What’s up with… Nscale, Open RAN, T-Mobile US

• AI datacentre startup Nscale raises $155m
• Open RAN market is “blurry”, notes Dell’Oro
• T-Mobile US CEO freaks out investors

In today’s industry news roundup: AI workload-focused datacentre developer Nscale has attracted $155m in its oversubscribed Series A round; the Open RAN sector ‘tanked’ this year, according to research firm Dell’Oro; investors take fright at a Bloomberg report suggesting the T-Mobile US CEO was girding his loins for a tough Q4; and much more!

Nscale, which is developing a portfolio of hyperscale datacentres across Europe and North America designed specifically “to support the entire generative AI lifecycle, enabling developers to run and train AI models”, has raised $155m in Series A funding from Sandton Capital Partners and others, adding to the $30m seed funding it raised a year ago. “This oversubscribed funding round signals strong confidence in Nscale’s path to building the hyperscaler, purposely engineered for AI,” the company boasted. It is investing heavily in graphics processing unit (GPU) technology from Nvidia and AMD in order to deploy “GPU supercluster infrastructure to deliver unrivalled speed, performance, and efficiency on AI workloads,” it added. Having already struck a partnership with Singtel and an alliance with UAE-based Open Innovation AI, Nscale is aiming to launch a public cloud service in the first quarter of 2025 “that will provide developers access to purpose-built inference and training solutions in a flexible development environment.” It is planning to build new datacentre facilities in the coming years, “leveraging the latest advancements in closed-loop direct liquid cooling to deliver maximum performance and efficiency, while minimising environmental impact”, with 120MW planned for 2025. “The AI market is scaling rapidly, and so are we,” boasted CEO Joshua Payne. “Nscale manages every layer of infrastructure in the value chain to meet the intensive needs of large-scale AI customers,” he added in this announcement. 

And still in the world of datacentre financing… Avaio Digital Partners, a datacentre business managed by Avaio Capital, has struck a deal to acquire a 452-acres business and industrial site in Appomattox County, Virginia, for the development of a $3bn datacentre campus. Find more information here. Virginia, it should be noted, already has the highest concentration of hyperscale datacentres in the world.

You’ve heard it before and you’ll likely hear it again – global investment in Open RAN technology has fallen off a cliff in the past year or so. The latest research firm to point out a sharp decline in Open RAN investments is Dell’Oro Group, which has published a blog titled Open RAN Tanks in 2024. The value of the Open RAN tech sector shrank year on year in 2023 and then plummeted again this year, with the value of the market in the first three quarters of 2024 shrinking by 30% compared with the same period a year earlier. The research firm does expect Open RAN investments to pick up – it’s just not sure when. “The long-term trajectory is positive, but the short-term picture remains blurry. With large-scale greenfield deployments now mostly in the past, the broader market sentiment will remain uncertain until 5G activity in the US/Japan improves or modernisation projects utilising the latest O-RAN ULPI interfaces [new O-RAN Alliance specifications for enhanced fronthaul] firm up,” noted the Dell’Oro team, adding that Spending on Open RAN tech is expected to “comprise a mid-single-digit share of the 2024 RAN market” and between 8% and 10% in 2025. With the overall RAN market set to be worth around $32bn this year, that puts the value of the Open RAN sector this year at around $1.6bn. 

Meanwhile, operators press on with their tests and trials. Deutsche Telekom has completed a proof of concept (PoC) for O-Cloud – the cloud platform it has mapped out to support its Open RAN rollout – with Red Hat and IBM. You can read about the PoC and what it enables in this blog. Deutsche Telekom is aiming to have more than 3,000 Open RAN sites up and running in Germany, where it is working closely with Nokia and Fujitsu, by 2027, as Petr Lédl, chief architect of DT O-RAN and VP of network trials, told TelecomTV during this recent interview. 

T-Mobile US CEO Mike Sievert gave Wall Street an unexpected jolt during a UBS investor conference on Monday when he appeared to note that the telco’s fourth-quarter financials might not be as pretty as some are expecting. Bloomberg’s reporting of his comments shaved more than 6% off the value of the company’s share price, which dipped to $228.86. The operator was quick to respond, issuing a press release to note that all is well and that the company is on track to meet its full year targets. “My comments explaining normal seasonal trends in Q4 were misinterpreted by one media outlet as a warning, so I want to make sure there is no investor confusion,” noted Sievert in the release. “To be clear, our Q4 is trending at least in line with prior expectations, maybe better. We continue to expect to deliver about 3 million postpaid phone net additions for the year, or more. Q3 was a fantastic growth quarter for T-Mobile and our growth momentum continues in Q4.” And investors shouldn’t complain too much – T-Mobile US has had an outstanding year, including an impressive third quarter, and, even with Monday’s dip, its share price is up by more than 41% this calendar year. 

The parent companies of XL Axiata and Smartfren are closing in on a deal to merge the Indonesian telcos in a move that would create a stronger rival to the country’s two leading players, Telkomsel and Indosat Ooredoo Hutchison (IOH). The companies signed a non-binding memorandum of understanding (MoU) to examine the potential of creating a merged operation (currently dubbed MergeCo) in May this year, and now, according to Bloomberg, the announcement of a deal to create a service provider with about 100 million customers (about the same size as IOH) is imminent. 

– The staff, TelecomTV