LG UPlus becomes the third South Korean telco to bet big on AI, while Telecom Italia completes $24B NetCo sale to KKR and Telefonica and Nokia collaborate on private networks in Spain.
A week in telecoms: LG Uplus bets on enterprise AI services
LG Uplus aims for $1.4bn in B2B AI sales by 2028
https://www.kedglobal.com/artificial-intelligence/newsView/ked202407020017
South Korean mobile operator LG Uplus has set itself ambitious targets for AI services in the coming years, with the aim of reaching 2 trillion won (US$1.4 billion) in revenue from the business-to-business (B2B) AI sector by 2028, according to the Korean Economic Daily.
The operator is set to unveil its first AI chip by the end of this year in partnership with DeepX, and plans to expand its AI infrastructure, platform and corporate client services. In the B2B field, it will focus on AI data centers and on-device AI, AI platforms using smaller large language models (sLLMs) and AI-powered services such as business operations and communications.
Kwon Yong-hyun, head of the corporate division at LG Uplus, told media that the AI market “is expanding far faster than expected.”
“We will use our entire capability for AI and apply AI technologies to all services to help the growth of corporate clients,” he said.
According to the paper, LG Uplus operates two hyperscale data centers in Korea and is planning to build an additional one by 2027. It also recently launched its own telecoms-focused small LLM, ixi-GEN, which it plans to integrate with services including chat agents later this year.
Local rival SK Telecom as well as Deutsche Telekom, e&, Singtel and SoftBank Corp., the founding parties of the Global Telco AI Alliance, signed a joint venture on LLMs at DTW24 – Ignite. In addition, KT has launched Mi:dm, an LLM service for corporate clients.
Telecom Italia completes $24B NetCo sale to KKR
Telecom Italia (TIM) finally completed its plan to sell off its fixed-line grid to the Optics BidCo consortium controlled by investment firm KKR.
The sale of NetCo for up to €22 billion (US$23.6 billion) allows TIM to reduce its net financial debt by about $13.8 billion, from an adjusted net financial debt of €26.6 billion at March 31, 2024. After leases, net debt stood at €21.4 billion.
TIM CEO Pietro Labriola said the completion of the transaction with KKR and the Italian Ministry of Finance “is the result of two and a half years of intense work, during which we have improved the management of TIM and identified industrial and financial solutions that will enable us to meet future challenges.”
NetCo comprises the primary and backbone fixed-line network business of TIM as well as FiberCop, a joint venture between TIM and KKR comprising TIM’s secondary fixed-line network. Following the transaction, TIM’s total headcount will decrease from 37,065 to 17,281.
“As the first European mover, we chose to separate the fixed network infrastructure services from the other services we provide, to ensure the best, sustainable and fastest possible development of TIM,” Labriola said.
In addition to KKR, Italian infrastructure fund F2i will hold a 10% stake in the venture, while the Azure Vista subsidiary of the Abu Dhabi Investment Authority (ADIA) and Canadian pension fund CPP Investments will hold 20% and 17.5% respectively.
In future, TIM will operate as a service company (ServCo), retaining its retail consumer and enterprise businesses and its mobile network as well as TIM Brasil. TIM also still owns wholesale unit Sparkle, although this business is also potentially up for sale.
In addition, the future business relationships between NetCo and TIM will be regulated through a 15-year term master service agreement (MSA), renewable for a further 15 years. The services comprised in the MSA will be provided at market prices and without any minimum purchase commitments, TIM said.
Rogers trials 5G cloud RAN with Ericsson
Rogers Communications completed a live trial of cloud radio access network (cloud RAN) technology with its network partner Ericsson, claiming a first for the Canadian market.
The trial was carried out at a Toronto Blue Jays game on the operator’s commercial standalone 5G network, which was launched in 2021.
Rogers declared that the implementation of cloud RAN technology is “foundational” for its future network evolution.
Ron McKenzie, Chief Technology and Information Officer at Rogers, said that cloud-native technology “is a critical component in the next generation of wireless networks.”
“We continue to invest in our coast-to-coast radio access network, including innovative Cloud-native technologies, to deliver the most reliable, consistent network services across the country for both consumers and enterprise customers,” he added.
Earlier this year, Rogers also tested 5G network slicing technology with Ericsson. The operator said its 5G network now covers over 2,300 communities in the nation.
Telefonica and Nokia collaborate on private networks
Telefónica and Nokia said they plan to collaborate on 5G private networks in Spain under a three-year agreement, aimed at supporting the deployment of private wireless networks in industries such as ports, manufacturing, and logistics.
Adrián García Nevado, Business Director at Telefónica Spain, noted that the partners have already worked on “more than 90 use cases with real customers for exploring the capabilities of 5G.”
Nokia also said it has deployed “mission-critical networks” to more than 2,600 enterprise customers in the transportation, energy, large enterprise, manufacturing, webscale, and public sector segments worldwide.
The partners plan to rely on Nokia’s Digital Automation Cloud (DAC), MX Industrial Edge (MXIE), Industrial devices, and digitalization applications.
Telefónica España will provide consulting and maintenance services, in addition to 5G connectivity; while B2B digital services unit Telefónica Tech is responsible for big data and Internet of Things (IoT) solutions, as well as technology integration.
The move comes shortly after Telefónica signed an agreement with Nokia with the aim of enabling developers to build network APIs that exploit characteristics of standalone 5G (5G SA) networks.
Nokia to buy Infinera to benefit from data center and AI boom
Nokia said it has signed a definitive agreement to acquire optical networking equipment maker Infinera in a transaction valuing the company at $2.3 billion, with the aim of expanding its optical network business.
The Finnish vendor said the transaction aligns strongly with its strategy, “as it is expected to strengthen the company’s technology leadership in optical and increase exposure to webscale customers, the fastest growing segment of the market.”
According to Reuters, the deal would help Nokia to leapfrog Ciena and become the second largest vendor in the optical networking market with a 20% share. Nokia said the combination will increase the scale of its optical networks business by 75%. In addition, the North America optical networking market represents about 60% of Infinera’s sales.
Nokia is said to be eyeing the billions of dollars in investment pouring into data centers to cater to the rise of artificial intelligence. As carrier spending on 5G equipment remains at a low level, telecoms vendors are seeking ways to diversify their markets and get into growing areas such as AI.
Nokia CEO Pekka Lundmark told Reuters that AI is “driving significant investments in data centers ... one of the key attractions of this acquisition is that it significantly increases our exposure to data centers.”
Nokia also plans to sell its Alcatel Submarine Networks unit to the French state and said its Network Infrastructure division will in future be built on “three strong pillars of fixed networks, IP networks and optical networks.”
In a statement, Lundmark said the vendor believes “now is the right time to take a compelling inorganic step to further expand Nokia’s scale in optical networks.”
“The combined businesses have a strong strategic fit given their highly complementary customer, geographic and technology profiles. With the opportunity to deliver over 10% comparable EPS accretion, we believe this will create significant value for shareholders,” he said.
Also noted…
Virgin Media O2 and Vodafone said they had hit the partial not spot coverage target of the Shared Rural Network (SRN) program. In addition, the two operators signed a new, long-term network sharing agreement that also sees Vodafone commit to selling spectrum to VMO2 should its merger with Three UK go ahead.
Netherlands’ three mobile operators — KPN, Odido, and VodafoneZiggo — acquired licenses for 3.5GHz spectrum after a two year wait.
Iliad has made an offer to buy Millicom International Cellular for $4.1 billion.
Proximus has partnered with Microsoft, Thales and Intel for its NXT sovereign cloud solution.
Deutsche Telekom selected LotusFlare for its Magenta API Capability Exposure (MACE) platform.
Ericsson said it wrote down SEK 11.4 billion primarily in relation to the acquisition of network API specialist Vonage, blaming a “deterioration in the market environment and elective decisions.”