• M&A drives Cellnex’s sales as it closes UK deal
• The UK is to get its first lithium refinery
• BT turns to digital tech to improve its energy efficiency

In today’s industry news roundup: Acquisitions fuel sales, and debt levels, at European towers firm Cellnex; with the lithium supply chain becoming a concern, the UK is to get its first refinery; BT’s turns to AI and digital twins to improve its energy-efficiency efforts; and more! 

Pan-European towers company Cellnex has reported revenues of €2.57bn for the first nine months of this year, up by 46% year on year, and free cash flow of €967m, also up by 46%, largely reflecting the growth that has come from multiple acquisitions. Over the past three years, Cellnex has grown tremendously as a result of major M&A deals, and its appetite for further deals has yet to be sated, it seems, as it was bidding recently for stakes in Deutsche Telekom’s towers unit (with assets in Germany and Austria) and Vodafone-owned Vantage Towers, though was beaten by rivals on both occasions. It has, though, just completed the final part of its €10bn acquisition of CK Hutchison’s European tower sites by closing the deal for the UK assets. But that and other multibillion-euro deals are having an impact on its profitability and balance sheet, as Cellnex reported a net loss of €255m for the nine-month period, while its net debt currently stands at €17.1bn. But this is a long-term play: Cellnex now has almost 105,000 operational tower sites (4,516 in Austria, 1,502 in Denmark, 10,420 in Spain, 24,015 in France, 1,890 in Ireland, 20,921 in Italy, 4,075 in the Netherlands, 15,199 in Poland, 6,086 in Portugal, 7,996 in the UK, 2,791 in Sweden and 5,397 in Switzerland) and 6,969 distributed antenna system (DAS) nodes and small cells, plus plans to build another 21,000 sites by 2030, so it has years of reasonably predictable recurring revenues ahead of it and much of its debt is at fixed interest rates. But, as mentioned, its M&A days are not over yet and it will likely look for other ways to gain a foothold in the German market, the one major country where it doesn’t currently have sites (hence its bids for stakes in the DT and Vantage towers businesses).   

The first large-scale lithium refinery in the UK is to be constructed at Teesport, Teesside, in the north-east of England. Lithium, often called “white gold” is actually a silver-coloured, soft, powdery alkali. It is the lightest metal, its Atomic Number is 3 and it is the 25th most abundant element on earth. More and more lithium is required because it has so many uses in sectors including ceramics, computers, medicines and glass. However, its primary use is in the manufacture of mobile phone batteries, while larger versions power electric vehicles, such as Tesla cars. Global demand for lithium is growing massively. Back in 2017 worldwide consumption of the element was 40,000 metric tonnes. This year it will be 600,000 metric tonnes and, according to Statista.com’s forecast, it will stand at 2,150,000 metric tonnes by 2030. The price of lithium is going through the roof and it is now a geo-politically and strategically vital resource. Nations around the world are manoeuvring to ensure that they get the supplies of lithium they need and are building up their reserves whilst reducing their dependency on it being imported from overseas. It is a difficult task because China currently is the de facto controller of the lithium industry with 90% of the rare-earth elements, and 60% of all lithium is processed there. As the president of the European Commission, Ursula von der Leyen, observed recently, “Lithium and rare earths will soon be more important than oil and gas”. Green Lithium, the company behind the new £600m UK facility, said it will begin production in 2025 and will be capable of refining 50,00 metric tonnes per annum. It added its output will “go into the supply chain for lithium-ion batteries, energy storage, grid stabilisation and EV batteries". Grant Shapps, the UK’s current Secretary of State for Business, Energy and Industrial Strategy, said the new facility will allow the UK “to move quickly to secure our supply chains of critical minerals as we know that geopolitical threats and global events beyond our control can severely impact the supply of key components, [which] could delay the rollout of electric vehicles in the UK.”

As energy efficiency climbs up companies’ agendas amid growing concerns over climate change and the energy crisis (both widely discussed topics at this year’s COP27 summit), UK operator BT has revealed the measures it is taking to address the situation. In view of the short-term challenges to the UK’s power supplies expected this winter, the telco announced it is in talks with the government and the Environment Agency, in particular, to assess whether it can (or if it will have to) reduce its demand on the grid, such as temporarily using alternate power supplies at peak times. “We’re gearing up so we’re ready to offer that support and remain focused on doing everything we can to support the national efforts of the country over the coming months,” stated Howard Watson, BT’s chief security and networks officer. Moving on from immediate challenges, the company is also “obsessively evaluating” new materials for the sector that can produce less heat, be cooled more efficiently or require no active cooling at all, or that can be powered optically and can be part of the circular economy. “Looking to the future, we’re using digital twin technology to understand energy efficiency in the network and identify changes to improve efficiency, predict energy usage into the future and improve climate resilience,” explained Watson. The digital twin technology, combined with advanced analytics and machine learning (ML), is also helping the company position itself “to better understand its own requirements as a business”, he added. Aside from these efforts, the telco’s mobile business EE recently claimed it can reduce up to 40% of energy consumed by its radio access network using lightweight massive MIMO gear from Ericsson – see What’s up with… BT, Ericsson, Samsung, global broadband growth.

The Federal Communications Commission (FCC), the US telecoms regulator, will next Friday and at long last publish new maps allowing domestic consumers and enterprises to see the type and extent of broadband and mobile comms coverage available in any given locality and area. Hitherto, the maps were so incomplete and inaccurate as to be all but useless. The new maps are late (it is more than two years since the US Congress mandated that they be compiled), will be incomplete and much more of a work in progress than a definitive snapshot of the true state of broadband coverage in the US. They will show broadband availability as it was claimed to be on 30 June this year, but much of the underlying data was provided by operators themselves, all of which have vested interests in presenting them in the best light and to their best advantage. In the past, the coverage figures from the carriers were not independently verified by the regulator and the previous iteration of the maps did not include either 5G coverage or, incredibly, any information about the most important and pertinent metrics of all – the availability, coverage and speed of domestic home internet service. After the FCC publishes the new maps, the National Telecommunications and Information Administration (NTIA) will announce state allocations from the US$42.5bn Broadband Equity, Access, and Deployment (BEAD) Program. The NTIA is legally bound to use the new FFC maps to distribute BEAD money based on the number of unserved locations in each state and it’s not happy about having to dole out the cash based on what it obviously regards as being questionable data. The head of the NTIA, Alan Davidson, has said that he wants to delay disbursement until the FCC’s second version of the new maps (presumably with more accurate information) is published sometime in 2023. So there's one political hot potato to deal with. And here's another: As things stand, the publication of the new map next week will signal the start of a bun-fight as a “public challenge process” will allow operators, individuals, state governments and Old Uncle Tom Cobley and all, to take exception to reported coverage stats and maps. Such challenges will be incorporated into future versions of the FCC and so the great grinding wheel will slowly crank into action again. CostQuest Associates, a broadband consultancy headquartered in Cincinnati, Ohio, is contracted to provide the FCC’s Broadband Serviceable Location Fabric, a common dataset designed to solve location accuracy issues and deliver the foundational data to support the National Broadband Map. No doubt its warp and weft will show some threadbare patches by the time the mapping stops, if it ever does.

Telenor is reportedly seeking a buyer for its operation in Pakistan, a business with more than 49 million customers that could be valued at US$1bn, according to Bloomberg, which reports that initial bids will be sought later this month. Just last month, Telenor signalled its intention to step back from, or possibly even exit, its operations in Asia with the formation of an “independent regional entity” based in Singapore to “take on full oversight and responsibility for the company’s operations in Bangladesh, Malaysia, Pakistan and Thailand.”

Down under, three Australian telcos have, at last, been nailed for “making false or misleading claims” about broadband internet access speeds (ie. lying through their teeth) for years. Australia’s Federal Court has fined Telstra AUS$15m, TPG Telecom (formerly Vodafone Hutchison Australia before, in 2018, merging with TPG, otherwise known as the Total Peripherals Group, “to create a more competitive entity”) has been penalised to the tune of $5m, and Optus, wholly-owned subsidiary of Singtel of Singapore, was hit with a $13.5m fine. Collectively, the three carriers have been fined $33.5mn (that’s US$22.1m). Of course that’s chicken feed in the grand scheme of things as far as the guilty telcos are concerned, but at least they have been convicted and made to pay for blatantly conning subscribers about the broadband speeds for which they believed they were paying. The Australian Competition & Consumer Commission (ACCC) testified that the false and/or misleading statements relating to the access speeds specified in heavily promoted 50Mbit/s and 100Mbit/s NBN ‘fibre-to-the-node’ internet service plans had continued throughout 2019 and into 2020. All three of the telcos admitted in court to lying about access speeds to at least 120,000 subscribers. The NBN is the National Broadband Network, the Australia-wide wholesale open-access data network. The NBN includes wired and radio communication components, rolled out and operated by NBN Co, which is a government-owned corporation that offers wholesale services to the country’s ISPs (which, in NBN parlance, are RSPs, or retail service providers) that then sell connectivity services to end users. Telstra, Australia’s largest wireless carrier with 19.6 million subscribers, is the Lucky Country’s largest telco by market share (prior to privatisation in 1996 it was the monopoly state-owned operator). In a statement issued after it had admitted to what was basically fraud, Telstra confirmed that between April 2019 and April 2020 it had failed to verify the maximum attainable speed of the NBN services ordered by around 48,000 customers, either completely or within a reasonable period after connection, adding: “We have gone through an extensive remediation and refund process. We've also taken a number of steps to ensure we better meet our regulatory obligations.” That’s big of them! Meanwhile, Optus (Australia’s second-largest wireless carrier with some 11 million subscribers) and TPG Telecom (the second-biggest Australian ISP and biggest MVNO with a total of about 6 million customers) emailed Reuters with their mea culpas. Optus claims it has “made changes to their systems and processes to address the concerns raised by the proceedings” and will get in touch with subscribers who are eligible for “remediation”. TPG’s apologia stated, “During 2021, TPG Internet undertook a remediation program where it contacted all affected customers and offered refunds to those NBN FTTN customers who were eligible.” The three telcos also said that in addition to refunds and compensation they would offer users a range of options, such as moving to cheaper tariffs. How magnanimous of them. However, such theoretical ‘generosity’ may mean little in practice The Commissioner of the ACCC, Liza Carver, told the court as none of the telcos “have adequate systems, policies and processes in place to ensure that they will do what they say they will.” It's enough to make a cat laugh.

- The staff, TelecomTV