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- Verizon sued by music giants for more than $2.6bn
- Millicom rejects Iliad owner’s $4.1bn takeover bid
- Wavenet and Daisy merge to form giant UK service provider
In today’s industry news roundup: Verizon is facing legal action for allegedly not dealing with thousands of music pirates that have been using its network; Verizon is also reportedly looking to sell thousands of mobile towers; Latin American operator Millicom has rebuffed Xavier Niel’s acquisition offer; Wavenet and Daisy have formed the UK’s largest independent IT and communications managed service provider; and much more!
Verizon is being sued by multiple record companies for alleged “massive copyright infringement committed by tens of thousands of its subscribers” in a lawsuit filed in a New York court that, if successful, could cost the US telco more than $2.6bn, reports Music Business Worldwide. According to the dozens of companies (including Sony Music, Universal Music Group, Warner Music Group and Atlantic Records) that are taking the legal action, Verizon is guilty of “contributory and vicarious copyright infringement” as it “knowingly provides its high-speed service to a massive community of online pirates, who it knows repeatedly use that service to infringe plaintiffs’ copyrights”. The music publishers claim that “Verizon has knowingly contributed to, and reaped substantial profits from, massive copyright infringement committed by tens of thousands of its subscribers,” and state that, between them, they have issued “hundreds of thousands of copyright infringement notices” to the service provider over the past few years – more than 340,000 since early 2020, to be exact. They even identified specific subscribers that were using Verizon connections to illegally download sound recordings from peer-to-peer networks, such as BitTorrent. The music companies stated in their lawsuit: “While Verizon is famous for its ‘Can you hear me now?’ advertising campaign, it has intentionally chosen not to listen to complaints from copyright owners. Instead of taking action in response to those infringement notices as the law requires, Verizon ignored plaintiffs’ notices and buried its head in the sand. Undeterred, infringing subscribers identified in plaintiffs’ notices continued to use Verizon’s services to infringe plaintiffs’ copyrights with impunity. Meanwhile, Verizon continued to provide its high-speed service to thousands of known repeat infringers so it could continue to collect millions of dollars from them.” The music companies claim Verizon “acknowledged that it received these notices of infringement,” but “rather than taking any steps to address its customers’ illegal use of its network, Verizon deliberately chose to ignore plaintiffs’ notices, willfully blinding itself to that information and prioritising its own profits over its legal obligations.” The music companies are seeking damages for each work infringed, with the total damages being claimed exceeding $2.6bn. Verizon reported full year revenues of $133bn for 2023 and ended last year with 114.8 million retail mobile connections. Verizon had not responded to a request for comment as this article was published. And that noise you can hear is the sound of legal teams at other US service providers rushing to see if they have also received similar copyright infringement notices from the music companies that have not been addressed…
Still with Verizon… The operator is reportedly exploring the possibility of selling between 5,000 and 6,000 of its towers, a move that could raise the giant US operator about $3bn, according to a report from Bloomberg that cited sources with knowledge of the plans. It’s not clear how many towers Verizon owns in total, though the majority of the roughly 200,000 towers across the US are owned and run on a wholesale basis by specialist companies, such as American Tower, Crown Castle and SBA Communications, rather than by the mobile network operators themselves. The trend across the telecom industry in recent years has been for network operators to sell and lease back some or all of their passive infrastructure assets, particularly cell towers. In 2015, Verizon sold more than 11,000 of its tower sites for $5bn to American Tower, one of the major neutral host providers of digital infrastructure assets to the telecom sector in North America. Telcos have also been forging new types of relationships with third-party suppliers to meet their network expansion needs: For example, just last year Verizon struck a deal with Vertical Bridge for the construction of new cell towers across the US that would be designed to meet Verizon’s needs and for which the operator would be the anchor tenant, though the towers would also be available for other mobile service providers to use.
As expected, the board of Latin American telco Millicom has rejected the recent $4.1bn takeover offer made by Atlas Investissement, the M&A vehicle of Iliad founder and owner Xavier Niel, stating that the offer “significantly” undervalues the communications service provider. On Monday, the operator published a lengthy document outlining the many reasons why it believes the $24-per-share offer from Atlas Investissement, which already holds a 29% stake in Millicom, doesn’t reflect the true value of the company and urged shareholders to reject the offer. So now the ball is back in Niel’s court and there appear to be expectations that he will return with a higher offer as Millicom’s share price increased by 1.6% to $25.18 during Monday trading on the Nasdaq exchange.
UK communications and IT services firms Wavenet and Daisy Corporate Services (DCS) have completed their merger following regulatory clearance, with the combined company now planning to trade under the Wavenet name and under the stewardship of Philip Grannum, who was Wavenet’s CEO (Daisy’s CEO Neil Thompson is leaving the business). According to Wavenet – which now has about 2,000 staff, 22,000 customers and an annual turnover of about £500m – it is now the “UK’s largest independent IT managed services and security provider,” and will focus on “delivering cyber, cloud and intelligent network solutions to UK businesses and the public sector.” The company’s largest post-merger shareholder is Macquarie Capital Principal Finance, while Daisy shareholders will retain a minority stake in the business. The deal was first officially announced in early May.
Network operator Elisa, which has about 2.8 million customers in Finland and Estonia, continued its steady start to the year in the second quarter. The company, which is not only a telco but also has a vendor arm in the form of Elisa Polystar (one of the sector’s pioneers in network automation), has reported a 1.6% year-on-year increase in revenues to €541m “despite geopolitical and macroeconomic headwinds” and a 4% increase in earnings before interest, taxes, depreciation and amortisation (EBITDA) to €190m. Elisa, which competes with Telia and DNA (part of the Telenor Group) in Finland, noted that “the competitive environment has been active, especially in 4G subscriptions. The usage of mobile services has continued to evolve favourably. Brisk demand for 5G services has also continued due to the wider range of 5G devices and better network coverage. The current geopolitical situation has also increased the demand for cybersecurity services. Competition in the fixed broadband market has continued to be intense, and the number and usage of traditional fixed network subscriptions is declining. The markets for IT services have continued to develop favourably,” though “the prevailing uncertainty in the general economy and high interest rates have caused some companies to delay investment decisions and project implementation.” Elisa is always looking for ways in which the deployment of cutting-edge technology can help its business. For example, it has already deployed 5G standalone (SA) systems in order to improve efficiency and enable a broader range of services, and it recently began the deployment of XGS-PON fibre-to-the-premises technology in its fixed broadband network as part of its efforts to take ”energy-efficient steps towards 100 Gbit/s connections”. In addition, the company has “continued to grow with bolt-on acquisitions in accordance with our strategy… the acquisition of Leanware Oy [in May for €16.1m] accelerates the growth of Elisa IndustrIQ’s industrial software business,” it noted in its earnings release, while the company’s Distributed Energy Storage (DES) solution has been deployed by Ålcom, a network operator in the Åland Islands, to utilise energy from solar panels in its mobile network operations. “This is the first time that solar energy production has been added to an Elisa DES deployment,” noted Elisa. If you’re interested in innovation in the telecom sector, Elisa is a good company to keep an eye on.
Mobile virtual network operator (MVNO) Tesco Mobile has been ranked as the leading UK mobile service provider for customer satisfaction by Juniper Research following a survey of 3,300 consumers. According to the results of the survey, “Tesco Mobile subscribers are the most satisfied with the cost of their subscription and the geographical coverage provided.” Tesco Mobile’s services run over the physical mobile network of Virgin Media O2 (VMO2), which did not appear in the top-five positions of the research firm’s ranking: Those positions were taken by Giffgaff, another MVNO that uses VMO2’s network, in second place; BT’s consumer division EE in third; iD Mobile, an MVNO that runs on Three UK’s network, in fourth; and Sky Mobile, another MVNO that runs on the VMO2 network, in fifth place. VMO2 took the seventh spot in the rankings, which shows it has a lot of work to do on its tariffs and customer care because companies using its network to deliver their services are being ranked much higher. In case you’re wondering, Vodafone UK came in sixth.
The value of mobile money transactions in emerging markets is expected to reach $2.37tn by 2029, up by 51% compared with the expected $1.58tn this year, a new market forecast by Juniper Research has found. That growth will be driven by operators expanding their portfolios to include higher-margin advanced services, such as powering merchant payments in-store or via ecommerce, or providing international remittances,” according to the Juniper Research team.
- The staff, TelecomTV
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