Back in 2020, buoyed by an international campaign led by then-President Donald Trump, numerous countries around the began to ban Huawei from their telecoms networks to various degrees, citing national security fears. Countries adopting this hard-line approach include the US, UK, Japan, Australia, and New Zealand, most of which have plans to phase out any existing Huawei equipment from their networks over the next decade…

Back in 2020, buoyed by an international campaign led by then-President Donald Trump, numerous countries around the began to ban Huawei from their telecoms networks to various degrees, citing national security fears. Countries adopting this hard-line approach include the US, UK, Japan, Australia, and New Zealand, most of which have plans to phase out any existing Huawei equipment from their networks over the next decade. 

Far more countries, however, have decided to take a more indirect route to tackling the issue of untrusted vendors, with most countries rejecting outright bans on companies like Huawei and ZTE in favour of increased regulation.

India too falls into this category. In summer last year, India’s Ministry of Communications gave permission for telcos to begin running 5G trials with a select list of vendors from which Huawei and ZTE were notably absent. This is tied to new procurement rules introduced for the sector last year, which limits the equipment operators may deploy to that approved by a specially appointed National Cyber Security Coordinator (NCSC). 

Though not quite the infamous US Entity list, which bans all equipment from listed vendors, this measure is nonetheless close to operating as a de facto ban for Chinese equipment suppliers in India. 

India is planning its first 5G auction to take place later this year.

Now, reports suggest that Vodafone Idea is in discussions with Finnish vendor Nokia to replace the company’s existing Huawei 4G RAN equipment.

According to a report from Reuters, the deal will see Nokia deploy 12,000 5G-ready radio sites and 4,000 small cells in Delhi.

Operators in other markets around the world, such as BT in the UK and Orange in Belgium, have conducted similar swaps of Huawei equipment for Nokia’s in recent years. 

The replacement process for Vodafone Idea could reportedly start next month. 

Huawei has continuously denied that it represents a security risk, saying that it is complying with all relevant regulations surrounding telecoms security. In some countries, like Sweden and Estonia, the Chinese vendor has event launched legal challenges against their exclusion from national networks, claiming that they are being discriminated against on the basis of their country of origin. 

Huawei also supplies equipment to Vodafone Idea’s rival Bharti Airtel, alongside Ericsson. Airtel has not yet announced if it will look to swap out Huawei from its own networks.

India’s largest telco, Reliance Jio, does not use Huawei equipment in its networks. 

In related news, Vodafone Idea earlier this year converted all of the debt it owes the Indian government into equity, equating to a roughly 35.8% stake.

Also in the news:

The TWF was established back in 2016 with the stated goal of increasing the value of state-owned assets in its portfolio. By 2020, it had acquired public shares in 22 companies, including airlines, banks, oil and gas, and satellite companies…

The TWF was established back in 2016 with the stated goal of increasing the value of state-owned assets in its portfolio. By 2020, it had acquired public shares in 22 companies, including airlines, banks, oil and gas, and satellite companies. At the end of September 2022, the TWF acquired a 26.2% in Turkish mobile player Turkcell. 

Now, the company is expanding its holdings in the country’s telecoms sector, buying a majority state in formerly state-owned Turk Telekom for roughly $1.65 billion.

« As (Turkey’s Wealth Fund), we believe that we will add extra value to telecommunication sector by contributing in the digitalisation process, while focusing on efforts to further strengthen the technological infrastructure of our country, » said CEO Salim Arda Ermut.

Turk Telekom’s ownership has been in crisis for some time. In 2013, OTAS, a unit of Dubai-based Oger Telecom, had taken a $4.75 billion loan to acquire a 55% stake in the business, but repeatedly defaulted. 

In 2018, , against the backdrop of the Turkish lira crash which left Turk Telekom floundering in billions of dollars of debt, a combination of Turkish and international creditor banks formed a special purpose vehicle to take control of the business. 

This banking consortium has been trying to sell its stake in the business since at least 2019.

As always, the share purchase is subject to regulatory approval. 
 

Back in November, Deutsche Telekom’s CEO, Tim Hoettges notably that the company was interested in finding for an industrial partner with which to potentially deconsolidate the company’s tower infrastructure. Both Vodafone and Orange were speculated to be viable options for some kind of partnership, with the former having spun off its own tower infrastructure unit to form Vantage Towers in 2020 and taken the company public in 2021…

Back in November, Deutsche Telekom’s CEO, Tim Hoettges notably that the company was interested in finding for an industrial partner with which to potentially deconsolidate the company’s tower infrastructure. Both Vodafone and Orange were speculated to be viable options for some kind of partnership, with the former having spun off its own tower infrastructure unit to form Vantage Towers in 2020 and taken the company public in 2021.

By December, the Deutsche Telekom’s willingness to sell a minority or majority stake in its towers had become more overt, with German media reporting that the company was looking to make a sale by Q1 of 2022. At the time, the media valued Deutsche Telekom’s tower assets – roughly 40,600 mobile towers – at up to €20 billion.

Now, a trio of inside sources speaking to Reuters are suggesting the sale process is already underway, with the company expecting indicative offers in the coming weeks. 

According to these sources, both Spanish infrastrucwww.reuters.com/business/media-telecom/exclusive-deutsche-telekom-launches-20-bln-auction-mobile-towers-2022-03-10/ture giant Cellnex and US-based American Tower Corp are both preparing to make offers for the towers. These are some of the largest independent tower operators in the world, with portfolios of roughly 130,000 and 220,000 towers, respectively. 

To say both of these companies have been on a shopping spree in recent years would be an understatement. In 2020, Cellnex agreed to purchase all of CK Hutchison’s European towers for roughly €10 billion; most of these deals have since closed, with the more complicated acquisition process in the UK being given the green light by regulators just last week. 

American Tower, meanwhile, bought Telefonica’s tower unit, Telxius, for $9.4 billion last year, as well acquiring data centre real estate investment trust CoreSite Realty for roughly $10 billion a few months ago.

However, it may not be just these independent tower operators that are interested in some form of tower deal. Vodafone’s Vantage Towers, with roughly 82,000 towers, and Orange’s tower unit Totem, with 26,000 towers, are also viable options for M&A. Both Vodafone and Orange have previously indicated that they would be open to merging their tower units with those of another European player.

Finally, private equity firms can also not be ruled out, having shown a strong appetite for investing in telecoms infrastructure in recent years, viewing towers as a reliable investment that will deliver predictable returns for many years.

If a tower sale does come to pass and overcomes the necessary regulatory hurdles, the funds raised by Deutsche Telekom will primarily go towards reducing the company’s debt pile of over €130 billion, as well as further expanding their 5G and fibre rollouts. 

Over two years ago, India’s government expressed its intent to set the reserve price for 5G airwaves at 4.92 billion rupees ($64.1 million) per megahertz of spectrum in the 3,300MHz to 3,600 MHz bands. 
 
Since then, the Indian operators have repeatedly complained to the Telecom Regulatory Authority of India (TRAI) that this price was extortionate…

Over two years ago, India’s government expressed its intent to set the reserve price for 5G airwaves at 4.92 billion rupees ($64.1 million) per megahertz of spectrum in the 3,300MHz to 3,600 MHz bands. 

This proposed reduction of the reserve price, combined with the potential development of the Made-In-India 5G sub-standard called 5Gi, would be substantial in combatting the enormous costs associated with rolling out this new network technology. 

While some telcos have expressed concern with the costs of designing 5Gi networks, telcos like Jio have revealed their readiness to switch to 5Gi if vendors can promise lower prices for 5Gi-compatible hardware. 

The spectrum auction, due to take place in September or August, will determine whether India will begin catch up with its 5G competitors in other major Asian markets, such South Korea, Japan, and China. All three of these competitors having launched 5G services years prior, with China noting almost half a billion 5G subscribers in December last year. 
 

After copious delays spanning years, the first stage of South Africa’s long-awaited spectrum auction is now complete.
 
South African mobile operators have long been crying out for additional spectrum from the Independent Communications Authority of South Africa (ICASA), having not been allocated new spectrum licences for around 17 years. 
 
This all changed at the start of the coronavirus pandemic…

After copious delays spanning years, the first stage of South Africa’s long-awaited spectrum auction is now complete.

South African mobile operators have long been crying out for additional spectrum from the Independent Communications Authority of South Africa (ICASA), having not been allocated new spectrum licences for around 17 years. 

This all changed at the start of the coronavirus pandemic, when ICASA announced that it would allocate temporary spectrum licences to the operators. This not only served to alleviate the pressure of network demand during a national lockdown but has since allowed the operators to tentatively launch 5G commercial services. 

These temporary licences were set to expire in November last year, but pleas from the operators have seen the terms extended to June 2022.

Now, with the start of the spectrum auction process, South Africa’s operators will be reliant on this temporary spectrum no longer. 

The auction process is split into three stages, the ‘opt-in’ stage, the auction proper, and the allocation phase. 

The opt-in auction, which began yesterday, has already concluded, with Rain and Telekom emerging as winners; Rain acquired 2x10MHz of spectrum in the 700MHz band, and 10MHz in the 2.6GHz band, while Telkom picked up 2x10MHz in the 2.6GHz band. In total, the pair paid roughly $175 million.

This phase of the auction was intended to allow South Africa’s smaller operators the chance to procure a minimum spectrum portfolio (MSP) of least two 10MHz blocks below 1GHz and 60MHz of spectrum above this frequency, including their pre-existing spectrum holdings. 

As such, only two bidders could win spectrum to achieve the MSP in this auction and the larger operators, MTN and Vodacom, were excluded from taking part. 

The main phase of the auction will begin tomorrow, with all six players allowed to participate. 

“The licensing of this spectrum through an auction has major economic and social benefits for our country, especially during this time when the economy is emerging from the ravages of the COVID-19 pandemic. This process provides a critical stimulus for economic recovery and has the potential to stimulate employment by leveraging on ICT networks and digital platforms to deliver economic value for the South African society,” said Dr Keabetswe Modimoeng, Chairperson of ICASA.

Also in the news:

Since 2010, Brand Finance has been compiling an annual report on the most valuable and strongest telecoms brands. The company has assessed 5,000 of the world’s biggest telecom brands, including the leading 150 in their dedicated report, the Brand Finance Telecoms 150 2022.
 
Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors.
 
Let’s take a look at some of the most notable results…

Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors.

Let’s take a look at some of the most notable results. 
 

Most valuable telecoms brand: Verizon 

Verizon takes the top spot again this year, with the company’s brand value rising by 1% to $69.6 billion. This marks the third year running the company has taken first place in the report, having never fallen below third place since the report began.

Verizon’s rival’s Deutsche Telekom (T-Mobile) and AT&T take the second and third place positions, with valuations of $60.2 billion and $47 billion, respectively. 

That the podium spots are dominated by primarily by US brands should come as little surprise. The market is not only huge, it is highly profitable, with mobile and broadband plans in the US some of the most expensive in the world. Despite enormous spectrum auctions and the expensive rollouts of 5G and fibre, the US telecoms market continues to exhibit healthy growth, providing the US operators a fertile landscape in which to grow their brand.
 

Fastest growing brand: Iliad Italia 

Iliad Italia launched in May 2018, becoming the fourth mobile player in the Italian market behind TIM, Wind Tre, and Vodafone. Since then, the company has grown quickly, in summer last year claiming a 10% share of the Italian market just three years after launch. It currently has roughly 8 million subscribers and launched a promising fibre-to-the-home offering earlier this year. 

According to Brand Finance’s report, the brand has risen in value by 109% to $447 million over the past year, making it the fastest growing brand in the telecoms industry. 

In second place is Etisalat (now e&)’s brand Moov, which saw its brand value increase 104% to $453 million in the last year. This rapid rise comes as a result of e& uniting 11 of its African subsidiaries under the Moov Africa banner at the start of 2021.

Strongest telecoms brand: Etisalat 

Using a combination of metrics including marketing investment, stakeholder equity, and business performance, Brand Finance has judged Etisalat to be the world’s strongest telecoms brand in 2022. Etisalat scored 89.2 out of 100 (an AAA rating) based on these metrics, having only broken into the top 20 in 2020.

Etisalat recently rebranded as e&, symbolising its corporate shift towards becoming a global technology and investment conglomerate.

“The transformation of e& from a telecom company founded more than four decades ago in the UAE into a global influence in digitalization highlights its role in upholding the UAE’s sustainable economic development and diversification plans,” said Sheikh Mansour bin Zayed Al-Nahyan, deputy prime minister of the UAE.

Naturally, this increase in brand value was also supported by its unified rebranding of its African assets into Moov Africa, as mentioned previously.

Second place and third place were taken by Swisscom (88.8) and PLDT (88.4) respectively.  

Vodafone NZ has reportedly engaged financial services firms Barrenjoey and UBS to explore the sale of its New Zealand towers.
 
The operator has the largest tower portfolio in the country, with its roughly 1,500 towers providing mobile coverage to around 98% of the population. The company says it remains committed to building additional sites to “maintain its relative coverage and capacity position in the future&”…

Vodafone NZ has reportedly engaged financial services firms Barrenjoey and UBS to explore the sale of its New Zealand towers.

The operator has the largest tower portfolio in the country, with its roughly 1,500 towers providing mobile coverage to around 98% of the population. The company says it remains committed to building additional sites to “maintain its relative coverage and capacity position in the future” as part of the deal, noting that the tower company’s EBITDA for the 2023 financial year is $51 million.

According to sources, the tower sale could be worth up to $1 billion.

Vodafone NZ said that the deal will be beneficial for customers by bringing “more focused investment to the active mobile network assets”, as well as having major benefits for the company’s efficiency and environmental impact.

The announcement should not come as too great a surprise. Investor appetite for mobile towers has been surging around the world for a number of years now, with firms viewing the infrastructure as a reliable long-term investment delivering predictable returns. Meanwhile, operators are keen to offload these passive assets in exchange for cash, helping to lower their debt and fund the further expansion of their expensive 5G and fibre networks.

This trend has certainly been seen in neighbouring Australia, where both Telstra and Singtel have sold all or part of their mobile towers last year.

Indeed, the sale of the Vodafone NZ towers has been rumoured for weeks with Infratil, who owns half of Vodafone NZ alongside Canada’s Brookfield Asset Management, saying in a recent investor call that it was exploring the “possibility of network capital release options”.

« As the necessary infrastructure to support digital economies grows in importance, and as telecommunications companies look to unlock value that can be reinvested, separate ownership of passive mobile tower assets has become increasingly common, » said Vodafone NZ in a statement. 

Vodafone NZ’s rival, Spark, said just last month that it was exploring its own ‘TowerCo’ spin off.

But while these tower deals are becoming increasingly popular, the handing over of towers is not always an easy process. Back in 2020, CK Hutchison announced that it would sell all of its European towers to Spanish infrastructure giant Cellnex for roughly €10 billion. But, while the transition of assets went smoothly in most of the company’s European markets, the deal came under severe scrutiny in the UK market, where the Competitions and Markets Authority (CMA) suggested the deal was uncompetitive and would leave Cellnex in too dominant of a position within the market. 

Also in the news:

The final regulatory hurdle to Cellnex acquiring more than 24,600 CK Hutchison’s sites in six European countries has been given approval. The series of agreements first announced in November 2020 covered Austria…

The final regulatory hurdle to Cellnex acquiring more than 24,600 CK Hutchison’s sites in six European countries has been given approval.

The series of agreements first announced in November 2020 covered Austria, Ireland, Denmark, Sweden, Italy and the United Kingdom and had originally been obstructed by the UK Competition and Markets Authority (CMA) who said that the original UK deal would lead to a “substantial lessening of competition in the supply of access to developed macro sites and ancillary services to wireless communication providers in the UK.”

The CMA has now approved the Cellnex acquisition of CK Hutchison’s 6,000 passive telecom infrastructure sites in the UK, subject to the divestment of around 1,000 of existing UK sites which overlap geographically with the CK Hutchison sites to be acquired.

Now that the deal can progress, it equates to an investment of around €10 billion and will incorporate addition of 600 new sites in the UK as part of up to 5,250 new sites being added across the six countries over the next eight years.

Cellnex CEO Tobias Martinez commented: “The combined agreements with CK Hutchison not only strengthen our position as a key pan-European operator, but also reinforce our partnerships with our customers and open up new opportunities and approaches for collaboration. Fundamentally, this rationalisation of infrastructure will create the required incentives to unlock, improve and extend mobile coverage, including 5G, across these key markets.”

You can meet Cellnex at Connected Britain on the 20-21 September 2022. Find out more HERE

David McCourt, Chairman of National Broadband Ireland gave a stark warning to the U.S., « If the U.S. doesn’t provide universal access, it will ensure that the Americans who are already struggling to compete in the global economy will fall further behind& »…

David McCourt, Chairman of National Broadband Ireland gave a stark warning to the U.S., « If the U.S. doesn’t provide universal access, it will ensure that the Americans who are already struggling to compete in the global economy will fall further behind ».

McCourt who is also the inaugural Economist in Residence at USC’s Annenberg school, was writing on the Nasdaq, Inc. website and said that it is now time for the U.S. to follow Ireland’s lead by embracing a comprehensive, inclusive, and technologically-forward broadband plan to ensure every American – rich or poor – has access to the internet.

Today, about 25% of Americans don’t have access to broadband at home, but studies, such as that completed by Deloitte into the US Digital Divide, have shown that a 10% increase in broadband access could result in 875,000 new jobs and $186 billion in economic output.

McCourt further went on to argue for an independent provider to build a broadband infrastructure for all Americans in an equitable manner, suggesting that the likes of like Verizon and AT&T have failed the American public as they have sought to pursue their own business interests.

Biden’s Infrastructure Investment and Jobs Act has seen $65 billion allocated to broadband expansion. It has never been a more interesting time to explore the development of a #ConnectedAmerica. Sign up to the dedicated Total Telecom America newsletter HERE

Twelve months ago Canada’s Rogers Communications agreed to buy Shaw Communications in a transaction valued at CAD 26 billion, proclaiming the combination of the two networks would create the possibility of “unprecedented wireline and wireless broadband and network investments…

Twelve months ago Canada’s Rogers Communications agreed to buy Shaw Communications in a transaction valued at CAD 26 billion, proclaiming the combination of the two networks would create the possibility of “unprecedented wireline and wireless broadband and network investments, innovation and growth in new telecommunications services, and greater choice for Canadian consumers and businesses.”

It seems not everyone agreed, and now Canadian Minister of Innovation, Science and Industry François-Philippe Champagne has stated that the the wholesale transfer of Shaw’s wireless licences to Rogers is fundamentally incompatible with the government’s policies for spectrum and mobile service competition – he is quoted as saying “I will simply not permit it,”

Three separate regulators are currently reviewing the deal and Champagne is not the only one who will be pleased if the deal does not go ahead. Smaller rival Quebecor, who announced their plans to launch a national cellphone network last November, said « The pending Competition Bureau of Canada decision on the Rogers-Shaw transaction could also be an opportunity to create the dynamics for real, sustainable competition, for the benefit of Canadians,”

Quebecor further pointed out that Bell, Rogers and Telus already control 90 percent of Canada’s mobile market and so believe the regulars should move for more competition in the market.

Rogers and Shaw on the other hand argue the deal is in the interests of Canadian’s with ongoing affordable wireless plans, initiatives to reach every Canadian where the combined company offers internet services, and plans create up to 3,000 net new jobs.

Canada’s Competition Bureau launched an investigation into the deal last September, whilst Rogers and Shaw have again stated that they believe the deal will close in the first half of 2022. If Rogers aren’t allowed to buy all of Shaw’s wireless business, it does not mean the deal cannot go ahead – but concessions will certainly have to be made.