The Croatian operator is the second Deutsche Telekom business to recently signal a tower spin-off, after Greece’s OTE
Hrvatski Telekom (HT) has equipped a new container terminal in Rijeka with a 5G network, provided as a complete managed service on a turnkey basis. Adriatic ports, like Rijeka situated on the Kvarner Gulf, have become more prominent given they provide the shortest maritime link between Europe and the Middle and Far Est.
HT has selected Rijeka Gateway, a port operating company founded by A.P. Moller – Maersk and ENNA Group, to develop and operate the terminal in Rijeka, which will start operating in 2025. APMT, as part of the Maersk Group, which oversees wireless connectivity in more than 70 ports around the world, will test this new managed service operating model in Rijeka and further migrate from the current architecture to “advanced 5G SA architecture”, allowing it to utilise dedicated network slicing for industrial applications.
In May the operator announced it was looking at plonking its tower infrastructure into a separate, owned subsidiary, along the lines of other Deutsche Telekom businesses in Europe. Last month it announced it had started looking into the possibility of merging with its network infrastructure subsidiary HT Servisi (HTS).
Hrvatski Telekom transferred its network infrastructure unit to ICT solutions provider Ericsson Nikola Tesla in September 2014. In June 2023, Hrvatski Telekom took it back in the fold and in November 2023, the subsidiary was renamed HTS from Ericsson Nikola Tesla Servisi (ENTS). The moves, if carried out, will help the operator better provide managed services like the pending Rijeka port deal.
Remotely controlled cranes
“This project demonstrates Rijeka Gateway’s confidence in our ability to provide a high-availability service for seamless 24/7 port operations. It confirms our strategy in providing business-critical communication through our public mobile network,” said Hrvatski Telekom COO for business customers and board member Marijana Bačić (above).
“We are developing one of the most technologically modern terminals in Rijeka, and from the beginning of the design of the terminal, we have defined the goal of maximizing the impact of the terminal on the environment and the local community,” said Rijeka Gateway board president Peter Corfitsen. “The terminal in Rijeka will be the only terminal in this part of Europe with remotely controlled cranes, almost all equipment will be electric, and we are also installing very advanced systems for energy optimisation and overall terminal management.”
He added: “A high-quality and reliable communication infrastructure is a prerequisite for such a way of working and we look forward to cooperation with Hrvatski Telekom.”
The Gateway River is one of the most extensive infrastructure projects since the establishment of the Republic of Croatia, which initiated a comprehensive revitalization of a part of Rijeka’s coastal area. According to the companies, the Gateway River will be the most modern, remotely controlled container terminal in this part of Europe.
With a concession for the next 50 years, it will serve as the main entry point for container traffic into the countries and markets of the European hinterland and will play a key role in the development of the local economy, given that most of the project contracts will be carried out by domestic companies. The value of the total investment is €380 million and the project itself has been declared a project of strategic importance for Croatia.
The Corporate Sustainability Reporting Directive (CSRD) is an unprecedented piece of sustainability legislation and will have a huge impact across the world
The Corporate Sustainability Reporting Directive (CSRD) came into effect at the start of 2023. It is an unprecedented piece of sustainability legislation because although at first glance it seems only to be relevant to companies in the European Union (EU), its reach is far greater and scope wider.
It applies to any non-European business with more than €150 million in EU revenues, or with an EU subsidiary turning over more than €40 million and with more than €20 million in assets. Also the CSRD requires companies to report not only on their own operations but also on those of companies in their ‘value chain’.
Hence smaller businesses inside and outside Europe will have a cascade of indirect requirements related to CSRD in the coming years. In other words, companies around the world should take notice of this bold legislatory thrust by the EU.
And what’s more…
Adding to the tsunami of regulatory requirements from the CSRD, in the last few weeks the European Council and Parliament have reached an agreement on the Corporate Sustainability Due Diligence Directive (CS3D). This adds further force to the EU’s drive for transparency and more rigorous standards from overseas supply chains: the CS3D will mean thousands of European companies must conduct annual due diligence on a wide-reaching set of environmental and human rights harms and violations across global supply chains.
Although some final details are still being worked through, the CS3D will require companies to publish net zero emissions plans in alignment with a 1.5 degree global warming pathway. This provision effectively mandates aggressive carbon reduction targets that will oblige companies and suppliers to drastically cut greenhouse gas emissions across their global operations, reaching back to the deepest darkest corners of global raw material sourcing.
Clearly with the CSRD and CS3D, the EU is not simply seeking to gradually tighten sustainability standards in the same way that US legislators have sought to keep pace with topical issues through the US’ Uyghur Forced Labour Prevention Act (UFLPA) and the Securities and Exchange Commission (SEC) Climate Change disclosures. Far from it, with the CSRD and CS3D the EU is moving the goalposts so far that even companies that were previously seen as “leading lights” in sustainability have been scrambling to get ready.
Expanding across three dimensions
Even for large European companies, the CS3D and CSRD represent a major expansion of sustainability requirements across three dimensions – in terms of topical coverage, process rigour, and value chain scope. This includes the many which have already taken an initial step into sustainability disclosure and due diligence via existing EU and national legislation like the Non-Financial Reporting Directive (NFRD) and France’s Devoir de vigilance
Firstly, the topical coverage of the new legislation is much broader than any of its predecessors, with the CSRD reporting standards requiring up to 1,000 distinct disclosures across 10 topical areas of CSR. Many of them have never been reported on in detail in the past, such as biodiversity and circular economy. The CS3D extends topical coverage of due diligence obligations to 30 human rights conventions and nine environmental conventions, including a raft of additional legal protections.
Secondly, both CSRD and CS3D have significantly ratcheted up the level of rigour for the processes involved in compliance. CSRD disclosures are subject to “limited” assurance and at a future date, to “reasonable” assurance. This is the same level of audit applied to published financial accounts, meaning that companies must drastically increase reporting controls and capability to stand a chance of passing an audit on their sustainability data.
An obligation to prevent harm
With CS3D the standards are also much higher than anything that preceded it: companies will be obliged to follow a demanding risk assessment process based on their contribution to potential human rights and environmental violations. They must also go further in their attempts to prevent, mitigate and remediate harms, such as actively working with industry peers to prevent and mitigate key sectoral risks.
The third and most challenging shift of the goal posts is widening the scope to the value chain scope for reporting and due diligence. National legislation, like the German Supply Chain Due Diligence Act (LkSG), obliges companies to apply supply chain due diligence primarily to their direct suppliers (so-called “Tier 1” suppliers).To comply with the wider scope of the CS3D, companies need to identify risks across all tiers of their value chain, through Tiers 2, 3, 4 and beyond.
A European company sourcing a large amount of lithium-ion batteries for example, could be expected to trace its supply chain all the way back to the cobalt, copper and lithium mining operations feeding raw materials into the roots of its supply chain. It also must join relevant peers and associations to remediate harms such as human rights abuses.
Equally, the extension of corporate sustainability reporting (CSR) reporting to the wider value chain through CSRD will require much greater effort to drive transparency from suppliers. One example is new contract provisions whereby suppliers must measure and disclose the carbon footprint of products supplied to their European customers using credible methods, such as ISO14044 compliant product Life Cycle Assessment (LCA) studies.
Telecoms
For telecoms companies, many of which operate in Europe and have sprawling, complex supply chains that extend across the world, CSRD and CS3D represent a significant challenge. The good news is that telcos are ahead of the curve. Indeed, it could be argued that as a sector, they are at the forefront of corporate climate action.
As of June this year, just 31% of the world’s largest 2,000 companies had set a Scope 3 emissions target. By contrast, 88% of the Joint Alliance for CSR (JAC), an industry body made up of 27 leading telecoms players, had Scope 3 reduction targets in place. JAC’s 2023 survey also showed that 93% of JAC members had already committed to net-zero or science-based targets.
By comparison, according to CDP’s latest data, only 37% of companies in Europe say they have a climate transition plan in place.
Now both parts of the EU’s new legislation are a serious step-change that should not be underestimated, even by companies currently leading on sustainability. Just as most European telecoms companies are part-way through an 18 to 24 month CSRD preparation period, epi Consulting estimates that the CS3D will take at least 18 months of preparation to meet the expected compliance deadline of 2026.
Cooperation beyond competition
To comply successfully with CSRD and CS3D, epi expects that telcos will need to deepen their cooperation and collaboration not only with major suppliers like ICT companies, but also, despite their being competitors, with their peers across the industry.
Under the Joint Alliance for CSR (JAC) banner, audit sharing has worked well so far in the telco industry, acting as a single body, united under a single banner, to ease the audit burden on the telcos themselves and the suppliers in their supply chains. This type of collaborative model is one that can be extended to meet many of the requirements of CSRD and CS3D in a more economical and effective way.
In the same way, suppliers to the telecoms industry such as ICT companies would be wise to seriously consider the potential to collaborate with their peers in an effort to emerge unscathed from the coming deluge of regulation. Collective requests to their respective supply chains, such as printed circuit board (PCB) and application-specific integrated circuit (ASIC) manufacturers, could help members of organisations like JAC to accelerate decarbonisation, gain transparency on working conditions and other relevant activities within their upstream supply chains.
This would also help ICT companies to be ready for the requests about supply chain transparency and sustainability improvement as their customers grapple with CSRD and CS3D.
Transformation
The danger posed by climate change demands new solutions at every level. The CSRD and CS3D represent radical measures at the legislative level, imposing a burden on large companies proportionate to the scale of the climate challenge.
But it’s a burden that the telecoms community can achieve by working together and calling on suppliers to pre-emptively work towards greater sustainability, while better protecting workers’ rights and human rights across the globe. In doing so, they can set an example for other companies and sectors across the world.
Vantage Towers now in 50:50 joint ownership with the consortium that includes KKR and Global Infrastructure Partners, as planned
Vodafone Group has sold another 10% stake in Oak Holdings, the partnership that co-controls Vantage Towers, for €1.3 billion. This sale achieves the 50:50 joint ownership structure with the consortium of infrastructure investors led by Global Infrastructure Partners and KKR. Vodafone says this “was envisaged when the co-control partnership was first announced”.
Vodafone will receive €1.3 billion from the sale of this equity stake, which has been sold at €32 per share, the same price as the initial transaction, announced 9 November 2022. This takes the total net proceeds to Vodafone selling equity in Vantage Towers to €6.6 billion.
Proceeds from this sale will be used for “deleveraging and will reduce net debt/adjusted EBITDAaL by 0.1x, which is in line with Vodafone’s target of operating in the lower half of its 2.25x – 2.75x leverage range”. At the close of the financial year at the end of March, Vodafone Group’s net debt stood at €33.2 billion. Its first quarter results for the current year will be on 25 July.
Partner content: Despite disillusionment regarding monetising 5G, we’ve learned some valuable lessons along the way that service providers should consider as they plan deployments
Five years on from the first commercial launch of 5G, the network has not exactly lived up to early expectations and the industry has collectively struggled to identify viable use cases and monetisation strategies, particularly for the consumer market. This may be especially disconcerting for those communications service providers (CSPs) who have yet to roll out the network.
According to GSMA Intelligence, 5G represents 20% of mobile connections in Europe and is expected to reach 81% by 2030. Despite the general disillusionment with where the industry stands with monetising 5G, there are still some valuable lessons that we’ve learned along the way and that service providers should consider as they plan their deployments.
Digital transformation, 5G monetisation
While some may argue that 5G has been overhyped, I would argue that it’s because the industry is intent on getting things right this time around. The world and market dynamics have drastically shifted since the rollout of 4G, and service providers are intent on learning from missed opportunities of the past. As such, we’ve seen over the better part of the last decade the industry entrench itself in a massive digital transformation effort. CSPs are sweating assets, consolidating IT, streamlining operations, and embracing new ways of working in a herculean effort to be more agile and better equipped to thrive in this digital era.
The ability to “move fast” and adapt quickly is particularly important in the context of monetising 5G. Without a clear use case to drive the 5G monetisation strategy, CSPs must be prepared to try many different things (e.g., use cases, pricing strategies, business models, etc.) to see what works best for the customers in their market. This is where we often find that digital transformation and 5G monetisation efforts converge.
At Oracle, we are often called upon to help our customers balance these two priorities – improving operations and the customer experience today with solutions and capabilities robust enough to support the monetisation strategies of tomorrow.
We have also found that many service providers, like Salam and Batelco, are undertaking substantial digital transformation programs that include consolidating and modernising IT systems like product catalogs, billing, and customer relationship management systems while simultaneously exploring new 5G use cases and business models. Ultimately, these providers want to ensure that their IT investments can support their future monetisation strategies.
Success looks different than expected
There are high expectations for 5G, including anticipations of the network spurring the next industrial revolution. While these are still very much a possibility, the slow pace at which 5G innovations have progressed thus far has caused the industry to become somewhat disenchanted. Be that as it may, there are still some successes achieved with 5G that we can tout, though they may be different than originally anticipated.
Foremost, I would be remiss if I did not mention the success of one of the early-identified use cases for 5G – fixed wireless access (FWA). To date, there have been more than 80 global deployments of 5G FWA, with the number expected to grow significantly in 2024. The technology’s low barrier to adoption (i.e., no wires, availability wherever 5G mobile coverage is available) and its ability to drive usage of data-intensive services like online gaming and streaming back onto the network are just some reasons to be excited.
Service providers that have rolled out FWA are also starting to see its impact on key performance indicators. Early adopter T-Mobile reported 4.2 million 5G FWA subscribers at the end of Q3 2023, with an average revenue per account (ARPA) of $139.83, a 1.70% increase year-on-year. Additionally, in regions like North America and the Middle East, where 5G FWA is widely available, service revenue growth is outpacing subscription growth, offering a beacon of hope to service providers in markets where FWA has not yet been deployed.
Quality over quantity
FWA is not the only 5G success. As we continue to see more 5G deployments around the world, new pricing trends and monetisation strategies emerge. A recent study by Juniper Research, 5G Red Cap, and 5G Advanced anticipates that CSP-billed 5G revenue will increase by 32% in 2024 to nearly $400bn. This is expected in part due to shifting 5G pricing and monetisation strategies. Today, a significant proportion of the CSPs that offer 5G do so at either no additional charge or price based on data tiers.
This trend seems to be changing quickly as CSPs seek to differentiate their offerings with 5G-rich app bundles and speed tiers. Verizon myPlan, for instance, combines 5G data plans with several 5G-rich apps. Customers can choose from pre-defined plans tailored toward customer interests, such as plans for sports fans or video streaming enthusiasts. Alternatively, customers can build a bundle of their choice by selecting a 5G data plan and their apps of choice.
Beyond bundles, a growing number of CSPs are now introducing pricing based on 5G speed tiers. Telenor Norway takes a hybrid approach to 5G pricing, offering data plans that are priced based on data and speed tiers. Telenor’s customers can select between data plans that offer 5G speeds of 1,000 Mbit/s or 200 Mbit/s.
Based on these trends, we expect pricing strategies to continue to evolve. In Asia, service providers are differentiating themselves with plans that include a guaranteed network experience or quality of service (QoS) for specific customer segments. Three Hong Kong (3HK), for example, offers two 5G Signature Plans. The 5G Live Connect plan is geared towards content creators and includes unlimited 5G streaming with a prioritized network experience to ensure high-quality live streaming.
The 5G Stock Pro plan is geared towards day traders and includes a guaranteed QoS with two times the network resources allocated to users, enabling real-time streaming of stock quotes. The plan also includes advanced analytics tools, real-time news and market commentary, and a personal investment portfolio. The CSP has also dipped its toe in the 5G B2B2X market with its 5G Live Up solution, which combines features of its 5G Live Connect plan with additional tools enabling content creators to grow and monetise their following.
Innovation still to come – are you prepared?
Throughout Oracle’s many conversations and engagements with service providers on the topic of 5G, the biggest lesson that we have learned thus far is that there is much more innovation still on the horizon, and CSPs must be prepared to capitalise on these emerging opportunities. The delay in the rollout of 5G standalone (SA) is to blame for the dearth of compelling 5G use cases the industry has been awaiting.
As 5G SA deployments pick up in the next few years, we can anticipate the pace of innovation to accelerate with it. In the coming years, we can look forward to revolutionising use cases like the metaverse disrupting our lives and the way we work. We foresee telecoms service providers becoming industry service providers with 5G fueling monumental transformations across industries.
Moreover, we anticipate that the network, supported by operations and business support systems (OSS/BSS), becoming a platform for innovation. Industry initiatives such as GSMA Open Gateway and CAMARA APIs will play a key role in standardising this platform approach, making it easier for external parties to develop on top of the network.
To this end, by opening up the network to external developers, co-innovation, and the support of B2B2X business models will create new revenue opportunities for CSPs. When coupled with new features of 5G SA, such as the ability to configure, monitor, (via the NWDAF) and charge for a guaranteed quality of experience (QoE), service providers can create compelling offers that drive incremental revenue growth.
Who knows what the future has in store for the industry – could we have foreseen the app revolution and subsequent digital economy sparked by 4G? What else does 5G have in store for us? Regardless of what the future holds, ensure your organization is prepared to rise to the occasion by investing in IT, network, and cloud capabilities that will support a variety of business models, pricing, and monetisation strategies with the agility to adapt and scale services seamlessly on demand.
About the author
Chantel Cary is Director, Product Marketing for the Oracle Communications monetization portfolio. With more than a decade of experience in the TMT industry, Chantel is an expert on telecoms business support systems (BSS) including charging, billing, policy control, customer management and partner ecosystem management. Prior to joining Oracle, she spent nearly 8 years at market research firm, Omdia, as a Senior Analyst leading research on BSS and monetization.
Broadband Forum’s CEO explains why disaggregation changes the game, operationally and commercially, for broadband providers – whether as a deployment or migration strategy
The Broadband Forum extended its network disaggregation principles out to fixed broadband access nodes. We asked Craig Thomas, CEO of the Broadband Forum, to explain why this approach brings operational, financial, commercial and strategic benefits to providers of fixed broadband infrastructure – and those who provide services on top.
Thomas says, “Some of the catalysts for disaggregation across 5G, 6G and fixed fibre will be similar: software-defined networking (SDN) is pretty much driven from the 5G world into fixed. There’s overlap that’s going to accelerate the adoption of disaggregation.”
He adds, “From a fixed point of view…we started in the SDN core, and it’s been slowly moving out to the edge. There’s a lot work around how to disaggregate and virtualise functions like the broadband network gateway (BNG), which manages subscribers’ services…Now we’re moving even further out, to the access node. In the fibre world, that means to the optical line terminal (OLT). In a mixed world of copper, then it could be the multi-service access node or MSAN.”
Capex AND opex advantages
According to Thomas there is a two-fold need for this approach. The first is so that fibre providers don’t need to buy separate control plane management platforms for each access node or BNG. The second is being able to expand the network faster with fewer opex costs from downtime for network upgrades, etc. because the upgrade is just done once.
Thomas says, “We work closely with 3GPP In a separate piece of work we call wireless/wireline convergence – the question is how to maintain a single core network? The Forum is working on Access Gateway functionality so that operators can avoid running two SDN networks – one for fixed or one mobile – instead running a converged single core and SDN environment.
“There’s a lot in the thought process behind this – our standards work addresses needs identified and requested by service providers. Then some of those service providers and the vendor community get together and say, ‘How do we write this open standard to make it happen?’ There’s the data model, the architecture etc.”
In May, the Forum published enhancements to 5G convergence standards. These Phase 18.1 specifications build on 3GPP’s Release 18 to extend the set of common capabilities. The idea is that operators can customise the Quality of Service they offer to differentiate themselves. Also, they gain more flexibility to migrate to a single, converged 5G Core within a multi-vendor broadband network.
This helps both the wholesale provider of fibre infrastructure as well as those providing selling services over it because, as Thomas notes, wholesalers can only provide so many packages to ISPs.He says, “They can’t support 100 different flavours because it becomes too hard to manage. A number of years ago, we introduced standards around something called Band X access network sharing. If you look at the glory of what 5G brings to scalability – the network and network slicing – we can bring that to the fixed network as well, and network slice all the way down to the OLT.”
He continues, “I don’t just have to sell you a per-port, bitstream type service. I can sell a virtual network operator service where I will supply all the network access, down to the hand-off peering so you have visibility all the way to the OLT. I’m virtually lifting and sharing the OLT between [retail] operators, not just selling one port.
Separating the physical and control
“We’re separating the physical from the management and the control planes completely. If we can do that, why can’t we separate the control plane to multiple wholesale providers, not just one? The [thinking] originated from marketplaces where there was no point in overbuilding fibre. In the UK, BT, Virgin Media O2 and CityFibre might build a fibre network in the same serving area. Why not build one, deploy the OLT then share the virtualised OLT in an SDN environment?”
In other words, differentiation should be what happens on top of the ‘plumbing’ rather than competing infrastructure. Disaggregation offers many commercial as wellas opex and capex opportunities.
“The most obvious one for capex is not needing a branded OLT with the control user plane and subscriber management built into every single access node,” Thomas says. “SDN, NFV and disaggregation gives operators the option of moving to a white box model – buying an OLT that’s an x86 server with some optical SFPs [small form-factor pluggable – compact network interface format] in it.”
He continues, “When you’re looking at things like the supply chain, disaggregation allows me to pick and choose anytime I want which access node or OLT [to use] in my network because the clever stuff is done in the cloud and by the SDN.”
Thriving in consolidation
This has big implications, given that in many markets the consolidation of alternative fibre network providers looks inevitable. Thomas explains, “If I can virtualise the functionality in the cloud, I don’t have to rip and replace if multiple operators consolidate their networks because the basic physical functionality of the access nodes and the OLT stay the same. I can have a single management and a single subscriber orchestration that manages all those devices, whatever they were, as long as the technology is standardised, whether that’s PON [passive optical network], point to point, or even copper. That’s a big benefit as well for future investment in fibre networks.”
He adds, “We also do something that is part of what we call an open broadband project, which is open-source software. We provide the migration strategy for those that offer traditional, monolithic type access so they can migrate them to an SDN when it makes sense. Again, it’s never replacing equipment.
So where is the intelligence in the network? “If you move to a disaggregated strategy, you can put the intelligence wherever you want in the network – consolidate it in a single cloud environment for instance, but you can also distribute intelligence to a metro edge compute type environment, say to give the flexibility of putting intelligence wherever you want it in the network,” according to Thomas.
Does one size suit all? He talks to US fibre broadband providers who are only serving 20,000 people: “I tell them they are investing now for 20,000 people, but whenever they go into a new city or town, or acquire [another provider], they’ve got that flexibility.”
Home hybrid gateways
Another avenue under development by the Broadband Forum is work the disaggregation of hybrid home gateways so that fibre networks providers “don’t need three models. I can have one home gateway model and one data model whether it’s a 5G home gateway, a fibre home gateway, or a hybrid one with backup services. Whatever the technology, it’s the same disaggregated network.
“So it doesn’t matter where they’re sitting, I recognise from my 5G world that it’s using the SIM card inside the home gateway, or automatically my OLT recognises that same home gateway has a fibre connection and needs to be directed to the access gateway functionality in the fixed or common core. That’s the flexibility of SDN, build it once instead of multiple times.”
Is there resistance in the market to this approach?“Not resistance. You’re always going to have the market leaders, the first adopters, with others questioning when it makes sense to move and often it’s the Tier 1s who are the first movers because they’re the ones with knowledge of SDNs, the software and data centres that they’re learning and taking to the core.”
Not all first movers are Tier 1s though, for example many new so-called altnets went straight to the latest technology because it does not made sense to deploy legacy. Regardless of size or age, Thomas stresses the importance of open source for open broadband standards and that it is imperative to provide a migration path to avoid rip and replace.
This, he says, allows operators to amortise their network investment over as long a period as suits their circumstances but have a clear path to SDN.
He concludes, “The great thing about this work is that it’s just as applicable to existing assets that [fibre providers] bought from a traditional vendor as the new network access they might deploy in future, whether using a grey or white box model, or one that’s vendor branded.”
Rethinking FTTP and multi-service fibre
Thomas says, “I’m lucky to chair an Executive Advisory Board where some of the largest service providers are telling me that the future of FTTP cannot just be seen as a residential network [for consumers]. They say we need to terminate multi-service fibre – build one network but have options for the business across there, the residential here plus for smart cities and mobile backhaul. Otherwise they are amortising and investing in that fibre more than once for different subscriber groups, or different types of user.”
This marks a sea change he says because “traditionally it’s been the new competitive providers that want to use FTTP for business while the Tier 1s’ attitude was, ‘I’ve built a business network, why would I want to reduce its value by saying you can have the same service on an FTTH network when I built this big, expensive, lambda optical network with dark fibre, MPLS and the like?’. But they can drive those technologies now onto the FTTH and even the Tier 1s are seeing this to justify network investment. It’s an interesting discussion.”
Here’s the pay off
Tier 1s should not see this as a bad thing, Thomas argues, but an opportunity to level disaggregation in fibre to the network access level. According to the European Union, 99% of businesses in Europe – about 24.3 million – are SMEs, defined as employing up to 250 persons with annual turnover not exceeding €50 million. Thomas says half of thembuy residential, rather than business, broadband. In addition, there are many thousands of people who work from home at least some of the time.
He points out that if operators can promote a service level agreement for those working at home – guaranteeing a certain level of service for the business user, a different level for children who are streaming content and perhaps another for the gamers in the family. Each might need a service with different parameters where different levels of experience are acceptable. Each guaranteed service will only cost an operator €2 or €3 or dollars or pounds more, Thomas says.
“It’s not a big expense but the home user, the teleworker, the cafe owner or whoever can justify each element they need and they’re not suddenly looking at a jump from £25 pounds a month to £100. It’s incremental pick and choose. That’s what service level broadband means – it’s more than broadband connectivity,” and it can all be enabled by pushing disaggregation closer to the end user.
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You might also be interested in this panel discussion, Financing fibre and making a return on invested capital, with Carlos Bouca, Director of Network Engineering and Operations at Altice Portugal (left below), Clayton Nash, Strategy Director at CityFibre (pictured centre) and moderated by Chris Godsmark, MD, Houlihan Lokey’s Global Technology Group. From our recent Business & Technology event in central London
The US group CrowdStrike reportedly caused a problem with Microsoft’s operating system resulting in disruption around the world
US software provider CrowdStrike is being blamed for a security software update which impacted Microsoft’s Windows operating system which caused disruption around the world. CrowdStrike’s software is in common use by businesses all over the globe to help secure Windows PCs and servers.
CrowdStrike has complained publicly about Microsoft for series of attacks it has had to contend with in recent months. Earlier this year it launched a package intended to work in parallel with Microsoft’s anti-virus Defender product.
The Verge reported, “Thousands of Windows machines are experiencing a Blue Screen of Death (BSOD) issue at boot today, impacting banks, airlines, TV broadcasters, supermarkets, and many more businesses worldwide. A faulty update from cybersecurity provider CrowdStrike is knocking affected PCs and servers offline, forcing them into a recovery boot loop so machines can’t start properly.”
Although some services have been restored, many have not. The outage affected companies in countries from Australia to the UK, and caused problems for Azure customers and in aviation, causing delays at check-ins and flights to be grounded in Europe and the US. It has impacted banks and broadcaster Sky in the UK, which is off air, the London Stock Exchange and retailers Woolworth’s and 7Eleven in Australia, and rail services, such as the UK’s Southern Rail. Many workers cannot not access the Microsoft 365 suite of applications.
UPDATE: It is now known that a single software update by CrowdStrike caused a IT meltdown in countries that rely heavily on Microsoft. CrowdStrike’s CEO said he was “very sorry”. This does nothing to repair the harm and cost caused by the outage from millions of people stranded in airports or travelling by rail, to those who missed medical appointments or suffered commercially or individually because of failed financial transactions, or media companies’ loss of advertising income because they could not get on air.
Not to mention the second wave of damage perpetuated criminals who will waste no time in making the most of the opportunities presented.
Perhaps the most frightening thing of all is the general attitude seems to be a shrug of shoulders and an acknowledgement that this is the shape of things to come. So it’s probably won’t be the “biggest IT outage ever” for very long.
Let’s just step back and consider. A single software update by one company collapsed half the internet. That it was a glorious demonstration of what could be wrought for hostile states, how have we ended up in this situation? The internet was designed to withstand nuclear war but not human error massively compounded by automation.
In February this year, Colin Bannon, CTO of BT Global made some acute comments about the dangers of automation in this FutureNet World interview, saying, “Most of the big outages in the last year have been caused human error then automation magnified the blast radius, pushing something that was wrong to every box”. In one instance, this included disabling the code reader on the highly secure door to a data centre that had to be accessed to fix the issue.
Bannon says, “That’s why an outage can take 12 hours now, because even if they know what the problem is, they don’t have that remediation.” Which indeed is the case with CrowdStrike and the fallout from the outage is likely to be weeks if not months before it is totally fixed.
Bannon also states that BT’s way of avoiding such disasters is thinking “about the old school techniques of diversity, not just resilience” which he outlines in the article here. Today UK regulator Ofcom said it has fined BT £17.5 million for being “ill-prepared to respond to a catastrophic failure of its emergency call handling service” last year. During the incident, nearly 14,000 call attempts – from 12,392 different callers – were unsuccessful.
Solutions for telco network resilience might not be the same as for IT, but both need to put resilience at the top of their agendas.
This is an updated version of the article published on Friday 19 July.
Is BT finally close to the end of its Italian opera?
Bloomberg BNN reports that investment groups Asterion Industrial Partners and Nextalia are potential bidders for BT Group’s Italian business. BT Italia offers security, cloud and networking services to large and multinational enterprises, and wholesale clients.
BT Global (formerly BT Global Services) has been steadily offloading assets over the last few years, since its Italian business was involved in a fraud scandal which emerged in 2016. BT Global sold parts of its Italian operations to TIM in 2021 and to Retelit in 2023. Last April, the company cut the remaining workforce in Italy of 484 by 128.
When news of the scandal broke, BT’s share price sharply and has never recovered. The reputational damage was considerable, not helped by previous scandals in BT’s global operations. BT Group had to make provision for over half a billion pounds in its accounts.
The fallout continued for years: it was only in January this year that a court in Milan convicted eight people of fraudulent accounting after a lengthy trial. Court proceedings began in 2021 against BT Italia itself and 20 defendants including Richard Cameron, the former CFO of BT Global Services, and Corrado Sciolla, formerly BT’s head of continental Europe. The two were found not guilty.
The eight people convicted were all Italians. They all have consistently denied any wrongdoing and plan to appeal.
Nicolas Roy, CEO of Orange’s towerco, TOTEM, talks about organic growth, scaling up the neutral host model and being part of a wider digitalisation of French territory
“From day one, we have had a very industrial mindset, to make sure that we are serving our customers the best as we can,” says Nicolas Roy, CEO of Orange’s towerco, TOTEM, which operates in France and Spain. The other two cornerstones of its business are scale and neutrality.
He points out that Europe’s towercos “are all quite young” because operators started hiving their passive infrastructure off into separate business units later than on other continents in the main. Some have divested themselves of their tower business units altogether (like Telefonica) and some have sold stakes in them (like Vodafone with Vantage Towers). From its inception in 2021, Orange said it would maintain control of TOTEM, which did not preclude selling minority stakes.
In February 2023, CEO Christel Heydemann (who was not in that role when TOTEM became operational) told the Financial Times [subscription needed], “When you see companies selling their towers [or] using financial vehicles to continue to invest in infrastructure there is something that is, maybe not wrong, but something weird going on in the market”.
TOTEM became operational as a separate entity in November 2021. She perhaps wanted to quash reports that Orange was weighing options for its Middle Eastern and African tower estate in February 2023, including the possible sale of stake in them, perhaps on a country-by-country basis. Orange has opcos in 18 countries in the region. Orange has made no announcements on the subject.
Since TOTEM became operational, it deployed 450 new sites in France, which Roy says has “a very strong dynamic”, and continued to build out 5G in France and Spain. It had 27,292 tower across the two countries as of the end of March 2024.
Attracting tenants
Roy says that attracting new tenants to its sites “is our key activity”. In March 2024 TOTEM reported revenues of €686 million for 2023, an increase of 0.3%. Orange said the growth was driven by a 3.6% rise in hosting revenues, including a 6% increase (to 16.6% overall) in hosting revenues from third-party customers.
In November 2022, it signed a commercial agreement with the French telco group iliad, giving it access to TOTEM’s ground-based towers and rooftops. Iliad operates under the Free brand in France (and Italy) and its French network already provided 5G coverage to more than 87% of France’s population and 4G coverage to 99.8% of it.
A month earlier, TOTEM struck a deal to upgrade and support the deployment of incumbent Telefonica Espana’s 5G network. This was in addition to the deal Telefonica had in place with Vodafone Vantage Towers in Spain.
Roy says there are “all kinds of new players going onto the grid of our sites” and adds that the creation of MasOrange (the joint venture between Orange Spain and MASMOVIL which began operations in March 2024) “will be a good thing for us, first because we will serve the biggest customer base in Spain through the joint venture. We think that in the long run, they will have to deploy a very solid, efficient capacity network… it’s perhaps too early to see exactly what will happen.”
Some indication perhaps of the likely consolidation is the deal TOTEM signed in September 2023 with DeltaComGroup in Spain to dismantle towers and recycle or reuse their components to “become part of the circular economy” and “avoid the emission of 300 tonnes of CO2 in Spain every year”.
The measurement of success regarding third-party tenancy of TOTEM’s passive infrastructure is its tenancy ratio target of 1.5 by the end of 2026. Roy points out that his company is well on the way to achieving it this year: TOTEM had reached 1.38 occupants per site by the end of June 2023.
Density and neutral host
Another key area of activity is to deploy more sites in areas of dense activity, including indoor spaces, like subways and stadia to support end users’ quality of service for B2B customers. It announced the deployment of a 5G network via a distributed antenna system (DAS) at the Orange Vélodrome stadium, in Marseille, home to football club Olympique de Marseille, making it the first stadium in France to have 5G coverage.
The antennas were designed to accommodate high peaks of mobile phone usage (the stadium’s capacity is 68,000 spectators) to provide consistent quality of service. Other French operators Bouygues Télécom, Free Mobile and SFR, have connected equipment to TOTEM’s antenna infrastructure so they can all offer 5G services at the ground. This neutral host model reduces the amount of space required by the equipment and energy consumption.
Underground ambitions
Perhaps most notably, TOTEM began deploying 5G infrastructure, end to end, on the new Line 15 Sud. This is one of the four new automated train lines under construction in Paris as part of the ambitious Grand Paris Express transportation project.
TOTEM aims to have installed the infrastructure along the entire 33km length of the Line 15 Sud and its 16 stations by the end 2025. Once completed, it will be the first 5G-connected Grand Paris Express line within the Parisian metro system.
Roy says the project is exciting and a challenge because it is technically difficult and is the largest scale neutral host project in France. This brings considerable responsibility. As he notes, “We operate mostly passive infrastructure which means downtown is not so much on our shoulders…but looking at the microsites when it comes to specific venues, it’s a different issue”.
Line 15 Sud requires new materials and network design to deal with “speeding trains, the tunnels, the thickness of the walls, the volume of traffic,” he notes. Roy agrees expertise and experience gained here will translate to other demanding projects.
Next steps in creating value
He continues, “As I said at the start, we are committed to being an industrial scale player. The key is to ensure we are developing the value of our assets…We are preparing sites, we are negotiating, we are making sure that all the stakeholders are really ready to go with us; to add new tenants and to be the one that will help extend their coverage. That’s our value. We are very focused on our organic growth, our industrial development.”
Roy explains the strategy for developing the assets’ value is “to digitalise our processes – we’re working on that. Our first step is to make sure our inventory is up to date, [so] that we know our sites and what capacity is available on our sites.
“The second step, and we are working on this currently, it is to partner with players so we can go one step further, to look deeper into our sites. I’m talking about having digital images of sites, such as of beam [MIMO] technologies, to reduce the number of visits that are necessary to host someone or perform checks at this site. This was not the first priority, so we are doing it now.”
He continues, “Then the third step is to become a platform, to provide access to each site through a very simple process…using a credential I can download a form then an auto-assign process to make it easier. We are seeing how we can build this platform.
“Once we will have perfect knowledge not only of our sites, but their surroundings in the city, the buildings, the countryside, and so on, we’ll be in a position to anticipate for customers how our sites will be beneficial for the quality of service of their network, their functions.”
Perfect knowledge from multiple sources
Obtaining this “perfect knowledge” is part of a wider scheme underway in France. The Institut national de l’information géographique et forestière (National Institute of Geographic and Forest Information), previously the Institut géographique national (National Geographic Institute) or IGN is partnering a group of French public bodies. Their mission is to establish the Large-Scale Reference (Référentiel à grande échelle or RGE) – digitalised information that can be superimposed on French territory, accurate to within 1 metre.
This includes aerial photography, topography (the shape of the Earth’s surface), a cadastral survey, that is a comprehensive recording of properties and their boundaries within France, and a database of all the addresses in the country.
This, as Roy puts it, is “working to digitalise every piece, every corner of France,” adding, “Again, we will have perfect knowledge of how sites are or will be positioned in the environment, and combining this information with information about our sites and information about our customers will enable us to anticipate how we could improve, extend customers’ coverage etc. It might be desirable to replace this site or by something else or do something differently to make sure that it will be more powerful in the end.”
Nebulous networks
He says, “This is a very long story, step by step, which at the end will create an industry with an even better the financial story”. In the meantime he observes, “If you look at all mature industries, such as the car industry, space or whatever, they reach a very high of digitalisation in all the processes for every single device.
“If you look at in our domain…not only telco but any kind of network…each site, each situation is a case in itself. Because it’s very diverse, it’s difficult to judge. With the power of IT and AI, we will enter into a new area in which players, such as those that equip cities [for example]…will be in a position to really add value by digitising their work processes.”
In the weeks after this interview took place, TOTEM announced its partnership with Ville de Demain [Tomorrow’s city]. It operates as part of STATION F, which is based in Paris and describes itself as “The biggest startup campus in the world”. Ville de Demain’s goal is to build an ecosystem that can address the challenges cities will face in future.
Participants include universities, Grandes Écoles (specialised top-level educational institution in France) and “other key players to offer a 360° vision of the City’s challenges and support the most innovative startups and project leaders. Its objective is to highlight and support the initiatives of all territories to accelerate their environmental and digital transformation.”
Ville de Demain’s approach is that infrastructure sharing “is an environmental and economic necessity to enable all cities to go further in their mobile connectivity projects while hosting their CCTV, data collectors and all smart city connected equipment. The intention is that through this partnership, TOTEM will be able to offer local authorities bespoke all-inclusive solutions to best address their needs and anticipate their future challenges [translated from French].”
The operator has announced new measure to addresses power blackouts with an industrial-grade generator fleet
VEON has said its wholly owned subsidiary, Kyivstar, continues to invest in resilient connectivity for Ukraine. It plans to deploy an additional 848 industrial generators and 61,766 batteries for service continuity during the extended blackouts caused by attacks on Ukraine’s energy infrastructure.
Since the war started, resilience has been part of Kyivstar’s strategy to maintain crucial communication services and safeguard digital operations. The operator has deployed 2,322 generators and 115,000 four-hour duration batteries at base stations to provide backup power during blackouts.
Kyivstar now plans to deploy 848 more stationary industrial generators and 61,766 new batteries to support business continuity of the network. The systems will be deployed throughout the country, including at critical facilities that require at least three days’ generating capacity in a major outage
VEON and Kyivstar announced their commitment to invest $1 billion in Ukraine from from 2023 to 2027 at the Ukraine Recovery Conference in Belin. Kyivstar was named as Ukraine’s largest foreign investor in 2022 and 2023 by Forbes Ukraine. It was also recognised at MWC 2024 with the GSMA’s Global Mobile Award for Best Mobile Innovation Supporting Emergency or Humanitarian Situations for its Network Resilience Project.
Oleksandr Komarov, CEO of Kyivstar, commented, “Energy resilience and preparedness against blackouts have been at the centre of our investment priorities since the end of 2022. Consistent and significant investment of over $24 million over the last two years has helped us improve energy resilience.
“However, the changing nature of threats to Ukraine’s energy infrastructure and extended blackouts now necessitate a reinforcement in our strategy. This second wave of focus on energy resilience will enable Kyivstar to support critical connectivity with even further resources dedicated to energy resilience.”
