What’s up with… Three UK, rural 5G in the US, Huawei

• Three UK uses 2023 results to press for Vodafone merger approval
• FCC set to unlock $9bn in US rural 5G coverage funding
• Huawei’s supplier ecosystem could be hit by new US sanctions

In today’s industry news roundup: The CEO of Three UK has urged the country’s authorities to approve its planned merger with Vodafone UK after it reported an operating loss for 2023; US regulator the FCC is on course to relaunch the $9bn 5G Fund for Rural America, which also includes incentives related to the deployment of Open RAN technology; US lawmakers are looking at new ways to block Huawei’s access to cutting-edge tech; and much more!

Three UK, which is hoping to merge with Vodafone UK, has reported a 3% year-on-year increase in revenues to almost £2.6bn, a 34% decrease in EBITDA to £402m, and an operating loss of £117m due to “higher operating expenses and an increase in depreciation and amortisation due to recent higher network investment.” The operator ended 2023 with 10.6 million customers, up by 3%. Three UK’s CEO Robert Finnegan used the results to put pressure on UK regulators to approve the planned £16.5bn merger with Vodafone UK, which is currently being assessed by the country’s Competition and Markets Authority (CMA) and being reviewed under the UK’s National Security and Investment Act. “The cost of rolling out and maintaining our 5G network, and our commitment to improving connectivity across the UK, has impacted our profitability… for the first time since 2010,” stated the CEO. “This financial performance is clearly unsustainable despite scaling back our 5G investment. With the current market structure of four MNOs, where there are two scaled players who have the ability to invest but do not face enough competitive pressure to do so, and two players (Three UK and Vodafone) who lack the scale to be credible challengers, the UK will continue to lag behind on 5G. The UK has the slowest data download speeds in the G7 and ranks 22nd out of 25 European countries in terms of 5G availability and download speeds. We are committed to improving our service for our customers and our country, creating additional jobs, and supporting the digital transformation that is taking place across the UK. The merger with Vodafone will enable the investment of £11bn in the UK over 10 years to create one of Europe’s most advanced standalone 5G networks in full support of Government targets,” he added.

Jessica Rosenworcel, chair of US regulator the Federal Communications Commission (FCC), is attempting to relaunch the 5G Fund for Rural America now that the watchdog has access to usable data from the FCC’s improved broadband coverage map, which shows that more than 14 million US homes and businesses currently have no mobile 5G coverage. “For the first time in our history of supporting wireless networks through the universal service system, this agency has comprehensive data about where service is and is not all across the country,” stated Rosenworcel. “This will be the foundation of our plan to expand the 5G service in rural America to where it is needed most – where people live, work and travel.” If she receives support for the relaunch from her fellow commissioners, the FCC would kickstart the 5G Fund Phase I multi-round reverse auction, which would distribute up to $9bn towards the cost of rolling out 5G coverage “to rural areas of the country unlikely to otherwise see unsubsidised deployment of 5G-capable networks,” the regulator noted. In addition, to promote the deployment of Open RAN “and its benefits for competition, national security, and supply chain reliability, the 5G Fund would include up to $900m in incentives for incorporating Open RAN in 5G Fund-supported networks,” the FCC added. Read more.  

The US is considering imposing sanctions against a number of Chinese chip vendors linked to Huawei after the Chinese telecom technology giant managed to develop and distribute state-of-the-art 5G smartphones last year despite suffering years of trade restrictions, according to Bloomberg. Much to the chagrin of many US politicians, in late August last year, Huawei  unveiled its Huawei Mate 60 Pro device, which included a locally produced, 5G-capable ‘Kirin 9000’ 7-nanometre (nm) chip. The belief is that while Huawei is barred from accessing and using any US technology, others in China’s chip ecosystem may have circumvented the US sanctions and produced the components that Huawei needed for its 5G smartphones. As a result, the US administration is now considering extending its sanctions to a number of Chinese semiconductor companies, including ChangXin Memory Technologies, Qingdao Si’En, Shenzhen Pensun Technology Co, and SwaySure. 

Eutelsat Group has signed a $500m deal with Intelsat to boost the pair’s efforts to provide multi-orbit solutions. The deal will make it possible for Intelsat to combine its geostationary orbit (GEO) and terrestrial networks with the low-earth orbit (LEO) network of OneWeb (which recently merged with Eutelsat to form the Eutelsat Group). The move builds upon an agreement between the two in March 2023, and will see an initial commitment of $250m, starting in mid-2024, with options of a further $250m over the next seven years. According to Eutelsat, this step will help them deliver “comprehensive customer solutions supporting networks, government, and mobility sectors.” Intelsat’s CEO, Dave Wajsgras, explained that the partnership will help the company deliver “new, true multi-orbit services and solutions.” Eva Berneke, CEO of Eutelsat Group, described the expanded partnership with Intelsat as “a strong vote of confidence in the capabilities of the OneWeb satellite constellation, today and well into the future”. Read more.

Rakuten Group has released high-performance open large language models (LLMs) optimised for the Japanese language. One of the models is a 7 billion parameter foundation model that has been developed based on the training of an open LLM by AI startup Mistral AI. The company has also launched an instruct model that it describes as a version of a foundation model fine-tuned on instruction-style data, which results in the model replying to prompted instructions. The models can be used for various tasks, including summarising content, answering questions, general text comprehension and building dialogue systems. With this step, the Japanese company has reached “an important milestone in performance”, and it plans to share its learnings with the open-source community to “accelerate the development of Japanese language LLMs,” explained Ting Cai, chief data officer of Rakuten Group. Read more.

IBM has acquired network and IT infrastructure automation specialist Pliant for an undisclosed sum. According to IBM, “Pliant adds essential capabilities to automate network and IT infrastructure tasks and abstract these functions to the application layer, enabling applications (and developers) maximum control for simplified provisioning and management of infrastructure directly within applications themselves. These optimisations include infrastructure resource provisioning and management, traffic management and configuration management for both traditional network and IT infrastructure and public clouds.

Chinese cloud and digital services giant Tencent has reported a 10% year-on-year increase in revenues to 609bn Chinese yuan (CYN) ($86bn) and a 34% increase in operating profit to CYN 191.9bn ($27.1bn). Last year, the company launched its proprietary large language AI foundation model, Tencent Hunyuan, and scaled it up to 1 trillion parameters. “Tencent Hunyuan developed into a top-tier foundation model with superior performance in numerical reasoning, logical inference, and multi-turn conversations,” noted the company’s chairman and CEO, Ma Huateng, in the earnings announcement.  

Following news last week of the ongoing success and growth of privacy-conscious messaging platform Telegram, which has more than 900 million users (up from 500 million in 2021) and is heading for an IPO, the company’s founder and CEO, Pavel Durov, has revealed on his own Telegram channel that the company has just raised $330m from the sale of new bonds, according to Reuters. The funds raised will “further solidify our position as an independent platform that is able to challenge the ‘Goliaths’ of our industry,” noted Durov, referring to the likes of Meta’s WhatsApp. 

- The staff, TelecomTV