What’s up with… Orange, Arctic fibre, Eircom

TelecomTV Staff
By TelecomTV Staff

Oct 25, 2022

  • Orange keeps growing but comes under investor pressure
  • Far North Fiber makes waves with its Arctic network
  • Eircom taken to task over alleged blocking tactics

In today’s industry news roundup: Orange keeps growing but investors are still concerned; climate change advances plans for an Arctic fibre link; Ireland’s national operator is in trouble; and more.

Orange showed some encouraging trends in its third-quarter results as revenues edged up slightly year on year, operating income dipped slightly but due to increased investment in its networks, and revenues from its enterprise business (Orange Business Services), which is being revamped under new leadership, stabilised due to increased demand for enterprise IT and integration services that offset an ongoing decline in demand for legacy services. CEO Christel Heydemann noted: “In an inflation-dominated macroeconomic environment, Orange has again delivered resilient results and demonstrated the complementary nature of its different markets. The Group’s third-quarter revenues grew by 1% largely thanks to the contribution of its European countries and Africa. EBITDAaL also grew slightly, rising 0.2%, thanks in particular to Scale Up, our program of net savings on indirect costs, which continues to deliver to plan.” But according to Reuters, investors are still not certain that Heydemann, who became CEO in April this year and recently addressed some of her priorities, has a clear strategy for the giant operator, and Orange’s share price dipped by 1.6% to €9.34. That seems rather harsh, given that Heydemann appears to have moved quite quickly to deal with the group’s problem children, namely Orange Business Services and Orange Bank, the latter of which is currently under review

Melting Arctic ice is assisting with a subsea cable, which is to be laid across the top of the world between Europe and Asia via the Northwest passage. The project, dubbed Far North Fiber, is being undertaken by an international consortium, involving Finland’s Cinia Oy, Alaska’s Far North Digital and Japan’s Arteria Networks, and will run from Scandinavia, via Ireland and North America, before finally landing in Japan. The 17,000km system, which connects Europe and Asia at the lowest possible latency, is expected to go into service at the end of 2026. 

The Irish telecoms regulator ComReg is taking Eircom, the republic’s biggest telco, to court because of its alleged ongoing refusal to co-locate competitors’ equipment in its exchanges as it continues to stifle competition. The privatised Eircom, now trendily trading simply as ‘eir’, used to be Telecom Éireann, Ireland’s former monopoly telecoms services provider. It remains Ireland’s largest fixed, mobile and broadband operator but is incorporated in the Channel Islands, which are Dependencies of the British Crown that float in the English Channel on the other side of the UK and, thus, quite a distance from Dublin. ComReg claims that eir, as the country’s dominant telco, has long been in breach of regulations requiring it to permit its rivals to access exchanges, ducts and cabling etc. Let’s not forget competitors do have to pay for the privilege: Co-location doesn’t come free; eir makes money from it. The case has been batted back and forth since 2019 and ComReg has issued eir with a Notice of Non-Compliance with its regulatory decision. Its patience obviously now exhausted, ComReg wants a €5.3m fine imposed on eir which, should it come to pass, would be a pyrrhic victory in that it would have about as much effect on eir's balance sheet as a gnat having a gnaw at an elephant’s toenail in the hope of causing the pachyderm a fatal bleed. Furthermore, and as might be expected by now, eir has been kicking up a fuss about the regulator’s decision to place the case before the fast-track Commercial Court division of Ireland’s High Court and has now agreed to join mediation talks with ComReg – in December. Have yourselves a merry little Christmas.

British householders are now well aware that they are looking into an inflationary abyss, due to a catastrophic pile-on of events and political missteps. As a result, many residential users will be looking around for expenses they can slash, so UK telcos,  broadband and OTT service providers are all hatching cunning discounts and deals to limit the inflationary damage. Just a few examples: BT is offering free broadband for the first three months of a 24-month contract; Broadband provider Hyperoptic is offering a 1GB connection for just £25 per month and claims this price means many customers will be saving £400 per year when compared to rival offerings; and Vodafone is offering a new cut-price social broadband tariff, from £12 per month, available to anyone claiming benefits.

Brussels, Belgium-headquartered ETNO, the European Telecommunications Network Operators' Association that represents Europe's leading telecom operators, has just published a study on the likely effects on the telco sector of the European Union’s new Data Act. The report said the legislation, when enacted, will, by 2028, “unlock a series of major socio-economic benefits”. The rewards will include the creation of 2.2 million new jobs and will boost gross domestic product (GDP) in the 27 EU member states by a hefty 1.98%. ETNO added that the new Data Act will also help foster more competitive cloud markets. Currently, CSPs and DSPs are both users of cloud computing services and providers of edge and cloud computing services, and forecasts show that European enterprises will have spent some €4bn in Europe itself on public edge computing services by the end of this year. The research stresses that, in due course, telcos will further benefit from a more competitive and dynamic cloud market thanks to easier switching between providers.

Modular datacentres are on the rise. According to Spherical Insights, which has issued a report, the global modular datacentre market  was estimated to be worth around US$16.56bn in 2021 and is expected to grow to $65.55bn by 2030. There are several drivers. Modularity makes it easier to expand and develop specialised prefabricated units according to need. Regulations for improved environmental protection and energy saving are a big factor in their popularity too. Modules are much easier to cool and are reckoned to be around 40% more energy efficient than the classic big open room – right now that’s obviously a major consideration and will continue to be so for the  foreseeable future. Read more information on modular data centres and the report, here

In the US, more and more households are cancelling their expensive paid-for tv services as inflation bites. Interestingly though, they are simultaneously signing contracts for high-speed broadband access, often from the very same pay-tv operators whose other services they are junking. Parks Associates, a Dallas, Texas-based research house, says the trend towards homes requiring faster internet broadband is accelerating rapidly as users opt for over-the-top video, in general, and streamed live sports, in particular. Parks Associates calculates that if the demand continues on its current trajectory, 93% of all US households will be subscribers to value-added fast broadband by mid- to late 2025. Kristen Hanich, research director at Parks Associates commented: “The home broadband market is entering a time of renewed competition and innovation, with the emergence of several new players and growing fibre deployments. Optimised Wi-Fi and gateway-based cybersecurity are popular in the residential market, and in the multiple dwelling unit (MDU) space, bulk internet and managed Wi-Fi deployments make this a competitive, but potentially lucrative, market.”

Chinese operators now have over 1 billion 5G subscriptions, according to The Register, which has been totting up the subscribers logged by the big three Chinese operators. It says these indicate a 5G adoption rate of 70% of the country’s 1.4 billion population. Why we (the rest of the world) were urged to enter a so-called ‘race to 5G’ remains the mystery as it’s now clear that we stood no chance of getting anywhere near the finish line!

UK regulator Ofcom says it’s developing a behavioural insight capability to help it counter big tech dangers online and users’ apparent inability to avoid being manipulated. It could be an early sign of a fresh, less legalistic approach by the UK watchdog. It says it’s setting out to understand online behaviour (and how it’s being exploited by the usual suspects) and it heads the article explaining its approach with “Tech firms work hard to understand user behaviour – so do we”. That sounds to me like a warning shot across big tech’s bows. The article points out that social media  “design features can lead to harm online, for example by encouraging or enabling children to build large networks of people – some of whom they often don’t know; or by exposing them to content or connections they hadn’t proactively sought out. And the way search results are presented influences whether users pay attention to content warnings or notice links to support services.” Judging by the article, it sounds as though Ofcom wants to correct and guide both big tech and its users, rather than simply deploy whack-a-mole regulations to curtail harmful behaviour as it arises. That means it has to get to grips with online psychology to make its case.

- The staff, TelecomTV

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