• Meta has severed its direct peering link with Deutsche Telekom
• Dell unveils its telco AI initiative
• EC approves e&’s acquisition of European operator PPF Telecom

In today’s industry news roundup: Meta gives up on negotiations with Germany’s national operator and cuts its direct IP peering links; Dell unveils its AI for Telecom initiative; e& gets a conditional go-ahead to take control of PPF’s telco operations in four European markets; and more!

Following a legal dispute over payments, Meta has cut its direct peering ties with Deutsche Telekom (DT) and is now routing its network traffic via a third-party IP transit provider, the hyperscaler has announced in this blog. “Following months of discussion, we are surprised and disappointed by the breakdown in negotiations with Deutsche Telekom. We have settlement-free peering agreements in Germany and around the world with telecom providers that allow their users high-quality and fast access to our apps,” Meta noted. “People expect reliable internet connections from their telecom provider to quickly and easily access the content they choose. Unfortunately, Deutsche Telekom is putting the open internet at risk and undermining net neutrality principles. It is using its market power to put its subscribers in Germany behind a de facto paywall, potentially restricting their access to internet services that do not pay Deutsche Telekom. Following months of discussion, we are surprised and disappointed by the breakdown in negotiations with Deutsche Telekom. Meta has taken significant steps to keep its apps available directly through Deutsche Telekom, but given the court ruling concerning the unprecedented and unacceptable fees demanded, we are now routing our network traffic through a third-party transit provider, instead of exchanging traffic directly with Deutsche Telekom.” As you’d expect, Deutsche Telekom takes a different view. Earlier this year its senior VP for group public and regulatory affairs, Wolfgang Kopf, noted in this blog: “In the midst of the coronavirus crisis, Meta abruptly terminated a long-standing data transport contract with Deutsche Telekom and ceased all payments, even as data traffic through Telekom’s network soared to unprecedented levels. Telekom sued Meta and won.” Kopf went on to highlight what DT and other telcos regard as one of the major pressures on their businesses – delivering big tech traffic over their networks without any contribution towards network capacity upgrades and expansion from the big tech firms: That argument is the basis of the ‘fair share’ debate that has once again reared its head in Europe. 

Dell Technologies has unveiled Dell AI for Telecom, an initiative “designed to simplify and accelerate AI deployments for communications service providers (CSPs).” It brings together the vendor’s AI expertise, infrastructure and services with software and silicon from across the AI ecosystem, mostly notably through an extended partnership with AI chip giant Nvidia. According to Dell, the initiative will “develop and deploy on-premises AI solutions that CSPs can use to enhance network performance, improve customer service and provide greater value at the enterprise edge.” Dennis Hoffman, senior VP and general manager of the Telecom Systems Business at Dell Technologies stated: “Capitalising on the multiple opportunities presented by AI has become the most compelling driver of network cloud transformation. Dell AI for Telecom brings together Dell’s AI expertise and infrastructure, with partners across the ecosystem, to help network operators implement AI solutions in and on the network that reduce opex [operating expenditure], improve performance and create new edge revenue opportunities.” Read more.

The European Commission (EC) has given its conditional approval to the planned €2.15bn acquisition by Middle East giant e& of a controlling stake in PPF Telecom Group’s telco operations in Bulgaria, Hungary, Serbia and Slovakia. Under its Foreign Subsidies Regulation (FSR), the EC says the deal can proceed subject to a number of conditions, mainly related to the prohibition of financing from e& or the Emirates Investment Authority (EIA) of PPF’s activities in the European Union internal market (with certain specified exceptions) and the requirement that e& must inform the EC of future acquisitions that wouldn’t individually fall under the remit of its FSR regulations. For further details on the conditions and background to the ruling, see this EC announcement. 

Sticking with European M&A… Portugal’s telecom regulator Anacom has given the green light to the proposed €150m acquisition by Digi Communications of Nowo Communications, the country’s fourth-largest network operator, which Vodafone tried to acquire before being thwarted earlier this year by Portugal’s competition watchdog, the Autoridade da Concorrência (AdC). Digi, which has already been investing in its own fibre access network infrastructure in Portugal, announced at the beginning of August that it has agreed to acquire Cabonitel, the parent company of Nowo, which has 270,000 mobile customers and 130,000 customers for its pay-TV and broadband services. Anacom believes the deal “is not likely to create significant barriers to effective competition” in the communications services sector and has informed the AdC of its ruling. However, Anacom did note that it “has some concerns regarding the lack of a network development obligation associated with the spectrum in the 3.6 GHz frequency band. If the acquisition of Nowo is approved, Digi may come to control an amount of spectrum in this band that, [provided it] had been acquired under the rules defined in the 5G auction held in 2021, would subject it to network development obligations,” which Anacom might impose on Digi if spectrum is transferred from Nowo to Digi. 

– The staff, TelecomTV