What’s up with… Ericsson, Telefónica, SK Telecom

• Ericsson and partners christen their AI factory venture 
• Telefónica reportedly set to build M&A war chest
• Regulator forces further concessions from SK Telecom

In today’s industry news roundup: The AI joint venture set up by Ericsson and a number of major Swedish companies and investors has a name and a CEO; Telefónica is believed to be ready to raise cash from its shareholders so it can go on an M&A spree, potentially starting in Spain; SK Telecom is having to give more concessions to its departing customers following its major cyber incident; and much more!

Sferical AI is the name being given to the Swedish sovereign AI joint venture that boasts Ericsson, pharmaceuticals giant AstraZeneca, aerospace, defence and security giant Saab, banking group SEB, and Wallenberg Investments as its founders. (Investor AB, the investment arm of the Wallenberg family, is one of the two main shareholders in Ericsson.) The formation of the company, which plans to build and run an AI factory in Sweden, was first announced in May as part of a collaboration between Wallenberg Investments president, Marcus Wallenberg, and Nvidia CEO, Jensen Huang. It will be based in Linköping in Southern Sweden, and have Jenny Nordlöw, an advisor at the Wallenberg Office, as CEO. “I am humbled by the task of leading Sferical AI and look forward to, together with our partners, establishing the next generation of AI infrastructure in Sweden and strengthening the competitiveness of Swedish industry,” stated Nordlöw in this announcement by Wallenberg Investments. Sferical AI “aims to strengthen the competitiveness of Swedish industry by providing participating partners with world-class computing power for AI in an integrated, sovereign and secure infrastructure,” noted the partners. Ericsson’s CTO Erik Ekudden added: “Ericsson is looking forward to working with Sferical AI partners to develop, deliver and operate advanced and complex AI to drive Swedish competitiveness – at both individual partner enterprise and national economy levels.” Ericsson Ericsson noted in May that the intended first phase of the AI factory deployment will be two Nvidia DGX SuperPODs featuring the AI chip giant’s latest generation Grace Blackwell GB300 systems, “making it the largest enterprise AI supercomputer in Sweden once operational. It is intended to run compute-heavy AI workloads to speed up processes such as training of domain-specific AI models and large-scale inference, including reasoning AI,” added Ericsson. 

Telefónica is reportedly planning to issue new shares in order to raise funds for an M&A war chest as part of the corporate plan being devised by the Spanish telco’s new CEO Marc Murtra. According to Spanish site Vozpopuli, which cited sources with knowledge of the plans, Telefónica is already in talks with major shareholders, including the Spanish state and Saudi telco STC Group, about the planned capital raise. Murtra, who was appointed as Telefónica’s CEO in January this year, told the telco’s annual general meeting in April that he had begun a major and “ambitious” strategic review of the company that revolved around cementing Telefónica – a company with “enormous potential” – as a European powerhouse. Murtra is also one of the leading voices calling for European lawmakers to allow greater telco sector consolidation in Europe. Reports of the potential capital raise has, in turn, fuelled speculation that Telefónica would target local rival Vodafone Spain as one of its planned acquisitions, according to Vozpopuli. Vodafone Spain, you may recall, was acquired for €5bn in May 2024 by Zegona Communications. Since then, the Zegona team has reversed the fortunes of the competitive operator, with its management heralding a “transformational year” for the company, during which it has been improving its margins and adding new customers for the first time in years, as TelecomTV reported in July. But if Telefónica is interested in its domestic rival, it will have to find a lot more than €5bn to buy the operator, as Zegona now values Vodafone Spain at well above €10bn. The speculation is doing wonders for Zegona’s own valuation as well – its share price on the London Stock Exchange currently stands at £11.60, up by 3.6% in Friday morning trading (since Vozpopuli published its articles) and up by an astonishing 177% since the start of this year. 

Meanwhile, in South Korea, SK Telecom’s post-data breach headache isn’t going away. Following the telco’s major cyber incident, first unveiled in April, and the resulting fallout, SKT cancelled termination fees for mobile customers that decided to switch to another operator as part of its broad efforts to compensate customers and rebuild trust. Now the country’s regulator, the Korea Communications Commission (KCC), has issued a ruling (in Korean) stating that SKT must cut the termination fees of any customer that cancels their non-mobile services, such as fixed broadband or digital TV, by 50% because so many non-mobile services are bundled in multiservice packages that include cellular connectivity. Even worse, SKT must cancel any mobile termination fees for mobile customers that leave at any time this year: Previously, the deadline for avoiding mobile service termination fees was 14 July. Such measures will put further pressure on SKT and increase the opportunities for the operator’s main rivals, KT Corp and LG Uplus, to pick up new subscribers – see KT, LG Uplus make hay as SKT suffers.

Hacking into telco IT systems seems to be the latest trend amongst cybercriminals. Not only have Colt and Orange Belgium been breached in recent weeks, as we reported on Thursday but major Australian broadband service provider iiNet has been breached, it reported in this announcement, while French telco Bouygues Telecom reported a data breach earlier in August (announcement in French only). While iiNet stated that “no credit, banking or financial information have been compromised” and “no driver’s licence numbers, ID documentation details, or bank account details were disclosed as a result of this incident,” it admitted that “a list of email addresses and phone numbers was extracted from the iiNet system” including ”around 280,000 active iiNet email addresses and around 20,000 active iiNet landline phone numbers.”

Ireland’s Competition and Consumer Protection Commission (CCPC) has approved the planned acquisition of BT Datacentres Ireland by Equinix (Ireland), a deal that was first announced in December 2024. Equinix, which already operates six datacentre facilities in Dublin, will shell out €59m to acquire BT’s facilities, which include two datacentres in CityWest and Ballycoolin. 

– The staff, TelecomTV