What’s up with… Deutsche Telekom, Telefónica, Darktrace

• Deutsche Telekom claims green network first
• Spanish state increases its stake in Telefónica
• UK cybersecurity specialist Darktrace accepts $5.3bn takeover offer

In today’s industry news roundup: Deutsche Telekom says it is the first telco worldwide to use large-scale battery storage systems for renewable energies; Spain acquires more Telefónica shares, taking its stake to 6%; UK cybersecurity specialist Darktrace is to be acquired by private equity firm Thoma Bravo for $5.3bn; and more!

With network operators worldwide striving to figure out how to improve the energy efficiency of their increasingly power-hungry networks, Deutsche Telekom claims to be the first telco in the world to use large-scale battery storage systems for renewable energies. The giant German operator, working closely with its subsidiary Power and Air Condition Solution Management GmbH (PASM), has powered on and hooked up its first large-scale battery storage systems in Münster (see picture above), where PASM integrated two large-scale battery storage systems, each with a capacity of 6 megawatt hours (MWh), into the power grid on 24 April 2024. The giant telco is planning further such sites in Hanover, Bamberg and Munich. The operator explains in this announcement (in German): “Large-scale battery storage systems are used to store excess wind and solar energy and release it again when needed. They help to keep the power supply stable, compensate for network fluctuations and facilitate the integration of renewable energies into the power grid. Since renewable energies are not always constantly available, a successful energy transition is not possible without storage technology.” Telekom and PASM plan to be able to store a total of 300 MWh of energy by 2030. “With our large-scale battery storage systems, we can further increase our share of renewable energies and thus actively shape the energy transition,” noted PASM’s managing director, Bernd Schulte-Sprenger. Abdu Mudesir, managing director of technology at Telekom Deutschland and DT’s group CTO, added: “The fact that we are the first telecommunications company to rely on large-scale storage, especially in network operations, underlines our claim to be not only a quality leader but also an innovation leader. The technology combined with cost effectiveness makes an important contribution to Telekom’s ambitious climate neutrality plans by 2040 and ensures that we set up our network to be sustainable and future-proof.”

SEPI (Sociedad Estatal de Participaciones Industriales), the Spanish state-owned industrial holding company, has increased its stake in Telefónica to 6%, having reached the 5% mark in March. SEPI plans to eventually hold a 10% stake in Spain’s national telco, which under Spanish law is classified as a “defence service provider” and a “strategic company”. The holding company is building this stake in response to the move by STC (Saudi Telecom Company), in which Saudi Arabia’s Public Investment Fund (PIF) holds a 70% stake, to take a 9.9% stake in Telefónica via direct and indirect investments. According to this statement from SEPI, its investment in the Spanish telco “provides greater shareholder stability to the company to achieve its objectives and contributes to the protection of the strategic capabilities of a key company in the telecommunications sector and a determining factor in most of the industrial capabilities and areas of knowledge that affect the essential interests of defence and national security.”  

British cybersecurity specialist Darktrace has accepted a $5.3bn takeover offer from private equity firm Thoma Bravo, a deal that values the security technology developer at 620 pence per share. There’s clearly some trepidation about the deal, though, as Darktrace’s stock is currently only trading at 603 pence on the London Stock Exchange, having leaped by about 20% to 620 pence when the deal was initially announced on 26 April. In the M&A documents published late last week, Thoma Bravo noted that it intends to “invest to accelerate Darktrace’s continued development and further scale the business globally”. It added, “Thoma Bravo recognises that Darktrace is a pioneer in using self-learning artificial intelligence to neutralise cyber threats and automate responses to cyber incidents, leveraging its long-standing research and development expertise. Rather than study historic attacks, Darktrace’s technology continuously learns and updates its knowledge of an organisation’s business data and applies that understanding to help transform security operations to a state of proactive cyber resilience. As a result, Darktrace has become a leader in cybersecurity artificial intelligence now providing a full lifecycle approach to cybersecurity enabling its 9,400 customers to identify, stop and respond to all known and unknown threats, across all aspects of an organisation’s cybersecurity tools. Thoma Bravo recognises the strength of Darktrace’s ActiveAI Security Platform, the expertise of its Cambridge-based technology team, the track record of its experienced management team, and the compelling nature of its resilient financial model.” Thoma Bravo has been interested in buying Darktrace for a few years: The companies engaged in merger and acquisition talks in 2022 but were unable to agree a deal. Now, though, with AI sprinkling magic dust over the global tech sector and Darktrace having developed AI-enabled systems for years already – BT is one of the companies that has benefitted for years already from its vendor’s AI insights – the private equity firm has returned with a better offer.  

Perhaps not before time, the deployment of massive MIMO (multiple-input multiple-output) technology in radio access networks (RANs) the world over is set to increase significantly over the next seven or so years, according to a new report, the Massive MIMO Market Forecast 2024-2031, from Bath, UK-based Rethink Technology Research. The report finds that the number of massive MIMO units installed globally per year is set to rise from the 930,000 units recorded in 2023 to 3.07 million per year by 2031 as the sector rides the “5G and Open RAN wave.” As a result, the annual spend on massive MIMO equipment deployed, installed and supported worldwide will rise from $47.7bn in 2023 to $151.4bn by 2031, by which time the research firm expects there to be a total of about 22 million massive MIMO units deployed around the world. That’s important for service providers, as massive MIMO offers greater spectral, improved energy efficiency, broader network coverage and increased capacity (especially important in dense urban areas) and, when combined with beamforming, enables the highly targeted use of spectrum to focus transmission power on individual users and improve the customer experience. Massive MIMO is particularly important in China, with Huawei having made a technological breakthrough in 2013 when company scientists incorporated research on time division duplex (TDD) channel reciprocity for multi-antennas. Basically, 5G supports two duplex modes – frequency division duplex (FDD) and TDD. FDD bands use separate frequency ranges for uplink and downlink, while TDD bands use a single frequency range for both uplink and downlink transmissions. Having made the breakthrough, and working with China Mobile, Huawei conducted the world’s first laboratory prototype test in September 2014 and the first commercial prototype of massive MIMO in September 2015. Subsequently, Beijing Mobile and SoftBank in Tokyo launched massive MIMO commercial test sites in collaboration with Huawei at the end of 2015 and at the start of 2016, respectively. These trials achieved single carrier wave speeds of more than 650 Mbit/s and were hailed as being the answer to spectrum scarcity. As is to be expected given the history of the technology and the size of the market, China dominates the deployment numbers, with a projected 1.12 million massive MIMO units expected to be installed each year by 2031. In second place will be the US, with more than 400,000, followed by India (where 5G services only became available in late 2022) with 262,000 units deployed each year. 

TPG Telecom is to use 2,444 network sites run by its domestic rival Optus in order to extend its 4G and 5G network in regional Australia. As part of the 11-year deal, the two telcos will create a regional multi-operator core network (MOCN) that will enable TPG Telecom to reach more than 98% of the population of Australia. TPG Telecom will pay Optus total service fees of around AUS $1.59bn (US$1bn) over the term but claims the investment is worth it, as it will help it avoid around one-third of the cost of operating and expanding its own regional mobile network. Additionally, TPG Telecom will receive approximately AUS $420m (US$276m) from Optus which will, in turn, use some of TPG Telecom’s unused network spectrum in regional Australia. Iñaki Berroeta, CEO of TPG Telecom, described the deal as “a major breakthrough in TPG’s ambitions” to grow the scale of its business. “Network infrastructure sharing of this kind avoids unnecessary capital investment and high operating costs, meaning there is more value for shareholders and less cost to pass on to customers. The transaction will also allow TPG to monetise its spectrum holdings in regional Australia in ways that were not otherwise possible,” he added. The network sharing agreement builds upon a passive equipment sharing joint venture between the two players, consisting of around 3,500 sites in metropolitan areas across Australia. Find out more.

Talking of Optus… Singtel is taking a non-cash impairment charge hit of $3.1bn Singaporean dollars  (SGD) (US$2.28bn) for the second half of its financial year, which ended on 31 March. The Singaporean operator noted that the charges mostly relate to the lower value assigned to its Australian operation Optus (comprising a goodwill impairment charge of SGD $2bn and a SGD $470m reduction in the balance sheet value assigned to Optus’s enterprise fixed access network assets). In addition, it is recording a goodwill impairment charge of about SGD $340m against its Asia Pacific cybersecurity business, mainly due to “general business weakness on lower corporate spending,” and a SGD $280m impairment charge against NCS Australia, an IT services subsidiary, due “mainly to higher cost of capital.” That total impairment charge will hit Singtel’s reported profits for the fiscal year but the operator said it won’t impact its dividend payments, so the impact on its share price was limited to 2.5% and the stock ended the day on the Singapore exchange at SGD $2.35.  

Ooredoo Group has partnered with Nokia to develop and deploy 5G private networks, and to deliver enterprise solutions to meet a range of needs across a variety of industries. In a statement, the Qatari telco group noted that the pair have signed a memorandum of understanding (MoU) to boost business connectivity with ‘cutting-edge’ 5G solutions, and explained that the move will enable its business customers to achieve advanced digital transformation thanks to “high-performance, low-latency 5G connectivity”, enhanced internet of things (IoT) capabilities and ultra-reliable communication networks. According to Najib Khan, group chief business services officer at Ooredoo, the deal with Nokia marks the beginning of a joint effort to “develop a pipeline for future opportunities in the 5G enterprise domain.”

The United Nations Institute for Training and Research (Unitar) has just published its latest Global E-Waste Monitor report. This fourth such document in the ongoing series makes for depressing reading. In 2022, the latest year for which comprehensive figures are available, some 62 million metric tonnes of electronic waste (e-waste) was produced, an astonishing volume that was up by 82% on 2010. And, if you think that 82% figure is unsustainably bad, consider this – Unitar forecasts that it will grow by a further 33% during the next six years to hit at least 82 million metric tonnes per annum by 2030. Billions of dollars worth of increasingly strategically valuable resources are routinely, and often very cynically, dumped in landfills, at sea or incinerated in places to which the industrialised world pays scant attention. There’s an awful lot of self-congratulatory hype wafting around from governments and enterprises about commitments to the recycling of e-waste but, as the Unitar Monitor shows, just 1% of the demand for the rare earth elements required to power smartphones, laptops, tablets and the myriad of other electronic gadgets that we all now rely on, is currently met via recycling schemes. Unitar says the reality is that the global generation of electronic waste is growing five times faster than documented e-waste recycling. Do note that word “documented”. The undocumented, and thus, by definition, uncounted and often unscrupulous, dumping of e-waste is an enormous problem that only adds to the environmental hazards afflicting the Earth. As technology progresses and its consumption increases, and as product lifecycles get shorter, options to repair devices remain very limited and consumers are under relentless advertising pressure to buy ever more new devices. As a result, the amount of e-waste the planet now groans under increases hour by hour, day by day. That’s why it is so vitally important that efforts to find solutions that can be of help in recycling e-waste are encouraged. One of the latest announced is a breakthrough by a team of scientists at the University of Washington in the US. They have developed a printed circuit board (PCB) that, as usual, houses chips, fuses, transistors, resistors and capacitors that perform within the same range of parameters as traditional PCB materials but can be recycled repeatedly. The method uses a solvent that transforms vitrimer, a class of renewable plastic that can be recycled numerous times, into a jelly-like mass, which nonetheless remains essentially intact and undamaged. This transformation allows solid components simply and easily to be extracted from the jelly for reuse or recycling. The vitrimer jelly can be used time and again to manufacture new ‘vPCBs’ (vitrimer printed circuit boards) and the team of scientists at the University of Washington was able to recover 98% of the vitrimer, all of the glass fibre and 91% of the solvent used for recycling. Analysis of the likely environmental impact of such a new technology found that were the technology to be widely adopted, recycled vPCBs could, in comparison to traditional PCBs, reduce cancer-causing emissions by a potential 81% and reduce global warming potential by 48%.

Here’s a claim to raise a few eyebrows (especially amongst UK internet service providers)... According to research commissioned by Vorboss, which provides broadband services to businesses in London via its own high-speed fibre network infrastructure, “the UK economy has suffered a loss of £17.6bn in economic output over the past 12 months due to connectivity outages. The total for London was £5.7bn, representing just over 1% of London’s GDP.” As a result, Vorboss is urging UK regulator Ofcom to introduce an “automatic compensation regime for business customers,” noting that such compensation measures were successfully put in place for consumers in 2019. Read more. 

Late last week the US regulator, the Federal Communications Commission (FCC), announced that it has reinstated the net neutrality regulations originally introduced during the presidency of Barack Obama and repealed during the Trump years. The new rules define broadband as “an essential service” and so now the FCC has the power to regulate broadband networks, a change many telcos and ISPs, and some politicians, are in high dudgeon about. Along with the published details and remit of the new regime came a short paragraph on the safeguarding of national security, which will have both immediate and longer-term effects on, and implications for, the relationship between the US and Chinese telecom operators, and via them, with the Chinese government. The FCC text reads: “The commission will have the ability to revoke the authorisations of foreign-owned entities who pose a threat to national security to operate broadband networks in the US. The commission has previously exercised this authority under section 214 of the Communications Act to revoke the operating authorities of four Chinese state-owned carriers to provide voice services in the US. Any provider without section 214 authorisation for voice services must now also cease any fixed or mobile broadband service operations in the United States.” The FCC added that Chinese telcos are “subject to exploitation, influence and control by the Chinese government” and has given China Telecom, China Unicom, China Mobile and Pacific Networks (as well as the latter’s subsidiary ComNet) 60 days from the “effective date of the net neutrality order” (25 April 2024) to “discontinue fixed or mobile broadband internet operations in the United States”. The move to stop Chinese telcos from providing broadband services belatedly followed their earlier banning from supplying basic telecoms services. Democrat FCC commissioner Geoffrey Starks noted that a simple examination of China Telecom’s website shows the company has 26 points of presence (POPs) in the US offering co-location, broadband, IP transit, and datacentre services. US government administrations and the FCC have frequently voiced considerable concerns over Chinese access to POPs located in US datacentres. Commissioner Starks commented, “They [the Chinese telcos] are interconnecting with other networks and have access to important points of presence and datacentres” adding that it is high time to “take a closer look at the threats that adversarial providers pose to our data and datacentres”. In point of fact, since 2022, the FCC has been conducting a detailed examination of so-called “vulnerabilities” that could compromise the “security and integrity” of the Border Gateway Protocol (BGP). Utterly vital to the working of the internet, the BGP can be likened to a postal processing system that routes letters and parcels around the world: It selects the most efficient routes for the delivery of internet traffic. However, the BGP has been described as “inherently vulnerable” because researchers have found it is comparatively easy to bamboozle routers into redirecting traffic straight to an eavesdropper’s network without being detected. 

- The staff, TelecomTV