What’s up with… Telecom Italia, Broadcom and VMware, Nokia

TelecomTV Staff
By TelecomTV Staff

Jul 7, 2022

  • Telecom Italia plans the splits
  • Broadcom sitting pretty as rival bids fail to materialise 
  • Nokia and Orange France deploy Passive Optical LAN

Telecom Italia (TIM) presented what it dubbed a “defined perimeter” of its plan to split into two separate entities, providing further details on the move which is, for the most part, a way to cut debt and attract new industrial and financial partners. Essentially, the plan is for a “potential separation”, which would see its fixed network infrastructure assets fall under a standalone company called NetCo, while its consumer and enterprise services, in addition to its Brazilian unit, would be incorporated into a new entity named ServiceCo (which slightly differs from earlier reports for a service unit called ServCo.) Furthermore, NetCo will house TIM’s fixed network, alongside its domestic and international wholesale businesses, Sparkle, and will aim to be “the first example in Europe of a fibre network infrastructure and technologies hub available to the whole market and with a widespread presence across the country”. In terms of ServiceCo, on the enterprise side, the unit will include digital companies Noovle, Olivetti and Telsy, in addition to datacentre assets. And in terms of consumer services, it will include fixed and mobile commercial activities in the small- and medium-sized enterprises retail market, including mobile network assets and service platforms. As for TIM Brasil, the plan is for the division to continue on its journey towards becoming a next-generation telco. According to the company, the plan would also open possibilities for new minority shareholders in TIM Enterprise – read more here.

So, the 40-day “go-shop” deadline has passed and, with no rival bids having been tabled to counter Broadcom’s proposed acquisition of the cloud and virtualisation specialist VMware, the deal is now more likely than ever to go through with the mooted completion being sometime in financial year 2023, and definitely no later than 31 October 2023. A sizeable proportion of VMware customers are not happy at the prospect. Broadcom only made its $61bn offer to take over VMware on 26 May, and things have since moved fast. Of course, the deal is still subject to approval by VMware shareholders and the usual US regulatory hurdles remain, but they are set pretty low. That said, the EU is now taking increasing interest in the proposed buyout and could yet upset Broadcom’s cost-cutting applecart. Analysts, such as S&P Global Market Intelligence and Gartner, have come out against the takeover, citing surveys of VMware customers that show some 56 per cent of them are very wary indeed of the probable impact on software licensing T&Cs and the associated increased costs. They are also concerned that Broadcom, notorious for its cost-cutting proclivities where takeovers are concerned, will take a sharp scythe to VMware’s renowned and expensive research and development efforts and, as has also happened previously, focus only on the ruthless upselling to big corporate customer accounts to the detriment of smaller enterprises, where VMware is strong. There are more than straws in the wind to support that bleak prospect. Indeed, entire giant haystacks have been blown hither and yon across the landscape since Tom Krause, the boss of Broadcom’s Software Group, announced that the merged company will “phase out” perpetual licences and replace them with a subscription-based model. Such a strategy would have profound ramifications for VMware’s 300,000 strong-customer base, and it is thought that many of them might vote with their feet and wallets and take their business elsewhere.

Today, Nokia announced a passive optical LAN (POL) solution for Orange over 20 sites in France, including Bridge, the new Orange headquarters in Issy-les-Moulineaux near Paris. This POL solution replaces the existing copper-based LAN that connects more than 5,000 end points, including Wi-Fi and hard-wired terminals. Nokia claims the Optical LAN means Orange can deliver superior user experiences as well as a low-energy solution for in-building and campus connectivity, which can be cost efficiently upgraded to increase speed and capacity as required. Nokia has been promising great deployable fibre technology and applications for some time and touting ever-faster speeds. With the addition of Bell Labs (which it inherited when it merged with Alcatel’s telecoms outfit) it can be counted as an optical powerhouse and it regularly pops up to announce eye-watering optical fibre records. Last month, it presented what it claimed was the first 100Gbit/s passive optical network (PON) at  Fiber Connect 2022 in Nashville, saying it had achieved that speed downstream on a single wavelength – see Nokia showcases first 100Gb/second fiber broadband technology in the USObviously  successful speed demos are one way to show the inherent upgradability of fibre (unlike high-speed radio tech), but it’s not just speed being touted – there’s always a low-energy promise too. According to Stefaan Vanhastel, CTO of Nokia Fixed Networks, “Fibre is the ultimate broadband infrastructure. It has almost unlimited capacity with only changes to the electronics at either end needed to increase speed,” he claims. “Today, fibre can already deliver 10G and 25G speeds. In the second half of this decade, 50G will be made available. With this proof-of-concept demo, we show that 100G is already within reach of all with the fibre network infrastructure currently being built.”

Russia’s Mobile TeleSystems (MTS) has reportedly acquired a 25% stake in New Digital Solutions LLC, a joint venture (JV) to develop 5G technology in Russia. The JV was originally formed by MegaFon and Rostelecom back in 2017-18 with the idea of sharing what looked likely to be the eye-watering cost of building 5G across Russia (at that time, various wholesale networks and JVs around the world were being mooted as the only way into 5G). That original Russian JV was fortified by Vimpelcom, which joined in 2021.  With the Russian invasion of Ukraine and the subsequent telecoms and IT pullback by global tech companies, the need for a joint effort presumably felt even more urgent. The JV is laying the 5G groundwork in Russia by testing for electromagnetic compatibility, reports Interfax, and implementing measures to clear spectrum for it to use. The Russian State Commission for Radio Frequencies granted a two-year allocation to New Digital Solutions to test spectrum in the 4400-4990 MHz range.

A new report says telecoms will be the fastest-growing business sector in Africa between now and 2027. In its latest survey, London-based World Mobile, a mobile operator whose network is built on blockchain, reveals that 75% of Africa’s top management, including CEOs, CTOs and CIOs representing a variety of industries, believe telecoms will thrive as internet connectivity improves, bandwidth becomes more widely available and less costly and economies across the continent reap the benefits. Senior executives in Angola, Botswana, Cameroon, Ethiopia, Ghana, Nigeria, South Africa and Tanzania, from companies with combined annual revenues of US$6.75bn, were polled and agreed that telecoms will be the most significant driver of economic growth over the next five years, ahead of healthcare cited by 61% of respondents, tourism by 44%, retail by 36%, and manufacturing and education, both cited by 22% of respondents. World Mobile’s mission is to greatly improve internet connectivity and bandwidth in sub-Saharan Africa and its innovative blockchain-based network greatly reduces capital expenditure and cuts costs when compared to traditional telecom operators. Currently, the company is collaborating with the government in Zanzibar where it is launching a unique hybrid mobile network delivering connectivity that is supported by low-altitude platform balloons to provide affordable and reliable digital communications services. It is also in discussions to expand in Tanzania and Kenya, as well as other territories that are under served by traditional mobile operators. World Mobile’s balloon-based network will be the first to be officially launched in Africa for commercial use. Find out more.

In Canada, the contentious proposed merger between Rogers Communications and Shaw Communications remains unresolved after a two-day mediation process between the two telcos and Canada’s Commissioner of Competition which had listed a series of objections to the joining together of two of the nation’s largest service providers and the likely effects this would have on competition. It was hoped that the mediation would provide a route to an amicable solution for all parties and avoid a lengthy and expensive legal case in Canada’s Competition Tribunal. The matter should now go to trial sometime in November and the process is expected to last weeks, if not months. However, a joint statement was released following the collapse of the mediation, saying: “Rogers and Shaw are not precluded from continuing discussions with the Commissioner at any time. Rogers and Shaw intend to continue to work constructively with the Commissioner to highlight the many benefits of the merger to all Canadians, including maintaining a strong and sustainable fourth wireless carrier across Canada through the proposed divestiture of Freedom Wireless, a subsidiary of Shaw to Quebecor Inc. which is the parent company of Vidéotron.”

- The staff, TelecomTV

 

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