What’s up with… Vodafone and Three, Telecom Italia, Singtel

• Vodafone UK and Three merger looks a long way off
• Telecom Italia unveils secure chip 
• Singtel puts 5G RedCap to the test

In today’s industry news roundup: The merger of Vodafone UK and Three has a long way to go before closing, according to industry analyst; Telecom Italia has unveiled a ‘Made in Italy’ secure chip and might soon need a new chairman; Singtel is the latest telco to put 5G RedCap technology through its paces; and more!

Exactly six months since Vodafone and Three UK confirmed plans to merge their operations, CCS Insight’s director of consumer and connectivity, Kester Mann, has given his two cents’ worth on the potential for the deal to be approved by regulators. The proposal’s fate is in the hands of the UK’s Competition and Markets Authority (CMA) and, according to Mann’s estimations, a firm decision will be known in the autumn of 2024 at the earliest. This is because the CMA is yet to examine the comments from “interested third parties” it has been recently gathering, and then is to launch a first-phase review followed by an expected second-phase investigation, which can take up to 24 weeks. According to the analyst, the merger plan appears to have been “poised on a regulatory knife edge” since being announced in June 2023. Reflecting on the past half year, Mann highlighted that Vodafone has been particularly vocal on the benefits from merging its operations with Three UK, while domestic competitors BT and Virgin Media O2 (VMO2) have not officially outlined their positions on the matter. Another highlight in the past few months has been a ruling by the European Commission which, according to Reuters, has found no anti-competitive concerns from the proposed deal. “It’s hard to know how much we can deduce from this as it made its judgment using a simplified mechanism over just a few weeks. Still, considering that the commission blocked Three’s acquisition of O2 in 2016, it could be a positive indicator”, suggested Mann. Significant opposition to the deal has come from the British and Irish trade union Unite, and from Which?, a UK-based consumer rights organisation over concerns around reduced choice and quality, and higher prices. Finally, Mann noted that although the deal faces “stern resistance”, he believes the merger “will sneak through”. “But to ensure the green light, the two parties will probably need to make further commitments. I believe they would be prepared to concede further ground given their precarious future as standalone operators if the deal gets blocked. As things stand, I’d put the chances of the merger gaining approval at about 60%”, he added. Securing the green light from the CMA is just the start of challenges for Vodafone and Three UK, though, he explained, adding: “Combining two mobile networks is a herculean task; if approved, the joint venture will need to carefully manage the integration to ensure there’s no impact on customer service. It’ll also eventually have to make difficult decisions in areas like the choice of network suppliers, branding, jobs and retail”.

Telecom Italia (TIM) has unveiled what it claims is the “first cryptographic microprocessor (secure microchip) designed entirely in Italy and capable of improving security in various areas of technology, from mobile devices to smart cities, from cloud infrastructure to the internet of things (IoT) to defence systems.” The ‘Made in Italy’ chip was developed by engineers at Telsy, which is part of the telco’s enterprise division. Read more.

Still with Telecom Italia… The telco’s chairman, Salvatore Rossi, will not seek re-election as the chairman of the telco, which is gearing up for a legal battle with its largest single shareholder Vivendi, when his current stint ends next year, according to this Reuters report. The national Italian operator recently agreed to sell its fixed access network to KKR for €18.8bn, but French media giant Vivendi described the deal as “unlawful” and stated it would “use any legal means at its disposal to challenge this decision and protect its rights and those of all shareholders.” Rossi has been chairman since 2019, since when Telecom Italia has been desperately seeking ways to reduce its debt pile of about €26bn. While the sale of the Italian fixed access network would go a long way to easing the telco’s financial woes, Vivendi believes the assets are worth much more than KKR is paying and is ready to fight to overturn the M&A deal. If Rossi, who has often clashed with Vivendi over numerous issues, officially tenders his resignation as chairman, the process of finding a successor would start immediately and a vote on his successor would take place at the telco’s annual general meeting due to be held in April 2024. 

5G RedCap (reduced capability) is gaining momentum globally, with Singtel having completed its first trial of “the next evolution of 5G radio technology” in Singapore. The test was conducted on its live 5G network in partnership with Ericsson and MediaTek. RedCap is specifically designed to support mid-tier internet of things (IoT) devices, such as smart watches and industrial sensors, by providing them with lower data flow and “reliable connectivity which reduces power consumption”. This all results in significant benefits for the battery life of devices, the Singaporean telco claimed in its statement announcing the move. “With RedCap technology, the complexity, size and capabilities of device platforms are considerably reduced, enabling cost-efficient integration into IoT devices. This unlocks opportunities for a multitude of devices to be connected to the 5G network, contributing to the expansion of the 5G ecosystem and supporting new designs for more scalable IoT innovations and applications,” explained Tay Yeow Lian, managing director for networks at Singtel Singapore. The operator cited findings from MediaTek that suggest 5G RedCap can reduce power consumption by 60% compared to existing 4G IoT devices, while research by Ericsson claims that production costs for manufacturers of IoT devices can be reduced by between 50% and 70%. Singtel is the latest telco exploring RedCap for broadening the potential of IoT: Earlier this year, the technology was tested by AT&T in the US, Optus in Australia, AIS in Thailand, BT in the UK, Bharti Airtel in India and du in the United Arab Emirates.

Telcos that are targeting multinational corporations (MNCs) and large enterprises as customers and partners but are neglecting reporting on social and governance (S&G) metrics stand to face “significant risks”, GlobalData has cautioned in its latest findings. In an analysis on 11 global telecoms service providers, the research firm found that these companies are improving performance in terms of gender, minority, LGBTQ+ and disability balance – and most of them work from historic baselines and set targets for future ratios. While acknowledging improvements on these metrics, GlobalData suggested that recognising the impact of social and governance factors is “imperative for telcos navigating the complexities of corporate partnerships and global enterprises”. The analyst company further noted that social and governance metrics can make a positive commercial contribution or cause “significant damage if not adhered to or found to be false”. “S&G has evolved from the fairly haphazard world of diversity, equity, and inclusion (DE&I) and can be seen as the poor cousin of environmental issues in ESG [environmental, social and corporate governance], but together they all point the way forward – and tech companies as a sector can be proud to be leaders in this field,” said Robert Pritchard, principal enterprise technology and services analyst at GlobalData. Find out more.

Alternative pan-European long-distance network operator EXA Infrastructure has continued its expansion in eastern Europe. It has announced a partnership with Grid Telecom, the telecoms vehicle of the Independent Power Transmission Operator (IPTO) of Greece, to enhance digital connectivity and provide infrastructure services anchored in Greece. The move, according to EXA Infrastructure, will establish “a critical link to the broader Balkans and Mediterranean region”. The partnership will see the two companies offer their wholesale and corporate customers “diverse open-access interconnection and international reach across Europe and beyond”, as the move will create “new reliable data routes, providing important and unique benefits, such as low latency, strong redundancy, advanced cyber security and high capacity”. “Our combined forces will create and support an important new telecommunications corridor to enable our customers to scale and grow in the broader region,” argued Nicholas Collins, CCO of EXA Infrastructure. Exa Infrastructure’s 142,000 km fibre network spans most of Europe (it has a presence in 34 European markets) and the transatlantic routes to Noirth America. 

Nokia has completed a joint lab trial with chip developer Arm and server vendor Hewlett Packard Enterprise (HPE) of a Cloud RAN system with integrated in-line acceleration capabilities at Nokia’s Open Cloud RAN Innovation Center in Dallas, Texas. The trial, which included the completion of an end-to-end cloud RAN layer 3 data call, “demonstrated the flexibility of Nokia’s Cloud RAN solution using in-line accelerator architecture which works seamlessly on multiple silicon architectures,” according to the Finnish vendor. “It is further evidence of the viability of Nokia’s anyRAN approach, which ensures the feature performance consistency of Cloud RAN with purpose-built RAN while enabling more choice for operators to build Cloud RAN networks,” the vendor claimed in this press release. 

- The staff, TelecomTV