What’s up with… UScellular & Verizon, telco AI, Netia & Nokia

• UScellular seals $1bn spectrum deal with Verizon
• Telcos need to embrace ‘responsible AI’ if they are to become AI native
• Netia tests quantum-safe networking with Nokia

In today’s industry news roundup: Verizon is snapping up extra spectrum from UScellular, which is selling most of its assets to T-Mobile US; telcos need to adopt responsible AI principles if they’re to make the most of their artificial intelligence opportunities, according to McKinsey; Poland’s Netis is the latest operator to check out the potential of quantum-safe networking; and much more!

UScellular has agreed to sell some of its spectrum licences to Verizon for $1bn and “entered into agreements with two other mobile network operators for the sale of other selected spectrum licences,” the US’s fourth-largest mobile operator has announced. “The transactions are part of the objective UScellular announced on May 28, 2024 to opportunistically monetise the spectrum that was not included in the proposed sale to T-Mobile US,” it added. UScellular struck an agreement to sell most of its assets – its customer base, retail stores and some spectrum licences – to T-Mobile US in a deal valued at $4.4bn in a deal that is expected to close in mid-2025. “We are pleased that significant value for a portion of the remaining licences will be realised,” said UScellular president and CEO Laurent C. Therivel. “Importantly, these agreements with multiple mobile network operators ensure that this spectrum will be put to work for consumers throughout the country. We are continuing the process to opportunistically monetise the remaining spectrum assets not included in today’s announcement,” the CEO added. 

AI gives telcos another chance to reinvent themselves by becoming AI-native organisations “that embed AI into every aspect of the business to help drive growth and renewal,” but to do so they will need to focus “acutely on responsible AI (RAI), which is the practice of deploying AI in ways that are ethical, safe, transparent, and compliant with regulations,” according to the team at global consultancy McKinsey, which has just published a new paper, Responsible AI: A business imperative for telcos. “In the highly regulated telecom industry, RAI frameworks that govern accountability and transparency are critical to gaining consumer trust, protecting sensitive data, and safeguarding against security threats. All this makes RAI more than just an ethical exercise for telcos. It is also a business imperative,” according to the McKinsey team. It also notes that telcos “can lead the way in deploying both generative AI (GenAI) to improve the customer experience and cut costs and analytical AI to optimise their back-end operations and infrastructure. McKinsey research shows that GenAI could drive significant EBITDA [earnings before interest, taxes, depreciation and amortisation] gains for telcos, with returns on incremental margins increasing three to four percentage points in two years, and as much as eight to 10 percentage points in five years.” The publication of the McKinsey paper comes only days after South Korean operator SK Telecom, which is aiming to become a global AI company, established its AI Code of Conduct. In it, the company sets out “the basic principles of AI governance” by which it abides as it executes its AI Pyramid strategy that was unveiled just over a year ago.  

Polish network operator Netia and Nokia have successfully completed quantum-secure networking, proof-of-concept tests using quantum key distribution (QKD) capabilities integrated into the vendor’s commercial PSS1830 optical networking system to send encrypted network traffic between datacentres located in Warsaw and Jawczyce. “In the face of growing cyber threats, using quantum physics is becoming a key element of data protection,” noted Netia in this announcement (in Polish). “Nokia’s technology called QKD enables the generation and exchange of encryption keys with absolute certainty of their confidentiality, using the principles of quantum mechanics. The Nokia DWDM system used in our network integrates this advanced technology into its DWDM PSS1830 system, which allows for an increased level of security,” added the operator. Quantum-safe networking is emerging as a key focus of R&D efforts at many telcos as the quantum computing era gets closer – keep track of our quantum tech coverage in this dedicated news channel. Note too that Nokia ranked second, behind IBM, in TelecomTV’s quantum-safe networking market perception study published earlier this year.

MásOrange, the Spanish operator created in March by the €18.6bn merger between Orange Spain and MásMóvil, has agreed a voluntary redundancy scheme with the Spanish unions that will see its workforce shrink by 650 roles, fewer than the 795 the operator had originally proposed, El Economista has reported.  

Netflix grew its subscriber base by almost 5.1 million in the third quarter to reach 282.72 million customers at the end of September and reported revenues of $9.83bn, up by 15% year on year. For further details, see this Netflix letter to shareholders.   

– The staff, TelecomTV