SES to buy rival GEO satellite provider, Intelsat; T-Mobile US invests in fiber networks, China Telecom named leader in techco transformation and European telcos launch and trial Open-RAN.
A week in telecoms: Satellite consolidation continues apace
A week in telecoms: SES outlines plan to buy Intelsat
The satellite communications industry is set for further consolidation next year if European provider SES succeeds in its recently announced plan to buy US-based Intelsat for $3.1 billion.
The move to combine the geostationary Earth orbit (GEO) specialists, which are also increasingly investing in medium Earth orbit (MEO) systems, comes amid rising competition from low Earth orbit (LEO) constellations such as SpaceX-owned Starlink and Amazon’s Project Kuiper.
Should the transaction be approved, it will create a company with a combined fleet of more than 100 GEO and 26 MEO satellites. Eight new GEO and seven new MEO satellites are set to be launched by the end of 2026. The proposed transaction is expected to complete in the second half of 2025.
SES Chief Executive Adel Al-Saleh, who recently moved over from Deutsche Telekom’s T-Systems, said having “scale and a multi-orbit capability is critical to success.”
Speaking during the SES earnings call, Al-Saleh said this is a “highly dynamic market. There is new competition, this market is moving very fast. [There are] new LEO entrants that are launching their constellations. There’s rapid innovation, both in space as well as the ground, new technologies coming into effect.”
The proposed combination of SES and Intelsat follows the acquisition by Viasat of Inmarsat, and Eutelsat’s takeover of OneWeb.
Moreover, telcos are increasingly hooking up with satellite providers of all flavors to extend broadband coverage and/or offer direct-to-device satellite services.
T-Mobile US plans first fiber foray
The self-proclaimed Un-carrier T-Mobile US has unveiled its intention to form a 50:50 joint venture with Sweden-based investment firm EQT in order to acquire local US fiber network provider Lumos.
The operator plans to invest $950 million initially, followed by an additional $500 million between 2027 and 2028. The funding is expected to enable Lumos to pass 3.5 million premises by the end of 2028, up from 320,000 premises and over 7,500 route miles currently.
The deal is expected to complete in late-2024 or early-2025. Lumos will then transition to a wholesale model with T-Mobile as the anchor tenant.
The move is significant as it marks the first time mobile-focused T-Mobile will have invested in a fixed fiber network. The operator has been exploring how it can expand its broadband operations beyond its fixed-wireless access (FWA) service, which is expected to have seven million to eight million customers by the end of 2025. T-Mobile currently has over five million FWA customers.
T-Mobile has already launched T-Mobile Fiber in in 16 US markets, in collaboration with local network providers such as SiFi Networks. Here, T-Mobile acts as an ISP on open access networks.
Despite the fiber deal, Chief Executive Mike Sievert emphasised that T-Mobile will remain focused on mobile. Speaking during an earnings call, he said the operator is “not interested in any wholesale changes that basically change who we are. No big on-balance sheet acquisitions are currently being examined.”
T-Mobile has also just received regulatory approval to acquire mobile brands Mint Mobile and Ultra Mobile and closed the deal on May 1.
E& reportedly eyes United Group
Emirates Telecommunications Group, known under the symbol e&, is said to be considering a potential acquisition of eastern European operator group United Group as it seeks to expand further outside its domestic market.
According to Bloomberg, which cited unidentified sources, United Group’s private equity owner BC Partners may seek a valuation of around €8 billion.
United Group has operations in Serbia, Slovenia, Croatia, Bosnia & Herzegovina and Montenegro. It has also expanded into European Union countries such as Bulgaria and Greece.
Last August, the expansionist e& agreed to acquire a controlling stake in PPF Telecom Group’s assets in Bulgaria, Hungary, Serbia and Slovakia. It has also built up a 14.6% stake in Vodafone Group.
BC Partners acquired United Group in 2019 from private equity firm KKR. In 2023, Saudi Telecom’s Tawal infrastructure arm agreed to buy a portfolio of tower assets in Bulgaria, Croatia, and Slovenia from United Group for €1.22 billion.
The Saudi operator has subsequently agreed to sell a 51% stake in Tawal to the Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund, in order to form the largest mobile tower giant in the region.
China Telecom appoints new CEO, leads techco transformation
China Mobile appointed He Bia to the role of CEO, replacing Dong Xin who resigned three months ago to take a government position. CFO Li Ronghua had been sitting as interim CEO, until Biao took charge on April 26.
He takes control of what is still the world’s largest mobile operator in terms of subscribers. China Mobile ended 2023 with 465 million 5G subscribers, adding 138 million last year.
In addition, the operator is making great strides in its transition from telco to techco — a strategy now being pursued by numerous CSPs around the world.
According to a new report from consultancy and research firm Omdia, China Mobile has emerged as the top overall performer in Omdia’s telco-to-techco benchmark, which assesses the efforts of 12 leading telecom service providers globally.
As explained by Matthew Reed, Chief Analyst, Service Provider Strategies, at Omdia, a telco that has adopted the techco model successfully is “a software-based organization that offers services in areas such as AI, big data, the cloud, and IoT, and can implement digital transformation for specific vertical sectors.”
Omdia noted that digital transformation revenue, which is China Mobile’s term for revenue from new digital services, accounted for 29.4% of its service revenue in 2023, an increase of 22.2% year on year.
Japan’s NTT is ranked second in Omdia’s benchmark report, followed by SK Telecom and then Telefónica. AT&T, e&, and Vodafone rank equal-fifth, followed by Reliance Jio, equally ranked Orange and Deutsche Telekom, Axiata, and MTN.
Open RAN news: Vodafone completes Italy trial, O2 Germany launches network
Open radio access network (RAN) developments were in the headlines this week, with come company announcements and a report on the performance of the open RAN infrastructure market in 2023.
Vodafone announced it had completed a three-month trial with Nokia in Italy, noting encouraging results in terms of speed and latency. However, the group is also in the process of selling its Italian business to Swisscom.
Vodafone is a major proponent of open RAN technology, with commercial deployments in Romania and the UK. It has also recently kicked off an open RAN tender for its 170,000 sites.
Over in Germany, Telefónica Deutschland (O2 Germany) and Samsung announced the launch of their first virtualized RAN (vRAN) and open RAN commercial site in Germany.
They said this builds on the their joint initiative, announced in October 2023, where they agreed to develop a roadmap for several tests of vRAN and open RAN technologies. Following the trials, O2 Germany and Samsung are now progressing from lab to field with the launch of this first commercial site.
Meanwhile, Stefan Pongratz, VP and mobile infrastructure analyst at Dell’Oro Group, published a report on the open RAN infrastructure market, noting that open RAN infrastructure revenues cooled off in 2023 after four years of intense acceleration.
However, Pongratz remains optimistic about the long-term outlook. “We still anticipate that most operators will gradually incorporate more openness, virtualization, intelligence, and automation into their RAN roadmaps over time,” he wrote.
Also noted…
The Federal Communications Commission voted to impose net neutrality rules.
South Korean operators SK Telecom and KT continued to pursue AI ambitions, with SKT planning to unveil its telco LLM in June.
Ooredoo Group signed an agreement with Nokia to collaborate on private 5G deployments.