What’s up with… Ericsson, Chinese hackers, Viasat and Inmarsat
- Ericsson wins legal battle over Iraq probe claims
- Chinese hackers seemingly have planted malicious code in US telecom networks
- EC approves Viasat’s $7.3bn acquisition of Inmarsat
In today’s industry news roundup: Ericsson’s Iraq nightmare might nearly be over; Microsoft finds malicious code planted by Chinese hackers in US telecom networks; the European Commission sends Viasat and Inmarsat to the corporate altar; and much more!
Some respite for Ericsson as it continues to deal with past misdemeanours in Iraq, where its admittedly lax internal investigations into historic payments that may have found their way into the hands of Isis terrorists got the vendor into trouble with various authorities, including the US Department of Justice (DOJ). In March last year, a group of investors filed a lawsuit in the Eastern District of New York (Brooklyn), accusing the company, the CEO Börje Ekholm and the vendor’s CFO Carl Mellander of having misled shareholders over corrupt practices in Iraq. Now the New York court has dismissed the action, and “rejected in full the plaintiff’s claims that Ericsson misled investors and concluded that Ericsson did not violate any disclosure obligation to investors,” noted the Swedish company in this announcement. However, the court’s decision is subject to appeal, with the vendor noting it will “continue to vigorously defend this matter if appealed.” In addition, Ericsson announced that Nasdaq Stockholm has formally closed its review into Ericsson’s public disclosure concerning the 2019 Iraq internal investigation report. Nasdaq, in closing the case, stated that it: “Cannot come to the conclusion that the content of the report was such that a reasonable investor would have used such information as part of his/her investment decision”. Earlier this year, Ericsson concluded its lengthy engagement with the DOJ over corrupt business practices by pleading guilty to deferred charges related to activity prior to 2017 and agreed to pay a fine of $206.7m. Ekholm will be hoping this nightmare will soon be over and Ericsson can once again focus on its core business.
The New York Times has reported that US intelligence agencies and Microsoft have detected “mysterious computer code appearing in telecommunications systems in Guam [a US island in the Western Pacific] and elsewhere in the United States” that was installed by a Chinese government hacking group. Microsoft has published a blog on the matter, noting that it has “uncovered stealthy and targeted malicious activity focused on post-compromise credential access and network system discovery aimed at critical infrastructure organisations in the United States. The attack is carried out by Volt Typhoon, a state-sponsored actor based in China that typically focuses on espionage and information gathering. Microsoft assesses with moderate confidence that this Volt Typhoon campaign is pursuing development of capabilities that could disrupt critical communications infrastructure between the United States and Asia region during future crises.” The most imminent future crisis involves China and Taiwan, as is well documented…
The $7.3bn acquisition of British satellite operator Inmarsat by its US peer Viasat has been approved by the European Commission. In a statement, the commission noted that the nod has been given “unconditionally” after an in-depth probe that lasted almost a year found that “the merger would not raise competition concerns in the European Economic Area (EEA) or any substantial part of it.” The investigation was assessing whether the takeover might reduce competition in the market for the supply of broadband in-flight connectivity (IFC) services to commercial airlines in the EEA and/or globally, as well as whether new operators of non-GEO (non-geostationary orbit) satellites, which have entered or are planning to enter the market, are likely to “exert sufficient competitive pressure on the merged entity in the near future”. The commission discovered that, firstly, Viasat and Inmarsat’s market position following the merger would “remain moderate”. And secondly, “a number of sizable competitors would likely exert sufficient competitive pressure on the merged entity” considering that the market for the supply of IFC services to commercial airlines is “nascent and growing, with significant excess broadband satellite capacity upstream”. Therefore, the European Commission has concluded that there would be “significant opportunities for both current competitors and potential new entrants. Furthermore, the fungible nature of satellite capacity across end-uses and downstream industry segments makes entry or new partnerships likely.” Margrethe Vestager, EVP of the European Commission in charge of competition policy, commented that the body’s probe has shown that “Viasat’s plan to buy rival satellite operator Inmarsat will not have a negative impact on the competitive landscape for this service”, and that there will be “sufficient choice among several credible providers”. With this decision, all major hurdles standing in the way of the takeover have now been cleared, after the deal received necessary approvals from the UK Competition and Markets Authority (CMA) and the US Federal Communications Commission (FCC) earlier this month.
UK regional fibre-to-the-premises (FTTP) altnet Toob has arranged £160m in financing from Ares Management’s Infrastructure Debt facility to help it continue to roll out its high-speed access network across the south of the UK, and that debt facility could be increased up to £300m to support additional rollouts. According to the altnet, its current owner, Amber Infrastructure Group, will “also invest significant further equity,” though no numbers were shared. The new funds will allow Toob to expand its network, which currently passes 140,000 premises, to more than 300,000 premises, and enable it to snap up any useful assets that might become available as other FTTP altnets falter, which is an unfortunate inevitability as the UK has more new fibre broadband network builders than the market can support. “This investment gives us the capital to extend our network to over 300,000 premises and, most importantly, it secures the business through to profitability as a platform for growth,” noted CEO Nick Parbutt in this announcement. “With this commitment from Ares and Amber, we can develop Toob, either through further network build or M&A activity. We are very pleased that the business and our team have an exciting future ahead of us as we deliver for more communities across the south of England,” added the CEO. Late last year, Toob extended its network reach through an agreement with wholesale FTTP player CityFibre.
Global 5G subscriptions are expected to rise from 934 million in 2022 to 3.1 billion in 2027, growing at a compound annual growth rate (CAGR) of 27%, according to new research from ABI Research. Additionally, traffic on the next-generation network is estimated to increase from 293 exabytes (EB) in 2022 to 2,515 EB in 2027, at a CAGR of 54%. With this, expectations are for the 5G core (5GC) market to broaden, which holds “potential for operators to monetise further existing cellular connectivity for traditional mobile broadband use cases but also offers scope for operators to expand cellular capabilities in new domains,” argued Don Alusha, senior analyst for 5G core and edge networks at ABI Research. Furthermore, the 5G core is linked to unlocking potential for “committed telcos” to innovate and create new operating models for growth outside of the consumer domain. As opposed to the traditional “universal and uniform” operating model of CSPs to provide mass market, country- or region-specific “static voice and data services”, 5GC offers telcos “a fluid and dynamic landscape” where requirements change, steering the industry towards edge deployments and topologies, Alusha added. The analyst company further noted that the shift from a centralised to a decentralised business will be “a significant trend in the coming years” for the industry. “In this emerging landscape, there will be enterprise-specific, value-based, and niche engagements where the business strategy sets the technology agenda. So, it is rational to conclude that a “bottom-up” approach may be required to deliver unique value and expand business scope,” noted Alusha.
As part of a broad range of bills, the US Energy and Commerce Committee has advanced a bill that would reauthorise the Federal Communications Commission (FCC) to auction spectrum, an authority that, incredibly, lapsed earlier this year. The hope is that the move will put pressure on the US Senate to agree a deal to once again allow the US regulator to auction wireless airwaves. “The Spectrum Auction Reauthorization Act would extend spectrum auction authority, make important changes to existing spectrum auction processes, and direct spectrum auction proceeds to fund critical programs,” noted committee chair congresswoman Cathy McMorris Rodgers in this announcement. “This bill would promote our national security by providing $3.08bn for our small communications providers to remove Huawei and ZTE from their networks. It would authorise and fund next-generation 9-1-1 technology to help our public safety officers and make sure Americans can reach emergency responders when they need it most. Most importantly, this bill is a product of long bipartisan, bicameral negotiations, and I urge my colleagues to vote yes.”
[EDIT CR] The international unit of Middle East operator giant e&, e& International, has beefed up its digital service play by forming a joint venture with technology company Circles, to deliver “delightful” digital experiences across its operating markets and beyond. In its statement, the telco noted that the move will allow its network of mobile network operators (MNOs), as well as other regional operators, to launch digital telco brands offering a range of technologies. According to e&, the partnership will use Circles’ digital expertise and global operations across 13 markets in the Asia Pacific and European regions, “bringing the best in digital solutions to e&’s footprint across 16 markets and beyond”. Additionally, the telco group will use a cloud-native, digital software-as-a-services (SaaS) platform called Circles X, helps MNOs to deploy digital telco brands from any location and is said to be able to unlock “an agile digital-first revenue growth engine, at a fraction of the operating cost by a traditional telco.”
- The staff, TelecomTV