What’s up with… DZS, Xavier Niel & Eir, Huawei

• Broadband equipment vendor DZS goes under
• Iliad’s Xavier Niel increases his stake in Ireland’s Eir
• Huawei embroiled in Euro bribery allegations

In today’s industry news roundup: Broadband network equipment vendor DZS has gone into liquidation; telecom entrepreneur Xavier Niel moves closer to total control of Ireland’s national telco; Huawei is at the centre of a European Parliament corruption investigation; and much more!

Broadband access technology vendor DZS has collapsed and ceased business in the US, the company announced late last week. “It is with utmost disappointment that we share that DZS was unable to secure the necessary working capital from either its current lender or any prospective lenders to sustain the business going forward,” the vendor announced. “As a result, on Friday, March 14, the company commenced a liquidation proceeding under Chapter 7 of the United States Bankruptcy Code. All United States operations ceased, and all United States employees were terminated as of the time of the Chapter 7 filing. The company’s foreign subsidiaries, including those in Germany, the United Kingdom, and Australia may continue to exist outside of the United States liquidation.” Just over a year ago, DZS sold its Asia business unit in a deal valued at $48m to one its major shareholders, Dasan Networks (though the deal included only $5m in cash) and raised $25m from investors for working capital as, under the leadership of telecom sector veteran Charlie Voft, it sought to turn around its fortunes. It also sold its enterprise internet of things (IoT) unit for $6.5m in November last year and its Service Assurance and WiFi Management software portfolio for $34m in October and, remarkably, even acquired NetComm Wireless for $7m in May. But 2023 and much of 2024 were brutal for vendors as network operators tightened their purse strings and now the lights are out at DZS headquarters in Plano, Texas. “During the company’s 25 years, Zhone/DZS developed industry-leading broadband access and connectivity solutions that today enable high-speed, secure and reliable internet access services to many service providers around the world. Over the past nearly two years, the company has been balancing its technology initiatives while optimising operating expenses and securing the necessary working capital to stabilise the business. Please know that the company has been working with extreme urgency to obtain a new working capital facility that would maintain the business and has otherwise been evaluating all possible strategic alternatives. Unfortunately, we have not been successful in those efforts,” it stated.  

Telecom sector entrepreneur Xavier Niel has increased his stake in Irish national telco Eir after US hedge fund Davidson Kempner sold its 8.9% stake in three tranches over the course of the past six months, reports The Times (subscription required). NJJ Boru, an investment firm controlled by Niel and his European telecom operation Iliad Group, now reportedly owns more than 70% of Eir’s shares, with Anchorage Capital the other main shareholder. It’s not known how much Niel invested to increase his stake. Niel has previously stated his intention to take full control of Eir, which last week reported a 2% increase in annual revenues to €1.33bn and full year 2024 earnings before interest, taxes, depreciation and amortisation (EBITDA) of €614m, up by 4%.

Huawei is embroiled in an “active corruption” scandal that revolves around the alleged bribery of at least 15 former and current members of the European parliament, The Brussels Times has reported, noting that the case was first covered by Dutch investigative outfit Follow the Money as well as Le Soir, Knack and Reporters United. Following a two-year investigation, houses of lobbyists have been raided, arrests have been made and Huawei has been identified by the Belgian federal prosecutor’s office as being the beneficiary of the alleged bribes, which included cash payments, all-expenses-paid trips, various modes of entertainment and more. For more on the case, see this Politico article.   

Sir Tim Berners-Lee, the English computer scientist who, 35 years ago, invented the World Wide Web, and followed it up with the HTML markup language, the URL system and HTTP, wants to take a wrecking-ball to the crenellated walled gardens of social media companies. In an article published by the Financial Times (subscription required) he complains that he envisioned the web as “a place for the shared benefit of all” and it has turned out to be anything but. Big tech companies continuously add to their massive wealth by the simple expedient of keeping people on their platforms for as long as possible. They keep them online via selection algorithms that optimise their engagement by constantly reinforcing it, even if that means (inevitably) providing access to fake news and extreme content that eventually results in individual and social polarisation and dysfunction. Social media companies have built practically impregnable virtual fortresses inside which they hold and jealously guard unbelievable masses of personal data related to their users. Berners-Lee writes that “digital sovereignty” has been lost and that social media platforms have time and time again demonstrated that they will not regulate themselves and, therefore, it is time to design a new standards regime and impose it from outside via strong legislation. It is time for people to reclaim their data, he believes, and one way for them to do that is via the London-based Open Data Institute that Sir Tim co-founded to meet the challenge of international co-ordination for a new standard that gives users control over their own data. The standard is Solid (social linked data) and the technical details are controlled by W3C, the web standards consortium. Solid seeks to decentralise the web and the platform can be used to build new applications that request access to user data. This data is stored in such a way that users have complete control over it. Of course, the social media giants will fight tooth and nail against such an approach, but there is an opportunity if not to stop them, then at least to slow them in their rapacious tracks. It will take a long time and may fail but something has to be done to curb the overweening power that, every day, is traducing formerly accepted norms. Despite the pervading gloom, Berners-Lee is an optimistic chap and maintains an abiding hope that the web still has the potential for the fulfillment of what he calls “unrealised promise”. It might sound utopian, but it’s better than unquestioning subservience to a worsening status quo. Perhaps the European Union could get the ball rolling by regulating social media like a utility? It would be a start.

In a lengthy email to (now former) colleagues, Evan Feinman, who has been running the $42.5bn Broadband Equity Access and Deployment (BEAD) programme in the US for the past three or so years, lashed out at the Trump administration and Elon Musk as he announced that 14 March was his final day in the BEAD hot seat, Politico has reported. It is no surprise that Feinman has lost that role – it falls under the aegis of the Department of Commerce, where the new secretary Howard Lutnick recently slammed “the prior administration’s woke mandates, favouritism towards certain technologies, and burdensome regulations” related to BEAD, before adding that a “rigorous review of the BEAD programme” was underway. The concern, then, as it is now for Feinman, is that this review will ultimately lead to Musk’s low-earth orbit (LEO) satellite broadband business, Starlink, getting a slice of the BEAD funding action that it previously wasn’t in line to get. In his circa 1,100-word letter, Feinman reportedly wrote: “Stranding all or part of rural America with worse internet so that we can make the world’s richest man even richer is yet another in a long line of betrayals by Washington.” Let’s see if that transpires, but with Musk seemingly able to call the shots on many financial decisions being made by President Trump’s administration, the concern of Feinman and others is that Musk’s empire will ultimately and unfairly benefit as a result of his current powerful role in political circles.   

– The staff, TelecomTV