What’s up with… Telia, Ofcom & big tech capex, Twitter, Starry

• Telia hit hard by energy price hikes
• Ofcom mulls big tech telco capex contribution in new review
• As Starry cuts staff, headcount reduction speculation swirls around Twitter

In today’s industry news roundup: Telia reveals just how big a hit telcos are taking as a result of higher energy prices; UK regulator Ofcom considers whether the big tech firms should cough up capex funds to the telcos; US fixed wireless access specialist Starry announces job cuts, while Twitter staff fear for their jobs; and more!

No-one, it seems, is immune to the energy crisis, especially in Europe. Swedish telco Telia has cut its outlook for 2022-23 due to high electricity prices. The company expects its energy bill for the full year to rise by 900m Swedish krona (SEK) ($79.7m), which is 600m SEK higher than the forecast it made three months ago. According to the company’s president and CEO Allison Kirkby, macroeconomic headwinds have strengthened “from a breeze to a mild storm during the summer, with sharply higher energy prices and interest rates”. She added that Telia has managed to mitigate some of these challenges, recording net income of 1.9bn SEK ($168.5m), up from 1.6bn SEK in the third quarter of 2021. Its service revenues rose 2.3% on a like-for-like basis to 19bn SEK ($1.68bn). See more.

UK regulator Ofcom has addressed the issue of whether the so-called big tech companies should contribute to telco capex expenses in a new net neutrality document published today. In its consultation document, Net Neutrality Review, Ofcom noted that it has included its “views on the possibility of allowing ISPs to charge content providers for carrying traffic, which might lead to more efficient use of networks. While there are potential benefits to a charging regime, we have not yet seen sufficient evidence that this is needed and believe there is sufficient flexibility provided for ISPs in our other proposals. Ultimately, whether or not a charging regime should be introduced in the UK is a decision for government and parliament.” Ofcom is taking feedback on its new review until 13 January 2023, and it’s likely to get quite a lot of responses on this particular part of its consultation. In general, Ofcom said it is reviewing its net neutrality rules because, by their very nature, they “constrain the activities of the ISPs” and thus “may be seen as restricting their ability to innovate, develop new services and manage their networks. This could lead to poor consumer outcomes, including consumers not benefiting from new services as quickly as they should, or at all. These potential downsides might become more pronounced in the future, as people’s use of online services expands, traffic increases, and more demands are placed on networks. We want to make sure that as technology evolves and more of our lives move online, net neutrality continues to support innovation, investment and growth, by both content providers and ISPs. Getting this balance right will improve consumers’ experiences online, including through innovative new services and increased choice.” Ofcom added that “current net neutrality rules are set out in legislation that was carried over from the UK’s membership of the European Union (EU). Any changes to the rules in future would be a matter for government and parliament.” Let’s hope the UK, including Ofcom, has some certainty on exactly who is running the UK government before 13 January, because currently it’s something of a guessing game. 

Recent speculation is keeping Twitter’s staff on their toes, as The Washington Post reported that the buyer of the social media platform, Elon Musk, told prospective investors he plans to dismiss almost 75% of the company’s 7,500 workers – read the original report here (requires subscription). The cuts are allegedly expected in the next few months, regardless of who will be the company’s owner at the time. However, according to Reuters, Twitter’s general counsel, Sean Edgett, has sent an email to employees ensuring them that layoffs are not planned. The company has been struggling financially recently: In the second quarter of 2022, Twitter booked a net loss of $270m compared to a $66m profit in the same period of 2021.

While for some, job cuts are nothing more than a rumour, for others they have become a reality. US fixed wireless access (FWA) service provider Starry announced it will cut about half of its workforce and put a stop on its expansion plans. It has, instead, opted for cost-cutting measures to conserve capital as it explores “all strategic options”. The announcement was made alongside its third-quarter results, which showed the company “continues to execute well”, as CEO Chet Kanojia put it. Starry reported a “record increase” of more than 10,000 customers in the period, bringing the total to 91,297 – a year-on-year increase of 66%. However, it seems these gains were not enough. “This is an extremely difficult economic climate and capital environment, and at present we don’t have the capital to fund our rapid growth. Because of that, we’re focusing our energies on our core business: Serving multi-tenant buildings in our existing dense urban markets”, said Kanojia. Starry has also withdrawn from the Rural Digital Opportunity Fund (RDOF), a programme by the US Federal Communications Commission (FCC) for deploying fixed broadband and voice services to unserved homes and small businesses in rural parts of the US. However, Kanojia maintained that “Starry remains open for business” and will be “laser-focused on financing the business over the long term and [will] continue serving our markets.” Read more.

Turkcell has deployed a disaggregated distributed backbone router (DDBR) internet gateway solution based on specifications developed by the Telecom Infra Project (TIP). The DDBR solution, consisting of Drivenets Network Operating System (DNOS) software with UfiSpace and Edgecore Networks hardware, “has given Turkcell the capability to scale the solution’s capacity up to 192Tbit/s in its Gebze datacentre,” noted TIP. “The deployment of the TIP DDBR solution is the first of its kind in the world and will deliver cost-effective and reliable connectivity for all our customers by its unique distributed model,” noted Gediz Sezgin, CTO of Turkcell. “We would like to thank TIP, Drivenets, Edgecore Networks and UfiSpace who contributed to this success.”

UK-based eSIM provider Truphone has been hit with a $600,000 fine and will have to follow “a robust compliance plan” after the US Federal Communications Commission (FCC) found the company failed to disclose stakes held by Russian investors. In a statement, the regulator said the company is also ordered to divest stakes owned by Russian investors Alexander Abramov, Alexander Frolov and Roman Abramovich. The penalty was imposed because, according to the FCC, Truphone transferred control of FCC licences to “unvetted foreign individuals” without the commission’s permission and failed to accurately disclose ownership stakes. The company has agreed to provide overdue and incomplete paperwork so that a thorough review into its ownership structure can be conducted by the authority. See more here.

- The staff, TelecomTV