What's up with... Telecom Italia, Huawei, Iliad
- Telecom Italia to begin merger talks with Open Fiber
- Huawei names CFO Meng Wanzhou as one of the company’s three rotating Chairs
- Iliad completes purchase of Polish cable operator UPC Polska
Fixed line fixes are a feature of today's news round-up with TIM preparing for merger talks with Open Fiber; while Iliad has added a fixed line provider to its Polish holdings.
Telecom Italia (TIM) has signed a non-disclosure agreement with Italian state lender CDP to begin talks on a potential merger of its fixed network with state-backed broadband provider Open Fiber. The Italian operator aims to seal a memorandum of understanding by 30 April to define “the objectives, the perimeter, the structure and the main evaluation criteria and parameters” related to the integration project. The future of the Italian telco player remains uncertain as the latest move comes only a few weeks after TIM agreed to hold formal discussions regarding a non-binding €10.8 billion acquisition offer it received from Kohlberg Kravis Roberts & Co. (KKR) in November. (See TIM agrees to takeover talks with KKR, but keeps its options open.)
From naughty step to rotating chair Huawei has named CFO Meng Wanzhou as one of the company’s three rotating Chairs. Meng is the daughter of Huawei founder Ren Zhengfei and was the subject of a three year house arrest in Canada (which she was passing through at the time) following a US Justice Department indictment on charges of violating sanctions on Iran. She was arrested in December 2018 on behalf of the US government, and released in September 2021 when she and Huawei agreed that in exchange for the charges being dropped she would admit to making false statements about Huawei's business dealings with Iran. So far there is no official word from Huawei about exactly when she might assume her six month stint at the top of the company.
The Iliad Group and Liberty Global have completed the sale by Liberty Global of Polish cable operator UPC Polska, to Play, Iliad’s Polish subsidiary for €1.5 billion. UPC Polska is one of Poland’s leading internet service providers, with 3.7 million fibre-connected households and 1.6 million single fixed-line subscribers. Iliad says the move gives it a further foothold in the Polish market after its acquisition of Play, in late 2020. Iliad says it aims to follow its convergence playbook to develop a new convergence leader in Poland in both the BtoC and BtoB markets. Find out more about Iliad here.
Look Mum, no servers… The global ‘Serverless Apps Market’ is projected to grow by a CAGR of ~23% from now to 2031. That’s according to researcher Nester which has compiled a report, and its finding is backed up by other researchers pitching in with similar growth projections. ‘Serverless' is essentially the next step away from specific hardware ownership and nuts and bolts system management for cloud apps. The best/most succinct definition comes courtesy of Red Hat which defines ‘Serverless’ “as a cloud-native development model that allows developers to build and run applications without having to manage servers. There are still servers in serverless, but they are abstracted away from app development. A cloud provider handles the routine work of provisioning, maintaining, and scaling the server infrastructure,” which means - amongst other things - that the user company doesn’t have to staff up and take responsibility for that under-app complexity. It all makes perfect sense as a growth area, especially for smaller companies and SMEs who are being cajoled into the cloud but don’t want to go there (see - What’s up with… When top down planning gets wheelspin) and maybe for telcos who want to service them across 5G.
Reimbursement rip-off?: On June 15 some US telcos will begin to get reimbursed for the cost of “ripping and replacing” Huawei and ZTE infrastructure from their existing networks under the provisions of the Secure and Trusted Communications Act of 2019, which designated the Chinese companies as risks to US national security. However, not all applicants to the FCC-administered scheme will be paid what should be due under the terms of the settlement because the funding allocated to it is US$3.7 billion short of what is needed fully to satisfy all claims. Two years ago the US Congress voted through $1.89 billion to be set aside to cover expected expenses but after quickly reviewing 181 of the applications for reimbursement made by 31 January this year, the FCC realised that the money available just isn’t enough and increased the estimate of the total required to $5.6 billion. The regulator is legally bound to certify approval of successful applications on June 15 but won’t be able to pay all the applicants what they are owed - unless the Congress votes more cash to the process, which is unlikely before sometime in 2023. Of the applications, 14 operators, each with fewer than 10 million customers, are claiming sums in excess of $100 million each. However, unless the magic money tree is given another severe shaking and the fund quickly topped up to $5.6 billion, the rules are that reimbursements will be made pro rata according to the size of the sums due but service providers with fewer than two million subscribers will be prioritised. The bigger operators don’t like that and arguments, recriminations, intense lobbying and threats of legal action will likely follow.
ARMing the world’s data centres: The complications of foreign ownership across ideological boundaries continues to be a focus of regulatory concern for UK chip designer ARM and all who sail in her (see - What’s up with… Arm and SK hynix) but good news about ARM’s actual technology prospects comes courtesy of TrendForce Research which observes that, in order to improve service flexibility, the world's major cloud service providers have already gradually introduced ARM-based servers and it’s a trend the researchers expect to intensify, propelling ARM’s penetration rate in data centre servers to 22% by 2025. This latest trend was spearheaded by AWS whose ARM-based processor deployment reached 15% of overall server deployment and will exceed 20% in 2022, claims the research outfit. This is a welcome development for ARM which has always struggled to make headway against the dominant x86 chip family in the data centre. Now, a confluence of disparate advantages and events appears to be turning the tables, albeit slowly. TrendForce cites three big ones: it says the ARM chips can “support diverse and rapidly changing workloads better and are more scalable and cost-effective. Second, ARM-based processors provide higher customization for different niche markets with a more flexible ecosystem. Third, [their] physical footprint is relatively small which meets the needs of today's micro data centres.” To which can be added the new geopolitical driver and need, in the light of recent violent events, to strengthen national data sovereignty and cybersecurity. The development of very local and small ‘edge’ data centres to this end, therefore favours ARM-based processors which are a better fit, use less power and take less space, according to TrendForce Research.
Philippines ‘Double Unicorn’ will go to IPO. Over in Manila, the privately-held start-up Global Finch Innovations Inc., is worth over US$2 billion and is doing exceptionally well. It is an arm of Globe Telecom which not only operates the biggest mobile network in the country but also one of the largest fixed-line and broadband networks. Last year Globe Telecom’s total mobile subscriber base was 86.6 million and the company’s GCash payment platform ‘Mynt’ recorded US$73 billion in gross transactions. Mynt's hugely popular GCash app (it has close to 50 million users, which is half the population of the Philippines) allows customers to buy prepaid airtime; pay bills at over 600 partner billers nationwide; send and receive money anywhere in the Philippines; make purchases from over three million merchants and social platform sellers and also have access to savings, credit, insurance and investments They can also place bets on cockfighting “contests”. It handles 20 million active transactions daily. Now Globe Fintech is adding trading in crypto currencies and stock and shares to its portfolio before going to IPO. CEO Ernest Cu commented , "We want to diversify our revenue.” He’s certainly doing that. He added that Globe is “no longer a one trick pony that’s only in telecom. We now have a fintech business and a telecommunications business. Eventually, we will have a health business, an e-commerce business. So it’s turning into a group of digital companies that feed on each other.” The parent company is further diversifying into data centres on the premise that “domestic demand and customers wanting to hedge geopolitical risks” will “make the Philippines even more attractive for the industry.” Some 47 per cent of Globe Telecom’s common shares are owned by Singapore Telecoms while the Ayala Corporation, the oldest and biggest conglomerate in the Philippines, with interests ranging from telecoms and financial services through to health care and power generations 31 per cent.
Thinking ahead to the quantum destruction of cloud security A week on Thursday a countdown clock will begin to tick down the years, days, months, weeks, minutes and seconds to the day when a quantum computer will be able to break and negate the present day’s most advanced and well-protected cloud cybersecurity systems. The clock (you can see it here Year to Quantum (Y2Q) countdown clock) is the brainchild of Cloud Security Alliance (CSA), based in Seattle in the US. The eminently reputable non-profit body is dedicated to the definition of standards, certification and best practices in secure cloud computing. Day Zero is April 14, 2030 - eight years hence. The CSA hopes the countdown, taken together with a programmes of education, reminders and warnings, will focus attention on the imminence of the threat and so spur stakeholders, including scientists, researchers and enterprises and organisations, urgently to plan and design counter-measures and solutions to protect cloud security in the coming age of quantum computing. Bruno Huttner, the co-chair of the CSA’a Quantum-safe Security Working Group (and Director of Strategic Quantum Initiatives at ID Quantique, then Geneva, Switzerland-headquartered company that specialises in quantum key distribution systems, quantum safe network encryption, single photon counters, and hardware random number generators) said, “There are solutions that can be used to mitigate quantum’s threat. For instance, new quantum-resistant algorithms can be combined with other solutions already utilising quantum properties like Quantum Key Distribution. Together they are part of a new quantum-safe infrastructure that can already improve cloud security and cybersecurity in general. But these solutions will only be effective if we take steps to implement them now. As the quantum age draws nearer, discussions on how to utilise the technology, and, most importantly, protects organisations against the risks it poses are moving out of the hypothetical and into the practical. Part of this process is to educate key stakeholders about these threats and opportunities.” Jim Reavis, the CEO of then CSA added, “Now is the time to prepare for a quantum-safe future.”
Rossiya Bank is reportedly planning to invest RUB3 billion (approximately US$35.5 million) into creating a mobile operator in Crimea (the region which Russia annexed in February 2014). Russian newspaper Kommersant stated that the project involves launching a 4G network provider within the next seven years, and involvement includes wired Internet provider Miranda-Media which is associated with Rostelecom but the latter explained to the media it is not participating in the project. Analysts reportedly said that the creation of a new telco player will require a much bigger investment than the cited amount, and a challenge is the purchase of equipment due to shortages. You can see more here (in Russian).
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