What’s up with… 1&1, Apple, GenAI

• RAN site bottlenecks still choking 1&1’s Open RAN rollout
• Will Apple crumble under antitrust pressure? 
• Enterprise demand for GenAI really does exist

In today’s industry news roundup: German 5G newcomer 1&1 is still in the early stages of its Open RAN network rollout as securing antenna sites remains a challenge; the US Justice Department and other legal bodies are suing Apple for allegedly monopolising the smartphone market; more and more enterprises are specifying generative AI support in their AI contracts, according to research house Omdia; and more!

German operator 1&1, a long-time mobile virtual network operator (MVNO) that has become the country’s fourth infrastructure-based 5G operator courtesy of the Open RAN-based greenfield network that has been built and is being managed by Rakuten Symphony, has reported full year revenues for 2023 of almost €4.1bn, a year-on-year increase of 3.4%. The costs associated with rolling out and running the 5G network, which became fully operational towards the end of last year, have hit its earnings, though, with the company’s operating profit dipping by 14.8% to €455.8m, mainly because of the €132.4m in costs associated with the 5G network. Those costs are expected to increase in 2024 to about €160m. 1&1 ended 2023 with 16.26 million customers, of which 12.25 million are mobile customers (up by 525,000 during the year) and just over 4 million are fixed broadband customers (down by 90,000). On the company’s earnings call, CEO Ralph Dommermuth noted that 2024 is set to be a year in which the 5G network rollout pace accelerates. “We’re planning to operate four core datacentres [all about to be deployed], 24 decentralised datacentres [all deployed]… and over 500 regional edge datacentres,” of which more than 100 are operational and each of which will connect to 5G antenna sites. “We’re planning more than 12,000 antennas in order to cover as many households as possible. That’s our target to achieve by 2030.” Securing locations where the operator can deploy its antennas has been its main network deployment “bottleneck”. 1&1 is on course to have 1,350 antenna locations in place by the end of this month, of which about 600 will be equipped with antennas, up from just 243 at the end of 2023. Of those 600, 200 will be hooked up to fibre backhaul connections that link them to an edge datacentre, so there is still a lot of network construction work to be done. 1&1 aims to have 3,000 antenna locations secured by the end of this year, of which 1,000 will need to be active to meet its already overdue licence obligations.   

Apple is being sued by the US Department ofJustice (DoJ), along with 16 other state and district attorneys general, for “monopolisation or attempted monopolisation of smartphone markets in violation of Section 2 of the Sherman Act,” the DoJ announced late on Thursday. The complaint, filed in the US District Court for the District of New Jersey, alleges that Apple “illegally maintains a monopoly over smartphones by selectively imposing contractual restrictions on, and withholding critical access points from, developers.” US attorney general Merrick B. Garland noted: “Consumers should not have to pay higher prices because companies violate the antitrust laws. We allege that Apple has maintained monopoly power in the smartphone market, not simply by staying ahead of the competition on the merits, but by violating federal antitrust law. If left unchallenged, Apple will only continue to strengthen its smartphone monopoly,” he added. As you’d expect, Apple reacted strongly, telling TechCrunch that the lawsuit “threatens who we are and the principles that set Apple products apart in fiercely competitive markets” and would set a dangerous precedent for government adopting a “heavy hand in designing people’s technology.” It added that it believes the “lawsuit is wrong on the facts and the law, and we will vigorously defend against it.” Experienced technology industry analyst, Radio Free Mobile’s Richard Windsor, noted in his latest blog that while there is little doubt in his mind that “over the years, Apple has engaged in some questionable competitive practices… [but] conclusively proving that Apple has harmed consumers through its practices will be difficult to prove.” He believes the case will rumble on for years and there will be “appeals, counter-appeals and a lot more back and forth before it is finally decided, which creates long-term uncertainty that the company does not need.” Ultimately, “Apple’s user experience, its consistency and the seamless integration of different device categories are better than anything else on the market,” noted Windsor. “This is why it has obtained the position that it has, and the government’s lawyers had better all switch to Android before the case begins or face being wrongfooted in the courtroom,” he wryly observed. 

We constantly hear that enterprises around the world are interested in using generative AI (GenAI), and now research house Omdia has some stats to back that up. According to data from its Enterprise AI Contracts Database, GenAI was specified in 7% of AI contracts in the first half of 2023 and increased to 38% in the second half of the year. “Annually, the number of GenAI-specified contracts increased from just one in 2022 to 96 (23% of contracts) in 2023. The trend suggests enterprises are truly adopting GenAI and that GenAI is rapidly growing share in the AI market. But the contracts also suggest some enterprises are simply in a GenAI exploration phase,” noted the Omdia team in this press release. The fact that enterprises are actively seeking GenAI support from their technology partners will come as good news to telcos such as Orange, which has started pitching GenAI services to its business users in France. 

National operator KPN has received unconditional approval from the Netherlands Authority for Consumers and Markets (ACM) for the €200m acquisition of Youfone. The deal was first announced in June 2023 but was put under review by the ACM in October as there were concerns the acquisition might “have a negative impact on competition”. Now KPN expects to close the deal in April.

Totem, the towers unit of telco giant Orange, is deploying 1,000 5G radio access network elements that will provide connectivity at the 16 stations and along the 33 kilometres of tunnels that comprise the future ‘Line 15 South’ of the new Parisian Métro system. “Deploying a 5G mobile network in the tunnels of a metro is a real technical challenge: It’s an indoor space with a high density of people, movements, and very thick (and therefore wave-impermeable) walls. Totem is deploying this pooled 5G network for all operators, working within the technical constraints of the tunnels and meeting the specific mobile coverage needs of all operators,” noted the tower company in this announcement.  

NEC and Japanese giant telco NTT say they have successfully conducted a “first-of-its-kind transoceanic-class 7,280km transmission experiment” using 12-core multicore fibre that “consists of 12 optical signal transmission paths in a standard outer diameter optical fibre.” According to NEC, this breakthrough points towards the future of large-capacity optical networks architectures that will be deployed in next-generation submarine networks. Read more. 

- The staff, TelecomTV