What’s up with… Nokia, Rakuten Mobile, Altice Portugal

• Nokia is to miss its 2023 financial targets
• Rakuten Mobile’s customer base hits 6 million
• Iliad owner Xavier Niel linked to potential bid for Altice Portugal

In today’s industry news roundup: More negative financial news for Nokia as the Finnish vendor admits it will fall short of its 2023 net sales, operating margin and free cash flow targets; Japan’s Rakuten Mobile ends 2023 with 6 million customers; serial telecom entrepreneur Xavier Niel is the latest name linked to a potential bid to acquire Altice Portugal; and much more!

Nokia’s financial woes aren’t letting up. The vendor, which is cutting up to 14,000 jobs as part of a company-wide restructuring process, was forced to revamp its medium-term financial targets last month following the loss of its radio access network (RAN) business at AT&T. It then ended 2023 with the announcement that it “will not achieve its financial outlook for the full year 2023 in relation to net sales, comparable operating margin and free cash flow” as its Nokia Technologies division, which manages and monetises its extensive patents portfolio, was unable to conclude some major technology licensing deals before the year’s end – those deals will therefore fall into the 2024 financials (assuming they are concluded during the coming 12 months, of course…). Nokia also noted that while its fourth quarter net sales were an improvement on those reported for the third quarter, the final three-month period “proved somewhat more challenging than expected given on-going customer spending constraint and the recently communicated customer purchasing decision”, which is a reference to AT&T’s decision to replace Nokia with its arch rival Ericsson as it revamps its mobile access network. The full details of its fourth quarter financials will be shared on 25 January, when the company will publish its full-year results for 2023. The vendor’s share price currently stands at €3.09 – about 30% lower than a year ago – giving Nokia a market value of €17.4bn. 

Rakuten Mobile ended 2023 with 6 million mobile customers, according to the Japanese competitive operator, which means it added about 500,000 customers during the final quarter of last year. It’s taken nearly three years for the operator, which has spent billions of dollars to accelerate its network investment cycle and more quickly reduce its reliance on roaming partner KDDI, to reach this point and it has a long way to go before it starts to seriously impact Japan’s three main mobile service providers, NTT Docomo, KDDI and SoftBank, which dominate a market of about 200 million cellular connections – Rakuten Mobile’s market share is currently at about 3%. For more on Rakuten Mobile’s strategy, investments, challenges and competitors, see our previous article, Rakuten Mobile is still stuck in first gear. 

Altice Portugal appears to be attracting an increasing number of potential suitors. The owner of French telco group Iliad and serial telecom entrepreneur Xavier Niel has reportedly expressed interest in acquiring the Portuguese business that is up for grabs as its owner, Patrick Drahi’s Altice group, looks to pay down some of its staggering $60bn debt pile by offloading assets. According to a Bloomberg report (available here via BNN Bloomberg), Niel has shown interest and is joining the race for Altice Portugal which has also attracted previous interest from the likes of Saudi telco giant STC – which in December 2023 emerged as a potential suitor offering more than €7bn for the Portuguese operation – and private equity firm Warburg Pincus, which reportedly tied up with Antonio Horta-Osorio, the former chair of Credit Suisse, for a bid valued at more than €6bn. Bloomberg further reported that bidders will be shortlisted early in 2024. Niel, of course, is already at the heart of the current telecom M&A scene following Iliad’s recent offer to merge its Italian business with Vodafone Italia – see Iliad courts Vodafone with €10bn Italian merger offer.

Still with Niel… Turkcell has sold its operations in Ukraine, including mobile operator Lifecell (about 9.1 million customers), to investment firm NJJ Capital, part of the Frenchman’s business empire. Financial details were not disclosed, but according to Turkcell the value of the assets sold is about 15.2bn Ukrainian Hryvnia ($400m).

As anticipated, multiple UK telcos, including BT, appear to have missed the end of 2023 deadline for removing Huawei equipment from their core networks, according to ISPreview, though it’s expected that the UK government will decide not to financially penalise the telcos and give them a bit more time to replace all of the Chinese vendor’s technology from their core network platforms. BT is certainly close to achieving the goal – a spokesperson for the UK national operator told Bloomberg that “all 4G and 5G data sessions and voice calls are now delivered by non-Huawei core equipment – meaning that over 99% of all core traffic is now being served by non-Huawei kit,” and that the remaining 1% was linked to legacy 2G and 3G networks.

UAE-based operator group e& has terminated discussions to raise its stake in Saudi Arabian mobile operator Mobily from 28% to 50% plus one share. “Following a period of engagement, a way forward to conclude the potential transaction could not be determined”, the telco explained in a brief notice to the Abu Dhabi Securities Exchange. While e& will not pursue a possible increase in its shareholding in Mobily, the company emphasised its continued support as the largest shareholder in Mobily as it remained “positive about Mobily’s future within the rapidly growing Saudi market.” The Emirati operator first unveiled intentions to increase its ownership in Mobily in Mach 2022, when it showed readiness to spend more than $2.1bn to grow its position in the Saudi market – see What’s up with… 5G in Malaysia, Etisalat, NTT and Schneider.

SoftBank has increased its stake in T-Mobile US to 7.64% from 3.75% as a result of an issuance of 48.75 million new shares worth about $7.6bn by the US operator. The new capital increase is linked to the agreement struck in 2020 between the US telco, SoftBank and Deutsche Telekom – the majority shareholder in T-Mobile US – when SoftBank sold Sprint to T-Mobile US in a $26.5bn all-stock deal. Read more.

América Móvil and Liberty Latin America have agreed to provide up to 972.4bn Chilean pesos (US$1.1bn) in additional capital for their Chilean joint venture ClaroVTR, which offers fixed, mobile and payTV services. In a statement, América Móvil explained that the new funding will be provided through 30 June 2024 to support ClaroVTR’s business plan and to permit refinancing of certain bank debt that has been guaranteed by América Móvil when forming the JV. The two parties have also agreed terms for a potential change related to the 50:50 ownership structure of ClaroVTR. Additionally, the pair has agreed that, subject to the fulfilment of certain requirements, either América Móvil or Liberty Latin America will be able to sell or purchase more shares in ClaroVTR in 2026. Find out more.

Three, which is in the process of trying to merge with Vodafone UK, is under the spotlight following a near £2bn dividend payment to its owner, CK Hutchison, reports The Guardian. While the operator says the payment is a result of a windfall from the sale of towers to Cellnex, critics point out that the dividend payment was made just as prices were being hiked by 14% and that the move shows the mobile operator is more profitable than it claims.

Indian optical equipment vendor HFCL has received a 11.27bn rupees ($135m) contract from state-owned Indian operator BSNL, which is having to invest heavily in its data transport and mobile access networks in order to remain even vaguely competitive in a market increasingly dominated by Reliance Jio and Bharti Airtel. Read more. 

Olusegun ‘Segun’ Ogunsanya has resigned as the CEO of Airtel Africa, which has operations in 14 sub-Saharan markets, and will be replaced by Sunil Taldar, who joined Airtel Africa in October 2023 as Director - Transformation. Taldar will work alongside Ogunsanya in the coming months and then be appointed to the board as an executive director and assume the role of CEO on 1 July 2024, at which time Segun will retire from the board and the company. The news comes as Airtel Africa’s customer base topped 150 million for the first time.  

- The staff, TelecomTV