A week in telecoms: Vodafone ties with Accenture, and Iliad and Zain announce Q3 revenue growth

Welcome to the Inform news round-up, where we take a look at a selection of recent CSP news and how it impacts the wider industry.

Vodafone ties with Accenture on shared services

Vodafone announced a strategic partnership with professional services firm Accenture to support the commercialisation of the group’s shared services operation, currently managed through the shared services unit, Vodafone Intelligent Solutions (_VOIS).

Vodafone also indicated that Accenture is expected to invest €150 million in a new shared services entity, taking an undisclosed stake in the new business.

The aim is to create a “scaled, commercially driven and more efficient organization with high-quality services and enhanced speed to market for its portfolio of offerings.” Vodafone said it will retain majority interest, management control and sourcing decisions.

Margherita Della Valle, Group CEO at Vodafone, flagged the move as a “significant development for Vodafone as we change and simplify the way we work to better serve our customers and drive growth.”

She added that the partnership with Accenture “opens up new opportunities for our company and our people. We’re excited about the potential of our new commercial shared services organisation and the potential to serve not only Vodafone’s own markets but our telco partners across the industry.”

Final terms of the collaboration are expected to be finalised by spring 2024. Notably, the new unit will benefit from Accenture’s technology and transformation services such as its digital solutions and platforms, and AI expertise.

For Vodafone, the move forms part of wider efforts to transform its business, improving efficiencies and creating a more agile operation that can better serve customers and drive growth. 

Iliad and Zain report revenue growth, while Vodafone sees a decline

Further quarterly results from communications service providers (CSPs) did not all reflect the uptick in revenues revealed in our recent benchmark report, Telco revenue growth: Time for operators to place new bets.

France-based Iliad Group was typically bullish, reporting an 8% increase in revenue in organic terms in the three months to the end of September. On a reported basis, Q3 revenue rose by 9.5% to €2.35 billion. The group attributed the rise to its “record sales performance in France and Italy.”

In France, for example, Iliad said it recorded its strongest revenue growth in nine years (up 9.5%) this quarter. In Italy, revenues were up 13%, an improvement on the previous quarter, while Poland reported revenue growth of 7.8%. 

Kuwait-based operator Zain was equally buoyant, reporting a 10% rise in Q3 revenue to $1.6 billion following “solid performances” in Kuwait, Saudi Arabia, Iraq, Jordan and Sudan. The operator also attributed some of its success to gains made from the sale and leaseback of mobile towers in the first nine months of the year. It also pointed to its growing focus on consumer digital and fintech services, as well as its ZainTECH and B2B initiatives.

Vodafone Group, meanwhile, reported a 4.3% decline in revenue to £21.93 billion in the first six months of its current financial year, which ends on March 31, 2024. The group attributed the decrease to the disposal of Vantage Towers, Vodafone Hungary and Vodafone Ghana in the prior financial year.

It was at least able to report a 4.2% rise in service revenue. Group CEO Margherita Della Valle also said the operator improved revenue growth in nearly all of its markets and also returned to growth in Germany in the second quarter.

The Group is currently trying to find solutions in its three most challenging markets: Italy, Spain and the UK. So far, it has agreed to merge its UK operations with Three UK and sell Vodafone Spain to Zegona. Della Valle confirmed that Vodafone is continuing to explore options in Italy. 

Strong growth predicted for AI in telecoms 

Artificial intelligence (AI) is far from a new concept, but the arrival of ChatGPT and discussions around generative AI (GenAI) have brought it to greater public awareness.

Communications service providers (CSP) have also been quick to hail the opportunities presented by AI and GenAI, as highlighted by operators such as Proximus in Belgium and Vodafone in the UK. Operators hope to gain benefits from network automation, while also using AI to analyse data to improve the customer experience.

According to a new report by Emergen Research, the global market for AI in telecommunications is expected to grow strongly in the coming years. The research firm estimates that the market is expected to grow from $1.7 billion in 2022 to $54.51 billion in 2023, rising by a CAGR of 41.4% over the forecast period.

According to Emergen, the growing adoption of AI solutions in various telecom applications, increasing need for monitoring the content spread on telecommunication networks, and the advent of 5G technology in smartphones are key factors driving market revenue growth. 

“In addition, rising consumer demand for better services and a seamless customer experience is another key factor driving revenue growth of the market. Telecom operators are expected to profit financially from opportunities to provide enterprise process automation services powered by edge computing and Al as well as outsourced IT services as 5G installations rise,” Emergen said.

It warns that market revenue growth could nevertheless be restrained by factors such as compatibility problems, unreliability of AI algorithms, shortage of experienced workers, and issues with the protection of sensitive data.

The report also said the cloud segment is expected to account for largest revenue share in the global AI in telecoms market over the forecast period, while steady growth is also expected in the area of virtual assistance. 

For more on telcos and AI, you can also catch up on recorded sessions from the AI at Scale track at DTW23 - Ignite to discover the opportunities presented by AI and AIOps to improve operational performance, reduce costs, and ignite business growth, and where GenAI can have the biggest impact.

5G makes progress in Europe and LatAm

There have been some 5G network developments this week as CSPs continue to roll out the next generation technology around the world. 

For example, Colombia remains on course to hold its 5G spectrum auction as planned on December 20. The Ministerio de Tecnologias de la Informacion y las Comunicaciones (Ministry of Information Technologies and Communications/MinTIC) said it has received four offers from operators that are interested in participating in the auction: Claro Colombia; Partners Telecom Colombia (WOM); the network-sharing JV between Tigo and Telefonica; and Sociedad Futura Telecall Colombia.

According to Comms Update, unconfirmed press reports suggest that Sociedad Futura Telecall Colombia is an affiliate of Rio de Janeiro-based B2B operator Telexperts Telecomunicacoes (Telecall).

Up for grabs will be licenses in the 700MHz, 1900MHz, Extended AWS, 2500MHz and 3500MHz bands. MinTIC plans to reveal which operators have met the bidding requirements on December 4. 

Meanwhile, Poland took a further step towards the deployment of 5G in 3.5GHz spectrum following the completion of a spectrum action in October. The Office of Electronic Communications (Urzad Komunikacji Elektronicznej, UKE) in Poland reportedly said it is expecting the first applications next month from mobile network operators (MNOs) looking to deploy 5G base station equipment in the 3.5GHz band.

CSPs continue to reach for the sky with satellite deals

Indian operator Reliance Jio Infocomm recently broadened debate about satellite services when it announced a joint venture with SES to provide connectivity at what it describes as “highly affordable prices”.

Meanwhile, CSPs continue to form partnerships with satellite providers to help combat rural broadband challenges, improve international network coverage for enterprise internet of things (IoT), and address new markets such as satellite direct-to-mobile. 

For example, Telefónica Germany formed a new partnership with low-earth orbit (LEO) satellite operator OQ Technology to underpin its enterprise IoT business. In a release, the operator said it will offer business customers “worldwide 5G roaming availability, enabling the use of narrowband IoT (NB-IoT) solutions on all continents and oceans,” from the second quarter of 2024.

The aim is to connect OQ Technology’s satellite network via a Telefónica IPX cloud and integrate it into Kite,” which is Telefónica Germany’s IoT connectivity management platform.

OQ Technology has also just announced the successful launch of two LEO satellites (Tiger-5 and Tiger-6) on SpaceX’s Falcon 9 rocket. The satellites, of which there are now eight in orbit, are nanosatellites carrying ‘cell tower’ NB-IoT systems that offer 5G IoT connectivity.

Also this week, Orange launched a new Orange Satellite with Nordnet offer that is designed to provide broadband services to customers in mainland France that are not eligible for fiber and only have access to ADSL speeds of less than 8 Mbps. 

The offer is based on the Eutelsat Konnect VHTS satellite, designed by Thalès Alenia Space in Cannes and launched by on Ariane 5 in September 2022.

Jean-François Fallacher, CEO of Orange France, hailed the launch of Orange Satellite with Nordnet as “another step towards the deployment of superfast broadband for everyone, everywhere in mainland France.”

“Our range of connectivity offers now includes satellite, in addition to 4G and 5G Home, fiber and ADSL. This new offer responds to the needs of the French population, whatever their connectivity requirements, even in the most remote areas,” he added.