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A week in telecoms: O2 Germany trials IoT boost; SK Telecom expands metaverse

This week we look at SK Telecom's latest metaverse play, O2 Germany's RedCap trials, merger plans for Ukraine, Microsoft’s Japanese and UK AI expansion drive and warnings about travel eSIMs.

11 Apr 2024
A week in telecoms: O2 Germany trials IoT boost; SK Telecom expands metaverse

A week in telecoms: O2 Germany trials IoT boost; SK Telecom expands metaverse

SK Telecom expands metaverse ambitions

SK Telecom (SKT) continues to pursue its ambition to achieve global leadership in the field of immersive experiences by signing new partnerships in Malaysia and the Philippines for its metaverse platform, ifland, to accelerate its expansion into southeast Asia.

The South Korean operator announced that it has expanded its list of ifland partners to include Malaysian telco CelcomDigi and internet of things (IoT) platform, Cherry, in the Philippines. 

The partners will provide a locally optimized metaverse platform, focusing on local brand partnerships, specialized marketing and providing primary customer support in their respective markets.

In addition, SKT said it plans to add supported languages such as Malay, Indonesian, Hindi, and Spanish in the first half of the year. Its other metaverse partners include Deutsche Telekom, &e, and Singtel. 

Mergerwatch: Iliad owner aims to create an expanded mobile operator in Ukraine

Xavier Niel, the expansionist founder of Iliad in France, unveiled his ambition to create the “fastest-growing mobile operator” in Ukraine through the acquisition of fixed telecom and pay-TV group Datagroup-Volia and its subsequent merger with mobile operator Lifecell.

Niel’s investment firm NJJ Holding is in charge of steering the project. The firm obtained regulatory approval in March 2024 to acquire Datagroup-Volia, currently 96.13% owned by a fund managed by US private equity firm Horizon Capital and 3.87% by Datagroup-Volia CEO Mykhaylo Shelemba.

Once the remaining conditions are met for the acquisition of mobile assets trading under the Lifecell brand, the parties intend to create a “national telecom champion” for “safe, secure and reliable telecom services in Ukraine.”

Lifecell is currently owned by Turkcell, which recently struck a deal with NJJ to sell its Ukrainian assets including Lifecell, digital services provider Global Bilgi, and tower company Ukrtower.

According to NJJ, the combined entity will provide mobile connectivity to nearly 10 million Ukrainians, while its fixed network will cover more than four million residences across Ukraine. It noted that the merger of Datagroup-Volia and Lifecell will also enable consumers to benefit from a triple-play offer, bundling mobile, fixed connectivity and pay TV.

The purchases would mark a significant investment at a time when the war-torn country is struggling to attract foreign investors. Sources suggest that the total value of the acquisition, including the purchase price and investment, is expected to be over $1 billion. 

According to Niel, his group is “confident that our landmark transaction will serve as a signal to others that the time to invest in Ukraine is now, to support the rebuilding of the country and realize its potential.”

Niel now has telecoms investments in more than 20 countries across the world, both through Iliad and NJJ. Iliad itself is present in France, Italy and Poland. Recent efforts by the group to buy Vodafone Italy were unsuccessful, however, with Vodafone agreeing to sell its Italian operations to Swisscom. 

O2 Germany tests RedCap

Telefónica Deutschland (O2 Germany) became the latest mobile operator to trial Reduced Capability or RedCap, a technology introduced in 3GPP Release 17 that brings 5G to devices that do not require its full capabilities.

The German operator said it “successfully tested compatibility” of RedCap with its 5G network in Munich. According to Mallik Rao, Chief Technology & Information Officer of O2 Germany, the technology brings “new momentum to the Internet of Things” and “closes a gap between the previous 4G network and high-performance 5G applications in the IoT sector.”

BT recently trialled RedCap technology with Nokia and MediaTek, as part of its wider efforts to support IoT business models. The UK operator sees RedCap as a complementary technology to current cellular (including low power wide area network/LPWAN technologies such as NB-IoT/LTE-M) and emerging direct-to-device (D2D) satellite technologies.

O2 Germany said 5G RedCap is interesting for business-to-business applications such as wireless industrial routers that can be used to monitor and control machines and systems and wireless surveillance cameras.

The German operator cited a study by Juniper Research that predicts the number of 5G-connected IoT devices in mobile networks will increase from 35 million in 2024 to over 360 million in 2028. “5G RedCap can accelerate this 5G transformation,” O2 Germany said. 

Microsoft beefs up AI with investments in Japan and UK

Microsoft has been stepping up its activities in artificial intelligence, announcing a $2.9 billion investment in Japan, opening a new AI hub in London, and creating a new AI-focused division.

First, Mustafa Suleyman and Karén Simonyan joined Microsoft to form a new organization called Microsoft AI, focused on advancing Copilot and other consumer AI products and research.

Suleyman, founder of DeepMind and Inflection, has been appointed EVP and CEO at Microsoft AI, while Simonyan joins the new group as Chief Scientist. According to Microsoft CEO Satya Nadella, Mikhail Parakhin and his entire team, including Copilot, Bing, and Edge; and Misha Bilenko and the GenAI team will now report to Suleyman.

Meanwhile, Kevin Scott continues as CTO and EVP of AI, responsible for the overall AI strategy at Microsoft.

Suleyman then announced the launch of the UK hub called Microsoft AI London, which aims to collaborate “closely with our AI teams across Microsoft and with our partners, including OpenAI.” The new AI hub will be led by Jordan Hoffmann, who was previously an “AI pioneer” at Inflection and DeepMind, based in London.

Over in Japan, Microsoft said it will invest $2.9 billion over the next two years to increase its hyperscale cloud computing and AI infrastructure in Japan. It will also expand its digital skilling programs with the goal of providing AI skilling to more than three million people over the next three years, open its first Microsoft Research Asia lab in Japan, and deepen its cybersecurity collaboration with the government of Japan.

According to Brad Smith, Vice Chair and President, Microsoft, this represents the group’s “most significant investment in Japan since we set roots here in 1978. These investments in digital infrastructure, AI skills, cybersecurity, and AI research are essential ingredients for Japan to build a robust AI economy.”

Mobile operators advised to develop own travel eSIM services, or lose out

Mobile operators risk losing over $11 billion globally to companies that provide special travel eSIM services if they do not develop and implement their own travel eSIM solutions to “complement existing roaming packages.”

According to a new report from Juniper Research, the global number of travel eSIM users will grow from 40 million in 2024 to over 215 million by 2028.

Juniper notes that travel eSIMs provide an alternative to operators’ roaming services, allowing travellers to download a temporary local profile onto their device and avoid roaming charges. 

The study also predicts that the rising cost of roaming internationally will drive the adoption of travel eSIM packages. It found that in 2024, mobile subscribers will spend an average of $8.57 per GB of data when roaming, whereas travel eSIM users will spend $5.50 per GB. 

It adds that the rising penetration of eSIM-capable devices in many countries “will provide a considerable platform for user growth. For example, more than half of connected devices in the US will have eSIMs installed in 2024, creating a large addressable market for travel eSIMs.”

Also noted…

Digi Spain is to sell its fiber-to-the-home network to Onivia, backed by a consortium of Macquarie Capital, abrdn and Arjun Infrastructure Partners.

Telecom Italia raised a loan of €1.5bn to provide liquidity ahead of the closing of the NetCo sale to the KKR-led group.