What’s up with…. BT & Safe Security, Verizon, EXFO & Viavi (again)

• BT invests in cyber security specialist
• Verizon ups its guidance after encouraging Q2
• EXFO founder tells Viavi to back off (for the fourth time)

A strategy security investment by BT and positive signs from US operator giant Verizon lead the way in today’s roundup of telecoms industry news nibbles. 

BT has announced a multi-million-pound investment in Palo Alto, California-based cyber security specialist Safe Security, the developer of SAFE (Security Assessment Framework for Enterprises), a “platform allows organisations to take a health check of their existing defences and understand their likelihood of suffering a major cyber attack.” BT is already a customer and, as a result of the investment, will add SAFE to its managed security services portfolio and become the exclusive provider of SAFE to businesses and public sector bodies in the UK. BT has opted not to share the exact size of its investment, but noted in a response to questions from TelecomTV that it is the lead investor in a $33 million round, and that its stake in the company is not a majority or controlling stake (but also not insignificant). BT does not get a seat on the Safe Security board as a result of its investment, but says it will have significant input into the company’s “strategy and future direction.”  Safe Security was founded in 2012 and is also backed by JC2 Ventures, the investment firm founded by former Cisco Chairman and CEO John Chambers. Various media reports, mostly from India where Safe Security has its development roots (Bangalore), suggest the latest round included further investment from Safe’s previous backers, including JC2. Read more. 

Verizon exceeded expectations in the second quarter of this year, reporting a 10.9% year-on-year increase in revenues to $33.76 billion, driven by “wireless revenue growth, strong Fios and Verizon Media results, and increased wireless equipment revenue,” and the same percentage increase in operating income to $8.17 billion. The operator ended the quarter with 121.3 million retail mobile connections. Verizon increased its full year guidance for wireless service revenue growth from “at least 3%” to “3.5% to 4%,” and raised its full year earnings per share (EPS) guidance from “$5.00 to $5.15” to “$5.25 to $5.35.” Verizon also noted that, in addition to the $17.5 billion to $18.5 billion in capex it plans to spend this year on 5G mmWave rollout, 4G densification and fibre access network deployments, it will spend between $2 billion and $3 billion on C-Band 5G network rollout, almost all of which will be spent in the second half of this year (as only $160 million was spent during the first six months). The operator’s share price increased by almost 2% to $56.66 after the numbers were reported. For all the details, see this Verizon earnings announcement. 

EXFO founder Germain Lamonde is digging his heels in… “For the fourth time, I make it crystal clear to Viavi and to my board of directors at EXFO that as controlling shareholder of EXFO, I would not consider any transaction with Viavi, or any other change of control transaction.” That was the reaction of Lamonde, EXFO’s founder, Executive Chairman and controlling shareholder, in a statement reacting to the latest takeover offer from Viavi, which on Tuesday increased its takeover offer to $8.00 per share, valuing the company at $459 million: Its previous (third) acquisition offer, dismissed by Lamonde last month, was for $7.50 per share, which valued EXFO at $430 million. As previously reported, Lamonde wants to take the company private, and has a meeting set for 13 August to discuss that move with other EXFO investors.

Telenor says it “returned to growth in the second quarter. The growth was driven by strong performance in the Nordics combined with a growing subscriber base and increased data consumption in the Asian markets. Subscription and traffic revenues increased by 2%” on a like-for-like basis, but total reported revenues were NOK 27.2 billion (US$3 billion), a decrease of NOK 1.8 billion.” The operator, which recently exited the Myanmar market, said its mobile subscriber base grew by 1.7 million to reach 170 million at the end of the second quarter. For the full story, see this earnings announcement.

Still with Telenor… It has selected Oracle Communications Billing and Revenue Management, including Oracle Converged Charging, to “lay the groundwork for 5G and provide seamless charging and billing interactions” for its 175 million subscribers in Asia, the companies have announced. Oracle Communications Consulting is leading the implementation and will deploy the solution in Malaysia, Thailand and Pakistan. The deployments will help with Telenor’s “three key initiatives: digitalizing its technical stack to be ready for 5G; innovating its operating model with more touch-free operations; and transforming how it works internally and with partners to deliver more value while containing capital expenditures.” Read more. 

Netflix says its revenues increased 19% year-on-year to $7.3 billion during the second quarter, while operating income rose 36% to $1.8 billion. It ended June with 209.2 million paying customers, up by just over 1.5 million customers from the end of Q1 and “slightly ahead of our forecast,” it noted in this statement. It expects customer numbers to rise more sharply in the current quarter and expects to end September with almost 212.7 million paying customers.

Quanta Cloud Technology (QCT) has teamed up with fixed broadband, xhaul and virtualization specialist DZS to “jointly accelerate virtualization and containerized Open RAN-based infrastructures for telco operators. This partnership between DZS and QCT leverages DZS mobile transport, telco edge, and converged network expertise and QCT’s server and NFV infrastructure integration capabilities, to address carrier and operator business opportunities in 5G, edge cloud and network virtualization.” DZS has been broadening its horizons in the past year by adding to its mobile transport technology portfolio with the acquisition of Optelian, and the acquisition in March of RIFT, a well-regarded company in the open source virtualized networking sector that specializes in the automated onboarding, orchestration and management of virtual network functions. For more on the QCT/DZS partnership see this announcement, and for more on the evolution of DZS under the stewardship of Charlie Vogt, see DZS reinvents itself with RIFT acquisition. 

The sudden change of CTO at CommScope has caused a ripple of consternation amongst those that follow the company. The fixed and wireless access technology specialist announced that Morgan Kurk has stepped down immediately as chief technology officer and segment leader of Broadband Networks, and that Tom Cloonan, currently CTO of the Broadband Networks segment, “has been appointed chief technology officer on an interim basis as the Company evaluates its longer-term strategic requirements of the CTO office.” Financial analyst Simon Leopold at Raymond James sees the transition as “a risk… We find it a bit puzzling that CommScope is swapping a Mobility expert with a Broadband expert in the CTO spot. This is not to suggest Cloonan lacks the ability, but we envision 5G as the most promising driver for CommScope, so the subtle message confuses us,” noted Leopold in a note to his investor clients. CommScope has been undergoing a fair amount of change in the past nine months since Charles Treadway was appointed as CEO last October, but investors seem to like what he is doing as CommScope’s stock has more than doubled since he took over and currently stands at $20.26. Read more. 

Kinetic Wholesale, a division of US operator Windstream that builds fibre connections to new macro cellsite towers across 18 states, has added fibre to 354 new macro tower sites in the second quarter of this year, it announced. “With the ongoing densification of towers increasing, Kinetic is well-suited to continue to meet the demand for 10G capability for cell-site backhaul,” stated the company.

Smartphone vendor vivo has teamed up with Asian operator AIS to conduct 5G standalone (SA) network tests in Thailand. “This marks vivo's inaugural participation in 5G SA commercial network testing in overseas markets outside of China,” notes the device firm in this announcement. 

- The staff, TelecomTV