What’s up with… Orange, Verizon, AT&T

TelecomTV Staff
By TelecomTV Staff

Jan 5, 2023

Orange's Michaël Trabbia (left) and Reservoir Sun managing director Mathieu Cambet seal their solar power deal.

Orange's Michaël Trabbia (left) and Reservoir Sun managing director Mathieu Cambet seal their solar power deal.

  • Orange unveils plans for its first solar farm
  • Verizon preps for massive reduction in capex from 2024
  • AT&T still has one more year of “peak capex”

In today’s industry news roundup: Orange goes (solar) farming in rural France; Verizon is ready to focus on making, rather than spending, money; AT&T is also coming towards the end of its major 5G investment cycle; and much more!

Orange has unveiled plans for the construction of its first solar energy farm, which will be based at its satellite communications site at Bercenay-en-Othe, south-east of Paris, and has signed a deal with solar electricity systems specialist Reservoir Sun for the construction of a photovoltaic power station to be located at the same site. Orange says the farm will cover a surface area of 50,000 square metres (the equivalent of seven football pitches), while the power station will have an installed capacity of 5 megawatts (MW) (1MW for self-consumption and 4MW for reinjection). “The power station will supply 20% of the site’s energy needs and surplus electricity can be fed back to the grid,” noted the telco. “This locally generated, low-carbon electricity corresponds to the annual energy consumption of 1,700 homes and will save over 100 tonnes of CO2 every year,” it added. Michaël Trabbia (pictured above, left), interim CEO for Orange Wholesale and International Networks, stated: “We are happy and proud to launch an ambitious local solar farm project at our Bercenay-en-Othe site. This solar farm reflects our additionality approach and is fully in line with our strategy to develop the use of low-carbon energies, in order to contribute to our environmental commitments. This project thus contributes to securing our energy supply while decarbonising our activities.” Orange has been very vocal about its green network and sustainability plans for several years, and Trabbia spoke to TelecomTV about the importance of energy efficiency (as well as many other hot topics) during an exclusive video interview in Paris last September.

Verizon is planning to slash its capital expenditure (capex) budget by billions of dollars by 2024 following years of heavy investment in its 5G network rollout, the US operator’s CEO Hans Vestberg told a Citigroup investor conference, reported Bloomberg. Having invested $22bn in its networks last year, Verizon is set to announce its 2023 capex plans when it reports its full-year financial results on 24 January, but Vestberg told the Citigroup event attendees that its 2024 capex will be about $17bn and boasted it will have the “lowest capital intensity” in the global telco sector at that point. With the major 5G investment cycle coming to an end, Vestberg now wants Verizon to focus on sales growth and cash generation by pushing services such as 5G-enabled fixed wireless access (FWA) broadband services. 

AT&T sees 2022 and 2023 as “peak years” for capital investment as the US operator continues to invest in growing its 5G and fibre services, according to CFO Pascal Desroches who was speaking at this week’s Citigroup conference. AT&T’s capex for 2022 (excluding vendor financing) is expected to come in at around $20bn, so it seems reasonable to expect the same kind of level again in 2023 before that sum tails off from 2024 onwards. (In contrast, domestic rival T-Mobile US has confirmed plans to reduce its capex for 2023 by about 30% – see T-Mobile US confirms capex dip as it boasts stellar 2022.) Desroches added that in 2023 he expects the company to keep its focus on growing customer relationships “in a disciplined manner, proactively reducing costs and remaining deliberate in its capital allocation”. AT&T’s finance chief said he also expects to see growth in free cash flow this year due to increasing wireless revenue from “a bigger postpaid phone base with increasing ARPUs [average revenue per user]; growth in fibre subscribers, ARPUs and revenues; and the benefits of ongoing cost transformation initiatives”. Although he does not expect the wireless industry to grow at levels similar to those witnessed in 2021 and the first half of 2022, Desroches was bullish that “demand remains healthy”. He also reiterated the telco’s goal of providing fibre to more than 30 million premises by the end of 2025. 

The tech and digital economy sectors are suffering further massive job losses. On top of the recent major cuts at Meta and Twitter, Amazon has just announced that it is shedding 18,000 staff and Salesforce is making 8,000 employees redundant. “Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so,” stated Amazon CEO Andy Jassy in his note to the company’s staff. “These changes will help us pursue our long-term opportunities with a stronger cost structure; however, I’m also optimistic that we’ll be inventive, resourceful, and scrappy in this time when we’re not hiring expansively and [are] eliminating some roles. Companies that last a long time go through different phases,” added Jassy. Meanwhile, Marc Benioff, CEO at Salesforce, stated in his letter to the company’s workforce (which can be found in this SEC filing) that “the environment remains challenging and our customers are taking a more measured approach to their purchasing decisions. With this in mind, we’ve made the very difficult decision to reduce our workforce by about 10%, mostly over the coming weeks. I’ve been thinking a lot about how we came to this moment. As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that.” But Benioff won’t be losing his job for making that decision, of course. 

The US Federal Communications Commission (FCC) is preparing to grant dedicated spectrum for unmanned aircraft systems, such as drones, as their use steadily increases. Its proposal, if passed, would make available licensed spectrum in the 5030MHz to 5091MHz band. The agency is aiming to improve the reliability of drone operations as, currently, drones mainly operate under unlicensed and low-power wireless communications rules or experimental licences. “The FCC must ensure that our spectrum rules meet the current – and future – spectrum needs of evolving technologies, such as unmanned aircraft systems, which can be critical to disaster recovery, first responder rescue efforts and wildfire management,” said FCC chairwoman Jessica Rosenworcel. Alongside the proposed rulemaking, the commission is also seeking comments on whether current regulations for various spectrum bands are sufficient to ensure the co-existence of terrestrial mobile operations and drones, or if it should make changes to diminish or prevent concerns related to interference and performance. FCC is also proposing a process for drone operators to obtain a licence in the aeronautical very high frequency (VHF) band to communicate with air traffic control and other aircraft. Read more.

Having launched the pilot of its mobile services in just three locations last August, US cable operator Cox Communications is now set to announce the national launch of Cox Mobile during the CES trade show in Las Vegas, CNBC has reported. In doing so it will join its cable operator peers Comcast, Charter and Altice in competing the with country’s major telcos – AT&T, T-Mobile US and Verizon – for mobile service customers, at a time when T-Mobile and Verizon, in particular, are aiming to eat into the cable broadband services market with their low-priced 5G fixed wireless access (FWA) services, which are proving increasingly popular, as T-Mobile has been boasting this week.  

Rumours are swirling in Italy that state lender CDP (Cassa Depositi e Prestiti) could team up with infrastructure investment firm Macquarie to bid for NetCo, the part of national operator Telecom Italia (TIM) that includes its fixed access network infrastructure (known as FiberCop) and its international networking division Sparkle. NetCo had been on course to merge with rival fixed access network operator Open Fiber, but the deal fell through in late November following the election of a new national government, which has since even suggested the possibility of TIM being nationalised. Now all parties are looking to break the impasse and give TIM some greater certainty about its future structure and finances. Macquarie is not a surprising name to be involved in these negotiations – it is already a 40% stakeholder in Open Fiber and is clearly keen to snap up TIM’s assets and merge them with Open Fiber. But the valuation being suggested in reports, such as this one from Milano Finanza, could be a stumbling block – around €18bn is a price that has been mooted in the past, but it’s way short of the expectations of major TIM shareholder Vivendi, which has previously stated it won’t agree to any sale of the fixed assets for less than €30bn.   

Takayuki Morita, the CEO of NEC, highlighted 2023 as the year when the Japanese company will deepen its focus on socially responsible initiatives, to “reliably provide the social values we create”, such as safety, security, equality and efficiency. He said this year will be “important” in speeding up the transformation of its strategy and culture, refining its 2025 mid-term management plan and making “a big jump forward”. NEC’s chief also expressed confidence that the company will “win the trust of our stakeholders” and make “significant progress toward co-creation for the future world”. According to Morita, the company’s main efforts in 2022 included strengthening its consulting business in the digital transformation field, partnering with other telcos to make progress with the commercialisation of Open RAN, and working on ecosystem creation for the use of artificial intelligence (AI) for drug discovery, in agriculture and to benefit the environment. Read more.

Fixed/mobile convergence contracts, whereby customers take their home broadband and mobile services from the same provider as part of a single contract, are growing in popularity in Europe, according to research group Mobile Experts, which estimates that more than 37% of broadband households in the region now subscribe as part of a converged service. "Fixed mobile convergence appears to have taken root," commented Mobile Experts analyst, Kyung Mun. "European telecommunications providers have realised that convergence is a way to save on key costs, reduce churn, and to enable new converged services,” he added. Read more.

- The staff, TelecomTV

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