• Microsoft teams up with, and buys stake in, the London Stock Exchange Group
• Meta Connectivity gets the axe
• KKR could yet get its hands on a big chunk of Telecom Italia

In today’s industry news roundup: Microsoft gets cosy with the London Stock Exchange Group in a deal that will add an extra cloud dimension to the way the financial sector transacts across multiple markets; Meta Connectivity falls victim to Zuckerberg’s recent major job cuts; private equity giant KKR is back in the M&A frame at Telecom Italia; and much more!

Microsoft has struck a 10-year strategic partnership with the London Stock Exchange Group (LSEG) that will result in the new allies jointly “empowering the future of financial markets by delivering next-generation data, analytics and workspace solutions that transform how firms connect, research, analyse, collaborate and transact across the entire financial markets value chain.” The tech giant noted in an announcement about the relationship: “Foundational to the partnership will be the digital transformation of LSEG’s technology infrastructure and data and analytics platforms onto the Microsoft Cloud,” while the duo will also “explore the development of digital market infrastructure based on cloud technology, with a goal to transform how market participants interact with capital markets across a broad range of asset classes.” Microsoft “estimates this partnership, and broader market opportunity, could generate an additional $5bn in revenue for the company over the next 10 years, including the $2.8bn minimum spend commitments from LSEG for cloud services and support.” And to solidify the relationship, Microsoft will purchase an “approximately 4% equity stake in LSEG through the acquisition of shares from the Blackstone/Thomson Reuters Consortium”. That stake is estimated to be worth about £1.5bn ($1.84bn). “We are delighted to welcome Microsoft as a shareholder,” said LSEG CEO David Schwimmer (no, not that one!). “We believe our partnership with Microsoft will transform the way our customers discover, analyse and trade securities around the world, and create substantial value over time. We look forward to delivering on that potential,” added Schwimmer, who has been keen to stress that LSEG will continue to work with other cloud services providers. For the full background and details about the partnership, read the Microsoft blog.  

Microsoft is in the midst of a mini M&A frenzy, it seems. As well as its deal with the London Stock Exchange Group, it has also just purchased British fibre specialist Lumenisity. But it’s not all seasonal cheer for the acquisitions team at the technology giant. It has hit a major hurdle in its effort to complete a somewhat larger acquisition: The US Federal Trade Commission (FTC) is "seeking to block technology giant Microsoft Corp. from acquiring leading video game developer Activision Blizzard, Inc. and its blockbuster gaming franchises, such as Call of Duty, alleging that the $69bn deal, Microsoft’s largest ever and the largest ever in the video gaming industry, would enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business," the commission stated in this announcement.

Meta Connectivity (FKA Facebook Connectivity) has fallen victim to Meta’s recent swingeing job cuts and will be shuttered, Meta confirmed to Light Reading late last week. News that Meta Connectivity had been hit by the group-wide job cuts came last month when Eran Tal, director of connectivity infrastructure ecosystems at Meta, noted on LinkedIn that “while the Connectivity technologies team was impacted, we will continue to drive telecom infra technology programs with industry partners, including through the Telecom Infra Project [TIP], as part of Meta’s Network Infra team,” and now Connectivity’s fate has been sealed, with some of the remaining staff going to that Network Infra group and others to Central Products. We await to hear how this will affect TIP, which appears to have reduced its reliability on Facebook/Meta support over the past year.  

Private equity giant KKR, which already owns a slice of Telecom Italia (TIM)’s fixed access network, is in talks to potentially take control of that asset under a deal with the Italian national operator and the country’s new government, according to Reuters. TIM had struck a deal to merge its fixed access network, dubbed FiberCop, with wholesale broadband access rival Open Fiber, but that deal was mothballed at the end of November and now the telco’s CEO Pietro Labriola is looking at multiple investment and spin-off options to discuss with the government as a new future for the operator is mapped out, and it seems new talks with KKR is part of the mix. Xavier Niel’s Iliad, which has been giving TIM some competitive challenges over the past few years, is also reportedly scoping out a potential bid for some of the assets that were identified when Labriola outlined his potential ServeCo/NetCo carve-up earlier this year. But, as there has been all along, there are multiple parties with a stake in the proceedings, not least of which is TIM’s main shareholder, French media giant Vivendi, which isn’t keen on any assets being sold for anything other than premium prices. We’ve said it before and so we’ll repeat ourselves… the longer this drags on, the worse it is for all parties involved. TIM’s future needs to be resolved, and pronto!  

The European Commission is likely to instigate an in-depth antitrust probe into chip giant Broadcom’s planned $61bn acquisition of VMware, according to sources cited by Reuters, which notes that the team reviewing the potential deal is set to complete its initial scrutiny of the deal on 20 December.   

Vodafone Business has moved up a gear in the private networks space, claiming to have deployed the first 5G hybrid mobile private network (MPN) in Europe, in partnership with automaker giant Porsche. The network delivers 4G and 5G coverage tailored for “high-performance testing” at the Nardò Technical Center (NTC), a facility operated by Porsche Engineering that spans more than 700 hectares in the Apulian region of Italy and consists of more than 20 tracks. Its hybrid infrastructure uses a private network fully integrated into the telco’s public mobile network. As a result, both private and public coverage is available at the same location so that NTC customers can make use of a private network that promises “high standards in data security”, while the local population can benefit from faster speeds delivered with the 5G public network. According to the telco, the real-time communications network can help the automaker’s customers benefit from reduced delays, wider bandwidth, enhanced security and reliability, and faster deployment time. Customers of NTC can also use a 1Gbit/s connection and “efficiently develop and validate a wide range of future business-critical applications, from new connectivity, vehicle-to-infrastructure, vehicle-to-vehicle and highly automated driving functions to self-driving vehicles”. Vodafone Business CEO, Vinod Kumar, claimed that 5G MPN can act “as a springboard for companies by enabling them to evolve the way they do business” and essentially bring applications that “will transform transportation and mobility”. Find out more.

Two months after experiencing a “small data breach”, Telstra seems to have compromised customer data again, this time due to “a system error” at its end. Due to the breach, details of some of its customers, including names, phone numbers and addresses “were incorrectly made available via Directory Assistance or the White Pages”, the largest telco in Australia said in a statement, available here. The wrongful listings were due to “a misalignment of databases – no cyber activity was involved”, according to Telstra. Measures taken by the company so far include the removal of the customer data from the Directory Assistance service and the online version of the White Pages, informing affected customers and an internal investigation “to better understand how it happened and to protect against it happening again”. Telstra’s CFO, Michael Ackland, stated: “Protecting our customers’ privacy is absolutely paramount, and for the customers impacted we understand this is an unacceptable breach of your trust. We’re sorry it occurred, and we know we have let you down.” According to Reuters, some 132,000 customers were affected by the breach. This is the latest in a line of security breaches of data held by Australian telcos in the past few months, the most notable of which was a massive cyberattack exposing the data of nearly 10 million Optus customers in September – see What’s up with… Ooredoo, Vodafone, Telefónica and Qualcomm.

Cisco, Fortinet, and Palo Alto Networks are the top-three suppliers of firewalls to enterprise users, grabbing 55% of what was a $3bn-plus market in the third quarter of this year, according to the latest network security market report from The Dell’Oro Group.  

News of ‘above-and-beyond’ coverage from Starlink and T-Mobile US... The US’s Federal Communications Commission (FCC) recently granted regulatory permission for Elon Musk’s SpaceX to launch 7,500 Gen2 Starlink (ie. next-generation) satellites to add to its burgeoning low-earth orbit (LEO) network. The authorisation came three months after the company announced it was to partner with T-Mobile US on the development of satellite-enabled cellular communications services, when the mobile operator’s CEO Mike Sievert and SpaceX chief Elon Musk outlined their “Coverage Above and Beyond” plans to enable service coverage anywhere in continental US, Hawaii, parts of Alaska, Puerto Rico and territorial waters. Initially, this is just using messaging applications, such as SMS, MMS and unspecified “participating messaging apps”, by late 2023, with voice and data coverage to follow later. Even to enable those initial messaging services, SpaceX needs to launch “second-generation satellites [that] will be able to transmit directly to your mobile phone,” Musk noted in late August. The Starlink constellation, which provides data connectivity (effectively, broadband from space) is already huge: Some 3,300 are now in orbit with more being added every few weeks – the original plan was to have 4,425 in place by 2024. But to fulfil the ‘above-and-beyond’ plans, the Gen2 satellites, which feature massive antennas arrays and are much, much bigger than the comparatively modest first-generation ‘birds’, are needed. According to Musk, the Gen2 satellite’s body is about 7 metres long and the antennas, which will need to be loaded onto the satellite, along with the other equipment (Ka-band and Ku-band and laser technology), will fold out once in orbit to be about 25 square metres in size. That increased size prompted the FCC to put a ceiling on the number of Gen2 satellites that can be launched in 2024, the idea being “to address concerns about orbital debris and space safety”. Phased launches will “help ensure safety in the space environment and protect other satellite and terrestrial operators from interference”, noted the regulator. The FCC’s decision came after multiple satellite companies and the even mighty National Aeronautics and Space Administration (NASA), the US federal agency responsible for America’s civil space programme as well as aeronautics and space research, complained that continuous launches of multiple satellites will cause severe problems in what are already heavily-congested orbital planes. Following the FCC’s decision to grant permission for the initial Gen2 launches, Starlink filed a request related to its satellite payloads that would enable its “direct-to-cell” system to provide limited website browsing capability at “theoretical peak speeds of up to either 3Mbit/s or 7.2Mbit/s peak upload (Earth to space) over 1.4 MHz or 5 MHz bandwidth channels per beam, respectively, and up to either 4.4Mbit/s or 18.3Mbit/s on the downlink (space to Earth) over the 1.4 MHz or 5 MHz bandwidth channels per beam, respectively”, using LTE (4G) technology. Musk subsequently noted (on Twitter, of course) that “this is total bandwidth within a cell, so would be divided among all phones… [it] will be great for text messages, voice calls and low-res pics. If only a dozen phones are active, which is true in remote regions, then video will work.” What has not yet been revealed is the cost of any of these ‘above-and-beyond’ services or when (or if) branded Starlink handsets will be available. Musk’s ultimate aim is to have a 42,000-strong constellation of Starlink satellites whirling around the planet. With the likes of Amazon's Kuiper project, OneWeb, China's Hongyan, and the myriad of other space-based communications systems that are either under way or in preparation, there will be well over 100,000 satellites in close, tight orbits by 2030 and earth-based astronomy will be so very severely affected that the “sky surveys” system designed to detect asteroids on a collision course with Earth won’t be able to see clearly enough to do its job. Hmm.

Staying with things Musky, the Renaissance Man and arch-visionary of the 21st century has had the builders in at Twitter HQ in San Francisco. They have been beavering away to transform office space into bedrooms. Musk’s demand for unquestioning obedience and total commitment to his cause on the part of the remaining members of Twitter’s staff is so extreme and the required hours of “high-intensity” work so long that people are expected to sleep in the office for the few hours they are allowed to rest. Unsurprisingly, the San Francisco Department of Building Inspection quickly received a complaint about what was happening and decided to take a look to determine whether city ordinances, zoning laws and building codes were being breached. In essence, commercial buildings are (obviously) not residential premises and come under different regulations. When he heard that the city authorities and mayor’s office were getting involved, Musk, ever the voice of reason, composed this deathless Tweet: “So city of SF attacks companies providing beds for tired employees instead of making sure kids are safe from fentanyl. Where are your priorities @LondonBreed!?” (London Breed is the mayor of San Francisco, who Musk accused of having “misplaced priorities”.) The Department of Building Inspection says it has no record of Musk applying for permission to turn office space at Twitter HQ into sleeping quarters and Patrick Hannan, communications director at the department, said: “Everyone in San Francisco deserves a safe place to live, work, play and sleep and no one is above the law.” Musk doesn’t like that. He prefers to do things as, when, and where he wants and, when thwarted, has a history of upping sticks and moving to another part of the US that he thinks will be more accommodating of his demands. He moved the Tesla HQ to Austin, Texas, after a spat with other Californian regulatory authorities and has already indicated he’s prepared to do the same with Twitter. According to a Bloomberg report, Musk recently said, on a Twitter Spaces live audio conversation, that “the left-leaning politics” of San Francisco have “influenced the culture at Twitter HQ”. He claimed: "What is happening is an export of the moral framework of San Francisco to Earth. This is kind of a big deal and problematic.” The governor of Texas, Greg Abbott, says he would welcome Musk and Twitter to the Lone Star State with open arms. It might not be long before the two embrace in a manly bear-hug under the portico of a new Twitter HQ – one with even fewer employees.

The scandalous collapse of FTX has had one beneficial effect: Gangs of North Korean cryptocurrency hackers will have to be redeployed to the good old standby of printing poor counterfeit copies of US$100 bills that fool almost no one. The regime needs hard currency, not least to keep the country’s leader in the kilos of exclusive French cheese he needs to get through his working day, but the value of cryptocurrencies was already falling like stones even before FTX imploded in what has been described as a “complete failure” of corporate controls, taking investors’ real folding money with it. That means North Korea will find it next to impossible to steal crypto to anything like the value of the $840m the New York City-based blockchain monitoring and research outfit Chainalysis calculates was pirated by the regime between January and May this year. The total for the whole of 2022 is expected to top $1bn. It’s unlikely to be that high again now that the crypto stream is drying up. Take the opinion of Nouriel Roubini, the respected, influential and determinedly pessimistic Turkish-born Iranian-US economist: He earned the soubriquet of ‘Dr Doom’ after correctly and very accurately foretelling the 2008 global financial crash but refers to himself as ‘Dr Realist’. Late last week, Roubini tweeted that the “standard operating procedure in crypto is to take the highest risks ever & go bust with probability of 99.9% just for the unlikely option value of becoming a billionaire. That is why all crypto will go extinct.” Earlier, Dr Doom had written, “Crypto is corrupt gambling where the house always and systematically front runs the retail suckers” who, of course and as usual, wind up losing their cash. In addition, Troy Stangarone, senior director at the Korea Economic Institute of America, noted recently in the current affairs magazine The Diplomat that FTX’s demise "also has implications for North Korea’s ability to continue to exploit weaknesses in the virtual asset ecosystem”. He added: “Changes will likely take time, and the vulnerabilities in open-source software may be a permanent feature of the industry, but the scale of the FTX collapse will likely result in the types of corporate and regulatory changes that will make crypto less useful for North Korea. For a regime that has become as dependent on crypto to avoid sanctions and steal hard currency, FTX’s collapse couldn’t be more ill-timed.” Oh dear, how sad… never mind.

- The staff, TelecomTV