What’s up with… Millicom, WindTre, AI in the UK

• Xavier Niel ups his bid for Millicom to $4.4bn
• Italy’s WindTre swallows FWA operator 
• New UK government cuts AI and advanced computing plans

In today’s industry news roundup: Iliad owner Xavier Niel has reportedly increased his bid to acquire Latin American operator Millicom, but only by about $300m; Italian operator WindTre is now the proud owner of a near-national 5G fixed wireless access network; the new UK Labour government has shelved plans to invest £1.3bn in significant AI and advanced computing developments; and much more!

Iliad founder and owner Xavier Niel has raised his bid for Millicom to approximately $4.4bn after the Latin American service provider last month rejected a previous $4.1bn takeover offer for being too low. Niel’s holding company Atlas Investissement, which already holds a 29% stake in Millicom, has now offered $25.75 a share in cash, compared with the earlier offer of $24 apiece. The acceptance window for the offer closes on 16 August, unless it is given an extension. The news came as the Latin American operator reported its second-quarter results, highlighting a 4.7% year-on-year rise in revenue to $1.46bn and a net profit of $78m. “Millicom has undergone an important transformation aimed at significantly increasing the company’s equity free cash flow generation. These efforts began to pay off in Q2, with EBITDA [earnings before interest, taxes, depreciation and amortisation] up almost 20% organically,” commented Marcelo Benitez who took over as CEO in June. He added that the company is “streamlining our product offerings and internal processes, which is enhancing productivity and generating cost savings beyond the initial targets of the efficiency project Everest. Additionally, we are prioritising ARPU [average revenue per user] growth in Mobile, reducing churn in Home, and accelerating growth in B2B. We are also making return-focused investments to sustain our market leadership and drive customer growth in the second half of 2024”.

Still with Millicom… Just days after agreeing a purchase deal with Telefónica in Colombia, the telco is pushing ahead with its portfolio strategy rejig. The company has agreed to merge its operation in Costa Rica with Liberty Latin America’s division in the Central American country. In an all-stock agreement, Liberty Latin America and its minority partner in Costa Rica will hold an approximate 86% interest, while Millicom will own 14% of the joint operation, although the final ownership breakdown will be confirmed upon completion of the deal. In a statement unveiling the move, Millicom noted that the merger demonstrates the two telcos’ commitment to Costa Rica as they create “the opportunity for a scaled platform and accelerated investments in fibre network expansion”. It also claimed that the move would “increase fibre competition and promote high-quality, good value services and access to the digital economy for all Costa Ricans.” As of the end of 2023, the combined operations of Liberty Latin America and Millicom in Costa Rica had adjusted operating income before depreciation and amortisation (OIBDA) of around $255m, net debt of $533m and more than 440,000 broadband subscribers. According to Liberty Latin America’s president and CEO, Balan Nair, by merging Liberty and Tigo, “the fixed operations will accelerate the transition to FTTH [fibre-to-the-home] and will enable us to deliver exceptional high-speed services for consumers, provide enhanced customer experiences, drive innovation and offer growth opportunities for our people.” A similar notion was expressed by Millicom’s chair, Mauricio Ramos, who added: “This merger is expected to generate new efficiencies and improve commercial offerings, providing customers with access to mobile services and premium content. It creates a stronger, more competitive entity with high investment capacity to meet the accelerated technological changes, network expansion, and service improvements, ensuring that long-term market conditions remain competitive while maintaining high-quality and valuable services for our customers in Costa Rica.” The deal is subject to conditions, including regulatory approval, and is expected to close in the second half of 2025.

WindTre, the Italian telco unit of CK Hutchison, has completed the acquisition of wholesale 5G fixed wireless access (FWA) network operator OpNet (formerly known as Linkem) for €485m. The takeover will allow WindTre to boost its 5G and FWA services portfolio, and to develop “even more innovative technological solutions” to help the digitalisation of businesses and the public sector, according to the company. “OpNet’s customers will continue to enjoy the same attention and care they have received thus far, and we are confident that we will further increase their levels of satisfaction,” noted Benoit Hanssen, co-CEO of WindTre. He added that the company will continue to operate under the OpNet brand and the commercial structure dedicated to wholesale customers. OpNet runs a 5G FWA network using more than 3,000 base stations and spectrum in the 3.5 GHz band that covers about three-quarters of Italy’s population.  Read more.

The new UK Labour government is already swinging the axe around in increasingly wider swathes as it seeks to fill the £20bn funding “black hole” left on the national balance sheet by the former Conservative administration. Some big and prestigious infrastructure projects have already been canned, with more to follow, and tax rises for almost everyone and everything are on the cards for the upcoming October budget announcement. However, given that the new government was supportive of the ancien régime’s plans to make Britain a major player in AI and advanced computing, it comes as a surprise to find out that a sum of £1.3bn is to be saved by cutting plans to develop and install an £800m exascale supercomputer at Edinburgh University in Scotland – which has already spent £31m on special casing in which to house the new computer that would have been 50 times more powerful than anything that has gone before – and to abandon the commitment to devote £500m in funding that had been earmarked for the AI Research Resource (AIRR) project. The AIRR was an international collaboration between the UK government, UK Research and Innovation (UKRI) – a government-managed public body funded by the Department for Science, Innovation and Technology (DSIT) – the University of Cambridge, the University of Bristol, and US tech behemoths Dell and Intel. It was announced last year alongside the previous government’s much hyped AI Safety Summit held in November 2023, which examined the potential risks of artificial intelligence and debated strategies to mitigate them via internationally coordinated action. That much-vaunted gathering was convened at the recommendation of the independently written Future of Compute Review, which focused on Britain’s compute needs between 2023 and 2033. Its purpose was to “spur growth and secure the UK’s status as a science and technology superpower”, and to “unlock the potential of compute for the UK, placing it as a global actor with a competitive compute ecosystem.” This, the report concluded, would require ”a holistic package of action”, including a strategic vision and national coordination, and recommended the development of “a new national exascale facility based across supercomputing and quantum computing facilities at Edinburgh, Bristol and Cambridge.” That plan is now dust and ashes, reports The Guardian. In its own defence, the new government asserts that the cash promised for the project was never actually allocated by the departed Conservative government and thus was no more than a fantasy anyway. The new government has already notified “all interested parties” of the decision to cull the programme. A statement reads, “The government is taking difficult and necessary spending decisions across all departments in the face of billions of pounds of unfunded commitments. This is essential to restore economic stability and deliver our national mission for growth.” The UK government adds that it remains “absolutely committed” to technological development, not least because, as at the end of Q1 2024, the market value of the sector was estimated to be worth at least £900m and was growing. It can only be hoped that the decision, which seems particularly short-sighted in terms of its relatively modest price versus potential national benefits, will be revisited and rescinded in due course. We’ll be keeping a close eye on developments. 

Vodafone UK has added long-term evolution for machines (LTE-M) to its internet of things (IoT) solutions portfolio for business customers. The offering focuses on low-powered, low-data use cases, such as wearable devices, asset tracking and burglar alarm setups. LTE-M is optimised for mobility and event-based connectivity, and is designed for IoT services that transmit small amounts of data and are not connected to mains electricity. “The power of LTE-M is the ability to choose the right tools for the right job. 5G might be the right choice for some IoT use cases, whereas LTE-M might be better for others. By enabling LTE-M to sit alongside 4G, 5G and NB-IoT [narrowband internet of things], we are providing a technology-agnostic solution for customers. This is about picking the right solution, at the right price point,” explained Nick Gliddon, business director at Vodafone UK. Find out more. 

That announcement came as the UK operator’s patent, Vodafone Group, issued a reminder about the impressive international IoT business it has built up over the past few decades. “We have been pioneering IoT connectivity for over 30 years, and launched our own Managed IoT Connectivity platform in 2010. We recognised that connecting devices – which can be monitored and controlled through mobile technology – had the potential to transform lives and businesses for the better… Today, Vodafone Business IoT is the largest global provider of IoT, connecting more than 187 million devices in over 190 countries and recognised for our leadership across IoT connectivity, roaming and industrial services by five of the world’s leading independent analysts,” noted the operator. “But it’s what you do with the technology that counts,” the operator added. To find out what Vodafone is doing, check out this announcement.  

Ofcom, the UK telecom regulator, is to make currently unassigned 32GHz spectrum available for the provision of fixed wireless access (FWA) services. A new consultation document – Expanding spectrum access for fixed links in the 32 GHz band – points out that in April this year a national 2 x 126 MHz block of spectrum in the 32 GHz band was returned to Ofcom and the regulator now proposes making this unassigned spectrum – 32.445-32.571 GHz paired with 33.257-33.383 GHz – available for FWA links “on an Ofcom-managed basis.” FWA is an alternative fixed broadband access technology that makes use of wireless links, often using licensed 4G or 5G spectrum. Hitherto, the few disadvantages of FWA have been the lack of agreed international standards to govern the use of the technology, together with constraints on spectrum availability that come with concomitant restrictions on bandwidth per customer. The Ofcom consultation document says its proposal will enable operators to increase their capacity to serve more consumers and businesses with improved services without any adverse effects on existing users of the 32 GHz band “or other users of frequencies”. The closing date for responses from interest parties is 13 September this year, with a decision to be published before the year end. It will be published simultaneously with the decision Ofcom has reached about its earlier proposals (from March this year) regarding returned spectrum in the 27.5-30GHz band. The 32GHz spectrum was originally auctioned in 2008 on a national block-assigned basis and is currently used for point-to-point wireless data transport links. These are used by BT and MBNL (Mobile Broadband Network Ltd), the network-sharing joint venture jointly owned by BT’s EE operation and Three UK. Managed service provider MLL Telecom also used the spectrum until recently but four months ago surrendered its two spectrum blocks in the 32GHz band. Ofcom noted it is “not aware of concrete evidence of demand for any other type of use in this spectrum” and so has decided “that fixed links will continue to be the most likely and highest value use in this band.”

The demand for graphics processing units (GPUs) and other accelerator chips for AI in the cloud and datacentre is set to reduce sharply beyond 2026, according to the latest forecast from Omdia, which explained this inflection point will be due to “a shift from technology adoption to [a] change in demand for AI applications as the driver of growth”. However, the likely slowdown will not happen until the market has “transformed the industry”, it added. Omdia estimates that the market for AI processors for the cloud and datacentre has grown from just under $10bn in 2022 to $78bn this year and expects it to eventually reach $151bn in 2029. “The most significant change is the upward revision of the underlying datacentre semiconductor market driven by growth in AI. Beyond that, we’re noticing hyperscalers’ custom chips, especially Google’s TPUs [tensor processing units], starting to capture market share from GPUs. We expect them to be increasingly important,” explained Alexander Harrowell, Omdia’s principal analyst for advanced computing.

The Yukon, a huge, wild and mountainous territory in north-west Canada partially bordering the US state of Alaska, has a human population of less than 50,000, most of whom live in the capital city of Whitehorse, situated in the south of the territory and moderately close to the border with British Columbia. There may not be many people living in the Yukon but those who do can be very blunt and determined when it comes to expressing their concerns and complaints. As can the Prime Minister and head of government, Ranj Pillai, who is personally involved in an ongoing spat with the incumbent telco Bell Canada (BCE). For years on end, there have been well-founded complaints made by Yukoners about shoddy services, including dropped calls, poor coverage, intermittent internet access, long delays in text delivery and expensive bills for both domestic subscribers, businesses and the indigenous people of the First Nations alike. After years of little or no action on the part of the telco, Pillai was finally sufficiently provoked to fire a public broadside against Bell Canada in which he took the telco to task about its “embarrassing” telecom services, Yukon News reported. He has sent a strongly worded letter to the CEO of Bell Canada, Mirko Bibic, and provided a salty accompanying press release to regional, national and international media outlets, which reads: “Yukoners are pissed – and rightly so. Cell phone reception has been terrible for months, even in the middle of downtown Whitehorse. Calls keep cutting out and service providers don’t seem able to tell Yukoners why.” He blames Bell Canada for the subscribers’ travails because the telco operates the cell towers across the territory. Pillai added that as premier of the Yukon it is his responsibility to speak for the people and demand reliable telecom services for them and demands that Bell Canada forthwith responds to his complaints with plans to remedy the situation, together with a binding timetable showing when the necessary work will be completed to the satisfaction of the whole population of the Yukon. He has further told Bibic that, as CEO of Bell Canada, it is “your responsibility to ensure that cellular customers are receiving the services they pay for with minimal disruption. In 2024, it should be embarrassing to telecommunications providers that Yukoners cannot have uninterrupted cell phone calls in the downtown of their capital city.” Pillai added, “The current level of service provided by Bell in the Yukon has not met the expectations of residents, causing frustration and hindering daily activities,” and noted that there are also widespread concerns about the provision of emergency communications systems and services across the Yukon, which is more than twice the size of the UK and bigger than the US a state of California, and is seeking assurances that Bell will “meet its mandate in Canada’s North.” Bell Canada’s CEO responded, in writing, to Pillai's letter the very day after he received it and assured the premier that he “takes seriously” the “frustrations” listed. He said most of the problems are down to “intermittent disruptions” because of “local upgrades” that have been slow to be completed and implemented. He promised that “moving forward, we will monitor the situation to ensure that the issues do not re-emerge,” and emphasised that Bell is spending CAN$22m (hardly a huge sum given the circumstances) in the Yukon over the next three years to improve things. Bilic wrote: “These investments will expand 4G and 5G service to dozens of cell sites across the region and improve capacity. This work is already underway and, once completed, will provide even more Yukoners with access to Canada’s fastest network.” The Yukon is served by several operators supplying mobile, limited landline, internet and TV services, a surprisingly large number given the small population, but many of competitive providers have to rely on robust service being provided by Bell Canada’s towers, which all too often has not been forthcoming. It is to be hoped that Premier Pillai will keep holding Bell Canada’s feet to the fire whilst being mindful, in a place where the winters are severe, that unfulfilled promises might give a few telco executives a case of chilblains.

- The staff, TelecomTV