What’s up with… STC, GenAI in Japan, Carlos Slim

• STC adds towers unit to regional powerhouse
• Japan’s Sakura and SoftBank invest in GenAI platforms  
• Carlos Slim commits further funding to Brazil

In today’s industry news roundup: STC is selling a majority stake in its towers unit Tawal to help form a regional giant; Japanese cloud and communications service providers are gearing up for major investments in cloud infrastructure to support generative AI (GenAI) workloads; Carlos Slim’s América Móvil is to invest a further $7.7bn in Brazil over the next five years; and more!

Saudi telco STC is folding its towers unit, Tawal, into a larger entity that will have more than 30,000 sites across the Middle East region. Saudi Arabia’s Public Investment Fund (PIF) is acquiring a 51% stake in Tawal – which has about 22,000 sites, mainly in Saudi Arabia but also across Pakistan, Bulgaria, Croatia and Slovenia following M&A activity in April last year – in a deal that values the towers unit at $5.85bn. PIF will then combine Tawal with Golden Lattice Investment Company (GLIC),  a relatively new towers firm with 8,000 sites in which PIF holds a majority stake, to form a regional towers powerhouse with annual revenues of $1.3bn. The combined new entity will be owned 54% by PIF, 43.1% by STC Group, and 2.9% by minority shareholders in GLIC (which appears to be also known as Latis). “Today's announcement is a significant milestone for the telecommunications industry in Saudi Arabia and the wider region,” stated Raid Ismail, head of MENA Direct Investments at PIF. “By bringing together the assets of GLIC and Tawal, we will establish a consolidated platform on which the telecommunications sector can flourish and give people a better experience to best connect communities and businesses. It is also in line with PIF’s strategy and the Saudi Vision 2030. Fast, reliable and accessible connectivity is a key enabler of growth and a cornerstone for the society, and these agreements mark a major stride towards a more interconnected digital future.”

Japanese cloud services specialist Sakura Internet is investing in 10,000 Nvidia GPUs (graphics processing units) to meet its generative AI (GenAI) workload needs following its selection by Japan’s Ministry of Economy, Trade and Industry to be a certified provider of a cloud platform for GenAI research and development, the company has announced. The GPUs are Nvidia’s HGX B200 processors, which will be deployed in the next couple of years, the company noted. According to the Nikkei news agency, Sakura Internet spent about 20bn yen ($129.4m) on the GPUs. Sakura, alongside telco KDDI, was named last week as one of the companies chosen to provide ‘cloud program’ support for Japan’s GenAI needs: As a result, Sakura is in line to receive up to 50.1bn yen ($324m) in government funding towards the development of its cloud platform.  

And it’s not just the ‘cloud program’ crew that are investing in GenAI-capable platforms in Japan… SoftBank reportedly intends to invest a whopping 150bn yen ($969m) by 2025 to enhance its computing power to support GenAI developments. According to a report from Nikkei, the financial injection will help the Japanese telco giant’s goal to build large language models (LLMs), the first of which would consist of 390 billion parameters and is set for launch in fiscal 2024. SoftBank is also reportedly planning to develop a high-performance model with a trillion parameters starting in 2025, and will be buying graphics processing units (GPUs) from current market leader Nvidia, which it plans to use for both its own GenAI developments and as an offering for enterprises. According to the report, SoftBank invested 20bn yen ($129m) last year into building computing infrastructure.

Telecom sector entrepreneur and billionaire Carlos Slim, who founded and still controls Latin American telecom giant América Móvil, has pledged to invest a further 40bn Brazilian reals ($7.7bn) in Brazil over the next five years, having already invested the same amount over the past five years, during a meeting with the country’s president Lula da Silva. According to a report from the country’s official government news agency, Slim and Lula da Silva discussed opportunities for commercial partnerships in the telecommunications sector and the improvement of the economic scenario in Brazil.” Slim noted: “It was a wide and interesting conversation. We spoke about… Brazil’s greatly improving [economy] with reduced inflation rates. We talked about our investment plans and our shared interest to continue believing in the country in a significant way.” América Móvil has long been a major player in Brazil and is currently the number two mobile operator with its Claro operation, second to Telefónica’s Vivo and ahead of TIM Brasil. It is also a major player in fixed line and broadband services via Embratel (a unit of Claro), and a major focus of América Móvil’s upcoming investments in Brazil are set to be in fibre access infrastructure.  

To commemorate Earth Day, BT has partnered with the UK Business Climate Hub (UKBCH) to help small and medium-sized businesses (SMBs) to halve their carbon dioxide emissions by the end of the decade. The British incumbent telco noted that the collaboration will combine “BT’s expertise in supporting more than one million small business customers” with UKBCH’s free resources to help enterprises with their sustainability goals. BT believes the partnership can enable businesses to achieve net-zero emissions by 2050 and suggested that in achieving this goal, UK SMBs would prevent the emission of 280 million tonnes of carbon. Altogether, SMBs account for some 44% of non-household emissions in the UK, according to figures cited by BT. Read more.

BT was not the only telco focusing on sustainability initiatives on this year’s Earth Day. Vodafone Group used the occasion to urge people to drop their old or unused mobile phones into its stores, so that the devices can be recycled or refurbished, adding that there are more than five billion mobile phones lying unused in homes and offices around the world. In a similar move aimed at increased circularity, UK operator Virgin Media O2 (VMO2) recently unveiled its ‘Like New’ programme to incentivise customers to opt for a refurbished handset when they buy a device.

Infrastructure asset investor Ardian is the latest company to be linked to a potential bid for the majority stake (50.01%) in French wholesale fibre access network operator XpFibre by Altice France, part of Patrick Drahi’s telecom empire, according to Bloomberg. Ardian joins KKR and Global Infrastructure Partners (GIP) as a potential buyer for an asset currently valued at between €6bn and €7bn. The remaining 49.99% stake in XpFibre is held by a consortium of other infrastructure investors, including Omers Infrastructure and Allianz Capital Partners. Drahi is in the process of selling multiple assets, including Altice Portugal (from which the billionaire is hoping to raise between €8bn and €10bn), in a bid to reduce the $60bn debt pile accumulated in building and expanding the Altice empire. So far only relatively minor deals have been struck: For example, a deal was agreed recently for the €1.55bn sale of Altice Media, and reports suggest Drahi is under pressure from family members to divest some of his shares in BT, but he is understood to be keen to hold onto that particular asset. 

- The staff, TelecomTV