regulatory partners in the United States and elsewhere.” If found guilty, Bankman-Fried could end up behind bars for decades: It’s worth remembering that Bernie Madoff got 150 years in the slammer once after he was found guilty of fraud. Meanwhile, this is a piece of advice to what Bankman-Fried smugly calls “unsophisticated investors” and what others call “mugs”: Don’t buy imaginary products with real money.

US operator T-Mobile has claimed to have made progress in the uptake of fixed wireless access (FWA) services which, according to the company, have “massively disrupted the traditional internet industry” over the past few years. In its 2022 State of Fixed Wireless report, the self-proclaimed ‘un-carrier’ noted there is a “sharp rise” of the technology, which had been used by more than two million T-Mobile broadband customers by the end of the third quarter of 2022. “It’s clear FWA is taking a bite out of Big Internet, growing by more than 70% across all providers since Q1 of this year. In fact, over the last year, the broadband industry’s growth has come almost entirely from fixed wireless. And that shift is expected to continue,” the company said. According to T-Mobile, growth of FWA can be explained with “decades of customer dissatisfaction with traditional ISPs”, as well as insufficient choice and competition in “vast portions” of the country. “It’s no secret that fixed wireless is disrupting a historically broken broadband industry, offering choice and competition at a time when consumers need it the most,” commented Mike Katz, CMO at T-Mobile. FWA is gaining traction globally, with US operators, in general, pinpointed as the main driving force behind the trend – see US telco giants driving FWA technology growth.

It’s a bit of an earthquake! Plans are afoot to make subsea comms cables double up as global seismic sensors. The idea is that the submarine networks could be retro-fitted, at repeater joints sited every 70km to 100km along a cable, with small monitors that would not only record and report on seismic movements but also sea temperatures and pressures. Earth scientists say that while the proposed system would be very useful, as plans stand they could be rendered even more strategically important if cables were to be laid at points where tectonic plates abut one another or at other places where seismologists have reason to believe the seafloor could rupture. The closer an early-warning sensor is to a subsea earthquake, the more quickly it can be detected and reported, and warnings issued and rescue services alerted. The new system would also provide tsunami tracking capabilities and climate change data, according to Eos.org, the science news magazine of the American Geophysical Union (AGU), which is headquartered in Washington DC. Charlotte Rowe, a seismologist at the Los Alamos National Laboratory in New Mexico in the US, who works with the United Nations Science Monitoring and Reliable Telecommunications (SMART) Subsea Cables, points out that, currently, almost all seismic networks are land-based and that, as a result, “we don’t do a very good job of characterising how seismic waves propagate through it [seawater].” Today, at the AGU’s Fall Meeting 2022, Rowe will update the scientific community on plans for SMART cables in various locations around the world. She will tell the gathering that the initial focus is on assessing external couplings for custom-made and custom-laid cables, wherein the couplings will allow for the later external installation of more and bigger seismic sensors capable of measuring a greater range of signals than the smaller seismic sensors planned for the SMART cables. Such devices, to be installed by submersible robots, will form a system to provide a neat solution to two of the major problems that beset the few current ocean bed seismometer deployments in that both power and communication facilities will be supplied by the cable itself.

The business division of e& (which rebranded from Etisalat Group earlier this year), e& Enterprise, announced an investment of up to $120m in a new joint venture (JV) that is set to become “the largest pure play cloud managed and professional services provider” in the region consisting of the Middle East, Turkey, Africa and Pakistan (dubbed by e& ‘METAP’). The company will own a majority stake in the JV (65%), with the rest (35%) to be owned by Bespin Global, a South Korea-based cloud managed services provider. The new entity will provide public cloud managed and professional services, based on the pair’s existing public cloud businesses and related services. Initially, e& Enterprise will make a $60m investment in Bespin Global, which can be boosted by another $60m within 18 months from completion of the transaction. Further investment of $155m from existing shareholders of Bespin Global has been agreed, the company said in a separate statement. According to e&, the JV will provide “a one-stop cloud solution” to help enterprises with their digital transformation goals. The company also believes growth of cloud services will increase with the rising adoption of the internet of things (IoT), edge computing, 5G and real-time analytics utilising artificial intelligence (AI) and machine learning (ML). And choosing the ‘METAP’ markets for the JV is not accidental: According to John HanJoo Lee, CEO of Bespin Global, the region is one where “cloud adoption is about to explode”.

The US Senate has passed a bipartisan bill, the Quantum Computing Cybersecurity Preparedness Act, that is designed to help the nation to prepare for and be able to react to quantum cyber threats. The bill’s provisions reflect a national security memo, issued in May of this year, that set deadlines for US agencies to examine and report back on the state of all currently deployed cryptographic systems so that the transition of the types of encryption that will be able to withstand decryption attacks by quantum computers can be prioritised. The bill also mandates that the US Office of Management and Budget make an annual report to Congress identifying the funding required for agencies to transition to post-quantum cryptography. In a press release, Senator Maggie Hassan, a New Hampshire Democrat, wrote: “Data breaches exploited by quantum computing are a serious national security concern. America’s adversaries look for any vulnerabilities in our cybersecurity systems in order to threaten our infrastructure, data and security. It is crucial that we are ready to defend against any adversaries using this incredibly sophisticated and emerging technology against our country.” She is supported by Senator Rob Portman, a Republican from Ohio, and by Representatives Ro Khanna (Democrat, California), and Nancy Mace (Republican, South Carolina). Both the US National Institute of Standards and Technology (NIST) and the National Security Agency (NSA) are developing standards for the implementation of a list of four quantum-resistant algorithms that NIST announced in July after scientists from around the globe had submitted their ideas for uncrackable encryption. Ro Khanna commented: “As quantum computing advances, we need to take steps to protect the personal data of Americans as well as US national security and government agencies data. I’m thrilled that the Senate has passed this bill to proactively keep our systems and valuable data safe and establish Congress’s oversight role in the process."

- The staff, TelecomTV

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