A week in telecoms: AT&T and Open RAN, a new towerco in MENA, and EU's pursuit of edge in cloud computing.

AT&T chooses Ericsson for Open RAN

AT&T hit the headlines this week with the announcement that it plans to migrate 70% of its wireless network traffic to open RAN by the end of 2026.

What grabbed the most attention was its selection of Ericsson and Fujitsu as it network partners, and not Nokia. AT&T signed a five-year deal with Ericsson that could be worth about $14 billion over the term of the contract.

The operator is now hoping to play a leading role in open RAN in the United States. It expects to have fully integrated open RAN sites operating in coordination with Ericsson and Fujitsu, starting in 2024.

“This move away from closed proprietary interfaces will enable rapid scaling and management of mixed supplier hardware at each cell site,” AT&T stated. “Beginning in 2025, the company will scale this open RAN environment throughout its wireless network in coordination with multiple suppliers such as Corning Incorporated, Dell Technologies, Ericsson, Fujitsu, and Intel.”

Ericsson has not been the biggest proponent of open RAN. In September, however, Ericsson said it will introduce support for open fronthaul across its cloud RAN and radio portfolios starting in 2024. It also noted that “more than one million Ericsson radios in the field are hardware-prepared for open fronthaul.”

For AT&T, Sweden-based Ericsson will make use of its 5G smart factory in Lewisville, Texas to manufacture 5G equipment. The factory produces next generation 5G and advanced antenna system radios for Ericsson’s U.S. customers.

Ericsson also noted that has achieved compliance with the provisions of the infrastructure law’s Build America, Buy America.

Ooredoo, Zain and TASC create new towerco

Ooredoo Group, Zain Group and TASC Towers agreed to create what they describe as the largest tower company in the Middle East and North Africa (MENA) region.

The enlarged towerco will have 30,000 towers in Qatar, Kuwait, Jordan, Iraq, Algeria, and Tunisia and a current estimated enterprise value of $2.2 billion. Ooredoo and Zain will each retain a 49.3% stake, while the founders of TASC will retain the remaining shareholding and continue to manage the operations of the business.

The tower entity is expected to achieve run-rate revenues close to $500 million annually, with an EBITDAaL of more than $200 million. The transaction is expected to close in some of the markets concerned in 2024.

Ooredoo and Zain said the transaction “constitutes a major milestone towards realizing key aspects” of their respective strategies that are “focused on evolving into smart telcos and creating value-focused portfolio.”

TASC will offer passive infrastructure as a service (PIaaS) in a partnership model, using the combined assets of Ooredoo and Zain. Both Ooredoo and Zain will retain their respective active infrastructure, including antennas, intelligent software, and intellectual property.

With this move, Ooredoo and Zain become the latest CSPs to shift towers into a new venture. The practice has become common in Europe, with major CSPs such as Deutsche Telekom, Orange, Telefonica and Vodafone selling or spinning off tower infrastructure.

EU approves €1.2bn in cloud and edge funding

The European Commission approved up to €1.2 billion in state aid from seven member states to support a European cloud computing and edge project that is widely seen as an effort to boost the involvement of European business in a field dominated by U.S. companies.

The project, called Important Projects of Common European Interest – Next Generation Cloud Infrastructure & Services (IPCEI-CIS), is backed by France, Germany, Hungary, Italy, the Netherlands, Poland, and Spain.

An additional €1.4 billion in private investments is also expected to be “unlocked” by the public funding. The EC noted that 19 companies will undertake “19 highly innovative projects” as part of the IPCEI.

According to the EC, the project concerns the development of the first interoperable and openly accessible European data processing ecosystem: the multi-provider cloud to edge continuum.

The research, development and first industrial deployment phases will run between 2023 and 2031, with timelines varying depending on the project and the companies involved.

The first novel result of the IPCEI – an open-source reference infrastructure – may be expected around the end of 2027, the EC said. It also estimates that at least 1,000 direct and indirect highly qualified jobs will be created during these phases, “and many more in the commercialisation phase.”

Deutsche Telekom has already confirmed its involvement in the project. The German operator said IPCEI-CIS “is a collaborative project which currently involves twelve EU member states and various industry leaders, including Bosch, SAP, Orange and Airbus. The project will make a significant contribution towards the EU’s declared Digital Decade goal of 10,000 edge-cloud nodes across the continent by 2030.”

Overall, the companies directly involved are Deutsche Telekom and Telefonica Espana (workstream 1, cloud-edge continuum infrastructure); Atos, Reply (Italy), Telecom Italia, Oktawave, Atende Industries, OpenNebula Systems, Arsys Internet, and Leaseweb Global (workstream 2, cloud-edge capabilities); 4iG, E-Group ICT Software, Tiscali, and CloudFerro (workstream 3, advanced smart data processing tools and services); and Siemens, Fincantieri, and Engineering Ingegneria Informatica (workstream 4, advanced applications).

The EC noted that the wider ecosystem involves more than 90 indirect partners.

SoftBank Corp buys stake in IoT and connected car platform Cubic Telecom

Japan-based telecoms group SoftBank Corp is investing about €473 million to take a 51% equity stake in Cubic Telecom as part of a major foray into connected cars and IoT connectivity.

The two companies said they plan to “form a strategic global partnership to pioneer the future of software-defined connected vehicles”.

Junichi Miyakawa, president and CEO of SoftBank Corp., noted that the move forms part of its ‘Beyond Japan’ strategic growth initiative.

SoftBank added that while it has been providing global IoT connectivity services, mainly in Asia-Pacific markets, it will now be able to make a “full-fledged entry” into IoT markets for connected cars and software-defined vehicles, giving it access to new revenue generating opportunities.

Future areas of interest include satellite and stratospheric-based Non-Terrestrial Network (NTN)-based solutions that provide connectivity to vehicles and IoT devices in areas that cannot be reached by traditional ground-based networks.

Cubic Telecom provides connectivity solutions to automotive, transportation and agriculture original equipment manufacturers (OEMs). It cited research from McKinsey & Company that said 95% of new vehicles sold globally will be connected by 2030.

Barry Napier will remain CEO of Cubic Telecom, while three SoftBank executives will join the Cubic Telecom board.

IBM and Meta form AI Alliance

IBM and Meta have launched a new AI alliance which numbers several world-leading universities, CERN and NASA among its 50 founding members, alongside AMD, the Linux  Oracle, Red Hat,  ServiceNow, and Sony Group. The AI Alliance sets out to be international and says it “is focused on fostering an open community and enabling developers and researchers to accelerate responsible innovation in AI while ensuring scientific rigor, trust, safety, security, diversity and economic competitiveness.”