We look at Vodafone’s latest results and turnaround progress, the launch by NTT DoCoMo of a new global unit, Airtel's GenAI and cloud tie up with Google, and plans to merge XL Axiata and Smartfren in Indonesia.
A week in telecoms: NTT DoCoMo goes global
NTT DoCoMo launches new unit in global push
Japanese mobile operator NTT DoCoMo announced the launch of a new unit called NTT DoCoMo Global with the aim of driving further growth outside its domestic market.
The unit will oversee DoCoMo’s global business operations “and drive integrated and agile strategies across diverse domains,” the operator said. It is expected to begin operating in July, and will take over existing global investments of the group.
NTT DoCoMo has already launched OREX as a global open RAN platform, reflecting similar moves by Rakuten, which launched Rakuten Symphony to market open RAN and cloud-native expertise globally.
NTT DoCoMo Global will have a wider remit, providing “both application services and operators-enabling services globally,” as well as expanding into other business sectors and investing in other companies. It will eventually incorporate OREX as well as NTT Digital Corporation and three overseas subsidiaries that will “serve as comprehensive support hubs for global expansion.”
The application services will include “Web3-based payment services that will enable individuals and companies to use blockchain technology easily and securely, and DoCoMo’s Data Marketing Platform (DMP) supported by AI,” the operator said.
The “operators-enabling services,” including open RAN and non-terrestrial network (NTN), “will enable telecom operators to transform their business landscapes,” DoCoMo added. The initial focus will be on Southeast Asia and North America, followed by Europe and the Middle East.
Airtel ties with Google Cloud on cloud and GenAI
Bharti Airtel and Google Cloud have entered into a long-term collaboration to provide services to Indian businesses that combine cloud solutions from Google Cloud with cloud managed services from Airtel. The aim is to accelerate cloud adoption by enterprises, and also deploy generative AI solutions.
Through this collaboration, the two companies are targeting the Indian public cloud services market, which is expected to reach $17.8 billion by 2027, according to IDC. Airtel has a current customer base of more than 2,000 large enterprises and “one million emerging businesses.”
Gopal Vittal, CEO at Bharti Airtel, said cloud and AI solutions “will be at the heart and center” of India’s digital transformation.
“We are happy to partner with Google Cloud and jointly address this market opportunity with secure and scalable cloud solutions for government, enterprises, and emerging businesses. Together, we will also accelerate the deployment of GenAI in the country and unlock its potential to solve problems,” Vittal said.
The two companies plan to develop joint AI/ML offerings for customers including geospatial analytics, voice analytics, and marketing technology solutions.
In addition, Airtel intends to make use of Google Cloud’s GenAI capabilities to “transform its customer experiences and interactions across its offerings of mobile, broadband, and digital TV, and to streamline its internal processes and operations. Airtel will also extend these capabilities to its B2B customers in India and globally.”
Airtel has set-up a managed services center in Pune with more than 300 experts “who are being extensively trained to champion Google Cloud services and develop world-class tech solutions.”
In a report at the end of 2023, Rajiv Ranjan, Associate Research Director, Cloud and Artificial Intelligence, IDC India, noted that public cloud services in India have evolved beyond “just cost savings and flexibility.”
“Enterprises are increasingly investing in modernizing applications, developing cloud-native solutions, and exploring artificial intelligence. While enterprises are ramping up investments in GenAI, chatbots, and conversational AI tools, GenAI tools are specifically used for cost optimization, application development, and workload testing use cases. In the future, GenAI is expected to help more in cloud security and cloud infrastructure management as well. All these investments will drive public cloud services growth in India,” Ranjan said.
Vodafone CEO says more needs to be done amid transformational drive
It’s been a busy week for Vodafone, which unveiled its full-year results for the year to March 31, 2024 and took stock following a period of change that has seen it offload some of its operations and attempt to bulk up others.
According to Vodafone Group Chief Executive Margherita Della Valle, Vodafone performed slightly ahead of expectations in the financial year, with organic service revenue growth of 6.3% and organic EBITDAaL growth of 2.2%. She also noted that Vodafone Business achieved 5.4% revenue growth in the fourth quarter.
However, Della Valle warned that much more still needs to be done in the year ahead.
“We will step-up investment in our customer experience, improve our underlying performance in Germany and accelerate our momentum in Business, whilst also continuing to simplify our operations throughout the group. We are fundamentally transforming Vodafone for growth,” she said.
Vodafone has already agreed to sell its operations in Italy to Swisscom and in Spain to Zegona, and has just won regulatory approval for the deal in Spain. However, it is still trying to persuade regulators to let it buy Nowo in Portugal, while its proposed merger in the UK is still very much up in the air.
The UK government recently gave conditional clearance to the proposed merger between Vodafone UK and Three UK following a national security assessment. However, a separate investigation by the Competition and Markets Authority (CMA) remains ongoing.
During an earnings call, Della Valle insisted that remedies would be unnecessary in the UK as it is the two smallest mobile providers that are combining. In doing so, she pointed out, the joint venture would bring fresh competition to larger rivals.
Germany will also remain challenging this year. Although it saw a return to underlying growth in FY24, Vodafone estimates it will lose around 50% of its 8.5 million multi-dwelling unit (MDU) households owing to changes in German TV laws.
German housing associations are prohibited from bundling television services and broadband into leases for MDUs from July 1, 2024, opening the way for other broadband and TV service providers to prise individual users away from bulk deals previously offered by cablecos.
Axiata Group, Sinar Mas explore merger in Indonesia
Axiata Group Berhad and Sinar Mas have signed a non-binding MoU to explore a proposed merger of their respective businesses in Indonesia, namely XL Axiata and Smartfren.
According to a joint statement, the proposed transaction is at an early stage of evaluation, with both Axiata and Sinar Mas intending to remain as joint controlling shareholders of the entity currently dubbed MergeCo. They also cautioned that discussions may not result in a binding agreement.
The aim is to create a stronger communications service provider in Indonesia. Previous reports have suggested the merger would create a $3.5 billion entity.
“The proposed merger of XL Axiata and Smartfren is expected to bring together the combined scale, competencies, finances and deep telecommunication expertise of Axiata and the local scale and market knowledge of Sinar Mas to generate significant value,” the statement said.
Axiata stressed that it is committed to remaining a leading player in Indonesia’s digital and technology landscape, “rooted in its long-term vision of supporting the country’s digital future.”
Indonesia is an important market and key to its strategic initiatives. XL Axiata is Axiata’s largest asset and from a portfolio standpoint, Indonesia is the highest value creator, where it runs five main businesses: XL Axiata, Link Net, EDOTCO, Boost and ADA.
German altnets form open access alliance to drive fiber expansion
Four German fibre-optic network providers, including Deutsche GigaNetz, DNS:NET, Eurofiber Netz, and Infrafibre Germany (which operates Leonet and BBV Deutschland), have signed a memorandum of understanding (MoU) to establish the new Open Access Alliance.
Operating as a neutral wholesale company, the joint venture plans to deploy local fiber optic networks in underserved rural and semi-rural areas, offering fiber wholesale access to all communications service providers.
According to a statement from the four fiber providers, the new alliance is “sending a strong signal for the promotion of the open access model and consensus-based industry standards.”
Promoting and establishing open access is essential, they said, to advance fiber network expansion in a “targeted and economically sensible manner.”
Although not mentioned in the release, a clear aim will no doubt be to reduce the possibility of overbuilding of fiber networks in Germany. This has become a controversial topic in Germany as altnets have accused Deutsche Telekom of network overbuilding, a charge that the former incumbent vehemently denies.
Also noted…
The Wall Street Journal reported that T-Mobile US and Verizon want to carve up UScellular.
AWS has appointed a new CEO, what appears to have been a surprise move. Meanwhile, the cloud services provider outlined plans to invest €7.8 billion into a European sovereign cloud project.
Germany’s telecoms regulator unveiled plans to extend spectrum usage rights in return for coverage commitments.
Sociedad Estatal de Participaciones Industriales (SEPI), the Spanish state-owned industrial holding company, has increased its stake in Telefónica to 8% and is ultimately planning to take a 10% holding.
Digi Communications announced plans to launch commercial operations in Belgium and Portugal. The operator currently generates most of its revenues in Romania and Spain. In the latter market, it recently picked up spectrum licenses and is in talks on a new wholesale and network roaming deal with Telefónica.