• Italy presses for ‘fair share’ capex contributions 
• Veon comes under activist investor pressure
• China Mobile’s 5G customer base hits almost 540 million 

In today’s industry news roundup: The Italian government puts its weight behind the case for ‘fair share’ payments from big tech in Europe; shareholder demands better returns and business progress from telco Veon; China Mobile’s numbers keep on growing; and much more!

The Italian government is pressing for the introduction of so-called ‘fair share’ payments by big tech players to telecom network operators, a minister told the media in Milan on Monday. Asked about the potential of major streaming companies and cloud players contributing to telco capital expenditure (capex) budgets, Italy’s industry minister, Adolfo Urso, told reporters that “it’s important that we go in this direction,” reported Reuters. “It makes good sense for big tech to contribute to the workload that is then entrusted to the large telecommunications networks,” Urso reportedly added. National operator Telecom Italia (TIM) is one of the major European telcos urging the European Commission (EC) to introduce rules that would force large traffic generators (LTGs), the companies that produce large volumes of data and video traffic that run across telco networks such as Amazon, Google, Meta and Netflix, to contribute towards the costs of infrastructure upgrades and rollouts. The topic has been bubbling away for the past couple of years and was brought back into the limelight in September when a new report, The future of European competitiveness, recommended that the EC should introduce a slew of new rules, including pro-market consolidation policies and the introduction of fair share financial contributions from the big tech firms to telcos – see EC report proposes ‘fair share’ payments, easier telco M&A.

Having wiped the sweat from its corporate brow after finally filing its 2023 annual report with the US Securities and Exchange Commission (SEC) and receiving confirmation from the Nasdaq Stock Market that it is now compliant with the exchange’s listing requirements, the management team at international network operator Veon has come under pressure from an activist investor that is demanding changes in the way the company is run. Veon, which has about 160 million customers in six markets, including Ukraine (Kyivstar), Bangladesh (Banglalink) and Pakistan (Jazz), reported revenues of almost $2bn and an operating profit of $546m for the first six months of this year: It currently has a market value of just over $2.2bn. But Shah Capital, which holds a 7% stake in the operator, is “disappointed” in the company’s performance, its low valuation and its perceived lack of respect from the investment community. In a letter to the Veon board, which was shared with the media, Himanshu Shah, founder of Shah Capital, noted that Veon has a low profile amongst the investment community, is not regarded as a fintech or datacentre player (despite having activities in both sectors), has a relatively weak management team and has failed to deliver dividends or other returns to investors, such as share buybacks, in the past three years. So he wants changes and has laid out seven demands of the Veon team, including immediate and ongoing share buybacks, a local/regional IPO for Jazz, Veon’s operation in Pakistan (or a listing of its fintech unit JazzCash), the listing of Kyivstar on the Nasdaq, a greater profile for Veon in investment circles, a new governance model and a concerted effort to reduce Veon’s tax payments. According to Shah, Veon’s stock has underperformed by 80% over the past decade while the Nasdaq has risen by 400% and he believes his plans will help boost the operator’s investment profile and help to grow the company. Veon’s share price gained 2% in early Monday trading to $30.07 so there appears to be an expectation that Shah’s pressure will result in some changes at Veon.

China Mobile ended September with 539.4 million 5G customers, more than half of its total mobile connections of 1,004 million, and 314 million fixed broadband customers, the operator noted in its third-quarter earnings report. For the first nine months of 2024, it generated total revenues of 791.5bn Chinese yuan ($111.2bn), of which 678bn yuan ($95.3bn) was service revenues, with both metrics up by 2% year on year. Profits before tax were up by 3.4% to 142.5bn yuan ($20bn) for the nine-month period.  

Rakuten Mobile’s customer base has hit the 8 million mark as the Japanese greenfield network operator continues to slowly but surely attract customers to its network. But it still has a long way to go before it starts to trouble the market leaders. Its 8 million total  includes business continuity lines used as backup by enterprise customers: Excluding those connections, and those delivered by virtual network operators that offer their services over its network, Rakuten Mobile has 7.29 million customers signed up to its own services. The company is hoping to reach a total of 10 million mobile connections by the end of 2024, but even then it would still only command a single-digit market share: By contrast, Japan’s market leader NTT Docomo has 90 million mobile connections. 

– The staff, TelecomTV