What’s up with… Vodafone Business, Telefónica, GenAI-enabled smartphones

Marika Auramo will be the CEO of Vodafone Business from 1 July 2024.

Marika Auramo will be the CEO of Vodafone Business from 1 July 2024.

  • Vodafone Business hires new CEO from SAP
  • Spain ups its stake in Telefónica
  • GenAI sets its sights on smartphones

In today’s industry news roundup: Vodafone’s enterprise services division hires an experienced executive from SAP, Marika Auramo, to become its new permanent CEO; Spain increases its stake in Telefónica to 5%; GenAI-capable smartphones to account for almost half of all smartphones by 2027; and more!

Vodafone Business, the enterprise services division of Vodafone Group, has appointed Marika Auramo (pictured above) as the new permanent CEO of Vodafone Business starting on 1 July. She will take over from interim chief Giorgio Migliarina, who took the reins late last year following the retirement of previous boss Vinod Kumar. Auramo joins from enterprise IT giant SAP, where she has worked since 1999, including in the role of chief business officer for the EMEA region. “I am delighted that Marika will be joining Vodafone to lead our Business division, a key growth driver,” noted Margherita Della Valle, CEO of Vodafone Group. “She brings extensive B2B experience from the IT industry, and I look forward to welcoming her as a member of our executive committee,” added Della Valle. Vodafone Business reported revenues for the telco’s fiscal third quarter that ended in December 2023 of just over €2.62bn, up by 5% year on year on a like-for-like basis, thanks to “strong public sector demand and increasing customer adoption of new digital services, such as cloud, security and IoT,” according to Vodafone. Auramo stated: “I am looking forward to working with Margherita and the management team and to engaging with Vodafone’s customers and partners. Vodafone Business has strong growth opportunities ahead – as large corporates, SMEs and the public sector look to adopt more digital tools to enhance growth and productivity – and I will be working alongside my new colleagues to capture this.”

Back in June 1996, the Spanish government, with some reluctance, began the lengthy process of privatising the country’s national telco. Late in February 1997, it finally relinquished its remaining 20.9% holding in the monopoly operator and Telefónica became a completely private company. The IPO (initial public offering) was a great success, with 191 million shares being placed as more than one in eight of the country’s households bought the stock in what was regarded as a demonstration of national support and pride. Indeed, the offering was oversubscribed by 5.4 times the number of shares available and the placement raised $4.4bn. The privatisation was the biggest transaction the Spanish stock market had ever undertaken. Fast forward 27 years and the Spanish state is now buying back Telefónica stock directly to counter actions taken by STC (Saudi Telecom Company). Commonly regarded as being a private company, STC is, in fact, ultimately owned by the Saudi government via the kingdom’s national Public Investment Fund (PIF) which owns 70% of STC’s shares. As Bloomberg reports, in September 2023, STC became the biggest single shareholder in Telefónica as it amassed a 9.9% holding worth some $2.2 bn (€2.1 bn) via direct and indirect holdings. Under Spanish law, Telefónica is classified as a “defence service provider” and a “strategic company”, which confers on the Spanish government the right to intervene in acquisitions and holdings of between 5% and 10%. It already held 3% of Telefónica and, last month, increased that to 5% via SEPI (Sociedad Estatal de Participaciones Industriales) the Spanish state-owned industrial holding company. It further announced that it intends to continue to build its holding in Telefónica up to 10%. Thus, the Spanish government will own 10% of Telefónica and Saudi Arabia will have 9.9%, making the Spanish state the largest single investor in the strategically important multinational telco – for now. Currently, STC actually owns 4.9% of Telefonica’s shares but holds various contracts that confer “economic interest” over a further 5% of capital. It will require the permission of the Spanish government to convert those contacts into Telefónica shares. Such permission may not be forthcoming as the Spanish government’s recent actions signal it is taking a more active, hand-on interest in Telefónica’s long-term strategic significance.

Smartphones using generative AI (GenAI) are set to represent nearly half of all smartphone shipments in 2027, according to data from Counterpoint Research, which estimates the market share of such devices will reach 11% in 2024. Growing at a compound annual growth rate (CAGR) of 49% from 2024 to 2027, GenAI smartphone shipments will surpass 550 million units in 2027, accounting for a 43% market share. Counterpoint Research defines a GenAI smartphone as a handset that leverages “large-scale, pre-trained generative AI models to create original content or perform contextually aware tasks”. “We expect such devices to have multimodal capabilities, allowing them to process text, image, voice and other inputs to generate a variety of output and enable a user experience that is fluid and seamless. We expect the hardware specifications of such devices will likely evolve as the technology advances. But at present, a device should have hardware capabilities that are comparable to or exceed the performance of current flagship smartphones to effectively run generative AI models,” the research house explained. Samsung has already taken a notable step into the GenAI segment with the launch of its Galaxy S24 series – see Samsung puts advanced AI in the hands of users. Additionally, “Apple’s anticipated entry in the space will further help the segment’s growth. Once Apple enters, we expect AI to immediately become a must-have feature in all mid-to-premium smartphone launches starting [from] 2025. However, the real differentiation will lie in the use cases as consumers are still evaluating the potential impact of AI in their future devices,” claimed research director Tarun Pathak.

A draft version of the report to the European Commission (EU) on the state and future of the European single market, due out on Thursday 18 April, has been leaked two days before its planned publication date. It has been seen by Euractiv, the Brussels, Belgium-headquartered independent pan-European news website that focuses on policies and affairs of the European Union (EU). The single market is the absolute bedrock of the EU’s raison d’être. It comprises the internal market of the 27 member states of the EU as well as (to some extent) Iceland, Liechtenstein, Norway (via the Agreement on the European Economic Area), and Switzerland (through various sectoral treaties). The single market guarantees the ‘four freedoms of the EU’ – namely the free movement of goods, capital, services, and people – and is managed via common rules, regulations and standards that all participating states are legally bound to apply and follow. The report has been prepared and written by the former prime minister of Italy, Enrico Letta, and the section on the EU’s telecom industry hits straight from the shoulder saying that the sector is one of the “primary reason[s] for Europe’s declining competitiveness.” Letta adds, “There is an urgent need to catch up and strengthen the single market dimension for financial services, energy, and electronic communications.” The report notes that European telecom sector companies have been, and are being, “held back” by “decisions taken in the past” and it is high time the prevailing “national focus”, which can be translated as the interests of individual member states rather than the overarching interests of the EU as a whole, “must evolve towards a European dimension” if the EU is ever to be able to compete head to head with manufacturers and companies from the likes of China, India and the US. Over recent years, the calls made by the big European operators and service providers for regulators to accept that mergers and consolidation between players in a national market are both necessary and desirable have become louder as, they contend, evidence emerges to show that cross-border mergers cannot create sufficient scale. The EC itself estimates that if connectivity goals are to be met by the due date of 2030, investments totalling €174bn are required, so something needs to be done soon. However, the Letta report apparently does not explain how such EU-wide consolidation might happen. It does, though, emphasise that the market forces within the “European dimension” should be permitted to take their course, and enable the market to consolidate and grow “in full respect of the European principles, objectives and rules” and thrive “on the essential link between large and small enterprises.” The Letta report is prescriptive in that any new regulatory framework should rely on an “EU centralised authority responsible for guaranteeing the coherence of rules” of the single market, as well as coordination of the different regulatory bodies. Simultaneously, “independent national authorities should deal with issues which for size or relevance remain national.” The author also concedes that the recent EC whitepaper on the potential for consolidation, mergers and acquisition in the single market “is moving in a favourable direction.” The big question, as ever with the EU, is whether any action can be taken quickly enough for it to have any meaningful and positive impact. 

Researchers at Oxford University in the UK are developing a verifiable “blind quantum computing protocol” whereby the use of quantum computers should become much more widespread (and cheaper). The idea is to use cloud-based systems that allow remote access to quantum servers. According to Phys.org, the influential online science, research and technology news site, few of the world’s limited number of quantum computers are accessible to anyone other than a very limited number of scientists and researchers working in universities, government departments, armed forces and commercial organisations. Demand to extend such access to others is growing and the notion of facilitating such requests via cloud-based systems that permit remote access to quantum servers is attractive and currently under investigation as a feasible solution. However, wider access to quantum computing would have concomitant and significant privacy and security risks. One way to mitigate such concerns would be to program servers securely to conceal a client’s algorithm along with the information produced via a cloud-based quantum computing system. The team of researchers at Oxford have been looking at how to delegate quantum computations performed by a client to an untrusted quantum server via a network link. The scientists used “a robust memory qubit” in a server, which can be entangled deterministically with a second qubit that allows the storage of quantum information while the devices perform the real-time feedforward operations. The primary objective of the experiment was to eliminate the efficiency and security limitations of earlier implementations: To achieve it, the researchers used a trapped-ion quantum processor networked to a client’s device via a fibre-optic quantum link. The system relies on a network qubit entangled with single photons that are sent to clients via an optical fibre, as well as a memory qubit that stores the current state of a computation. Meanwhile, the client “operates a much simpler device: A photon detector, specifically built to measure the polarisation of the incoming photons in an arbitrary switchable basis,” noted Oxford University’s Gabriel Araneda, co-author of a paper on the experiment. “The measurement of the photon collapses the wavefunction of the entangled state between the photon and the network qubit, thus ‘steering’ the state of the network qubit into a state known exclusively to the client,” he added. The process through which the state of the quantum qubit is “steered” into a state that is known only to clients is called “remote state preparation” and this process is what ultimately leads to the server being ‘blind’ to the state of its own qubits. Overall, “the experiment shows how quantum computing customers can access the processing power of remote quantum computers privately and securely.”

Telehouse, the global datacentre service provider owned by Japanese telco KDDI, has set up operations in Canada. In a statement, the company noted that by launching Telehouse Canada, it will bring “improved IT infrastructure and connectivity services needed to power Canadian growth and innovation”. It further noted that the new business will meet the growing demand by enterprises and organisations for “highly resilient colocation services, digital connectivity” and the enablement of high-performance computing. The launch comes after KDDI agreed to buy three Toronto-based datacentre facilities from Allied Properties Real Estate Investment Trust for CAN$1.35bn (US$1bn) – see KDDI splurges $1bn on North America datacentre expansion. With this launch, Telehouse now operates over 45 datacentres across more than 10 countries. Read more.

The growing importance of fixed wireless access (FWA) and fibre in expanding global connectivity has been highlighted in a new report from Tarifica, a provider of telecom plan and pricing data. In its latest analysis, the company suggests that while fibre provides “unparalleled speed and reliability”, FWA acts as “a compelling alternative, particularly in regions where laying physical cables is impractical or cost prohibitive”. In terms of pricing for FWA, Tarifica found that the service remains expensive in the US compared to Germany and France. “In the United States, fibre remains the preferred choice due to its superior performance, but the emergence of 5G FWA presents an opportunity to connect remote areas. Meanwhile, Germany’s diverse FWA landscape caters to a range of speed and data requirements, providing versatility for users in urban and rural areas,” explained Soichi Nakajima, VP of data and analysis at Tarifica. According to the analyst firm’s report, both technologies will continue to co-exist and preference will depend on factors such as speed requirements, coverage area and budget constraints. “The shift towards more accessible and cost-effective connectivity solutions underscores the importance of innovation and competition in the telecommunications landscape, driving towards a more inclusive and connected society,” it stated. Find out more.

 - The staff, TelecomTV

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