What’s up with… US legislation, SK Telecom, Vodafone

• The One Big Beautiful Bill Act hits Open RAN funding
• SK Telecom faces further customer base attrition 
• Vodafone attracts unwelcome scrutiny in the UK

In today’s industry news roundup: The Trump administration’s One Big Beautiful Bill Act has its ups and downs for the telecom sector; SK Telecom is bracing itself for a week of further customer churn following its data breach; UK politicians are keeping a close eye on a legal claim against Vodafone; and much more!

The Trump administration’s One Big Beautiful Bill Act, passed last week by Congress, will have a range of implications for the US telecom and tech sector. AT&T has already announced it will accelerate its fibre access network rollout plans as a result of the “pro-investment policies and tax provisions” enshrined in the legislation, as reported last week. In addition, US regulator the Federal Communications Commission (FCC) is happy the Act includes “key provisions that will restore the FCC’s spectrum auction authority after it lapsed in 2023,” it noted in this brief announcement. The FCC is now mandated to conduct multiple spectrum auctions between now and the end of September 2034. “The bill also creates a large pipeline of dedicated spectrum, advancing US leadership in wireless,” noted the regulator, which is a key part of FCC chairman Brendan Carr’s Build America Agenda for the US regulator. But the news is not so good for the Open RAN community in the US, which had been picking up grants from the US Department of Commerce’s National Telecommunications and Information Administration (NTIA). The NTIA had been handed a $1.5bn slice of the Chips and Science Act funding to “support the development of open and interoperable networks” through the Public Wireless Supply Chain Innovation Fund (aka the Wireless Innovation Fund), and had been distributing funds to various Open RAN-related companies including, in late 2024, $273m to companies engaging in Open RAN radio unit research and development activities. But those days are over as the new Act has rescinded the $850m of Wireless Innovation Fund cash that has not been allocated. 

SK Telecom (SKT) lost about 800,000 customers to its domestic rivals KT Corp and LG Uplus in the aftermath of the data breach that was first reported in April, reports The Korea Herald. That loss is likely to have taken its mobile customer subscriber base below the 22 million mark, as the operator ended March with 22.73 million mobile customers and stopped signing up any new customers shortly after the breach was unveiled. SKT is likely to see its mobile customer base shrink even further this coming week, according to the newspaper: As part of the Accountability and Commitment Program announced by SKT last week in an effort to appease customers and the South Korean authorities, customers who cancel their mobile subscription by 14 July will not be subject to any contract termination fees, so any customer with a mind to jump ship over concerns that SK Telecom’s cyber defences are not up to scratch are likely to jump ship in the next few days. 

A bitter row between Vodafone UK and a group of its (approximately) 150 retail store franchisees has been brewing for months, with the UK operator doing little to address the initial problem and ignoring the rumblings as they grew louder: Limited negotiations between the two sides ceased at the end of May and have not restarted. That should now change, as the UK government has let it be known that it is “closely watching” the service provider over accusations that it is “unjustly enriching itself” at the expense of the complainants. As The Guardian reports, the UK minister for small business Gareth Thomas says he will “track very carefully” the £120m legal claim for compensation that is being made by 62 franchisees. Oversight of the process at the level of a government minister will give Vodafone pause for thought. Last week, in the House of Commons, Thomas told members of parliament (MPs): “There are, without question, some very serious allegations being levelled at Vodafone in this case. Until now there has not been sustained concern about the quality or effectiveness of the self-regulation of franchises in general. However, I recognise that this particular case has raised concerns across the House and I will track very carefully what happens in this case and the final outcome and conclusions that any court case might come to.” He added, “Franchising can be used as a method to exaggerate the power of the business at the heart of the franchise and to weaken the position of franchisees. My assertion is that this is common and is particular in the case of Vodafone.” The warning flag is snapping at its mast in a chilly breeze and Vodafone UK, in the aftermath of its recent £16.5bn merger with its rival, Three, will be keen to avoid forensic regulatory examination into its actions: The merger reduced network-based competition in Britain’s mobile comms sector, and led to media, analyst and political calls for increased regulation. VodafoneThree is now the UK’s largest mobile operator, with almost 30 million customers and the top brass at the new entity will want to get the case settled as quickly and quietly as possible. The 62 plaintiffs listed in the lawsuit claim that Vodafone unilaterally and “drastically” cut the rates of commission it paid franchisees for selling its products from high street stores. This, it is alleged, resulted in the franchisees going into considerable individual debt (after being cajoled by Vodafone to take out expensive bank loans) in efforts to keep themselves from going under. Their court filings claim Vodafone “indiscriminately… operated to enrich Vodafone at the expense of its franchisees”. Another MP, Luke Akehurst, the Labour MP for North Durham, said, “There are major corporates that treat their franchisees very badly, that sign them up on one set of terms – one rate card – and then change the goalposts. Then when people dissent and complain about that, they find that their franchise is withdrawn and they lose their investment when they have put a great deal into that corporate giant. I think this is a matter that, in the near future, is going to require some ministerial attention.” According to the BBC, when approached for comment, Vodafone issued a statement: “This is a complex commercial dispute between Vodafone UK and some franchise partners and, as we have said from the beginning, we refute the claims.” Franchisees also claim Vodafone withheld Covid-19 business rate relief and enforced excessive fines. In essence, the plaintiffs allege: Unfair commission cuts that have made many of Vodafone’s franchisee high street shops unprofitable; breach of contract by Vodafone failing to observe its duty of good faith by acting unfairly and unreasonably in its relations with franchisees; unjust enrichment of Vodafone by it unfairly profiting from the franchisee operations; unethical practices (such as withholding Covid-19 business rate relief) and applying excessive fines for minor infringements; and lack of transparency – namely Vodafone failed to provide franchisees with adequate notice of impending significant, unilateral changes of contract and commission structures and rates.

Rakuten Mobile, which launched in Japan in April 2020, is slowly inching towards a business landmark, following the news that it has breached the 9 million subscriber mark. The operator, which is part of a broader Rakuten Group digital services and platforms strategy, achieved its first quarter of earnings before interest, taxes, depreciation and amortisation (EBITDA) profitability earlier this year and is now inching towards the 10 million customer mark, though it’ll do well to reach that milestone before the end of the year.  

Only weeks after Trump Mobile, which is run by the US President’s sons Donald Trump Jr. and Eric, announced its “transformational” T1 Mobile service, a key part of the proposition has gone awry. The “all-American service for our nation’s hardest-working people” included a “made in America” state-of-the-art smartphone that would retail for “under $500” (ie. $499). Now, the Independent has reported that, after the initial welter of over-egged publicity and promises, it has quietly been confirmed the handset won’t be made in the US at all, but will merely be “brought to life” there (presumably by a sudden jolt of ‘turn it on’ electricity generated from Trump Tower). The original advertised intent was that the handsets would be built in the US states of Alabama, California and Florida but, alas, that’s not going to happen. One of the central economic planks of President Trump’s second administration is “America First”, and to “bring back home” the design and manufacturing of high tech products such smartphones and semiconductor chips but, although such facilities are planned and even being built in the US, it still has an insignificant domestic smartphone manufacturing system, predominantly because of the price of labour, taxation, and a long-established reliance on comparatively cheap offshore components and product manufacture. Trump Mobile originally claimed that it will feature call centres “based in the United States” and “phones made in America”. However, Eric Trump has now confirmed that at least the first tranche of deliveries of the new handset will not have been made in the US after all. Furthermore, he failed to confirm where they will come from, or when US-manufactured T1 smartphones will be available, saying only that, “Eventually, all the phones can be built in the United States of America.” So, what does “eventually” mean in this context? This year, next year, sometime, never? The fact of the matter is that the vast majority of smartphones bought in the US are made overseas, mainly in China, South Korea, India and Vietnam. Currently, only one US company, Purism, makes and assembles the components of its Liberty range of handsets domestically (in San Diego, California), and it has also developed its own operating system. However, the basic chassis of the devices, which sell for $1,999, are manufactured in China. Todd Weaver, the CEO of Purism, reckons that any US-made smartphone on sale at the price touted by Trump Mobile will be far from leading edge. He commented, “If the Trump Phone is promising a $499 price tag with domestic manufacturing, this announcement looks to be classic vapourware.” There is another word that gets over the concept rather more directly, it is “flatulence” brought on by a diet of too much hyperbole. The fact is that more than 80% of all the world’s smartphone components are made in just one country, the People’s Republic of China.

Australian fibre network operator Vocus Group, which focuses on the needs of enterprise customers, has received confirmation from the Foreign Investment Review Board (FIRB) that the Australian government has no objection to its AUS$5.25bn (US$3.4bn) acquisition of TPG Telecom’s fixed network assets. The deal was announced in October 2024, when Vocus said the acquisition would position it as a “key digital infrastructure operator in Australia, with an extensive integrated network of high-quality subsea, metropolitan, intercapital and regional fibre with significant breadth and scale.” The FIRB clearance “represents the final Australian regulatory approval required for this transaction”, noted Vocus, which expects to complete the acquisition before the end of this year.  

– The staff, TelecomTV