What’s up with… Direct-to-cell, rip-and-replace, Telecom Italia, BT

• One New Zealand launches direct-to-cell service with Starlink
• US telcos to get more rip-and-replace funding
• Telecom Italia receives a €700m bid for its Sparkle unit
• BT defeats £1.3bn class action lawsuit

In today’s industry news roundup: New Zealand operator becomes the first in the world to launch a satellite-to-smartphone service for its paying customers; US operators are set to get another $3bn in rip-and-replace funding to swap out Chinese technology; Telecom Italia is pondering a €700m takeover offer for its international business, Sparkle; BT has survived a potentially massive class action lawsuit payout; and much more!

One New Zealand (One NZ), in partnership with Elon Musk’s Starlink, has become the first mobile service provider to offer a direct-to-cell communications service via satellite to its customers. Much of the telecom world’s attention has been on the progress being made by T-Mobile US with Starlink – the US operator is now signing up customers for its beta service launch – but One NZ already has its initial service up and running, with customers using specific devices able to send and receive text messages when they are out of reach of the telco’s terrestrial infrastructure, as long as they have line of sight to the sky (potholers, take note!). Joe Goddard, experience and commercial director at One NZ, stated: “We have lift-off! I’m incredibly proud that One NZ is the first telecommunications company globally to launch a nationwide Starlink Direct to Mobile service, and One NZ customers are among the first in the world to begin using this groundbreaking technology. We've worked with Starlink to provide coverage across Aotearoa, including to the around 40% of NZ’s landmass that is not covered by traditional mobile networks – plus approximately 20 kilometres out to sea. Right from the start we’ve said we would keep customers updated with our progress to launch in 2024 and as the technology develops. Today is a significant milestone in that journey.” The initial One NZ Satellite TXT service is available on a small number of eligible devices – currently the Samsung Galaxy Z Flip6, Samsung Galaxy Z Fold6, Samsung Galaxy S24 Ultra and Oppo Find X8 Pro – with more to be added in the coming months, noted the operator. As you’d expect, the initial service has its limitations, so, for now at least, One NZ is offering the service for free to its existing subscribers. “The initial TXT service will take longer to send and receive TXT messages. In many cases, TXT messages will take 3 minutes. However, at times it may take 10 minutes or longer, especially during the first few months. As the service matures and more satellites are launched, we expect delivery times to improve,” notes the operator on its website. “The type of eligible phone you are using, where you are in New Zealand and whether a satellite is currently overhead will all have an impact on whether your TXT is sent or received and how long it takes,” it added. But this is only the beginning of what will be a broadly available and groundbreaking service, one that will be incredibly important in countries such as New Zealand with a tricky terrain that is nigh on impossible to cover with regular mobile network infrastructure.   

The US Senate has passed the National Defense Authorization Act (NDAA), a massive defense spending package that includes a $3bn provision for US telcos in need of financial help for their rip-and-replace programmes, which involve switching out Huawei and ZTE technology for alternatives that are not deemed a security risk. The Act now goes to President Biden’s desk to be signed. Jessica Rosenworcel, the current head of US regulator the Federal Communications Commission (FCC), praised the move, noting that the funding for the Secure and Trusted Communications Networks Reimbursement Program (known as the rip-and-replace program) will be paid for by the proceeds from an FCC auction of AWS-3 (advanced wireless services) spectrum. “The ‘rip-and-replace’ program addresses the critical need to remove vulnerable and insecure equipment from U.S. networks,” noted Rosenworcel, who is stepping down from the post in January. “Full funding will not only help protect our Nation’s communications infrastructure but also ensure that rural communities who rely on these networks maintain vital connectivity.” The FCC noted that the rip-and-replace program, created in 2019 to “address the national security threat posed by the extensive integration of Chinese companies’ networking technology” by US network operators, had only received $1.9bn in funding to date, falling way short “of the nearly $5bn actually needed to replace this equipment”. 

After multiple delays, Telecom Italia (TIM) has finally received a binding takeover offer for its Sparkle international business, with Italy’s Ministry of Economy and Finance (MEF) and Retelit, a provider of communications and IT services to the Italian enterprise sector, offering €700m for the business. The Italian national operator, which earlier this year sold its fixed access network unit for €22bn in order to help reduce its giant debt pile, will start its “relevant evaluation and decision-making process as soon as possible”. Which likely means early 2025. The €700m offer is “effective” until 27 January. The news comes only days after reports emerged that private equity giant CVC Capital Partners is mulling the purchase of Vivendi’s stake in Telecom Italia (currently worth about €1bn)  with a view to making an offer for the entire company.   

The BT Group legal team is breathing a sigh of relief today after it successfully defended a class action lawsuit that could, if the telco had lost the case, resulted in a payout of up to £1.3bn. The lawsuit claimed that BT had overcharged landline customers for years, but despite BT’s claim it had no case to answer, it was sent to the UK Competition Appeal Tribunal in January this year. But, as BT noted on Thursday, the tribunal has “dismissed the claim and found that BT Group's conduct did not breach competition law. We take our responsibilities to all of our customers very seriously and welcome today's ruling,” the operator added.  

El Salvador’s Bitcoin dream is turning into a nightmare as the International Monetary Fund (IMF) forces it to revoke the cryptocurrency as legal tender. Back in September 2021, the Central American country became the first in the world to adopt Bitcoin, the first decentralised cryptocurrency, as legal tender. It’s an experiment that didn’t last for long. Bitcoin is certainly revolutionary: Nodes in its peer-to-peer network verify transactions through cryptography and record them in a public distributed ledger, the blockchain, all without central oversight. So, it is very, very different to globally accepted traditional banking and financial processes and the price of Bitcoin can be, and frequently is, extremely volatile. It’s riding the crest of a wave at the moment – each Bitcoin is currently valued at just over $102,000 – but it may not be very long before it tumbles off its surfboard and experiences another of its periodic wipeouts. In power since 2019, and now well into his second term as president, Nayib Bukele’s dream is/was for El Salvador to become a tax-free haven and technology super-hub that will encourage big multinationals and other high-tech companies to move there. With peculiar timing, El Salvador actually adopted Bitcoin when it was slap-bang in the middle of negotiations with the hugely powerful IMF over a loan to bail out its tottering economy. The IMF’s reaction to the national adoption of Bitcoin was scathing. It described the move as “pure folly” and “economically dangerous for developing countries.” Three and a bit(coin) years on, and, after all the hype and bugle oil, the El Salvadoran government now faces an economy almost without any tax income or hard currency reserves and finds itself going back, cap in hand, to the IMF. Without (yet) publicly saying, “We told you so”, the IMF (subject to final approval by its board) has granted the country a $1.4bn loan contingent on various undertakings - the main one being that El Salvador will “scale down” its reliance on cryptocurrency by revoking Bitcoin’s status as legal tender. It is also required to “minimise” its usage of Bitcoin in public sector finances and, further, allow businesses to decide for themselves whether or not to accept the cryptocurrency. The indications are that many will spurn it. The IMF puts it thus: “The potential risks of the Bitcoin project will be diminished significantly in line with Fund policies. Legal reforms will make acceptance of Bitcoin by the private sector voluntary. For the public sector, engagement in Bitcoin-related economic activities and transactions in and purchases of Bitcoin will be confined.” Meanwhile, the El Salvadoran government is desperate to conclude further financial assistance agreements with other traditional sources of real rather than virtual finance and currently is seeking $1bn from the World Bank and $3.5bn from the Inter-American Development Bank (IDB). Reality is biting and the El Salvadoran authorities are feeling the pain. All this is a far cry from Bukele’s vision for the country to become a Bitcoin powerhouse founded on compute-intensive (and therefore extremely energy-hungry) Bitcoin mining generated by limitless volcanic geothermal energy. ‘Bitcoin City’, El Salvador’s equivalent of El Dorado, which is to be built “next year” (it has been ‘next year’ since 2021) on the slopes of the active Conchagua volcano in the country’s south east is still little more than virgin jungle and there’s no indication that ground has been broken for the construction of the new city’s “magnificent central plaza” that will “look like a bitcoin symbol from the air” – and a white elephant from everywhere else.

Warsaw, Poland-based mobile networking technology startup IS-Wireless has raised more than $5m from the Polish Agency for Enterprise Development (PARP) and The National Centre for Research and Development (NCBR) to further develop its RAN intelligent controller (RIC) platform with a focus on “real-time operation, enhanced security and multi-service capabilities,” the company has announced. The team at IS-Wireless, which featured in TelecomTV’s recent report on RIC developments, is convinced there is a need for near real-time RIC systems that can enable sub-millisecond response times. The company says its new R&D projects will ”extend its existing RIC to incorporate real-time operating mechanisms. This will unlock a range of benefits, including advanced interference control and significantly more efficient spectrum and energy management. Real-time capabilities are also essential to realizing the full potential of 5G, bringing to life the diverse use cases promised by the IMT-2020 vision but generally unfulfilled to this moment,” such as massive machine-type communications (mMTC) and ultra-reliable low latency communications (uRLLC). 

Cisco is to acquire SnapAttack, an Arlington, Virginia-based threat detection specialist that will help Splunk, for which Cisco paid $28bn in March, “further accelerate its organic threat detection content and engineering roadmap”. Read more.    

– The staff, TelecomTV