What’s up with… Intel, Echostar, Telecom Italia

• Intel is caught in the M&A spotlight
• Echostar gets extra time to meet its 5G rollout deadlines
• Telecom Italia’s Sparkle preps quantum-safe networking launch

In today’s industry news roundup: Intel is the subject of investment and potential acquisition speculation only days after unveiling a new turnaround strategy; US 5G newcomer Echostar receives FCC approval for a new network rollout timetable, but its prospects don’t look much improved; Telecom Italia’s international unit, Sparkle, completes another quantum-safe networking test and is now working towards a commercial launch; and more!

Intel is once again in the spotlight, just a week after CEO Pat Gelsinger outlined the company’s latest cost-cutting strategic overhaul. The chip vendor, which has had a difficult year, was the subject of intense speculation late last Friday when financial media reports suggested that wireless chip giant Qualcomm had reached out to Intel about the potential of a friendly takeover (more on that later), speculation that lifted Intel’s share price by about 3% to $21.84 and sent Qualcomm’s stock in the opposite direction, down by almost 3% to end last Friday at $168.92. And now, Bloomberg has reported investment firm Apollo Global Management is set to invest $5bn to take a stake in Intel, a move that would show faith in Gelsinger’s new turnaround plan. There is currently no confirmation or clear signal that Apollo would make such an investment, but the news did give Intel’s share price a 2.5% lift to $22.38 in early trading on the Nasdaq exchange on Monday morning and that investment transaction seems a far more likely scenario than Qualcomm steering a friendly merger with Intel. Those particular mega-merger reports come only weeks after Qualcomm was cited as one of the companies that might be interested in acquiring Intel’s Altera subsidiary: That unit is now open for external investment discussions as part of Intel’s new cost-cutting strategy, as Gelsinger revealed last week. But acquiring or investing in a standalone unit is one thing – buying a beleaguered $93bn chip giant that is scrambling to get its financial house in order and figure out a way to become more relevant in the AI era is quite another. So is it possible that Qualcomm, currently valued at $188bn, might be entertaining a merger with Intel? It seems somewhat unlikely and not very feasible. Mergers and acquisitions are tough to execute successfully – combining Qualcomm and Intel would be a legal, financial and operational nightmare, even if it did create a semiconductor behemoth with massive scale, clout and annual sales of more than $90bn. Such a deal would create so many uncertainties and challenges that it would hand an advantage to both Intel and Qualcomm’s rivals, something that neither needs right now. So it’s an interesting idea and great for what used to be called ‘water cooler chat’ but it doesn’t seem likely, especially given that Qualcomm would need to offer far more than the $90bn valuation that Intel currently commands. Intel’s share price has slumped by 54% this year, so it’s certainly as affordable as it’s ever likely to be but it is still a massive firm to swallow. There would be some advantages to such a merger, as seasoned analyst Richard Windsor points out in his latest Radio Free Mobile blog, but the list of disadvantages is way longer, he notes.  

Echostar, which merged with greenfield 5G operator Dish Network at the start of this year and has been using the Boost brand to try to attract 5G customers, has been granted extra time by US regulator the Federal Communications Commission (FCC) to meet its network rollout licence obligations. Echostar noted that the FCC’s approval of its 5G Buildout Framework plan means it will enable it to “optimise and enhance its coast-to-coast buildout of the world’s first cloud-native Open RAN 5G Boost Mobile Network, while more efficiently deploying the network in new areas of the country.” The operator added, “The pricing and innovation improvements from EchoStar’s continued presence in the wireless market is a win for all American consumers,” though those consumers don’t appear to be overly attracted to the Boost mobile tariffs currently as it only has 7 million mobile customers, of which an unknown number are signed up to 5G contracts. Echostar is now promising its network will cover 80% of the US population by the end of 2024 and that it will “accelerate and expand its final buildout milestones in more than 500 licence areas on this same timeline”. (Boost users get nationwide service thanks to Echostar’s wholesale deals with AT&T and T-Mobile US). The company is also promising to launch a “low-cost wireless plan” and make a “5G device available to consumers nationwide, regardless of whether they live in an area where EchoStar has built out its Boost mobile network or relies on roaming partners to provide service.” The company added: “EchoStar is proud of all it has already achieved in deploying a next-generation cloud-native Open RAN network that supports 21st century innovations, including artificial intelligence and the many more advancements yet to come. EchoStar appreciates the opportunities afforded by the FCC’s new framework for that work to continue efficiently and effectively.” Now all it needs are some willing customers. The fact remains that Echostar is regarded as a struggling company, with at least one influential analyst, Craig Moffett of MoffettNathanson, noting in August that EchoStar is “highly likely to go bankrupt, quite possibly by the end of the year.”

Sparkle, the international networks and operations unit of Telecom Italia (TIM), and its fellow TIM Group company Telsy, a cybersecurity specialist, have completed a quantum-safe communications proof of concept (PoC) on a 400Gbit/s network connection between two datacentres in Athens using quantum key distribution (QKD) technology and optical networking equipment from Ribbon Communications. “QKD represents one of the most promising solutions to offer an additional level of security to existing communication infrastructures,” noted TIM in this announcement. “By leveraging the laws of quantum mechanics, QKD offers unconditional security against both classical cyber threats and possible future interceptions by quantum computers,” it added. “With this PoC on quantum key distribution we take another step forward in protecting our network against the potential threat of quantum decryption,” said Antonella Sanguineti, head of marketing and product management for networking, cloud, security and identity solutions at Sparkle. “The various experiments we have conducted, in collaboration with the most experienced companies in the field and within the framework of European and international projects, reinforce our determination to continue along this path in order to offer our customers maximum protection,” added Sanguineti. The PoC is the latest in a series of quantum-safe networking tests and trials undertaken by Sparkle, which has already conducted a test across an international virtual private network (VPN) connection between Italy and Germany and another in Athens. Now Sparkle, which is still in line to be sold by TIM as part of its restructuring process, is planning to launch a commercial ‘Quantum-Safe Internet’ service before the end of this year. Telecom Italia is one of a number of telcos exploring the potential of  quantum-safe networking: Check out this new TelecomTV interview with Gabriela Styf Sjöman, managing director of research and networks strategy at BT Group, which has been at the forefront of the sector for several years already – see BT & Toshiba team with Equinix for quantum-safe connectivity.

Sensing that fixed wireless access (FWA) is going to be a niche but long-lasting and potentially lucrative way to provide broadband services to end users, Palo Alto, California-based vendor Air Wireless has unveiled what it is calling a “wireless DOCSIS” technology solution that enables cable operators to expand the reach of their DOCSIS-enabled broadband networks over the air. Naveen Kadiyala, the company’s president, noted: “At Air Wireless, we are committed to delivering cutting-edge solutions that empower operators to connect unserved and underserved communities globally. While our current wireless DOCSIS technology supports a wide range of use cases and enables immediate network expansion with faster revenue generation, our future roadmap, which includes support for 5G and Wi-Fi 7, ensures that we stay at the forefront in driving the next wave of innovation in broadband and wireless connectivity.” Right now the company’s marketing-heavy pitch seems more like hot air than high-speed broadband air, but as ever the real test will come when network operators reveal which companies they trust with the supply of the technology that supports their primary revenue-generating services.

– The staff, TelecomTV