Orange: new strategic plan 'Lead the future' for 2023-2025

Orange results 2022 & new strategic plan.

• 22Q4:
• Scale Up cost savings plan reaches EUR 700m cumulative indirect cost savings since 2019 (excl inflation EUR 1b)
• Guidance 2023: EBITDA AL slight growth, ecapex strong decrease (15% of rev from 18% in 2022), organic CF (telecom) >= EUR 3.5b, leverage AL mid-term ~2x, dividend 72c
• Launches new strategic plan Lead the Future:
• 4 Pillars
1. Generate value from core (FTTH, Data, AI, 5G, 4G Home, satellite in FR (with Eutelsat), merger Spain with MasMovil [Belgium with VOO]; to raise ARPO)
2. Capitalise on infra (to add 5m fiber lines in Europe, 2m in MEA; RAN sharing; raise 3rd-party operator hosting rate from 1.37 to 1.5 by 2026 for TOTEM pylons; to decommission copper in FR and 2G/3G in Europe by 2030; to expand 4G & 5G in Africa; increase use of Data & AI; Network Integration Factories for automation & virtualisation)
3. Transform OBS (accelerate growth in Enterprise, stgrengthen position in cybersecurity, OBS to rename as Orange Business, to be leader in next-gen connectivity solutions, plans far-reaching program of cost optimization to return to EBITDA AL growth by 2025 at the latest, Orange Cyberdefence rev 2025 EUR 1.3b)
4. Growth in MEA (2020-2025 rev CAGR 7%, increased profitability; Orange Money (2022: 29m active users, EUR 100b in transactions) to expand beyond transfers & payments, also to non-subs)
• 3 Guiding principles: performance, excellence, trust
• ESG:
• CO2 emissions -30% (scope 1, 2) by 2025 from 2015, -45% (scope 1, 2, 3) by 2030 from 2020, net zero carbon by 2040
• Recycling to 30% by 2025 (currently 23.1%)
• Business model transformation: simpler, faster, more efficient, agility, simplification of processes
• Extends Scale Up cost savings program by additional EUR 600m by 2025 (on base of EUR 11.8b)
• Targets 2025: EBITDA AL CAGR LSD, increased capex discipline, organic CF EUR 4b in 2025, leverage AL mid-term 2x, ROCE 2025 up from 2022 (to grow by 100-150 bp by 2025), dividend 75c over 2024

Week 7 in Telecoms, Internet, Media

Corporate

• Orange
• 20Q4; outlook 2021: EBITDA AL stable, capex EUR 7.6-7.7b, organic telecoms CF EUR 2.2b (3.5-4.0b in 2023), lverage (net debt/EBITDA AL) 2x medium term
• Establishes Totem: towerco for FR, ES (25500 sites o/w 17000 in FR o/w 55% towers & 45% rooftops; 8000 in ES divided 50/50 over macro sites & rooftops), to raise colocation rate from 1.3 to 1.5 in 8 yr, plans 3000 build-to-suit sites; pro forma rev EUR 500m, EBITDA AL 300m, margin 57% [see 191204] - Considers partnerships with Vodafone (Vantage Towers), DT (Deutsche Funkturm), to keep control
• Vantage Towers (Vodafone)
• 20/21Q3
• Partners with Sigfox in Germany for low-power IoT - Aims to be 5G superhost
• Liberty Global: 20Q4; merger Virgin Media UK with O2 UK to close mid 2021
• VodafoneZiggo (Vodafone, Liberty Global): 20Q4 prelim; guidance exceeded (adj EBITDA growth 6%, PPE 20% of rev, TSR EUR 501m, synergies EUR 214m one yr early); Guidance 2021: adj EBITDA growth 1-2%, PPE 19-21% of rev, TSR EUR 550-650m; 1 Gb/s over Docsis 3.1 coverage 3m HP (o/w >1m subs), target 80% penetration YE 2021 (with >2m subs), nationwide early 2022; to upgrade Mediabox XL (1m subs) to Mediabox Next UI; plans IT systems integration; to migrate to fully digital operating model; Bonds: issued $91m Sr Secured Notes Nov 2020 (4.875%) at 104% to redeem 10% of SSN due 2027 (4.25%); Issued $200m SSR due 2030 (4.875%) to redeem $200m of SSR due 2027 (5.5%); Leverage incl vendor & handset financing 5.49x; IPO optional
• Sunrise UPC (Liberty Gloabl): 20Q4
• Tele Columbus: Mgt submits change-of-control confirmation; successful offer requires 50% + 1 share by 210315; plans rights offering 21Q2, EUR 475m
• Bouygues Telecom (Bouygues): 20Q4; new governance: to separate Chair (Martin Bouygues) and CEO (Olivier Roussat); Bouygues Telecom appoints Richard Viel Chair & CEO
• CETIN (PPF): Bloomberg: plans IPO, valuation EUR 4b

Networks

• Point Topic: residential broadband tariffs ranking by country 20Q4 (total 82 countries): Ukraine cheapest, NL #39
• KPN starts FTTH roll-out in Haarlem, plans 72k premises, to start in Delftwijk

Services

• Telecoms
• Telenet bundles Tadaam (FWA-over-4G + OTT-TV) with Base (mobile), 5 EUR/mo discount
• MasMovil (KKR, Cinven, Providence): Launches MoneyGO for Yoigo subs: banking services (device financing, cc, loans up to EUR 60k)
• Video
• Walt Disney: Plans 10 original series for Disney+ in Europe (4 from FR, 3 from IT, 2 from DE, 1 from NL), target 50 by 2024
• NBCU (Comcast): Hayu (reality) expands to 11 new countries: ES, PT, FR, IT, CH, Lithuania, Estonia, Latvia, PL, HU, CZ (earlier to DE, AT), 5 EUR/mo
• YouTube (Google/Alphabet): To expand Shorts (short vertical videos) [a la TikTok] to US March 2021; to add 4K, downloads for offline viewing & DVR to YouTube TV; to launch in-video shopping
• Web services
• Google: Updates Google Meet, Classroom, Google Workspace for Education for e-learning with >50 new features
• Facebook: To restrict users from sharing news in Australia in response to Media Bargaining Code
• WhatsApp (Facebook): WhatsApp ToS to change (share payment & transaction data with Facebook in order to help better target ads), new conditions to be accepted by 210515, then few weeks for asking users to comply, then users to be blocked from reading & sending messages, then to delete inactive accounts after 120 days
• IBM: WSJ: IBM puts Watson Health business (annual sales $1b) up for sale; brands: Merge Healthcare (analyzes mammograms & MRIs), Phytel (assists with patient comms); Truven Health Analytics (analyzes complex healthcare data)

Regulation

France wants changes to DSA: each member state to have the right to fine tech platforms & force them to remove illegal content; proposes illegal content to also contain harmful content & disinformation

Week 3 in Telecoms, Internet, Media

Corporate

General

• Telefonica DE: CMD: Strategy update; confirms outlook 2020; raises div to 18c over 2020, sets 18c as floor for 2021-23; 3 growth pillars: 1. Mobile growth: grow market share in rural areas & reinfoice urban, 2. Smart bundling (fixed & mobile, incl FMS) based on tech agnostic approach, 3. Attack in B2B (esp SME) opportunity; takes 10% stake in FTTH venture Unsere Grüne Glasfaser, to invest EUR 100m in FibreCo; target full 5G coverage (>100 Mb/s) by 2025, to sunset 3G 2020-21; to add 1500 built-to-suit (BTS) mobile sites (via Telxius) by 2025; guidance 2020-22: cum rev growth >= 5%, margin higher, capex/rev 17-18% in 2020-21, normalising from 2022; to be climate neutral by 2025
• Deutsche Telekom: Merges T Infra NL (3150 towers & rooftops; rev EUR 60m, EBITDA AL 30m, plus EUR 250m loan) with Cellnex NL (984 towers acquired 2016-17 for EUR 492m) for 38% stake to be held by newly established DIV, total 4314 sites (incl 180 build-to-suit sites), DT to deconsolidate, Cellnex expects rev contribution EUR 63m, FCF to increase EUR 30m, T-Mobile NL to lease for 15 yr (automatic renewal 10 yr); establishes Digital Infrastructure Vehicle (DIV, independent mgt, focus on European digital infra (fiber, tower, datacenters, open to institutional investors, DT to hold 25%), DT contributes EUR 400m, Cellnex EUR 200m, with dealflow agreement for future transactions in European towers (Cellnex to co-invest for 51% stake) `
• Orange: Establishes Orange Concessions, 50/50 with consortium of La Banque des Territoires (Caisse des Dépôts), CNP Assurances, EDF Invest, call option for Orange to take control & consolidate, to close end 2021; co-control; 23 PIN networks, 4.5m FTTH lines (plugs) (built or to-be-built), valuation EUR 2.675b [ie sells 50% stake for EUR 1.33b]; roll-out & maintenance by Orange - To decide on towers 210218
• Elisa: Establishes JV with Lounea (western Finland, #4 operator) to create nationwide FTTP network
• VOO (= Nethys (= Enodia), Brutele): Rumor: Brutele (owned by 30 munis) to sell to Enodia

Results

• Telia: 20Q4
• ProSieben: 20Q4 prelim; Mediaset Spain raised stake by 3.43% to 13.18%
• Netflix: 20Q4    

Other

• Sunrise UPC: Integration leads to reorganisation and job cuts (significantly less than 30%) (Sunrise had 1763 FTE, UPC CH 1500)
• Amazon: CIRP: Amazon Prime reaches 142m subs in US YE 2020 o/w 52% on annual tier
• Iliad: Targets carbon neutrality by 2035, 10 pledges
• Tele2: Launches new sustainability strategy, 4 focus areas: 1. Advance circular economy to combat climate change, 2. Maximize potential through an inclusive and diverse workplace, 3. Boost innovation for sustainability, 4. Protect children in a connected society

Networks

Fixed

• Finder (Australia): 85% of users stream online o/w 36% experience buffering weekly, 16% daily
• France gvt allocated EUR 570m for FTTP rural expansion (total EUR 3.57b)
• Ookla Speedtest Global Index (Dec 20): global average FBB 96/52 Mb/s, MBB 47/13 Mb/s; FBB: Thai #1 (308), Sing #2 (245 Mb/s), HK #3 (227), RO #4 (191), CH #5 (189), NL #26 (136); MBB: Qatar #1 (178), UAE #2 (178), S Korea #3 (169), China #4 (156), Australia #5 (113), NL #9 (101)
• EC approves public funding for FTTI (12k schools) in Italy, EUR 325m
• FTTH
• CityFibre (= Antin, Goldman Sachs) reaches 500k premises passed; target 1m YE 2021, 8m (30%) YE 2025
• Lothian Broadband (FWA & FTTP) plans 50k FTTP lines in areas where already present
• Virgin Media UK activates FTTP in Accrington (Lancashire), 6800 HH; average max speed 516 Mb/s
• Google Fiber renegotiates access deal with Provo City: fee changes from 5% of TV rev to 2% of BB rev

Wireless

• Telekom DE and Telefonica DE to share several hundred sites (incl active network) for 4G (800 band) in grey areas in 2021 - Also between Vodafone DE and Telefonica DE
• Agcom (IT): average data consumption 20Q3: 9.2 GB/mo (+48%)
• 5G
• Inventec and Affirm (Microsoft) partner to develop smart industry solutions
• Salt Home (FWA over 5G & 4G; with Gigabox: outdoor antenna, WiFi 6 router) coverage reaches 2m pops (>50%); max 400 Mb/s over 4G, 1 Gb/s over 5G
• Mobily (KSA) demos network slicing (RAN, Core & transport; separates critical traffic from general internet traffic) for FWA (over 5G and 4G) in Riyadh, with Nokia; enables prioritising customers (service tiers for consumer or enterprise) and premium services (voice, data, gaming, home office apps etc)
• SmarTone (HK) launches 5G SmarTransport Safety Monitoring System, with Route 3: provides video footage from tunnels and highways to control room (motion-detection cameras, ML/AI analytics
• LEO
• SpaceX launched 60 sats (batch #17) for Starlink, total >1000

Services

Video

• Youfone: To expand to BE on Proximus networks (fixed & mobile), to launch April 2021
• Pluto TV (= ViacomCBS): Expands to FR 210208, 40 channels; next to expand to IT, end 2021
• Lionsgate: Expands Lionsgate Play to Indonesia
• Newsplayer+: Launches in UK; live news channels, 2.50 GBP/mo; channels: Al Jazeera, Bloomberg TV, Bloomberg’s Quicktake, Euronews, Newsmax, Africanews, Germany’s DW-TV, France 24, China’s CGTN, India’s NDTV 24×7, Israel’s i24, Russia’s RT, Australia’s Ticker, Turkey’s TRT, US network NewsNet
• Critics’ Choice Awards TV nominations: Netflix 26 (6 for The Crown, 6 for Ozark), HBO 22

Smart city

• Turk Telecom launches smart city platform (50 services: next-generation transportation, energy, environment, health, life, security) in 9 cities

Regulatory

Spectrum

• Subtel (Chile) plans 5G auction 210208: 700 MHz (2x10 MHz), AWS = 1800 & 2100 MHz (2x15 MHz), 3.5 GHz (150 MHz), 26 GHz (400 MHz), valid 30 yr; Claro, Entel, WOM interested, to be awarded 26 GHz spectrum without tender
• PTS (Sweden) raises SEK 2.32b from auction (2.3 & 3.5 GHz, valid 25 yr until 451231); Telia SEK 760m for 120 MHz in 3.5 GHz band, Net4Mobility (= Te;e2, Telenor) SEK 666m for 100 MHz in 3.5 GHz band, 3 Sweden SEK 491m for 100 MHz in 3.5 GHz band, teracom SEK 400m for 80 MHz in 2.3 GHz band

Platforms

• Google France agrees remuneration deal with news publishers, represented by APIG (use of snippets under neighboring rights), to negotiate individual licensing agreements with IPG certified publishers, to participate in News Showcase [see 201001]
• Google to block Google Search, Facebook to block News in Australia if News Media Bargaining Code approved

Week 46 in Telecoms, Internet, Media

Corporate

• KPN
• Bloomberg: several parties interested in making offer
• Bloomberg: EQT approaches for friendly takeover
• Orange
• Acquires 54% stake in Telekom Romania Communications (TKR) from OTE (state retains 46%), EUR 268m (EV EUR 497m; #2 in fixed (5m customers, 3m fiber customers, 1.2m TV subs, 960k BB subs) & FMC (881k subs vai MVNO on Telekom Romania Mobile, to migrate to Orange RO); to close 21H2
• Launches Djoliba: West African fibre backbone (10k km terrestrial & 10k km undersea), connecting capitals of Burkina Faso, Cote d'Ivoire, Ghana, Guinea, Liberia, Mali, Nigeria, Senegal
• Conseil d'Etat sides with Orange in tax dispute, to recover EUR 2.2b paid in July 2013
• Telefonica: Rumor: considers sale of undersea cable network (run by Telxius = Telefonica Tech). EUR 2b (10x EBITDA)
• TIM: plans datacenter spin-off 21Q1
• Vodafone: Bloomberg: to raise EUR 4b from Vantage Towers (68k in 9 markets) IPO early 2021, valuation EUR 20b (EV)
• Virgin Media UK (Liberty Global: Sunrise deal closes 201111, holds >98%, plans squeeze-out    
• Platforma Canal+ Polski (Vivendi): Cancels IPO plan over market volatility
• 3 Group Europe (CK Hutchison)
• Sale & lease-back (15 yr + option on 15 more) 24600k towers in IT (8900), UK (6000), IE (1150), AT (400), DK (500), SE (2650) to Cellnex, EUR 10b o/w 8.6b cash + 1.4b in shares (for a 5% stake); to add 5250 towers, EUR 1.4b; total rev & EBITDA (incl new sites) increase EUR 1.2b resp. 970m; to close by country over 18 mo
• Fitch on Cellnex deal: "additional financial flexibility ahead of the group's 5G investment increase, and alleviate near-term pressure on free cash flow and leverage caused by the pandemic" - "The deal underscores the shift towards passive network sharing as telecom operators seek to monetise non-core assets and extract operational synergies."
• Eurofiber: Acquires network assets from Levelfour (15 business parks)
• Proximus: Citymesh to be MVNO on Proximus for business market, Private networks 
• Telstra: Plans split in 3 legal entities: InfraCo Fixed (passive physical infra:  ducts, fibre, data centres, subsea cables, exchanges); InfraCo Towers (may be sold); ServeCo.(incl active elements: RAN, spectrum, fiber)
• Spotify: Acquires Megaphone: podcast tech (advertising, publishing), $235m cash
• Vimeo (IAC): Raises $150m equity; IAC considers spin-off
• Alchimie: Plans IPO in Paris; has 300k subs for 55 SVOD theme channels (aggregated from 300 rights owners incl BBC, Arte, France Télévision, ZDF Entreprises etc)
• Believe: Rumor: plans IPO 2021, valuation EUR 2b
• Snap: Acquires Voca.ai, rumored price $70m (AI-based voice agents for call centers)

Hardware

• Apple: launches M1 chip, new macOS (Big Sur), new MacBook Air, MacBook pro, Mac Mini
• Vodafoine ES launches smart speaker Átika (integrates TV voice control, Amazon Alexa), manufactured by Sagemcom
• Sunrise launches Blabloo: smartphone for kids, with parental controls; CHF 19 with mobile plan
• Virgin Media UK launches Virgin TV 360 (Mini box, remote with voice control, 6 simultaneous recordings)

Services

• Business telecom: Telekom DE launches MagentaBusiness HomeOffice: hardware (Apple MacBook or Dell Latitude; Apple also payable in monthly installments), connectivity, software (collaboration tools), security package, consulting, support
• T-commerce: NBCU partners with PayPal to offer t-commerce
• Video
• Netflix
• Distr deal with DNA (= Telenor) in Finland: bundle of BB & Netflix family tier (4 screens), one bill
• With Google: bundle with Chromecast, $90 (ie 50% discount on Standard tier for 6 mo)
• ViacomCBS
• Reaches 17.9m subs at 200930 (CBS All Access & Showtime); target 19m YE 2020; to sunset smaller streaming services (MTV Hits, NickHits, Comedy Central Now, Noggin)
• Pluto TV Reaches 28.4m subs at 200930

• Walt Disney: Disney+ reached 73.7m subs at 201003, Hulu 36.6m, ESPN+ 10.3m
• FuboTV: Reaches 455k subs, total content streamed 133m hr (+83%); target 500-510k YE 2020
• Discovery: Launches Discovery+ in UK & IE: SVOD, factual, lifestyle & reality programming, incl 80 hr originals at launch, 5 GBP/mo or 30 GBP/yr or 6 EUR/mo or 35 EUR/yr; promo with Sky: 12 mo free for Sky Q subs
• Molotov: Adds free AVOD tier Mango
• Orion (DTH Russia) launches Telekarta Premiere Cinema, 300 RUR/mo (EUR 3.30): movies & TV premieres from streamed TV channels & online cinemas
• Web services
• Google: Google Photos ends unlimited photo storage 210601, total free storage on Google Drive (photos, documents) 15 GB; currently 4t photoso stored in Google Photos, 28b photos/videos added per week
• Amazon
• Amazon Alexa launches Care Hub (help people to care for aging family members)
• Launches GameOn app for mobile: capture & share mobile gameplay, clips between 30 sec and 5 min, supports 1k games
• Facebook: Facebook Messenger and Instagram launch Vanish Mode: allows auto-delete for chats

Networks

• Fixed
• Liberty Global (Virgin Media UK) plans 10 Gb/s upgrade based on mix of FTTP (CSPON) & Docsis 4.0 (1.8 GHz)  
• Fixed-line traffic: TalkTalk reaches new data traffic peak 201110: 6.85 Tb/s
• 5G
• Telia Estonia launches 5G in Tallinn, Tartu, Parnu using DSS (Ericsson)
• ABI Research for InterDigital report: Environmentally sustainable 5G deployment: power requirement +160% by 2030
• Rakuten: average data consumption on 5G 11.5 GB/day = 350 GB/mo (4G: 15 GB/mo)
• 6G: Univ of Surrey establishes 6G Innovation Centre (6GIC), publishes report: to focus on Ubiquitous Coverage & Ambient Information

Regulatory

• Telecoms: Min EZK (NL) opens consultation on Regeling veiligheid en integriteit telecommunicatie, until 201216
• Spectrum: CTU (CZ) starts multiband auction (700 MHz & 3.4-3.6 GHz), starting prices CZK 5.4b; 700 portion reserved for newcomer
• Streaming video
• New law ES (Ley General de Comunicación Audiovisual) obliges global streamers to finance European productions; to allocate 5% of sales
• India's Ministry of Information & Broadcasting to regulate streaming video services
• Search: Google: 135 companies & 30 associatoions call on EC antitrust Chief Margarethe Vestager: Google Search favors Google Shopping, Google Travel, Google Jobs in OneBoxes (EC Digital markets Act draft planned 201202: level playing field for platforms)
• E-commerce: Amazon: EC prelim view: breaches EU antitrust rules by distorting competition in online retail markets (systematically relying on non-public business data of independent sellers who sell on its marketplace, to the benefit of Amazon's own retail business) in DE & FR, sends Statement of Objections; opens second antitrust investigation of Buy Box (favors Amazon and sellers using FBA)
• Privacy: Inrupt (= Tim Berners Lee) launches Solid: privacy platform for enterprises; starts pilot with Flanders: to roll out Solid to 6.5m people

Week 41 in Telecoms, Internet, Media

M&A

• KPN: Bloomberg: EQT considers offer
• IPKO (Telekom Slovenije): Attracts >10 potential buyers, to diclose Nov 2020
• TalkTalk: Toscafund Asset Management (TAM, hedge fund, owns 28.5%) plans to offer 97 p/share, to deceid by 201105; Board supports
• Telia: Sells Telia Carrier (019: rev SEK 5.39b, EBITDA excl IFRS-16 SEK 500m, capex SEK 396m; 530 employees) to Polhem Infra (= First AP Fund, Third AP Fund, Fourth AP Fund), SEK 9.45b (EV/EBITDA 18.9), capital gain SEK 7.00b, extra div 0.65 SEK/share; to close 21H1
• 3 Group Europe (CK Hutchison): Rumor: 3 UK plans sale of rooftop locations (acquired from UK Broadband, 2017), to exit MBNL (macro sites JV with EE/BT) in order to sell
• Virgin Media
• Interim result of Sunrise offer: 37m shares tendered = 82%, minimum acceptance has been met,  additional acceptance period 15-28 Oct 2020
• Virgin Media IE considers mobile merger
• Destiny: Acquires Voips (NL)
• Vivendi: Canal+ increases Multichoice stake to 6.5%
• Quibi: Rumor: 400-500k subs, offered company to Apple, WarnerMedia etc.

Corporate

• KPN: Expects KPN Business EBITDA to stabilise during 2021 for SME, 2022 for LE (instead of end 2020)
• Orange: Scales back smart speaker & assistant (Djingo) ambitions
• TIM: S&P downgrades outlook to negative over corona virus pandemic & reduced ownership of secondary network
• Orange BE: Focus on BB-only to drive market share to 25%
• AT&T: WarnerMedia plans 20% cost redux, to cut 1000s jobs

Networks

5G

• Batelco (Bahrain) reaches near-nationwide coverage (95%)
• Vodafone CZ launches NSA 5G in 5 cities (Prague, Brno, Usti nad Labem, Jesenik, Karlovy Vary), with DSS
• O2 UK (Telefonica) plans expansion to 100 cities YE 2021 after merger with Virgin Media (Liberty Global)
• US Postal Service (31k facilities o/w 8k owned; 44m pops live within 1 mile of owned facility) proposes leasing its locations for site locations & MEC
• AT&T launches mmWave 5G (5G+) in downtown Milwaukee (3 sites), max 1 Gb/s, total 36 cities
• Telekom Slovenije launches 5G (2.6 GHz band) subscription, 29 EUR/mo for 300 GB, max 450/100 Mb/s
• DNA expands 5G to Kauniainen, total pops coverage 1.2m
• Verizon Business plans solutions (combining 5G UWB & MEC) at sports & entertainment venues, with Cisco
• O2 Slovakia launches commercial 5G pilot in Bratislava (4 sites), with Nokia, Ericsson, Huawei, ZTE
• Mobilitie plans 5G DAS network at Brooklyn’s Atlantic Terminal Mall
• Orange FR plans 5G launch Dec 2020; launches 4 5G subscriptions (SIM-only, 12 mo contract): 70 GB + unlimited voice/text for 40 EUR/mo, unlimited data/voice/text for 95 EUR/mo
• Vodafone ES expands 5G to MAS supermarket in Sevilla for AR app with 4K video
• Proximus and Orange BE order core from Ericsson, RAN from Nokia for 5G, to replace Huwei
• Post Luxembourg to launch 5G (700 & 3.6) 201016

Fiber

• Swisscom demos 50/25 Gb/s over PON
• PTS (SE) awards SEK 106m rural BB subsidies in 44 projects
• Isle of Man allocates extra funds to accelerate fiber broadband roll-out

Sharing

• Kazakh operators (Beeline (KaR-Tel), Kcell, Mobile Telecom Service (Tele2-Altel) ) sign joint rural coverage pledge to cover 600k pops

Other

• BT: Launches edge-based, open caching as a service, tech from Cisco, Qwilt, Digital Alpha
• Cellnex plans IoT networks in IT, UK, IE, with Everynet, based on LoRaWAN tech (for Industry 4.0, Smart Cities, Smart Parking, Social & Facility Management, Environmental Management, Smart Utility)
• Telefonica DE
• Extends access to Telekom DE's fixed network (VDSL, 33m lines) to include FTTH (1.8m lines, max 1 Gb/s) 10 yr, to be judged by BNA, Telekom DE to use the proceeds for further FTTH roll-out
• Reuters: plans FTTH network in DE with partners, total EUR 5b

Services

• Nvidia launches Maxine: managed cloud AI (gaze correction, super-resolution, noise cancellation, face relighting etc; dramatically reduces how much bandwidth is required to 10% of H.264) videoconferencing service for developers

Hardware

• Amazon: To launch eero for Service Providers (ISPs) in US/Canada Nov 2020: WiFi hardware & software: eero 6 Series Mesh Wifi System (WiFi 6), eero Insight (issue monitoring), eero Secure (security, privacy, parental controls; blocks blocks malware, spyware, phishing; ad blocking)

Regulatory

Spectrum

• CTU (CZ) plans multiband (700 & 3.4-3.6) 5G auction, 7 bidders, encourages newcomers
• EKIP (Montenegro) plans 5G multiband auction 21Q4: 700 (694-790), 3.4-3.8 GHz, 1 GHz in 26 GHz (24.25-27.5 & 26.5-27.5)

Platforms individually

• Google: Rumor: DoJ considers Google to separate Chrome (browser, its data fuel Google Search) & ad business, plans antitrust suit over market power abuse by Google Search - Google proposes Turtledove as alternative to cookies (to be abolished in Chrome)
• Facebook
• Instragram starts labeling state-controlled media accounts & posts
• To remove all Qanon content from all platforms
• To block political ad in US when polls close on Presidential Elections day 20110
• Bans 100s of fake accounts linked to conservative youth group Turning Point USA
• Twitter: To flag (Warnings and Restrictions) misinformation & premature claims about who won the 2020 US Presidential election
• Etsy: Removes Qanon related items

Platforms general

• Paris Court of Appeal to rule 201008 on whether competition authority has the power to require Google to negotiate with French press on neighbouring rights which allow online newspaper publishers to be remunerated for publishing extracts of their articles on Google News - Google and Alliance de la Presse d’Information Générale (APIG, " Google accepts the principle of remuneration for our press titles") working on remuneration of neighboring rights - Paris Court supports competition authority for fairer negotiations between Google and publishers; APIG, FNPS, SEPM target Apple App Store, highlighting 30% commission & in-app payments, ringfencing of consumer data in media subscription packages purchased through the AppStore
• Facebook and Twitter remove posts from POTUS Trump with false corona virus claim
• US Congress (House Judiciary's Antitrust subcommittee) to report Oct 2020 on antitrust hearings 200729, delayed due to new info about Facebook's Instagram acquisition (from whistleblower) - Reports 201006: Amazon (most third-party sellers and many suppliers), Apple (distribution of software apps on iOS devices), Facebook (online advertising and social networking), Google (online search) all have monopoly powers (built on acquiitions), proposes break-ups - Republicans oppose: "Unfortunately, the Democrats’ partisan report ignores this fundamental problem and potential solutions and instead advances radical proposals that would refashion antitrust law in the vision of the far left." - Amazon disagrees - Apple disagrees
• ECJ: mass personal data collection (mobile, internet) breaks EU law (unless in a situation of serious threat)
• Ukraine considers tax on digital services (Facebook. Netflix, Amazon): 20% VAT
• Global Privacy Control (NYT, EFF, DuckDuckGo) proposes setting preferences once for global opt-out

ARCEP (France) ends Phase 2 of 5G auction

Overall

• Ends 201001 raising EUR 2.786b from 310 MHz after 17 rounds
• 10 MHz blocks priced at EUR 126m (to be paid over 4 yr)
• Phase 1 (200102): 50 MHz for EUR 350m (to be paid over 15 yr)
• Positioning auction follows Oct 2020

By operator:

• Iliad FR wins 70 MHz for EUR 602m
• Orange FR wins 90 MHz, EUR 854m (total holdings: 257 MHz)
• Bouygues Telecom wins 70 MHz, EUR 602m
• Altice FR wins 80 MHz, EUR 728m (total holdings 245 MHz)

Week 28 in Telecoms, Media, Internet

CORPORATE

Orange

Appoints Julien Ducarroz CEO Orange PL (from Orange Moldova) and Mari-Noëlle Jégo-Laveissière Head of Orange Europe (Romania, Slovakia, Moldova, Luxembourg)

Telefonica

Telefónica Innovation Ventures invests in Nozomi (cybersecurity)

Proximus

To merge Unbrace (app development) into Codit (IT)

Orange BE

Appoints Xavier Pichon CEO (from BCG; formerly Orange)

Tele2

Appoints Kjell Morten Johnsen (formerly VEON, Telenor) Pres & CEO to replace Anders Nilsson

Zain/Etisalat

Zain & Mobily (Etisalat) plan tower JV in Saudi Arabia

Alphabet/Google

GCP ordered by Deutsche Bank, 10 yr - Rumor: cancelled cloud project for China etc (project Isolated Region) - GCP ordered  by Renault

Amazon

Reuters: to invest $100m in stock awards for Zoox employees (900), may cancel acquisition if large number of employees refuse job offer; to pay $1.3b, to close Sep 2020

Facebook

Sustainability Report: GHG emissions reduced 59% from 2017, 86% of ops powered by renewable energy, total energy usage 2019 +50%

Axios: Facebook boycott organizers share details on their Zuckerberg meeting, generally disappointed (not yet ready to address the vitriolic hate on their platform)

Delays Oversight Board to 20Q4 [see 200506]

Internal Civil Rights Audit report: doesn't do enough against hate speech & disinformation

Microsoft

Rumor: considers offer for Warner Bros games division

Spotify

Ad deal from Omnicom (agencies Hearts & Science, OMD, PHD), $20m: ads around podcasts

Sony

Acquires 1.4% stake in Epic Games (makes Fortnite, Unreal Engine), $250m; valuation $17.86b; total raised $1.83b

Sells Sony Pictures Television France (unscripted activity & Starling) to Satisfaction (renames to Satisfy)

Quibi

[History] - Sensor Tower: <10% of April 2020 sign-ups converted to paying subs (72k of 910k) - Denies

fuboTV

Sells stake to Credit Suisse Capital, $20m (2.1m shares at $9.25); 20Q1: reaches 287k paying subs (+37% yoy)

Nielsen

Plans 3500 job cuts

WPP

3 Units to merge into Finsbury Glover Hering (FGH), WPP to own 50.01%, FGH 49.99% through buy-back

Thomson Reuters

Rumor: Reuters plans paywall from Feb 2021

NPO

Minister finalises plans [see 190606]: to end advertising online & around children's programming 210101, extra state funding rises to 40m EUR/yr; to reduce ad load/income 20% per yr 2022-2027 (total reduction 50%); to add local programming to NPO 2 TV, NPO 3 TV remains youth focused

Vivendi

Canal+ fined EUR 3-5m for opt-out sale 2017

(NETWORK) EXPANSION

Deutsche Telekom

Magenta Telekom extends reach to >50 communities in Tyrol providing services over cablecos & munifiber    

T-Mobile PL expands RSP coverage to full Fiberhost (= Inea) coverage: 1m HH

Iliad IT

Iliad IT to provide services on Open Fiber's FTTH network by 2024

Euskaltel

Euskaltel to provide services over Orange ES 1.8m FTTH lines

Google

Loon launches service (4G) in Kenya (31k miles^2, incl Nairobi) with Telkom Kenya (35k beta users); 35 balloon at 12 miles; down record 19 Mb/s, up record 4.7 Mb/s, latency 19 ms

Google Fiber plans FTTP in West Des Moines (Iowa), city to invest $35-42m in open access conduit network; Google Fiber to rent access for 2.25 $/mo (minimum $4.5m over 20 yr) - Confirms    

5G

Elisa expands 5G in Helsinki

TDC plans Private 5G at Grundfos (pump manufacturer DK), with Ericsson

AT&T plans Private 5G for Phillips 66 (refinery), with Accenture

Fortum Power & Heat plans Private 5G in 2.3 GHz band (20 MHz) based on owned spectrum

Zain KSA expands coverage to 30 cities (in all districts)

Groupe ADP, Hub One, Air France plan Private 4G/5G at Paris-Charles de Gaulle, Paris-Orly, Paris-Le Bourget airports.(1k employers, 120k employees), with Ericsson

India

India plans nationwide fiber (BharatNet) at panchayat (village council) level

Zambia

Fibrecom (= Zesco = gvt) to invest $50m in fibre in 2 yr

Ghana

Vodafone Ghana to migrate subs from copper to FTTH

Spotify

Rumor: to expand to Russia 200715

DAZN

To resume int expansion 200724 (beta)

SERVICES

Amazon

AWS launches AWS IoT SiteWise: managed service that collects data from the plant floor, structures and labels the data, and generates real-time KPIs and metrics to help industrial customers make better, data-driven decisions; first customers: Volkswagen, Bayer Crop Science, Pentair, Genie (= Terex), TensorIoT, Softing Industrial

Twitter

Rumor: plans subscription platform (codename Gryphon)

Disney

Fox Sports NL ends support for Smart TV apps (Samsung, LG) & Apple TV

Comcast

Peacock to focus on AVOD tiers; reaches 1000 employees; to invest $2b in 2020-21; target $2.5b rev in 2024 on 30-35m subs

Peacock content deal with NBU for free matches of NBC Sports’ Premier League from 200715, total 175 mathes in 2020/21 season

Sky Q adds features: new UI, voice discovery, bring together TV & apps more seamlessly, adds sports centers

AT&T

HBO Max to expand to Latam 2021

Crunchyroll orders new original series

Amazon

Prime Video adds user profiles (max 6 per account), with parental controls

Adds tuner to Fire TV Cube for OTA channels in US, Canada, UK, DE, FR

Naspers

Showmax adds live sports

TDC

YouSee (MSO, = TDC) plans stand-alone OTT service YouTv: live TV channels + 3rd-party OTT services

5G

Cable & Wireless Seychelles plans 5G launch July 2020 for smartphones, first in capital Victoria, Roche Caiman district & the airport; with Huawei

Taiwan Star plans 5G commercial launch Aug 2020, with Nokia

Traffic

ACM (NL) Telecommonitor 20Q1: mobile data usage (3G & 4G) 214b MB (+35% yoy), 20.257m mobile lines (+4% yoy), fixwed voice (PSTN & ISDN) 340m minutes (-21% yoy), #SMS -10% yoy, M2M connections 7m (+35% yoy), 7.45m BB lines, 2.76m FMC bundles (+8% yoy), fixed-only bundles 4.17m; market shares mobile data: T-Mobile #1 (>50%), KPN #2 (20-25%), Vodafone #3 (15-20%)

TECHNOLOGY

KPN

KPN demos 8.5/8.5 Gb/s (1 ms latency) over XGS-PON in real-world setting in Amersfoort

Compression

Fraunhofer Heinrich Hertz Institute (with Apple, Microsoft, Qualcomm, Ericsson, Intel, Huawei) developed H.266 = Versatile Video Coding (VVC); to halve bitrate requirement of H.265

2G/3G

GSMA: emerging markets will rely on 2G & 3G for another 5 yr

5G

3GPP finalises Release 16, adds or enhances NR–Unlicensed (NR-U), Integrated Access Backhaul (IAB), Sidelink (C-V2X, device-to-device), Time Sensitive Networking (TSN, replaces ethernet & cabling, suited for Industry 4.0), Precise Positioning (without GPS; based on round-trip delay, angle of arrival & other; precision <1 meter); enhances Release 15 (MIMO/beamforming, power efficiency, latency); [equipment based on enhanced Release 15 & Release 16 to be launched early 2021]; Release 17 (Dec 2021) may be delayed

Samsung launches vRAN for 5G (fully-virtualized); replaces dedicated baseband hardware with software elements on a general-purpose computing platform (scale capacity & performance more easily, add new features quickly, have flexibility to support multiple architectures), reduces maintenance costs (moves to a COTS (commercial off-the-shelf) x86-based platform)

Motorola launches Moto G 5G Plus, EUR 350 (4GB RAM, 64GB storage) or EUR 400 (6GB RAM, 128GB storage) - VinSmart (= Vingroup, Vietnam) launches 5G smartphone Vsmart Aris 5G, based on Qualcomm Snapdragon 765G - OnePlus plans One Plus Nord 5G 200721, rumored price EUR 290

Verizon plans migration to SA core 5G 2020

PLATFORM (SELF) REGULATION, LITIGATION, LICENSING

Platforms

WSJ: EU plans platform regulations aimed at moniopolistic behavior, tax evasion & content liability (hate speech)

Google, Facebook, Twitter halt processing Hong Kong government requests for user data; TikTok blocks usage in Hong Kong (operates as Douyin in China) - US considers TikTok ban - Microsoft Telegram, Zoom also pause data requests; Apple considers - Amazon orders employees to delete TikTok app over security risks - Amazon says order sent by mistake, will not ban TikTok

Indonesia launches 10% VAT on Amazon, Google, Netflix, Spotify

Facebook and Twitter ban posts promoting conversion therapy

Alphabet/Google

Rumor: California plans antitrust investigation

Facebook

Rumor: considers blackout on political ads in the days running up to the US presidential election

Twitter

Bans >50 accounts linked to Identitarian movement (white nationalist)

Apple

Plans to require apps to seek additional permission from users before tracking them across other apps & websites

Amazon

Amazon, authors (John Grisham, Scott Turow, R.L. Stine, Sylvia Day etc) & publisher (Penguin Random House) sue Kiss Library (pirated e-books)

Spectrum auctions

Mexico to delay 5G auction to 2021

FCC: 271 bidders for Auction 105 (3.5 GHz band: 3550-3650, 7 Priority Access Licences (PALs) per county, 10 yr licenses), to start 200727

PTS (SE) proposes combined 2.1 (expires end 2025) & 2.6 (expires end 2023) GHz auctiom, consultation until 200901

China

FT: UK Prime Minister Boris Johnson to demand phasing out Huawei from UK 5G networks

Backdoor accounts discovered in 29 FTTH devices from Chinese vendor C-Data    

Orange BE 17Q4 highlights: Luxembourg impairment, underlying high growth

• Impairment Orange LU 17.9m
• MSR -3.3% (+2.9% excl MVNO impact, +6.7% excl MVNO & RLAH impact)
• Adj EBITDA -21% (-1.8% excl Wallon pylon deal; +11% excl Wallon deal & RLAH impact)
• Opex related to BB+TV 13.4m (~x2)
• Rev MVNO-loss impact (Telenet) 2017 on rev -9.1m (17Q4 -15.3m), RLAH impact -36.4m (o/w -8.4m in 17Q4)
• EBITDA impact MVNO-loss -7.5m, impact RLAH -7.3m
• Cable business 2017 EBITDA impact -18.5m
• NB-IoT & LTE-M nationwide
• Launches unlimited mobile data/voice/SMS plan 180212 (a first in BE)
• Targets 2018
• adj EBITDA 280-300m (incl MVNO loss impact -30m on rev [also lost Lycamobile, will lose VOOmobile]
• RLAH impact on rev -26m & on EBITDA -17m
• capex (excl cable) flat
• focus on oper efficiency
• mid-term BB market share target 10%
• div 2017 50c
• started using network data (dropped calls) to identify & target eligible residential customers for a femtocell
• Big Data for targeted network investments, churn mgt, rev assurance/fraud detection
• plans one-stop shop (fixed & mobile) for businesses, coop with Orange Business Services

Wither Orange NL's broadband unit (2)

The balance seems to be tipping in favor of holding on to the former Wanadoo unit.

What is happening? Deutsche Telekom bought Orange NL to merge it with T-Mobile NL. However, Orange NL also operates an LLU unit (the former Wanadoo operations). So far, Deutsche Telekom appears to have either a PTT (eatern Europe) or a mobile-only strategy 'abroad' (even as Vodafone is entering the fixed-line business). I therefore assumed that the BB unit would be put up for sale.

Now Deutsche Telekom has spoken, in Barcelona. It aims to reduce its dependence on the domestic business by expanding abroad - in both mobile and ISP assets. The latter is really new to the strategy. (remember that Club Internet (France) and Ya.com (Spain) were sold). See also the recent Q3 report (page 17, under Group Strategy): "Grow abroad with mobile communications" (which, by the way, is repeated in the Barcelona presentation).

This addition to the strategy could have quite far reaching consequences, as T-Mobile operates (mobile-only) units in the UK, the USA, Poland, Austria, the Czech Republic and the Netherlands. Deutsche Telekom could be a major consolidating force, but it remains to be seen if the company truly pursues this strategy.

KPN: away from network ownership and toward FTTH

Today I had the honor to meet with Joost Farwerck, director of Wholesale and Operations at KPN. Most striking were unequivocal belief in FTTH ('the endgame', as I have referred to it before) and an apparent decline in interest in being a network operator.
Joost very tellingly was able to see me in between a trip to Australia and New Zealand and a meeting with bbned (Telecom Italia).

Here are my edited notes.

1. All-IP

• KPN is planning the migration to an NGN, as I have written about before. Many MDF locations, LLU and ADSL2+ will be phased out and replaced by SDF locations, SLU and VDSL2. Fiber will be pushed deeper into the network, to reach all the way to 28k street cabinets (FTTC) and bypassing 1300 MDF locations. No FTTH as yet, only in greenfields and selected towns (Enschede and Almere).
• Currently, details of an MoU are worked out. The MoU was signed over the summer by both KPN and the main unbundlers (bbned, Tele2 and Orange). The new agreement is to be published around December 15. The details are about phasing out the MDF locations, the migration and KPN will present an alternative to line sharing (this product is on the way out anyway, as it is replaced by full LLU). Apparently, street cabinets offer enough space for SLU. Bbned is going the way of SLU.

2. Network operator v. service operator

• KPN believes WBA (wholesale broadband access) is a good product that will ensure competition, based on equivalent access.
• Joost seems to think that OPTA nor the new EU regulations, will lead to functional separation. I think KPN is a case in point where proper accounting separation and a good wholesale strategy + portfolio can fend off functional separation.
• By the way, accordin g to Joost, a wholesale customer can be more valuable than a low-end retail client.
• Outsourcing is becoming a major part of KPN's strategy. At Joost's division up to 50% of current employment levels will disappear.
• Joost seems to be much more of a services man than a network operator. I have noticed this before at both Tiscali and Telecom New Zealand. Network control is less important in a regulated all-IP world.

3. Co-op

• I am a big fan of cooperation. So is Joost, but challengers seem to think differently. KPN tried to team with Tele2/Versatel several years ago, but was turned down. Also, unbundlers are sub-scale in many cases, but (foreign) owners appear to be 'believers', as Joost put is. They all seem to think that they can make it work on their own. Too bad that there are few G9 (Australia) type of intitiatives.
• Joost seems to be similarly at a loss when it comes to long-term commitment of the large Dutch unbundlers. Tele2 is selling off many assets; T-Mobile may sell on the Orange BB unit; Telecom Italia may get rid of bbned.

4. FTTH

• "FTTH is the endgame". I couldn't agree more.
• However, VDSL gets deployed 5-7 times faster (and is written-off in 3-4 years), so it cannot be skipped. Here Joost is very much on the same track as Belgacom.
• KPN recently teamed with 'public enemy #1', Reggefiber, for the city of Almere. Joost told me they will own the passive infrastructure together (I was under the impression it would be 100% Reggefiber); KPN will serve as network operator; KPN (and others, if they wish) will be service provider.
• KPN beefed up its Belgian mobile operator by acquiring Tele2 Belgium. That obviously begs the question: will E-Plus make a similar move in Germany? Joost seems to see better business opportunities for some German expansion (out of the Netherlands), e.g. to the Ruhr area, than for doing FTTH in some rural Dutch areas.