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Telco revenues to witness slow recovery in 2021, IDC reports

Inside Telecom Staff

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Telco revenues

Telcos have evolved from merely supplying their customers with telephony or broadband services, but also look to provide a setlist of Internet-based services such Pay TV.

While this offering has brought providers with new sources of revenue, during 2020, these services slumped with telco revenues totaling $1.53 trillion in 2020, representing flat year-over-year growth, according to the International Data Corporation (IDC) Worldwide Semiannual Telecom Services Tracker.

Forecasts for the coming year by IDC suggest that worldwide spending will increase by 0.7 percent in 2021 to reach a total of $1.54 trillion; however, with YoY numbers witnessing a minimal hike, it indicates that telco revenues will go through a slow recovery process.

“The COVID-19 pandemic was unquestionably the most important factor influencing the telco market in 2020. In the first six months of the year, the pandemic brought a notable decline to the market in the form of decreased subscriber numbers and lower services spending,” the IDC report highlighted.

This was caused by the strict lockdowns imposed by governments as well as the widespread pessimism and anxiety that forced people to cut spending on nonessential products and services.

In the second half of the year, the demand recovered, fueled by economic stimulus measures and the progress in vaccine development. The renewed optimism helped the global and regional markets to cover the losses recorded in the first half of the year and come close to equaling the prior year’s results, IDC experts noted.

Although the revenue outcome in 2020 was neutral, the pandemic drastically changed the trends that have shaped the global telco market for a long time.

Consumer fixed data services have suddenly become the most important type of connectivity, enabling home-bound people to work and entertain. Business fixed data services have temporarily lost momentum due to the migration of traffic to the consumer segment, but most of these connections were preserved as they were protected by long-term contracts.

In parallel, fixed voice services saw a slight increase in dropout rates because some companies within the small business segments went bankrupt and more residential clients gave up their connections for cost-cutting purposes.

 Mobile services spending also declined slightly due to slower renewal of contract agreements, reduction of out-of-bundle spending, and a sharp decrease in roaming revenues due to travel restrictions.

In the Pay TV segment, the migration from traditional Pay TV to Over the Top (OTT) services accelerated during the COVID-19 crisis, driven by increased consumption of video content and new OTT service launches.

IDC experts believe that connectivity will become an even more critical asset for households and businesses after the pandemic, as some of the habits adopted during the crisis (remote working, collaboration, online media consumption) are expected to become part of everyday life.

According to the report, the migration toward FttP access is expected to accelerate in most of the country markets, while the business fixed data market will recover in the longer term as the economic recovery drives increased investments in the cloudification of enterprise business activities.

Revenue growth in the mobile services space will be buoyed to a degree by 5G adoption, which will invite users to deploy more advanced data capabilities and uptake the content and services dependent on high-speed data connectivity, IDC expressed.

The global telco market was put to a serious test in 2020 and it successfully passed. IDC believes that the lessons learned last year will help the industry to secure stable growth in the coming period. “The COVID-19 pandemic demonstrates the resilience and value of the telecoms industry,” said Chris Barnard, vice president, European Infrastructure and Telecoms.

“New ways of working will persist beyond the pandemic, shaping future revenue opportunities, while the network-centricity of consumers will drive bandwidth requirements in that segment as well,” Barnard added.

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Telecoms

Patrick Drahi’s Altice acquires 12.1% stake in Britain’s BT

Inside Telecom Staff

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Patrick Drahi

France’s second largest telco, Altice, announced on Thursday the acquisition of a 12.1 percent stake in the UK’s BT Group for a valuation of $3.1 billion, as it looks to double down on its ambition of building a nationwide fiber broadband network.

Altice – which is owned by telecoms tycoon Patrick Drahi – operates in the U.S., France, Portugal, and Israel delivering fiber and mobile networks to more than 40 million users.

Altice UK is owned by Next Alt, Drahi’s private holding, which also controls SFR, the second largest telecoms operator in France behind Orange.

However, Altice UK, a company set up specifically for the acquisition, had rushed to calm critics by publicly informing “the BT board that it does not intend to make a takeover offer for BT.”

The company even highlighted that it holds the board and management team at BT “in high regard and is supportive of their strategy.”

In parallel, BT echoed Altice’s intentions as they released a statement categorizing the 12.1 percent acquisition as “support for our management and strategy.”

“We welcome all investors who recognize the long-term value of our business and the important role it plays in the UK,” BT Group’s statement read.

While others consider that BT, which is the UK’s largest broadband and mobile operator, is championing itself as a national hero by revamping the country’s networks which are currently trailing behind other EU countries such as Spain.

According to previous announcements, the telco is planning to extend its fiber broadband to 25 million homes and businesses by 2026 – a case in point of why the acquisition was approved.

This was doubled down by Drahi who released a statement noting that the investment “has a compelling opportunity to deliver one of the UK Government’s most important policies, namely the substantial expansion of access to a full-fiber, gigabit-capable broadband network throughout the UK.”

“Our approach is to combine high levels of technical expertise, resilience and operating efficiency with a strong focus on innovation and customer service. Altice has brought an entrepreneurial culture, energy and effectiveness to building its networks and operations,” the telecoms tycoon added.

In parallel, it is worth mentioning that this acquisition places Altice as the largest BT shareholder, steaming ahead of Deutsche Telekom’s 12.06 percent stake, according to numbers by Refinitiv.

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Telecoms

BT triples broadband speeds for 8,500 micro-businesses

Karim Husami

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broadband speeds

BT is tripling broadband speeds for 5,900 micro-businesses in Manchester and 8,500 micro-businesses in Birmingham to promote the launch of its new business unit dedicated to small firms and start-ups.

The new unit is launching in Birmingham by offering discounted full fiber packages for thousands of micro businesses – which typically have a handful of employees.

BT’s recent survey found that nearly a third of Birmingham small businesses (28 per cent) planned to move more of their operations online following lockdown restrictions easing; while 67 per cent would be more likely to adopt new technologies if they knew the technology industry provided training or support.

The survey also found that more than 70 per cent of small firms in Birmingham are confident in the success of their business as the lockdown restrictions lift. And with more than 18,000 businesses set up in Birmingham during 2020, the rise of digital shopkeepers and freelancers mean that an increasing number are running their business from home.

BT’s new online tools are designed to remove some of the biggest barriers which are preventing the UK’s smallest companies from using digital advertising to boost their online presence and reach new customers. The new service is currently being trialed with customers and BT will share more details over the coming weeks.

Working with its infrastructure partner Openreach, BT’s Enterprise business will focus on bringing full fiber to businesses across Birmingham, including 8,500 micro businesses initially. These businesses will be able to access BT’s fastest full fiber speeds yet – up to 900Mbps – a tripling of the speeds previously available.

Sarah Walker, BT Enterprise business director for the Midlands, said: “By setting up this new unit we’re investing in the future of Birmingham’s smallest firms and start-ups which are the lifeblood of the local economy. I’m really proud that we’re creating this new unit at a time when their success has never been more important in securing the city’s future as it rebuilds after the toughest economic crisis in a generation.

“In addition, we’re tripling the speed of full fiber broadband for businesses in Birmingham, with nearly 8,500 of the city’s smallest firms now able to access speeds of up to 900Mbps through BT. The availability of our fastest business broadband speeds yet will grow over time as Openreach continues to expand its full fiber footprint across the city,” Walker said.

Together with the launch of the UK’s first ‘unbreakable’ Wi-Fi for micro-businesses – delivering guaranteed coverage across the workplace, full fiber speeds and free tech expert support – the new unit will help the UK’s smallest firms and start-ups to rebuild and get set for growth.

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Telecoms

Finland, Japan team up to develop 6G research

Inside Telecom Staff

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As this article is being written, a new 5G connection is being setup somewhere around the world as operator after operator are swiftly working to either roll it out or refine it.

But while the fifth generation of mobile networks has become the goal for many countries across the world, major telecom players around the world have started planning ahead for 6G.

Industry groups from both Japan and Finland announced on Tuesday a joint research to develop the sixth generation of mobile networks, in a bid to compete with Chinese companies who have already started forging 6G standards.

Both nations will cooperate through the Finnish 6G Flagship research program coordinated by the University of Oulu and the Beyond 5G Promotion Consortium of the Japanese Ministry of Internal Affairs and Communications.

The Memorandum of Understanding (MoU) was published in Tokyo in connection with the Global Digital Summit organized by The Nikkei, a Japanese financial media, and the Japanese Ministry of the Interior and Communications.

6G Flagship and the Beyond 5G Promotion Consortium are now launching research and development collaboration on 6G technology. “The goal is to contribute significantly to the global standardization and regulatory development of 6G technology,” University of Oulu said in a statement.

“Japan is a major global player in the development of wireless mobile technologies, and it is in Finland’s interest to expand the cooperation to themes where mutual competitive advantage can be achieved for 6G development. The importance of the collaboration is underlined by Japan’s decision earlier this spring to invest $2 billion in the development of 6G technologies,” the statement added.

This cooperation comes following $4.5 billion commitment by both Japan and the U.S. toward the advancement of next-generation communications technology, dated back in April. Extending the cooperation to “third-countries” to promote secure connectivity is seen helping in the competition with China to set global standards.

In addition to the University of Tokyo and the National Institute of Information and Communications Technology, the key member organizations of the Beyond 5G Promotion Consortium in Japan includes several Japanese telecommunications companies, operators, and the conglomerate SoftBank.

6G Flagship is a research, development and innovation program funded by the Academy of Finland and the University of Oulu for 2018−2026.

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