- Drahi lines up another BT stock raid
- Musk flips the bird at his Twitter logo
- Cityfibre’s network, and operating losses, are growing
In today’s industry news roundup: Altice’s Patrick Drahi is reportedly lining up an even bigger stake in BT; Elon Musk’s Twitter is now X… don’t ask why; Cityfibre’s rapid rollout comes at a cost; and more!
BT’s senior management and board of directors might be a tad twitchy this week following multiple reports that French billionaire and owner of European network operator Alice, Patrick Drahi, is about to make his fourth raid on the operator’s shares and increase his current 24.5% holding to 29.9% – just short of the threshold of 30% at which a shareholder is legally obliged to make a formal offer to buy the entire company. Drahi, via his Altice UK subsidiary, is already BT’s largest single shareholder, with Deutsche Telekom (DT) being the second largest with a 12.5% holding. Drahi has always maintained that he doesn’t want to acquire the UK national telco lock, stock and barrel but, should this latest plan go ahead, he’ll be in position to mount a sudden, aggressive takeover bid. However, simply increasing his holding above 25%, never mind up to the danger point of 29.9%, will automatically trigger a second UK government investigation into any potential threats to British national security under the terms of the National Security and Investment Act. The government invoked the same piece of legislation to investigate Altice last year and, at its conclusion, gave Drahi’s move a clean bill of health. Whether or not it would come to the same conclusion a second time around, in a particularly febrile political atmosphere and at a time of heightened international tensions, is a moot point. All the more so because, since mid-July, Altice has been mired in allegations of corruption centred on the company’s co-founder Armando Pereira and dealings at the company’s Portuguese operations. Drahi first took an interest in BT in 2021, when he bought 12.1% of its shares. Shortly thereafter he raised that holding to 18% and then, in May this year, upped it again to 24.5%. BT’s stock has been in the doldrums for years and the group is currently worth around £12.6bn. Its current CEO, Philip Jensen, is set to hand over to an as yet unidentified successor within the next 11 months – or rather sooner if matters come to a head. And they might, especially if BT gets embroiled in a takeover saga. Speculation that Drahi might sink further funds into BT stock gave the UK telco’s share price a boost on Monday, as it gained 2.7% to trade at 126.5 pence on the London Stock Exchange.
Elon Musk seems to be hell-bent on destroying what’s left of Twitter. The company’s famous and globally recognised blue bird logo has been dumped and replaced with an X – yup, X now marks the spot where that globally recognisable icon used to be. Until last week, the Twitter website evangelised the blue bird logo, calling it “our most recognisable asset, that’s why we are so protective of it.” Not any more. The company’s name was officially and legally changed to X Corp. back in April this year, but everyone apart from Musk and his diminished band of happy staffers still call the brand Twitter. Why has he re-branded? Musk’s ambition (one of countless others, including dying on Mars) is to create a world-bestriding super-app (come on, it couldn’t ever be just an app, could it?) and, yea, verily, X is its identity, brand, logo and name. It’s also, apparently, the name for the posts that people add to the site – what was once a ‘tweet’ is now “an X”, according to Musk. But that’s more than a little clumsy and he’ll have a job to get users to change from a word completely synonymous with Twitter that has been common parlance since 2006, when the company was founded. Musk left it to Linda Yaccarino, who was recently appointed as the CEO of Twitter (and who is now presumably the CEO of X), to spell out the big message around the change. On Sunday she Xed (no, you see, that doesn’t really work, does it… let’s just say she tweeted): “It’s an exceptionally rare thing – in life or in business – that you get a second chance to make another big impression. Twitter made one massive impression and changed the way we communicate. Now, X will go further, transforming the global town square. X is the future state of unlimited interactivity – centered in audio, video, messaging, payments/banking – creating a global marketplace for ideas, goods, services, and opportunities. Powered by AI, X will connect us all in ways we’re just beginning to imagine. There’s absolutely no limit to this transformation. X will be the platform that can deliver, well… everything. @elonmusk and I are looking forward to working with our teams and every single one of our partners to bring X to the world.” Musk, who claims that the X signifies the “imperfections in us all that make us unique”, acquired Twitter for US$44bn in October, 2022. Seems longer ago, doesn’t it? During the intervening months, Twitter’s workforce has been cut by more than half, and its advertising revenues by almost the same. Its user numbers continue to dwindle with every spasmodic change its owner introduces, one of the latest being a limit on how many tweets a day different types of account holders can read. He also allegedly owes at least $500m in unpaid severance salaries to some of the staff he fired: A lawsuit about that was filed last Tuesday. However, that pales into insignificance in comparison with the $13bn of debt that Twitter/X needs to pay off by 31 July, which is next week. While Twitter has been on the slide, Meta’s rival app, Threads, has launched, with Mark Zuckerberg claiming that it immediately attracted more than 100 million users and continues to grow. The latest analyst estimates are that it has between 150 million and 200 million users. New subscribers are attracted by Threads’ automatic connection to the Instagram platform, which means that the new app has the potential to attract 2 billion users in the near term. In February this year, Twitter claimed to have 396.5 million users – a change in name and brand now could go either way in the battle for microblogging supremacy.
Evidence that alternative UK wholesale fibre network operator Cityfibre is still in its relative infancy, especially with regards to its business operations, came in the company’s 2022 full year accounts, as filed with Companies House. The figures showed that Cityfibre’s full year operating loss almost trebled year on year to £114.8m as it continued to build out its network as quickly as possible, while revenues were still negligible as wholesale customers (of which it had 33, with Vodafone UK and TalkTalk the primary users) were still in the early stages of offering their services over Cityfibre’s infrastructure. The company ended 2022 with 2.2 million ready-for-service fibre connections, up by 1 million since the end of 2021, so significant progress was made: Cityfibre is aiming to reach 8 million UK premises by the end of 2025 so it still has a long way to go, although it does have the funding in place to reach that target. But as everyone’s costs go up, and with losses increasing, Cityfibre faces some major challenges in the next few years, especially as its main rival, BT’s Openreach, is ploughing ahead with some very attractive low-price wholesale deals, the latest of which was dubbed Equinox 2, that are simply too attractive for UK ISPs to turn down. Despite such challenges, which resulted in some job losses at Cityfibre earlier this year, the company is still bullish and is seeking additional scale and, according to the always well-informed ISP Review, is lining up some potential acquisitions as smaller altnets struggle to stay afloat.
TelecomTV has been looking closely at developments in quantum computing recently – see Quantum computing’s daunting challenges and Google reignites the ‘quantum supremacy’ debate – again – and has found that while there are many challenges before the industry can offer ‘utility’ services that can be applied by many companies across multiple sectors, significant progress is being made. And some companies are already benefitting from the incredible computational power that such devices offer. Now T-Systems, the enterprise unit of Deutsche Telekom, has announced it has signed a deal with IQM Quantum Computers, the “European leader in building superconducting quantum computers,” to provide its customers with cloud access to IQM’s quantum systems. “T-Systems customers will be able to train their skills and develop use cases on IQM's quantum infrastructure. This access will be integrated into the Deutsche Telekom affiliate’s cloud landscape. T-Systems will also offer its customers dedicated quantum know-how and training, tailored to their needs in a set of different customisable packages. These range from one-day introductory sessions through [to] business case proofs-of-concept over several months,” noted Deutsche Telekom in this announcement.
The European Investment Bank (EIB) has signed a €315m finance deal with neutral infrastructure giant Cellnex to “support the development of the mobile telecoms infrastructure behind 5G rollouts in Spain, Portugal, France, Italy and Poland,” the bank has announced. “The loan will mobilise total investment of €631m to improve and expand the coverage and capacity of very high bandwidth mobile network infrastructure in these countries, helping to speed up the digital transition in both urban and rural areas,” noted the EIB. Read more.
KPN, the national operator in The Netherlands, appears to be on solid ground right now, reporting not only a 1.6% year-on-year increase in second-quarter revenues to €1.33bn but a 9.9% increase in operating profit to €337m. To get the full details, you’ll need to visit the telco’s investor relations website and download the report, which you can do here.
- The staff, TelecomTV