A week in telecoms: Orange, KT and SK Telecom continue AI drive

Ericsson, Nokia report Q1 revenue slump but see stronger H2

All eyes were on Ericsson and Nokia this week as they reported results for the first quarter of 2024. As the vendors had previously feared, revenue has continued to decline owing to lower network spending by operators.

Ericsson said organic revenues fell by 14% year-on-year to 53.3bn Swedish krona ($4.88 billion), due mainly to a 19% slump in sales by its Networks division to SEK33.7 billion.

The vendor is also not hopeful that the situation will improve any time soon. Börje Ekholm, President and CEO of Ericsson, said it expects to see a further decline in the RAN market this year “as customers remain cautious with their investments and the pace of investment in India continues to normalize. Dell’Oro estimates the global RAN equipment market will decline by -4% in 2024, which may prove optimistic,” he added.

On a somewhat brighter note, its gross margin (excluding restructuring costs) improved to 42.7% from 39.8% a year earlier while earnings before interest, tax and amortization (EBITA) increased by more than 6% to SEK5.1 billion.

Ekholm added that if current trends persist, “we expect our sales to stabilize during the second half of the year, benefiting from recent contract wins and the normalization of customer inventory levels in North America.”

In terms of new contracts since the end of Q1, Ericsson won an extended deal with Swisscom. Among other aspects, the new agreement will see the introduction of Ericsson Intelligent Automation Platform (EIAP) to provide “comprehensive multi-technology network management and automation for the Swisscom network.”

Nokia said its net sales declined 19% in the first quarter, to reach €4.6 billion. In the Mobile Networks division, business was impacted by particularly low levels of spending in North America and India, which led to a Q1 net sales decline of 37% in constant currency.

However, Nokia also saw an improvement in the gross margin to 48.6% and cited a strong contribution from Nokia Technologies.

Nokia President and CEO Pekka Lundmark also said the Finnish vendor had seen continued improvement in order intake, “meaning we remain confident in a stronger second half and achieving our full year outlook.”

Lundmark added: “We have been executing quickly on the operating model changes we announced back in October along with our cost savings roadmap. These actions, combined with our expectation for improved net sales growth in the second half of the year, supported by our order backlog, mean we are solidly on track to achieve our full year comparable operating profit outlook of €2.3 billion to €2.9 billion and free cash flow conversion of 30% to 60%.

Samsung regains smartphone leadership

IDC and Canalys provided Q1 updates for the global smartphone market that revealed Samsung has regained the top spot, pushing Apple into second place.

Both research firms also put Xiaomi in third place, followed by Transsion and then Oppo.

According to Ryan Reith, group vice president with IDC’s Worldwide Mobility and Consumer Device Trackers, while Apple managed to capture the top spot at the end of 2023, “Samsung successfully reasserted itself as the leading smartphone provider in the first quarter” with a 20.8% market share and shipments of 60.1 million.

IDC also said that global smartphone shipments increased 7.8% year-on-year to 289.4 million units in Q1 2024. “While the industry is not completely out of the woods, as macroeconomic challenges remain in many markets, this marks the third consecutive quarter of shipment growth, a strong indicator that a recovery is well underway,” the research firm added.

Canalys analyst Le Xuan Chiew agreed that the worldwide smartphone market “started the year on a positive note, marking a significant improvement on the same period last year.”

Chiew added: “With the economy stabilizing, new product launches and strong promotional efforts, the market has rebounded, offering smartphone vendors an excellent opportunity to revitalize growth.”

Orange adds Augtera AI platform to its NOC

Orange continued its ongoing application of artificial intelligence-based technologies in order to improve its operations and service delivery.

In a recent move, the France-based operator added the Augtera Network AI platform to its Network Operation Centre (NOC) tools in order to apply AI and ML to daily network operations.

Augtera specialises in AI and ML-powered network operations platforms, and Orange has been trialling its technology over the past two years in “multiple Orange networks” in France and globally.

The operator claims that it will reduce by 70% the daily number of NOC alarms “thanks to Augtera’s network topology knowledge-based auto-correlation.” In addition, it said Augtera’s anomaly detection will help prevent network failures by identifying incidents before they occur.

The integration started in April and will be fully rolled out in Orange Global Networks by the end of 2024.

Jean-Louis Le Roux, Executive Vice President International Networks at Orange, said Augtera AI has been tested in various production environments to assess both the technical capabilities and business outcomes.

“Through a systematic evaluation of multiple use cases, we have identified two initial ones that produced excellent results during the trial. We are pleased to be moving forward to integrate Augtera with our existing NOC tools to bring transformative efficiency and predictability to our operations. This aligns with our ongoing commitment to pioneering the adoption of AI/ML and innovating to provide the best-in-class experience to our customers,” he said.

Rahul Aggarwal, founder and CEO at Augtera Networks, praised Orange for its “visionary” approach to the adoption of AI/ML for network operations and said the operator was among the pioneers to trial Augtera.

KT and SK Telecom invest in AI firm

South Korean operators KT and SK Telecom (SKT) have led a $72 million funding round in domestic AI company Upstage as part of ongoing efforts to boost their AI activities.

Other investors included Korea Development Bank, Shinhan Venture Investment, Hana Ventures, Mirae Asset Venture Investment and Industrial Bank of Korea.

The AI startup’s portfolio includes large language models (LLMs), such as Solar LLM, and its Document AI solution.

Upstage has now raised more than $100 million since its establishment in October 2020. According to the company, this makes it “the most-funded South Korean AI software company in history.”

Sung Kim, co-founder and CEO of Upstage, said the funding “will help us build the world's best generative AI model and deliver the ultimate ‘AGI for work’ solution to businesses worldwide.”

The new financing will be used to accelerate the development of purpose-trained LLMs for global enterprises, with Upstage opening a new office in San Jose, California.

Vodafone Business appoints SAP executive as new CEO

Vodafone Business appointed a senior SAP executive to replace Vinod Kumar, who left the goup at the end of 2023. Marika Auramo will take on the role in July 2024. Since Kumar’s departure, Giorgio Migliarina has been leading the business as interim CEO.

Auramo is currently Chief Business Officer for Europe, Middle East, and Africa at SAP. Prior to that, she was Chief Operating Officer for EMEA North and interim President for the same region. She has spent more than 25 years at SAP.

Margherita Della Valle, CEO of Vodafone Group, said Auramo “brings extensive B2B experience from the IT industry, and I look forward to welcoming her as a member of our Executive Committee.”

Auramo observed that Vodafone Business “has strong growth opportunities ahead – as large corporates, SMEs and the public sector look to adopt more digital tools to enhance growth and productivity – and I will be working alongside my new colleagues to capture this.”

According to the group, Vodafone Business reported service revenue growth of 5% in the fiscal third quarter. Vodafone said the unit is “growing across all segments due to strong public sector demand and increasing customer adoption of new digital services, such as cloud, security and IoT.”

Also noted…

Virgin Media tied with Starlink to serve remote areas.

India’s Vi carried out a public offering to fund 4G and 5G.

BT is reportedly planning to sell off its Irish unit.

ETSI has elected former Ericsson and Huawei executive Jan Ellsberger as its new director general.

US-based Comcast entered the prepaid market with the NOW brand.