What’s up with… Ericsson, CityFibre, Adtran and ADVA
- Ericsson gets green light for Vonage acquisition
- CityFibre loses critical wholesale pricing appeal
- Adtran and ADVA complete their merger
In today’s industry news roundup: Ericsson only days away from swallowing Vonage; CityFibre loses Equinox appeal; Adtran and ADVA are now married; and more!
Ericsson has received clearance from the Committee on Foreign Investments in the United States (CFIUS) to acquire Vonage Holdings and now expects to close the deal by 21 July. The $6.2bn purchase of Vonage will add significant heft to the vendor’s new Enterprise Wireless Solutions business unit and provide the cloud-oriented technology for what Ericsson is calling its “global network platform”. Ericsson CEO Börje Ekholm talked up the company’s enterprise potential during his second-quarter earnings presentation on Thursday – see Ericsson bangs the enterprise drum as costs and inflation weigh heavy.
Competitive UK wholesale fibre access network builder CityFibre has lost its appeal to the Competition Appeal Tribunal (CAT) over UK regulator Ofcom’s approval of the Equinox wholesale broadband offer brought to market by BT’s quasi-independent access network division, Openreach. In late September last year, Ofcom approved the Equinox package, which offers discounted pricing to internet service providers (ISPs) that take long-term contracts with Openreach. This was much to the chagrin of a number of alternative fibre access network builders, who believed Ofcom did not scrutinise the Equinox offer correctly before approving it: CityFibre launched its appeal last December and the case was heard in May. In the judgment, published today, the tribunal noted it had unanimously rejected CityFibre’s appeal and that “a court should be cautious about interfering with a consultation process carried out by an expert regulator”. It added: “While the consultation process could perhaps have been improved on, it was not so flawed as to be unlawful, and the Tribunal found that no prejudice was suffered by CityFibre in any event.” CityFibre, naturally, is disappointed as it feels that Ofcom’s approval of Equinox discourages infrastructure competition and is likely to lead to further, similar, offers from Openreach. CityFibre CEO, Greg Mesch, noted in emailed comments: “Whilst the CAT has dismissed the appeal, and we have always recognised that the threshold for a successful judicial review of a regulator’s decision is a high hurdle, the CAT has made significant criticisms of Ofcom. It has stated that Ofcom's consultation process could have been improved. Ofcom failed to appreciate that infrastructure competitors would have had information highly relevant to its assessment despite that information being important for the purposes of securing investment. The CAT has also criticised Ofcom for its failure to provide clear and consistent guidance to those making very significant investment commitments on the basis of Ofcom’s policy decisions. The CAT’s conclusion expressly encourages Ofcom to ‘maintain careful scrutiny of the market at this important time’ to ensure that any decisions it makes deliver real competition. We are sure that Ofcom will take careful note of the CAT’s comments. Ofcom must now be proactive in scrutinising any future Openreach offers if it is to sustain and protect investment in infrastructure competition.” Openreach didn’t have quite as much to say. “We're pleased with the outcome and have always maintained that Ofcom was right to find that our prices allow other networks to compete fairly,” stated a spokesperson. “Competition is good for customers, it’s what Openreach exists to promote, and it’s something the government and Ofcom have rightly worked hard to encourage.”
Adtran and ADVA have completed their merger to create a single optical transport, fixed broadband access and virtualisation technology vendor that boasts hundreds of major network operator customers around the world and annual revenues of more than $1.2bn. “With a total addressable market of US$13.7bn and a joint annual R&D budget of approximately US$240m, the combined company has enormous revenue potential and intends to capitalize on global investment opportunities around fiber buildouts,” the companies, which are now both part of Adtran Holdings, noted. “With global headquarters in Huntsville, Alabama, US and a European headquarters in Munich, Germany, the company will leverage its expanded global footprint to provide its partners and customers with an even better service offering.” For further details on the combined operations and their aspirations, see Optical lovebirds eye a $14bn market opportunity.
The government of Germany has adopted a new strategy for the digitalisation of the country. The nation’s federal minister for digital affairs and transport, Volker Wissing, unveiled that the initial goal of the plan is to bring fibre connectivity to half of all households across Germany by the end of 2025. The broader goal is for full fibre and 5G coverage by 2030. He added that the nation’s gigabit strategy creates “the right framework” to reduce bureaucracy for private companies, which intend to invest €50bn into fibre expansion in the coming years. Learn more from the ministry’s statement, here (in German).
The Taiwanese government is reportedly mulling a hefty fine for Foxconn for investing in Chinese chipmaker Tsinghua Unigroup without obtaining the necessary approval. According to Reuters, the authorities are considering hitting Foxconn with the maximum possible penalty of up to 25m Taiwan new dollars (TWD) (approximately $835,000) for its investment in the semiconductor company, which was made through a subsidiary.
For those hoping the mobile core network system market would pick up soon – there is a body of opinion that suggests operators are not investing fast enough in their 5G standalone core platforms – here’s a forecast from The Dell’Oro Group that will dampen your spirits. According to the research house, “industry headwinds are expected to decrease mobile core network (MCN) market growth. Worldwide MCN five-year growth is now forecasted at a 2% compound annual growth rate (CAGR), compared to our January 2022 forecast of 3% CAGR.” Oh dear. Read more.
- The staff, TelecomTV
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