What’s up with… Deutsche Telekom, Ericsson, Virgin Media O2

  • Deutsche Telekom still has faith in Open RAN
  • Ericsson starts cutting jobs as part of latest efficiency drive
  • Virgin Media O2 linked to bid for FTTx altnet

In today’s industry news roundup: Deutsche Telekom shares its O-RAN Town insights and commits to an Open RAN future; Ericsson to reduce its headcount in Sweden by 1,400; Virgin Media O2’s parents linked to potential acquisition of UK fibre altnet Trooli, and much more! 

In a new document published today, Deutsche Telekom has reaffirmed its commitment to making “Open RAN the technology of choice for future networks” despite the multiple challenges it faced during its recent O-RAN Town trial in Neubrandenburg, a town of about 65,000 residents north of Berlin, which the operator has previously described as disappointing. Franz Seiser, executive tribe lead for Deutsche Telekom’s access disaggregation, technology architecture and innovation unit, noted during a recent interview with TelecomTV that the operator had learned a lot from the O-RAN Town trial, the network for which was built using technology from Mavenir, Dell Technologies, Intel, NEC and Fujitsu, but that there is still a lot to do before Open RAN systems are ready for mass deployment. The results of that trial had led to some speculation in the industry that Deutsche Telekom might abandon its Open RAN plans altogether, but in a whitepaper published today, the operator notes that the deployment of open, disaggregated RAN systems is still very much part of its networks strategy and that the takeaways from O-RAN Town have “informed our requirement setting and decision-making as we prepare for the next stage of our Open RAN journey at Deutsche Telekom.” Indeed, the team at DT notes that “by leveraging advancements in cloud and silicon technologies, it is our ambition for Open RAN to eventually outperform the state-of-the-art S-RAN [single RAN] solutions in terms of performance as well as deployment and operational efficiency.” As Seiser pointed out to TelecomTV, there is still a great deal of work to be done, but DT also today reiterated its plan to qualify vendors “in preparation for an initial commercial rollout of Open RAN from 2023/24.”

Unfortunately, it’s not just the big tech and major IT companies that are cutting jobs in 2023… As part of its plan to reduce its annual expenses by 9bn Swedish krona (SEK) (US$868m) by the end of this year, Ericsson is reducing its headcount, something that had already been reported. Now details are emerging of how many staff are being affected: In Sweden, about 1,400 Ericsson staff are set to lose their jobs, according to Reuters, while details of the number of positions affected in other countries are set to be revealed in the coming days. Ericsson ended 2022 with more than 105,000 staff, having increased its headcount last year by more than 4,200, most of whom were part of the $6.2bn acquisition of Vonage. Ericsson’s full-year selling and administrative (SG&A) expenses in 2022 came to SEK35.7bn ($3.45bn). Meanwhile, reports from China suggest that network equipment and handset vendor ZTE is also reducing its headcount, but no numbers have been mentioned.   

Virgin Media O2 and its parent companies, Liberty Global and Telefónica, are among a number of parties considering a bid to acquire UK fibre-to-the-premises altnet Trooli, which is seeking a buyer and is expected to be valued at more than £100m, according to Sky News. If VMO2’s parents decide to bid, the M&A move might be made through the Nexfibre joint venture set up last year by Liberty Global, Telefónica and InfraVia Capital Partners to build out a new UK fibre access network that will pass 7 million UK premises. Trooli, which is aiming to pass 1 million premises in rural and semi-rural areas in the south-east of England by the end of 2024, has been seeking a buyer or a new investor for a few months, having failed to secure a new funding round last year – see UK fibre altnets face 2023 squeeze.

Ashwini Vaishnaw, India’s minister for railways, communications, electronics and information technology (the man with three ministries – how’s that for a portfolio?) says the rest of the world has quickly learned that India’s home-grown 4G and 5G equipment and expertise is so good that the nation will be a major exporter of telecoms technology by 2026 – and perhaps even earlier than that. In a speech at the Economic Times Global Business Summit 2023 over the weekend, the minister singled out for praise the remarkably rapid rollout of domestic 5G and noted that within 100 days of the launch of the first such services on 1 October 2022, by Reliance Jio and Bharti Airtel, 5G was available and operational in more than 200 Indian cities. Vaishnaw said India is enjoying the “fastest [5G] deployment happening anywhere in the world”, a feat, he added, that has attracted the attention and admiration of the entire world. He told his audience: “The [4G and 5G] stack is now ready. It was initially tested for 1 million simultaneous calls, then for 5 million, and now it has been tested for 10 million simultaneous calls” and is a “phenomenal success”, with at least 10 countries interested in trialling it. He’s right about the success but over-gilded the lily by claiming that while “population-scale” telecoms solutions are being tested on India’s indigenous 5G stack across various platforms (including healthcare, identity and payments) are very important individually, together they are a “dynamic force” able to provide a solution to “any major problem in the world.” Presumably he meant any major telecoms problem, and not that Indian 5G is the panacea for all the earth’s ills. Meanwhile, Nirmala Sitharaman, India’s minister of finance and corporate affairs, has announced that 100 5G labs will be set up in India’s top engineering institutions and universities. She said the initiative will help “to realise new opportunities, business models and employment potential” and added the facilities “will cover applications such as smart classrooms, precision farming, intelligent transport systems and healthcare applications”.

Middle East-focused telco STC Group reported record revenue for full year 2022, up 7.02% year on year to 67.4bn Saudi riyals (SAR) which equates to approximately $17.9bn. Its net profit rose almost 8% to SAR12.1bn ($3.2bn) in the period. STC Group CEO Olayan Mohammed AlWetaid described 2022 as “a year of successes and achievements”, adding that the telecom “delivered on many initiatives and investments that had a positive and clear impact on increasing and diversifying the Group’s revenue”, such as expanding its business in its domestic market of Saudi Arabia, and “entering into promising and new domains” including cloud computing, internet of things (IoT) and digital infrastructure. Its investments are part of its Vision 2030, which aims to position Saudi Arabia as “a main digital hub in the region and the world”. As per the company’s own estimations, its brand’s value has almost doubled in the past five years, from $6.2bn in 2017 to $12.3bn in 2022. See more.

Still in the Middle East… Zain Kuwait and ZainTech, the digital and ICT solutions arm of Zain Group, have announced a collaboration with Microsoft to launch the so-called National Cloud Initiative. The offering, which will target both the public and the private sector in Kuwait, will blend Microsoft’s cloud portfolio, Zain’s private cloud infrastructure and ZainTech’s know-how in data and application sharing. According to the operator, the new cloud environment will enable “greater deployment options” for local businesses, and will allow computing resources to be easily scaled while continuing to interoperate with on-premise systems. It will enable organisations to modernise their datacentres with the addition of “cloud techniques, such as software-defined datacentres, self-service and elasticity based on virtualisation,” as well as integrating artificial intelligence (AI) and machine learning (ML) into their applications. Find out more.

The deployment of 5G in Malaysia is sluggish and partial: Current coverage is just over a third of the population. Critics say this is a direct result of governmental interference in the sector, as does the country’s erstwhile minister of finance, Datuk Seri Johari bin Abdul Ghani. In an interview with the country’s popular, influential and independent bilingual news portal, Free Malaysia Today (which provides reports in Malay and English), he said the government should be administering the country and keeping out of telecoms. At the root of the problem is the Digital Nasional Berhad (DNB), a special-purpose vehicle (SPV) established and owned by Malaysia’s Ministry of Finance and regulated by the Malaysian Communications and Multimedia Commission. The DNB was established in March 2021 “to drive the development of 5G infrastructure in Malaysia and offer 5G as a wholesale network service to other telecommunication companies.” Meanwhile, the government appointed Ericsson as sole provider of 5G equipment and infrastructure. Since its foundation, the DMB has been widely criticised for being a de facto monopoly. Following Malaysia’s 15th general election held in November 2022, the newly appointed prime minister, Anwar Ibrahim, announced his government would examine DNB’s 5G network strategy and would give a decision on its future by the end of March this year. Currently, only DNB can roll out 5G in Malaysia, as it has control over the 700MHz, 3.5GHz and 26/28GHz spectrum bands. Other service providers cannot build their own networks and must lease 5G access from a single wholesale network. With the March date looming, agitation for change is growing, hence the ex-minister of finance’s intervention. He draws a comparison between what happened in Thailand, where rollout of 5G has been left to the telcos and 5G provision has been smooth and swift, and Malaysia when the DNB is regarded as a bureaucratic behemoth and a major obstacle to efficient 5G deployment. The minister adds that all the government should do is to defer to the technical know-how and infrastructure deployment expertise of the telcos and simply oversee the sector to ensure it benefits the population, nothing more. The DNB has done itself no favours in the perception of both the telcos and the public and spectacularly shot itself in the foot when, under media pressure, it went off at half-cock and claimed that it had beaten its end-of-year 2022 target and made 5G available to 50% of the population. It hadn’t done anything of the sort and still hasn't. In a humiliating climb-down it was forced to admit that 5G coverage is actually at 39%. The SPV also admitted that rollout of new sites is badly behind schedule and the current minister of communications and digital, Ahmad Fahmi bin Mohamed Fadzil, has said, “We hope by 2025, there will be at least 80% [5G] coverage in populated areas.” Maybe that is a more realistic target but, then again, maybe it’s not.

Meta is to begin testing a paid subscription, dubbed Meta Verified, for its subsidiary social media services Facebook and Instagram. The bundled offering has been created to “help up-and-coming creators grow their presence and build community faster,” the company claimed, with its main features being a verified badge that authenticates a person’s account with government ID, increased visibility and reach, and enhanced protection against impersonation. The service will be gradually tested in Australia and New Zealand this week to allow Meta to find out “what’s most valuable” before expanding the subscription model to the rest of the world soon. The monthly subscription will be priced at US$11.99 on the web, and $14.99 on iOS and Android. The move comes after Meta reported a staggering 55% year-on-year decline in net income for the fourth quarter of 2022 to $4.7bn, and a 4% year-on-year drop in revenue to $32.2bn.

And in a related development... In the US, the Federal Trade Commission (FTC) is to open an Office of Technology as part of an evolving strategy to keep up with the advances being made by the big tech companies. In its announcement about the launch, the FTC said that staffing levels at its new “dedicated” technology unit will be “more than doubled”. However, to put that in context, currently just 10 people work for the FTC’s existing technology office and funding for new personnel will pay for no more than an additional 12 staff. What’s more, those on Uncle Sam’s payroll take home a lot less than those who work for Apple et al and the disparity in salaries between the public and private sectors has always presented government departments and agencies with a huge problem when trying to attract and retain top talent, so it will be hard to hire staff who will be able to keep up with the bewildering array of ongoing developments at the likes of Apple, Google and Meta and their hundreds of thousands of employees. Stephanie Nguyen, who has been chief technology officer at the FTC since October 2022, says members of the new Office of Technology will be skilled in disciplines including data sciences, AI, software engineering and security, and will liaise with other FTC units, including the competition and consumer protection bureaux to investigate big tech market abuses. That means resources of the new Office of Technology will be stretched to breaking point from the very beginning because of its mandate to help the larger FTC itself pursue cases across the entire US economy and not just the technology sector. The reality is that the new office is likely to be quickly overwhelmed by its immense potential workload and it will either collapse under the weight of its underfunded and understaffed responsibilities or will have to get a lot more federal funding. “We are an agency that would always benefit from more resources,” said Nguyen, and hinted that requests for additional funding will soon be forthcoming. And good luck with that in a time of a riven Congress. The whole thing smacks of lip-service and box-ticking rather than a meaningful attempt to keep up with advances made by the big beasts of big tech and be able to keep their excesses in check.

- The staff, TelecomTV

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