What’s up with… Cisco, Telecom Italia, broadband tech sales

  • Cisco completes Splunk acquisition, targets AI hopefuls
  • Telecom Italia could sell yet more assets
  • The broadband equipment sector shrunk by 9% in 2023

In today’s industry news roundup: Cisco has its eyes on the massive opportunities in secure data management that the AI era will deliver as it closes its acquisition of Splunk; Telecom Italia is reportedly rummaging around its portfolio to find more assets to sell; the broadband equipment sector attracted less investment last year as network operators tightened their purse strings; and much more!

Cisco has completed the $28bn acquisition of cybersecurity and observability specialist Splunk, a move that was first announced only last September and which will enable Cisco to provide “unparalleled visibility and insights across an organisation’s entire digital footprint.” Cisco CEO Chuck Robbins claimed the integration of the two companies’ capabilities will revolutionise the way our customers leverage data to connect and protect every aspect of their organisation as we help power and protect the AI revolution.” Cisco is hammering home the message about how this combination of its networking expertise and Splunk’s secure data management capabilities are going to be key for companies looking to benefit from AI applications. “Effective use of the right data at massive scale is critical to enable the meaningful benefits of AI and help organisations drive outcomes never before possible,” noted the vendor. “To truly reap the benefits of AI, organisations need the infrastructure to power it, the data to develop it, a security platform to protect it, and an observability platform to monitor and manage it in real time. Cisco will be able to do all four together.” News of the deal’s completion comes a month after Cisco announced job cuts and tempered financial expectations for this year – see Cisco cuts thousands of jobs and its 2024 sales target.

Telecom Italia (TIM) is lining up the sale of its remaining stake in towers firm Inwit (Infrastrutture Wireless Italiane) for about €300m in a bid to raise additional capital that can be used to reduce its debts, according to Bloomberg. The stake sale isn’t imminent, but is being considered as a possible way to raise more cash: Telecom Italia currently owns about 3% of Inwit’s shares, courtesy of its 10% stake in holding company Daphne 3. The Italian operator is trying to secure a deal for the sale of its international operations, Sparkle, for up to €800m and is pressing ahead with the sale of its NetCo domestic fixed network unit for up to €22bn to private equity firm KKR and other investors. The sale of NetCo, which is due to be completed this year, will help Telecom Italia reduce its enormous debt pile significantly, but investors reacted strongly earlier this month when the telco, as part of its new company strategy, revealed that its net debt was set to increase to €7.5bn from €6.1bn this year due to various operational and M&A-related costs. As a result, the telco’s share price is still in the doldrums at just €0.22 on the Milan stock exchange, giving Telecom Italia a market value of just €4.66bn.

The value of the global broadband access equipment sector shrunk by 9% year on year in 2023 to be worth $17.5bn, according to research house Dell’Oro Group, as network operators tightened their purse strings and cut back on their capital expenditures across the board, leading to a reduction in the value of the global telecom equipment market by 5% to about $95bn. It was also always going to be difficult for the global broadband access equipment sector to continue growing at the rapid pace seen in recent years: 2022 was a record year for broadband network investments as telcos and ISPs poured cash into their fibre-to-the-premises (FTTP) networks and cable operators invested in technology upgrades, propelling the value of the market to just over $19bn that year. So while the sector did shrink last year, it’s still much bigger than the circa $16.3bn value of the market in 2021. It’s worth noting that the Dell’Oro team did point out that spending on fixed wireless access (FWA) customer premises equipment (CPE) did increase last year by 7%, thanks mostly to the high demand for services in the US market, where both Verizon and T-Mobile US now have millions of FWA customers – see FWA takes near 7% share of US broadband market.

As a further sign that vendors should brace themselves for a drop in telco spending, China Unicom has announced plans to reduce its capital expenditure (capex) by 12% in 2024 to ¥65bn (US$9bn), a significant drop from the ¥73.9bn ($10.3bn) in capex it booked for 2023 when “network investment saw an inflection point”. Claiming that its 5G network coverage is now nearing completion, the Chinese telco said it will shift the focus of its investments from its “stable” business unit of Connectivity and Communications to Computing and Digital Smart Applications (CDSA), reflecting a trend of “unstoppable” digitalisation. China Unicom added that investment into CDSA will be “appropriately brought forward” to enhance the division’s deployment. In 2023, the operator booked a 5% year-on-year rise in operating revenue, to ¥372.6bn ($51.8bn), while net profit was up 11.8% to ¥18.7bn ($2.6bn). For 2024, it expects to see “stable growth” in operating revenue and double-digit profit growth. Read more.

Voxi, the mobile virtual network operator (MVNO) owned by Vodafone, has launched a large language model (LLM) chatbot to engage in “human-like interactions” with customers. Developed in collaboration with Accenture, the solution uses generative AI (GenAI) and is said to be able to handle “more sophisticated” requests by customers of both Voxi (which is Vodafone UK’s offering for people aged 25 and under) and Vodafone. Additionally, Vodafone is exploring ways to improve its other chatbot, TOBi, which is focused on the telco group’s European markets. Vodafone has previously claimed to be the first UK telco to develop and deploy an LLM chatbot for customer service use.

Japanese telco SoftBank is eyeing a quantum-enabled future, having demonstrated an integration of quantum key distribution (QKD) technology with optical wireless communications. The “breakthrough” saw Softbank deploy Toshiba Digital Solutions’ QKD system in its own optical wireless test environment, demonstrating “how a QKD network can be deployed by combining optical wireless technologies and optical fibre technologies, providing a new, cost-effective and timely method for deploying QKD secure networks in urban environments.” According to the telco, this is an important step towards enabling the deployment and expansion of urban QKD networks, which are expected to provide enhanced security features in the future. It added that by installing optical wireless devices on locations such as building rooftops, QKD can be deployed without the need for dedicated or new optical fibre installations. Find out more.

Readers of a certain age will remember the phrase the “Gnomes of Zurich” which, coined in 1964 by a UK politician with a bit of a reputation for liking a few drinks too many, was widely applied during the 1960s and 1970s as a disparaging term for Swiss bankers. Zurich is the epicentre of banking in Switzerland and the appellation “gnomes” was bandied about for years on end in parliament, on radio, TV and Britain’s ‘red-top’ tabloid newspapers. The term associated Swiss bankers with extremely secretive policies, dubious dealings and mountains of gold hidden away in underground vaults. And now, 60 years on, a team of researchers at the Eidgenössische Technische Hochschule Zürich, (ETH for short) and otherwise known as the Swiss Federal Institute of Technology, Zurich, has discovered a new way to extract gold from discarded laptop computer motherboards and from other devices, according to IEEE Spectrum. The world is awash with billions of tonnes of disused electronic components and the search is on for new methods to retrieve them from landfill sites and rubbish tips and recycle them to extract precious metals. Switzerland is also renowned for its cheeses and the new process uses by-products from cheese-making to separate gold from electronic waste. How’s that for green credentials? The ETH team applied a protein amyloid nanofibril (AF) aerogel, which comes from the whey left over when cheese is made. Amyloid nanofibrils are highly ordered, straight and unbranched fibrillar polypeptide aggregates with a diameter of 10 nm. Their strands are oriented perpendicular to the fibril axis and form a dynamic scaffold on which nanotechnologies and environmental applications can be constructed. An aerogel is a synthetic porous ultralight material derived from a gel from which the liquid component has been removed with a gas, without any significant collapse of the gel structure itself. The result is a solid with extremely low density and extremely low thermal conductivity. In the case of extracting gold from disused mother boards, the aerogel sponge simply sucks up the gold. Almost everything retrieved is very high-quality, 22-carat gold and the new technology, used at scale, could provide a very meaningful source of the reclaimed precious metal. What’s more, as lead researcher Raffaele Mezzenga says, “We are positive we will [also] be able to extract platinum, palladium, silver, and exotic rare earth metals.” The ETH experiments have shown that gold can be captured from a soup of liquified motherboards to the value of 50 times the cost of the extraction process. The great boon of the new system is that it eliminates two waste products in one productive process. Experiments to increase the scale of the extraction process continue.

- The staff, TelecomTV

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