Regulators will launch major probe into Orange’s planned stake in VOO

Orange Belgium first announced their intention to take a 75% stake in fixed line operator VOO back in November 2021, with the Wallonia-based operator valued at roughly €1.8 billion.
The move would present Orange the chance to offer both mobile and fixed line services in Belgium for the first time – a key element of Orange’s wider Engage2025 strategy, which aims to create converged fixed and wireless businesses throughout the company&’…

Orange Belgium first announced their intention to take a 75% stake in fixed line operator VOO back in November 2021, with the Wallonia-based operator valued at roughly €1.8 billion.

The move would present Orange the chance to offer both mobile and fixed line services in Belgium for the first time – a key element of Orange’s wider Engage2025 strategy, which aims to create converged fixed and wireless businesses throughout the company’s European portfolio.

The Belgian fixed line market is currently dominated by the Proximus and Telenet, which have market shares of 44.8% and 36.2%, respectively. VOO sits in a somewhat distant third place with roughly 10.3%. 

In the Belgian mobile market, meanwhile, Orange Belgium’s market share sits at around 25.7%, slightly behind Telenet’s 27.2%. Unsurprisingly, incumbent Proximus dominates in this market too, with a market share of around 40%.

As such, this majority stake sale would pull together the third-place players in both the fixed and mobile markets, potentially giving both companies a considerable opportunity to broaden their subscriber base. 

Naturally, any such deal of this scale and potentially disruptive impact to the market will draw the attention of antitrust regulators, which have been conducting preliminary investigations into the deal for the past few months. 

Now, anonymous sources are suggesting that this initial probe by the regulators will be conclude today with the announcement of a deeper, four-month investigation

This decision is reportedly a result of Orange failing to offer meaningful concessions to address the regulator’s competition concerns.

Orange argues that the deal will be good for Belgian customers and increase competition in the Wallonian market. 

« The opening of this phase is a new step during which we will have the time and the opportunity to demonstrate to the Commission that this transaction is beneficial for the sector and will make it possible to sustainably strengthen competition throughout Belgium, » said Orange in a statement. 

The past two months has been busy for the Belgian telecoms sector, which not only raised €1.2 billion in its latest spectrum auction but has also seen both Telenet and Proximus advance plans to create their own new fibre joint ventures for Wallonia and Flanders.

This growing interest in fibre deployment in Belgium should come as little surprise. Belgium has one of the lowest fibre penetration rates in Europe, lagging far behind its neighbours, particularly France. This creates a major opportunity for investors and telcos, who have in recent years combined their efforts with those of the Belgian government to deploy fibre at an astonishing rate. 

Today, Belgium has the fastest fibre deployment rate in Europe – something that Orange is surely looking to take advantage of.
 

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Telefonica Brazil open to ISP acquisitions

Telefonica Brazil did not rule out acquisitions to bolster its Vivo brand’s internet offering, after being linked to buying rival ISPs, despite plunging year-on-year income. 

In an earnings call, Telefonica Brazil CFO David Melcon said the operator is “always attentive to market opportunities in every way, and that also includes fibre”.

Melcon highlighted the company has a target to gain 29 million internet connections by the end of 2024 with six million stemming from joint venture FiBrasil and the other 23 million stemming from its Vivo brand.

Currently, Vivo has 21 million connections a rate which is “on pace” to hit target said Melcon, which is why the operator is not rushing into mergers and acquisitions.

“If we are going to face any M&A decision in the future it depends on the overlap of the network, on the quality of the network and the quality of the companies being sold.

“M&A is complex [in fibre]. We also need to see how we are going to integrate our customer base because one factor to consider is buying the network, and the second is buying the customer [base]. We have a clear plan to get to 29 million and that’s building together with FiBrasil, » said Melcon.

In its Q2 2022 financial results, the company reported a net income year-on-year plunge of 44.6% to BRL746 million (US$140m) due to higher expenses stemming from its mobile unit.

There was a 282% surge in operating costs to BRL601 million as the company took on debt to pay for 5G licenses in Brazil’s recent auction, and acquired rival Oi’s mobile assets, at a time of higher interest rates.

EBITDA  amounted to BRL 4.5billion which was an increase of 8.3%, while net revenues grew 7.8% to BRL11.8 billion.

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South Korean operators betting big on content creation

The 2020s are a shaping up to be a decade of change for telco business models. While connectivity itself is more important in all facets of our lives than ever before – as highlighted throughout the coronavirus pandemic – traditional voice and data service revenue are not growing in time with the surging demand. Combine this with the expenditure telcos face with the pricey rollout of new technologies like 5G and fibre, and the telecoms industry at large is looking for its next money-maker. 
For many operators…

The 2020s are a shaping up to be a decade of change for telco business models. While connectivity itself is more important in all facets of our lives than ever before – as highlighted throughout the coronavirus pandemic – traditional voice and data service revenue are not growing in time with the surging demand. Combine this with the expenditure telcos face with the pricey rollout of new technologies like 5G and fibre, and the telecoms industry at large is looking for its next money-maker. 

For many operators, this search has led for a shift in direction towards targeting the enterprise market, often through the deployment private networks, while for others the shift will be towards transforming into technology integrators and aggregators, offering customers suites of supporting services alongside connectivity. 

In South Korea, however, a new trend is emerging that could also prove surprisingly profitable: content creation. 

In fact, it is not content giants like Netflix or Amazon that are behind the latest smash hit South Korean TV series, but rather KT’s content creating subsidiary, KT Studio Genie. 

The show, ‘Extraordinary Attorney Woo’, which focusses on an autistic lawyer, is currently the most watched non-English TV series on Netflix in 190 countries and it is perhaps this potential to reach an enormous international audience that makes content creation so alluring to the operators.

The timing also could not be more perfect, with South Korean TV and cinema having begun to receive widespread critical acclaim in recent years, with award winning films like Parasite and TV series like Squid Game helping to make the country’s entertainment industry much more approachable for Western audiences. 

KT first set up Studio Genie back in March 2021 and Extraordinary Attorney Woo’ is only its second production, following the slightly lacklustre “Never Give Up” last year. 

Nonetheless, it represents a key part of KT’s media strategy, with the company saying it would invest around $380 million to produce over 30 new drama series and 300 entertainment programmes by 2025. In fact, the studio intends to release 22 drama series by the end of 2022.

And KT is not alone in its considerable content creation ambitions. 

SK Telecom established a South Korean video streaming service, Content Wavve Corp., back in 2019, working alongside three of the country’s national broadcasters. Since then, then Wavve has pledged to invest around $760 million in content creation by 2025.

LG Uplus, meanwhile, has recently invested an undisclosed sum in children’s animation studio SAMG Entertainment, while also bolstering its own Content Platform Business Group, which is set to focus on 5G-based virtual reality (VR) and augmented reality (AR) content. 

Of course, this is not to mention the work that all three operators are doing with regards to the metaverse, with each making strategic investments in this area in 2022. SK Telecom in particular seems to have something of a lead in this area, already making international partnerships to help offer its metaverse platform, Ifland, to customers abroad. 

The South Korean telcos appear to be unanimous in their decision to be directly involved in content creation, rejecting the conventional wisdom of operators in Western markets that have instead struck partnerships with content players like Netflix and bundled these services alongside connectivity. 

Now, with Netflix no longer looking like the unassailable behemoth it once was, betting big on content could be a big win for the South Korean telecoms operators. Their international rivals are sure to be watching the situation closely. 
 

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South African fibre provider targets underserved markets with new funding

A major debt finance deal promises to enable open access fibre provider MetroFibre Networx to bring more fibre connectivity to underserved markets in South Africa.

According to local press reports, major financial institution the Standard Bank Group says it has finalised a R5 billion (about US$295.5 million) debt finance package to support MetroFibre Networx’ ambitious fibre-optic data network rollout across South Africa.

The financing will be used to expand MetroFibre’s fibre connectivity into homes and businesses in underserved communities, contributing to increasing its reach by an additional 500,000 households across the country.

Metrofibre Networx, a carrier-class Ethernet (CE 3.0) infrastructure company that provides highly managed fibre optic broadband connectivity in South Africa, is one of a number of companies targeting less well-off customers.

Openserve, Frogfoot and Vumatel are among the other big names in a market where fibre network operators are cutting prices and increasing line speeds to win over customers.

News service ITWeb Africa points out that there is fierce competition driving the move into underserved markets such as townships. There also appear to be business opportunities.

On its website MetroFibre refers to its recently launched MetroConnect solution as a new “pre-paid pay-as-you-go service which provides a 20Mbps fibre connection into your home with the flexibility to top-up when you need to, for as long as you need it”.

It also describes the new service as one of the ways in which the company aims to “transcend the limitations that lock millions of South African homes out of access to fibre connectivity and leave them reliant on expensive and limited mobile connectivity”.

How long this competition can continue is unclear, though, judging from the MetroFibre Networx finance deal, there’s still a lot to play for in the market.

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Earthquake detection using submarine cables

A 2015 United Nations report estimated that every year, an average of 60,000 people and $4 billion USD in assets are exposed to the global tsunami hazard, which can be triggered by certain types of undersea earthquakes or volcanic eruptions.  Over a number of decades, various countries have deployed dedicated tsunami warning systems, like floating buoys, to augment land-based seismic detectors. 
Seismic waves travel 20 to 30 times faster through the earth&’…

A 2015 United Nations report estimated that every year, an average of 60,000 people and $4 billion USD in assets are exposed to the global tsunami hazard, which can be triggered by certain types of undersea earthquakes or volcanic eruptions.  Over a number of decades, various countries have deployed dedicated tsunami warning systems, like floating buoys, to augment land-based seismic detectors. 

Seismic waves travel 20 to 30 times faster through the earth’s crust than a tsunami wave, so if they can be detected and localized, it should be possible to determine which coastal areas are at risk and send early warnings.  We need detectors in as many locations as possible because, for every 200-km distance between the earthquake’s epicenter and the point of detection, there is an additional one-minute delay to a potential warning. 

This is where submarine communication cables can play a part.  Initiatives are underway by the Joint Task Force, Science Monitoring And Reliable Telecommunications (JTF SMART) to promote the inclusion of dedicated seismic detection and environmental monitoring sensors in the next generation of submarine cable repeaters.  But new cables are deployed at a relatively low rate of perhaps 20 to 30 per year.  In contrast, there are hundreds of existing long-distance submarine cables deployed around the world – can something be done retroactively with these cables to turn them into seismic detectors? 

As the diagram shows, seismic events cause measurable effects in the state of polarization (SOP) for a given data wavelength on the cable.  Modern transponders are specifically designed to eliminate this “background noise,” but they could also be programmed to identify unexpected SOP disturbances.  Moreover, submarine cables can be many thousands of kilometers in length, so how can we determine where along the length of the cable the seismic effect is felt most strongly? 

Every 50 to 100 km along a submarine cable there are optical amplifiers, which are often configured with a passive filter device called a Bragg Grating that reflects back about 1% of one specific wavelength – usually 1561 nm.  By adding a measurement transponder at the ends of the cable operating at this wavelength, it is possible to isolate where the seismic effect is felt most strongly to the granularity of the amplifier spacing – the lower left of the diagram shows the head of the “wave” peaks at Amplifier 104.  For this system to deliver the most benefit, the responses from as many cables as possible could be correlated to allow triangulation of the epicenter and thus provide data for early warnings. 

Work on this exciting new approach is ongoing, with Google playing a particular role in offering their cables as test beds and developing open-source signal analysis software.  As a leader in subsea optical transmission infrastructure, Infinera is an active collaborator in this area.  At OFC 2022, Infinera and Google presented the results of work done on the Curie cable system in the Pacific Ocean, with additional work on seismic detection under development. 

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