What’s up with… Openreach and BT, Orange and MásMóvil, handset recycling

• Openreach and BT’s CEO under Ofcom scrutiny
• EC details objections to planned merger of Orange and MásMóvil
• GSMA rallies operators around handset recycling initiative

In today’s industry news roundup: UK regulator Ofcom has its beady eye on Openreach and BT’s CEO Philip Jansen following recent indiscretions; the European Commission doesn’t like the look of the major telco merger in Spain; a dozen operators have joined forces with the GSMA in an effort to get billions of mobile phones back into circulation; and much more! 

BT’s quasi-independent fixed access network unit Openreach and, indeed, BT’s CEO Philip Jansen are under increasing scrutiny from the UK’s telecom regulator Ofcom, which has just published its latest monitoring report on Openreach’s independence. Ofcom noted that its report “sets out our view on whether actions or decisions by Openreach have risked distorting competition and harming the market. BT’s wider competition-related obligations are dependent on compliant behaviour being driven by example from the very top. The comments of BT’s chief executive, Philip Jansen, in February of this year – including being reported as saying Openreach’s fibre push will ‘end in tears’ for rivals – caused Ofcom and industry significant concern. We would be extremely concerned to see similar comments in future and will be keeping this under close review.” So a slapped wrist for Jansen: Those remarks came in an interview with the Financial Times at a time when Openreach’s controversial Equinox 2 pricing offer, which attracted major criticism from some key rivals such as CityFibre, was under review by the regulator: Jansen wrote to Ofcom at the time to claim the remarks were taken out of context. Equinox 2 was ultimately approved by Ofcom in May. And that’s not all: Ofcom noted today that Openreach had recently “informed us that for the 2022-23 financial year it did not achieve some of the quality-of-service standards set by Ofcom. As a result, Ofcom has opened an investigation into Openreach’s performance and will publish updates in due course.” Don’t expect any tough punishments, though. 

The news comes as Openreach begins the lengthy process of closing down about 4,600 local exchange facilities over the next decade by opening up consultations with the wholesale ISP customers, such as TalkTalk, Sky and Vodafone UK, that use those facilities to deliver services to their retail customers. In a blog published today, Richard Allwood, chief strategy officer at Openreach, noted that the deployment of fibre rather than copper access networks means “we’re able to provide fibre broadband services to the entire country from just 1,000 ‘super digital exchanges’ or Openreach handover points (OHPs).” Closing down 4,600 exchanges “will be a major undertaking with several million services to be migrated, and the importance of ensuring vulnerable customers and the UK’s critical national infrastructure providers are protected along the way.  So we’re planning it in stages – with the first 103 exchanges to close by December 2030. These have some of the highest running costs so there’s a clear advantage in targeting them first. Most of the remaining 4,500 exchanges will likely follow in the early 2030s,” noted Allwood. “Moving to this new digital world will ultimately benefit everybody”, including the ISPs that will be “able to serve their customers from fewer exchanges” and the “millions of end users who will benefit from fibre technology providing speeds up to 10 times faster and with up to 80% fewer faults than traditional copper-based services.” It will also help to “save costs through consolidation of equipment and reduced space and power requirements.” 

Still with BT… It has published a set of financial reports that show the impact of combining its former Enterprise and Global business units into a single unit called BT Business. The formation of that unit was announced in December 2022 and came into effect on 1 April this year, the start of BT’s 2024 financial year. BT’s new documents show that if BT Business had been in operation in the most recent full financial year that ended 31 March 2023, it would have reported total revenues of £8.26bn, down by 2.7% year on year at a time when BT Group’s full-year revenues went up by 0.6% to £20.43bn. Not surprisingly. The earnings trend isn’t so good for the new unit either. In the 2023 fiscal year, BT Business managed earnings before interest, tax, depreciation and amortisation (EBITDA) of £1.95bn, down by almost 11%, while BT Group’s EBITDA increased by 2.8% to almost £8bn. Of its main business lines, only the small and medium business (SMB) sector reported year-on-year sales growth in fiscal 2023, while the UK Corporates and Public Sector, Global and Wholesale lines of business all suffered sales declines. BT Business CEO Bas Burger has his work cut out!  

As anticipated, the European Commission has sent a statement of objections to Orange and MásMóvil about their proposed €18.6bn merger in Spain. The statement notes that the two operators are the second- and fourth-largest providers of mobile and fixed internet services in the country (Telefónica being the largest and Vodafone the third biggest), so the EC is worried that the “proposed joint venture may reduce competition in the retail supply of mobile and fixed internet services as well as of multiple-play bundles in Spain.” Specifically, the EC is concerned that reducing the number of major operators from four to three will eliminate “a significant competitive constraint and innovative rival in the Spanish retail markets for mobile telecommunications services, fixed internet services and multiple-play bundles (including fixed mobile convergent ones). The commission is concerned that this may lead to significant price increases for affected retail customers across the Spanish market. Predicted anticompetitive effects are substantial even after taking potential cost savings into account, in a context where competition has been a driving force for investment and quality of services in the Spanish market.” The commission noted that this statement “does not prejudge the outcome of the investigation. Orange and MásMóvil now have the opportunity to reply to the commission’s statement of objections, to consult the commission’s case file and to request an oral hearing,” but this looks like it’s going to be a tough deal for Orange to get over the line. 

A dozen mobile operators, led by Orange and Tele2, have signed up to a new set of sustainability and circularity targets developed with industry body the GSMA to deal with the estimated 5 billion mobile phones that are currently unused and sitting in homes and offices around the world that could be reused or recycled.  The other operators signed up to the cause are BT Group, Globe Telecom, GO Malta, Iliad, KDDI, NOS, Proximus, Safaricom, Singtel and Telefónica. “Most mobile operators around the world are already taking concrete actions to rapidly cut their carbon emissions over the next decade,” noted John Giusti, the GSMA’s chief regulatory officer, in this announcement. “Moreover, mobile connectivity is playing a major role in helping all sectors of the economy reduce their climate impact, enabling smarter and more efficient manufacturing, transport, and building, to name a few. However, mobile operators are determined to go further. We believe in the need to move to a more circular economy to reduce the impact of mobile technology on the environment, and applaud the latest commitments from 12 leading operators to accelerate the transition to greater circularity. In addition to the environmental benefits, more efficient and responsible use of resources could lower costs and make devices more affordable for the unconnected,” added Giusti. Read more. 

IS-Wireless, an Open RAN-focused network software startup from Poland, is starting to gain traction in Europe. Having helped to deploy Poland’s first Open RAN-enabled 5G private network recently, it has now been selected by a consortium of German industrial leaders, including T-Systems, to deliver the radio units as well as the distributed unit (DU) and centralised unit (CU) for an Open RAN-based 5G network that will be deployed in Berlin this year. IS-Wireless will also provide a near-real time RAN intelligent controller (RIC) with xApps to ensure the “network performance needed in the demanding use case of connected and autonomous mobile robots,” the Polish vendor noted. The resulting network will be used by the consortium to explore the “potential of Open RAN private networks in industrial applications, including autonomous mobile robotics and optimisation of energy use in production plants.” Read more.  

Increasingly desperate to make some cash – any cash – from its incredibly huge investments in the metaverse, the company that used to be called Facebook has come up with what it hopes will be a money-spinning wheeze: Meta is introducing a VR (virtual reality) monthly (or yearly) payable games subscription service, Music Ally has reported. Those who sign up will get access to two games a month, but here’s the rub – customers won’t be able to pick and choose the games they want, instead Meta will allocate games to them, from a very limited list. A hundred years on, Mark Zuckerberg is introducing his very own 21st century take on Henry Ford’s notion of consumer choice, which was that you could buy a Ford automobile in any colour you liked, as long as it was black. Zuckerburg knows he needs to do something: Last year, his company’s metaverse division, Reality Labs, lost US$4bn in real money. The new Meta Quest+ service, which will be available in less than a week’s time, will cost $7.99 a month (or $59.99 for a year) and, Meta says, will be compatible with its Quest 2, Quest Pro and the as-yet-unreleased Quest 3 headsets. Currently, Meta’s VR headsets cost between $299.99 and $999.99. The first lucky punters will get to play ‘Pistol Whip’ and the “nostalgia-fuelled” ‘Pixel Ripped 1995’ for a month before these games are followed by Walkabout Mini Golf and Mothergunship: Forge. By George, it sounds tempting doesn’t it? Except for Walkabout Mini Golf, which seems doomed to be a disappointment given that Meta is still not able to provide its avatars with legs – appendages that are usually regarded as being a basic requirement for a game of golf. Two years ago, Zuckerberg unveiled his ‘meisterplan’ to build a meisterverse – an all-embracing and all-enveloping online virtual environment where people can communicate, work, play games and live for as long as they like, provided they keep a VR headset strapped to their craniums. Research shows that, in reality (see what I did there?), most people can stomach such an environment for between 5 minutes and 60 minutes before ripping the things off their faces and sighing in relief. Zuckerberg said, “Over time, I hope that we are seen as a metaverse company and I want to anchor our work and our identity on what we’re building towards.” So far, people don’t seem particularly impressed by that hope, or the buildings either, come to that. Mind you, it’s a fair bet that millions of people would be willing to pay a dollar or two to watch the upcoming Zuckerberg v Musk cage fight in VR: Just imagine a no-holds-barred contest between two monstrous adolescent egos settling their differences by wrestling, legless, in virtual mud. It gladdens the heart to think on it. Back in 1971, a range of children’s toys, the Weebles, swept the world. They were egg-shaped and weighted so that gravity always restored then to an upright position. The family of Weeble toys included animal and people look-alikes. Surely someone can quickly come up with figures representing Elon and Mark in time to have them on sale before the grudge match. And always remember the catchphrase: “Weebles wobble, but they don’t fall down”.

The NFC Forum, the standards and compliance organisation for near-field communication, has announced its roadmap innovation priorities to take it through to 2028. NFC is the technology that enables the “tap-to-pay” wireless and contactless payment methodology that has conquered the world. It is based on an international standard governing very close proximity (i.e. less than 2cm and often as close as 5mm) transaction processing that, in well over 90% of cases, does not require a battery to drive it. Instead, power is ‘harvested’ from the connecting device itself. The five-year roadmap was collaboratively developed by NFC Forum members, including Apple, Huawei, Google, Identiv, Infineon, NXP, Qualcomm, Sony, and STMicroelectronics, and features five key proposed initiatives. The first is to increase power for NFC wireless charging by taking it from 1 watt to 3 watts. The rationale here is that the change will bring wireless power and charging to new and smaller form factors, “disrupting industrial design while defining new markets.” The second is to increase the range to make “contactless transactions and actions faster and easier” while simultaneously improving usability by “decreasing the precision needed for antenna alignment.” The third is to introduce ‘multiple-purpose tap’ which, allegedly, will “further improve the contactless user experience by supporting several actions with a single tap.” The fourth is to modernise device-to-device communication and thus empower NFC-enabled smartphones “to have point-of-sale functionality (SoftPOS)”, allowing businesses or individuals to receive payments anywhere. And the fifth is the expansion of NFC’s ability, apparently “to share data formats needed for sustainability and enabling NFC to share data on its composition and ways a product can be recycled, helping to meet evolving consumer demands, and regulatory requirements, as well as contributing to a healthy circulatory economy.” According to the forum, “The individual work items are currently in varying stages of development, ranging from research to market requirements to draft specifications.” It added that it will “collaborate with its 400 members and various industry bodies to extend the reach of its roadmap and ensure its work programme is complementary to other industry initiatives.” While some of these proposals seem sound, others give cause for concern. For example, one of the most important aspects of current contactless payments is that users have to take a conscious and positive action to tap a payment terminal, thus signifying that he or she is aware of the sum being taken and it is acknowledged that payment is correct. The ‘tap’ has become even more important as the upper threshold of the payment sum is periodically raised. For example, people in the UK can now tap payments of up to £100, making fraud all the more attractive to criminals and upping the likelihood of increases in the rates of so-called “stride-by” scanning and ID theft. If the range of POS terminals is increased by six or times, or even more, as is being proposed by the NFC Forum, so that it can actually penetrate through to a pocketed wallet and take payments, it won’t be long before retailers and companies are deluged with claims of electronic pick-pocketing. Once the “tap” goes, so goes basic verification. Also (and this already occasionally happens within extant parameters) the longer and stronger the range, the more likely the payment will be taken from a commonly used “default card” in a wallet before an alternative can be proffered for payment. Some of these proposals need a serious rethink or trouble will ensue to take the NFC Forum off its five-year roadmap and into the crash barrier.

- The staff, TelecomTV