What’s up with… NTT and Intel, EE and Three, BT

• NTT and Intel team up on next-gen chipsets
• Three beats EE to the UK’s 5G crown (at least for now) 
• Class action suit leads BT to the dock

In today’s industry news roundup: NTT Group and Intel join forces to develop smaller, more energy-efficient semiconductors; Three UK pips EE to the post as top 5G provider in the UK, but EE takes the top spot for mobile network performance; BT in court to answer to claims of landline overcharging dating back to 2017; and much more! 

Japanese giant NTT Group, Intel and South Korea’s SK Hynix are set to develop technology that will enable the mass production of semiconductors that use optical rather than electronic signal processing, a move that would result in smaller and more energy-efficient chips, according to the Nikkei news agency. The joint effort aims to keep key technology-focused allies competitive with China, which has been ramping up its own semiconductor development and production capabilities since it was hit by US technology export restrictions. Japan’s Ministry of Economy, Trade and Industry believes the country can lead the way in the development of such next-generation semiconductors and is set to provide 45bn yen ($305m) towards the NTT-led initiative, which will see Intel contribute its expertise in central processor unit (CPU) technology and SK Hynix its expertise in memory chips to go with the Japanese telco’s expertise in the integration of optical and electrical processing that it has been channelling into its innovative optical and wireless network (IOWN) developments. According to Nikkei: “By fiscal 2027, the companies aim to establish production technology for devices that incorporate light into semiconductors and memory technology capable of storing data processed at terabit-class speeds. Intel will advise on the development of production technology. The goal is to reduce power consumption by 30% to 40% compared to conventional products.”   

EE has been named the best overall mobile network in the UK once again but was narrowly surpassed by Three UK in terms of 5G availability and performance in the second half of 2023. These are some of the key findings in a report by Ookla’s mobile network testing provider RootMetrics, which reviews the performance of the mobile sector in the UK every six months. Three UK was awarded ‘Best 5G honours’ for having “the strongest combination” of 5G availability and performance. Vodafone UK showed “strong improvement” in 5G availability and speed results in the period, being the only operator to register 5G median download speeds exceeding 100 Mbit/s in all 16 cities examined by RootMetrics. The company found no clear winner in terms of the fastest 5G speed experience in the UK, but noted fast median download speeds across the board for all four operators – primarily over 150 Mbit/s – for which EE came in first with its 5G median download speed of 174.1 Mbit/s. EE has been granted RootMetrics’ overall award for the twenty-first time in a row, while Vodafone ranked second in nearly all UK-wide performance categories. Virgin Media O2 (VMO2) marked “very little change” compared to its rankings in the first half of 2023, though it did register faster 5G speeds and improved availability of the network in most of the 16 cities tested in the study. Find out more.

The class action lawsuit brought against BT over claims of landline overcharging, and which if successful could result in a payout of up to £1.3bn, is now being heard by the UK’s Competition Appeal Tribunal, a specialist judicial body. The compensation claim, known as CALL (the Collective Action on Land Lines), was initiated by Justin Le Patourel, a claimant who is leading the case on behalf of the customers. BT claims the issue was dealt with by regulator Ofcom in 2017 and that it has no case to answer. The lawsuit is now underway following a number of unsuccessful appeals against the trial by the UK telco. 

Eutelsat Group has issued a profits warning for its 2023-24 financial year due to underperformance at OneWeb, its low-earth orbit (LEO) satellite operation. According to the French satellite firm, OneWeb’s financial performance has been impacted by “delays in the availability of the ground network, as well as a revenue mix more oriented than expected towards the sale of user terminals, which impacts margins.” However, it added that the deployment of the ground network is “progressing well” and is expected to be 90% completed in the second quarter of 2024. “We continue to see strong momentum in the takeup of pre-signed commitments with major customers, and we believe we are on track towards [achieving] our longer-term targets,” Eutelsat Group noted. The satellite player outlined that the low-earth orbit (LEO) activities of OneWeb are also “progressing well, with 100% of the satellites in place and a backlog of $1.1bn” at the end of the last quarter. For the near term, however, it has lowered its revenues forecast for financial year 2023-24, and is now expecting between €1.25bn and €1.3bn in revenues (down from between €1.32bn and €1.42bn). It has also adjusted its profit (earnings before interest, taxes, depreciation and amortisation, or EBITDA) outlook, and is now expecting between €650m and €680m (versus €725m to €825m previously expected). The company expressed confidence in “the prospects of OneWeb” and Eutelsat Group’s “unique” combined offer for geostationary (GEO) and LEO satellite connectivity. “As the constellation achieves full global operational coverage, we anticipate an acceleration in revenues,” Eutelsat noted, adding that it is still aiming for double-digit compound annual growth rate (CAGR) in revenues and adjusted EBITDA between fiscal years 2024 and 2028.

In an effort to maximise the proceeds from the sale of its business in Portugal,. Patrick Drahi’s Altice International is reportedly trying to sell its fibre access network (and a datacentre facility) in the country separately from the rest of the telecom assets, according to a report from financial news portal Jornal de Negocios (in Portuguese, subscription required). Altice is trying to sell the Portuguese operations (also known as Portugal Telecom or Meo) for more than €7bn in an effort to raise funds it can use to pay off some of its debts and has reportedly received more than 20 non-binding bids. 

Last week delivered a welter of bad news for the telecom vendor sector as the trio of major US network operators –  AT&T, Verizon and T-Mobile US – all revealed year-on-year reductions in capital expenditure when they reported their 2023 financials and delivered their forecasts for the year ahead. But capex reductions are not universal: Chunghwa Telecom in Taiwan, for example, has just published its 2024 forecast and expects its “acquisition of property, plant and equipment in 2024” to increase by $3.04bn Taiwan new dollars (TWD) (US$97.4m) to about TWD$34.02bn (US$1.09bn), an increase of almost 10%, “owing to the investments in 5G deployment to maintain a competitive edge, the expansion of internet datacentre [capacity], new construction of [a] submarine cable, and the elimination of energy-intensive equipment to realise ESG [environmental, social and governance] practices,” the telco noted. For 2024, Chunghwa Telecom expects its total group revenues to increase by up to 3.1% year on year to as much as TWD$230.19bn ($7.4bn). 

The future of the UK’s largest chip manufacturer Newport Wafer Fab is still up in the air as the UK government is dithering over clearance for the South Wales-based company’s acquisition by US semiconductor manufacturer Vishay Intertechnology, The Guardian has reported. Vishay struck a deal to acquire Newport Wafer Fab for $177m in November last year after the UK government stepped in to compel Chinese-owned Nexperia, which had acquired the Welsh chip production company in 2021, to divest itself under the terms of Britain’s National Security and Investment Act. But according to The Guardian, the Vishay deal has not yet been approved, leaving Newport Wafer Fab in limbo and on course to cut jobs.  

Singtel plans to provide rich communication services (RCS) to its business customers in the first quarter of 2024 to help enterprises engage with their customers through “an improved, immersive mobile messaging experience”. Claiming to be the first in Singapore to offer RCS, the telco explained that the service will be in collaboration with Google, allowing smart devices running on the Android operating system to receive “high-quality multimedia content, transact and complete administrative tasks” such as scheduling appointments or delivery tracking. According to Terence Lai Tuck Leong, VP of digitalisation, products and partnerships at Singtel, it will support businesses in their “innovation and digital transformation efforts in line with expectations from customers who are increasingly savvy and seeking smoother, frictionless interactions with their service providers.” The move comes shortly after Juniper Research estimated that telco revenues from RCS business messaging will skyrocket by more than 500% over the next two years to be worth $8bn in 2025, boosted by Apple’s decision to start supporting the technology – see Apple factor to boost telcos’ RCS business messaging revenues – report.

- The staff, TelecomTV