• AT&T preps satellite-to-smartphone launch with AST SpaceMobile
• Telecom Italia’s Sparkle completes quantum-safe networking test
• Indonesian operators confirm merger talks

In today’s industry news roundup: AT&T strikes six-year satellite-to-smartphone services agreement; Telecom Italia unit boasts successful cross-border quantum-safe networking test; Indonesia’s XL Axiata and Smartfren are plotting a major telco merger; and much more!

AT&T has struck a six-year commercial deal with AST SpaceMobile to offer satellite-to-smartphone services to its customers in the US. The pair have been collaborating for some time and AT&T invested in the low-earth orbit (LEO) satellite innovator last year, but now a full commercial deal has been struck. The AST SpaceMobile team drew deep from the hyperbole well to announce that the deal was “not just one small step, but one giant leap towards enhanced connectivity for consumers and businesses across the country.” The satellite startup is set to launch its first five commercial satellites into orbit from Cape Canaveral this summer (July or August), though a date for the launch of a service by AT&T has not yet been revealed. Those satellites will be able to provide cellular services to AT&T mobile customers via their existing smartphones when they are in areas not reached by the telco’s terrestrial mobile network. “Space-based direct-to-mobile technology is designed to provide customers connectivity by complementing and integrating with our existing mobile network,” stated Jeff McElfresh, chief operating officer at AT&T. “This agreement is the next step in our industry leadership to use emerging satellite technologies to provide services to consumers and in locations where connectivity was not previously feasible.” Of course, AT&T isn’t the only one bragging about being able to do this and it’s in a race to be first. T-Mobile US struck a deal with Starlink to offer satellite-to-smartphone services in August 2022 and it looks like they are ahead of their rivals: Starlink, the LEO operating unit of Elon Musk’s SpaceX, launched its first direct-to-cell satellites at the start of the year and has been undergoing service tests with T-Mobile US since then. The news came as AST SpaceMobile, which also counts Vodafone, Rakuten, American Tower and Bell Canada among its investors, updated investors on its current financial position. 

Sparkle, the international division of Telecom Italia (TIM), has teamed up with quantum-safe encryption specialist Arqit Quantum to successfully test an internet protocol secure (IPsec) tunnel between Italy and Germany using Arqit’s Symmetric Key Agreement (SKA) Platform. The proof of concept (PoC) test was supported by Telecom Italia’s cybersecurity unit, Telsy. “This important step marks the creation of a software quantum-safe virtual private network (VPN), standing as a pivotal moment in network security,” boasted Sparkle in this announcement. “Being software based, the SKA Platform is quickly and easily scaled across any existing telecom network, ensuring that sensitive data remains protected against potential decryption by future quantum algorithms, thereby mitigating the risks associated with evolving cybersecurity threats,” it added. Daniele Mancuso, Sparkle’s chief marketing & product management officer, noted: “Our state-of-the-art global network provides critical services to carriers, institutions and enterprises who choose and trust Sparkle’s leading secure connectivity services to keep their data safe. The successful completion of the quantum-safe VPN PoC, preliminary to a large-scale commercial launch, anticipates the potential threat of quantum decryption and confirms our market-leading commitment to continuously elevating the security and resilience of Sparkle’s infrastructure,” added Mancuso. To find out more about quantum-safe networking and to check out the results of a recent TelecomTV market perception survey – see IBM tops quantum-safe networking ranking.

The parent companies of XL Axiata and Smartfren have confirmed they are discussing a potential merger of the Indonesian telcos in a move that would create a stronger rival to the country’s two leading players, Telkomsel and Indosat Ooredoo Hutchison. Recent reports suggest that talks have been underway for some time already. Axiata Group and Sinar Mas have signed a non-binding memorandum of understanding (MoU) to examine the potential of creating a merged operation (currently dubbed MergeCo) in which they would both hold an equal stake. Axiata noted in this announcement that “validation of merger rationale and value creation to shareholders, due diligence, preparation of a joint business plan and agreement on key terms will be the principal activities carried out during the exploratory phase governed by the non-binding MoU.” Combined, XL Axiata and Smartfren, currently the third- and fourth-largest mobile operators in the country respectively, would have about 94 million mobile customers (about 58 million from XL Axiata and 36 million from Smartfren). This would make it a stronger rival to the market leader Telkomsel (majority owned by Telkom Indonesia and partly owned by SingTel), which has just over 158 million mobile users based on September 2023 numbers, and the market’s second-largest player Indosat Ooredoo Hutchison, which has about 100 million mobile customers. “Axiata believes that MergeCo will have the strategic agility, competence and scale to meet increasing expectations and demand from consumers, businesses and the Indonesian public sector. MergeCo is expected to deliver superior customer experience in the telecommunications sector and create additional shareholder value, including through synergies from the combined operations of XL Axiata and Smartfren,” stated Axiata. 

It was a case of “steady as she goes” for Deutsche Telekom and its captain (sorry, CEO) Tim Höttges as the giant German telco reported a 2.9% year-on-year increase in first-quarter revenues to almost €23.5bn and a 4.7% increase in adjusted EBITDA to just more than €12bn. Revenues increased in Germany and Europe (DT’s other European operations outside its domestic market) but dipped ever so slightly in the US, where T-Mobile (in which DT holds a majority stake) had previously reported a 0.2% sales dip. Höttges was particularly bullish about the performance of the Europe division, which has operations in Greece, Romania, Hungary, Poland, the Czech Republic, Croatia, Slovakia, Austria, North Macedonia, and Montenegro (also comprises the operator’s international services unit) and boasts 48.8 million mobile customers, 7 million broadband service subscribers and 4.3 million pay-TV customers: It reported a 6.3% increase in revenues to almost €3bn and an 8.7% increase in EBITDA to just over €1bn in the first quarter. In Germany, DT ended the first quarter with 63.3 million mobile customers (up 12.9% year on year), almost 13 million fibre broadband customers (up 6%) and 4.4 million pay-TV customers (up 5.5%).   

Amazon Web Services (AWS), which is just about to get a new CEO, plans to invest €7.8bn in the AWS European Sovereign Cloud in Germany over the next 15 years, a move that “reflects AWS’s long-term commitment to meeting Europe’s digital sovereignty needs,” the hyperscaler has announced. “The AWS European Sovereign Cloud is planning to launch its first AWS Region in the State of Brandenburg, Germany, by the end of 2025, available to all customers,” it added. Earlier this week, AWS committed €1.2bn to further investments in France. 

Frank McCourt, a US billionaire and founder of Project Liberty, an organisation he formed in 2021 with the aim of “building a stronger, healthier internet infrastructure” that puts users in control of their data,  has announced that Project Liberty is “organising a bid to acquire the popular social media platform TikTok in the US, with the goal of placing people and data empowerment at the centre of the platform’s design and purpose.” US President Joe Biden recently signed a bill into law that will either force TikTok’s current owner, Chinese firm ByteDance, to sell the company to an owner that the US doesn’t regard as a security risk or face being ousted from US app stores, a move that would be calamitous to TikTok’s business. But even if ByteDance were to agree to sell, there has always been a big question around who might acquire it. Now McCourt and Project Liberty have stepped forward, and are working with investors and legal partners and have the support of “world-renowned technologists, academics, community leaders, parents and engaged citizens.” According to Project Liberty, “this bid for TikTok offers an innovative, alternative vision for the platform’s infrastructure – one that allows people to reclaim agency over their digital identities and data by proposing to migrate the platform to a new digital open-source protocol.” It added: “In launching the bid, McCourt and his partners are seizing this opportunity to return control and value back into the hands of individuals and provide Americans with a meaningful voice, choice, and stake in the future of the web.” One of the “world-renowned technologists” supporting McCourt is none other than the investor of the world wide web, Sir Tim Berners-Lee. “This proposal has my support. The web I invented was to provide power and value to individuals, which they do not have at the moment. Users should have an ability to control their own data, to share it with other people and organisations as they choose. A TikTok utilising open internet protocols, such as Solid [an open-source protocol backed by Berners-Lee], will embrace the critical values of privacy, data sovereignty, and user mental health,” he noted. The move begs lots of questions but here are the two main ones: Will ByteDance agree to sell and, if so, at what valuation? This previous report suggests about $100bn. 

- The staff, TelecomTV