Network access provider Openreach (BT) are preparing to trial a new “end customer voucher scheme“, which will offer a special gift card for shopping worth £50 to consumers who follow the promotion and sign-up via a Fibre-to-the-Premises (FTTP) based broadband package from one of their many retail ISPs.

The idea of a wholesale provider offering an incentive directly to consumers is nothing particularly new in this market (i.e. as a complement, NOT replacement, to any offers that retail ISPs might already be running). For example, CityFibre have long made a habit out of offering cashback incentives to new subscribers (here).

However, Openreach usually prefers to deal directly with ISPs at the wholesale level, rather than consumers. But the new trial changes that dynamic a bit. Sadly, the related briefing on the operator’s website (here) doesn’t include any useful information, although we have since been able to uncover some details and can now share them with our readers.

The voucher scheme appears to reflect a small scale trial, which will run from 24th June 2024 to 1st September 2024 and is to only be marketed at certain postcode sectors in England, Wales and Scotland (reflecting an overall sample of under 100,000 premises). Northern Ireland has not yet been included.

As part of this, Openreach will market a special offer to consumers in the chosen FTTP areas – aimed at those who have yet to sign-up with the new service – via online social media and physical postcards. The trial offer involves a One4All multi-store gift card that is said to be worth £50, irrespective of your choice of ISP. Existing FTTP customers on their network won’t be able to apply, unless they’ve been without an active service for at least 60 days.

Crucially, this is currently just a trial, and we don’t yet know how the promotion might change in the future, or even if they’ll expand its availability. Openreach are already seeing decent take-up of around 34% and this may well help to incentivise further adoption, while at the same time helping them to compete with cheaper and faster rivals. But no doubt Altnet’s will be watching very closely for anything they might deem as the incumbent abusing its market position.

As first rumoured on these pages during April 2024 (here), two of the markets largest alternative UK network operators – Netomnia (YouFibre) and Brsk – both of which have deployed a significant amount of Fibre-to-the-Premises (FTTP) broadband ISP infrastructure to cover UK homes and businesses, have today formally agreed to merge.

Firstly, some context. Brsk is currently the smallest of the pair and have, thus far, been fuelled by an investment of at least £259m (mostly via Advencap and the Ares Management Corp), which has enabled them to cover 552,000 premises (536,000 Ready for Service) in England. The operator sells packages to consumers under the same brand (they have 41,200 customers) and, until today, were aiming to pass 1 million homes by 2026.

On the other side we have Netomnia, which is easily the largest of the two operators, having already covered almost 1 million premises and raising £795.5m of investment in the space of just three years (via Advencap, DigitalBridge and Soho Square). The operator, which sells its packages to consumers via sibling ISP YouFibre (they had 80,000 customers in March 2024), also held a tentative ambition to reach up to 2 million premises by the end of 2025 (1.5m is already planned).

However, the pair have long been linked to speculation about a possible consolidation, which is partly due to the fact that they share one of the same investors. In addition, both operators have managed to avoid overbuilding each other, and appear to share a similarly capital-efficient approach to build, which harnesses as much of Openreach’s existing cable ducts and poles (PIA) to run new fibre as possible (Netomnia spends an average of £250 per premises passed).

The newly merged group will thus have a combined network footprint of 1.5 million premises (RFS) and a customer base of 140,000 immediately post-merger, with a target of reaching 3 million premises (coverage) by the end of 2025.

Jeremy Chelot, CEO of Netomnia, said:

“By merging our network expertise and resources, we are creating a powerhouse to deliver an unparalleled internet experience for our customers, driving innovation and further consolidation among altnets. The additional capital from our investors and support from our lenders is a powerful endorsement of our vision and ability to execute at the highest level.”

Giorgio Iovino, CEO of Brsk, said:

“The merger is a testament to our shared entrepreneurial spirit and experienced teams that can deliver even more. Together, we are set to deliver a fibre network that is not only fast and reliable but also future-proof, ensuring our customers benefit today and tomorrow. Our joint platform will be where the most powerful internet lives.”

The official announcement notes that Netomnia and Brsk have already used £300m of debt and they “plan to use up to £900m of debt to grow the footprint to 3 million premises, demonstrating the companies’ prudent approach to capital management“.

Just for context, since 2020, Netomnia and Brsk have raised over £1.3bn of capital, with support from investors Advencap, DigitalBridge, and Soho Square Capital. DigitalBridge and Advencap will now be committing additional equity funding as part of today’s news.

The merger is set to be finalised in the coming weeks, pending regulatory approval (this will not be an obstacle), enabling customers to benefit from an “alternative FTTP platform that offers a seamless network experience, unified pricing, and enhanced service quality across the shared footprint.”

The deal will create one of the market’s largest Altnets, which will be much more readily able to challenge the leading players in this space, such as CityFibre, CommunityFibre and Hyperoptic. In addition, the combined entity creates a much more attractive wholesale option for ISPs, since scale is often a key factor for some providers when planning to invest in supporting a new network.

The newly merged entity will be led by Netomnia and YouFibre’s existing boss, Jeremy Chelot, as Chief Executive Officer (CEO) and Wil Wadsworth as Chief Financial Officer (CFO). Giorgio Iovino and Ian Kock will remain as CEO and Chief Operating Officer (COO), respectively, of Brsk.

Finally, I’d like to apologise for being slower than usual to cover this development, but even yours truly needs time off and a 1pm press release on Saturday tends to clash with lunchtime alcohol consumption and chaotic family life .

Telecoms giant BT has confirmed to ISPreview that they’re aware of an annoying error that impacted many entries in a couple of the online .PDF (Adobe Reader) versions of their A-Z Directory of Business & Residential Listings (phone book), which have recently begun to replace the old printed Phone Book.

In this case, the issue stemmed from the fact that BT had accidentally added an extra zero (0) on to the end of all the residential listings for places like Horsham (here), which is now in the process of being corrected “as soon as possible“.

Suffice to say that if you’ve already downloaded some of the affected listings then it might be wise to try again in a few days and, hopefully, by then it will have been resolved to give the correct numbers again. Credits to one of our readers (Hywel) for pointing out the mistake.

News

Bank of America, Morgan Stanley, and BNP Paribas have been hired to manage the sale in the Indian market 

Vodafone is seeking to sell its 21.5% stake of India’s Indus Towers, which is worth around $2.3 billion, sources familiar with the matter told Reuters. 

The sources said that the final stake sale remains undecided, but could be lower than 21.5% if demand is insufficient. 

Indus Towers are one of the largest tower companies in the world, with 219,736 towers and 368,588 co-locations to its name as of March 2024. 

Vodafone first announced its intention to sell its stake in 2022 (which then was 28%), but has only sold off a small percentage so far. 

Staying with the Indian market, Indian operator Vodafone Idea has issued its network equipment vendors Nokia and Ericsson with preference shares instead of payment for product orders. If approved by investors, Nokia will receive nearly 1.03 billion shares and Ericsson 634 million, giving the companies a 1.48% and 0.91% stake in Vodafone Idea respectively. 

“VIL is all set to participate in the industry growth with right investments to expand its 4G coverage and offer 5G experience to its customers while remaining focused on its execution capabilities,” said Akshaya Moondra, CEO of Vodafone Idea in a filing to the Bombay Stock Exchange. 

“As VIL embarks on its growth journey, support from key stakeholders is critical and the agreement with Nokia and Ericsson reaffirms these vendors as long-term partners of the Company, and sets the stage for the next phase of our growth,” he continued. 

The company has struggled with its cash flow for some time. Although the country’s third largest mobile operator by subscriber numbers, it struggles to compete with Reliance Jio and Bharti Airtel. The Indian government became the company’s largest shareholder last year (33.1%), but due to its debt, remains as India’s only telco yet to launch 5G services. 

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Also in the news:
Freshwave to deploy small cells in Manchester for VMO2
SGP.32: A reality check on the latest remote SIM provisioning standard
Vodafone Germany partners with FlyNex on industrial drone platform 

Customers of Sky’s sibling NOW Broadband ISP sub-brand, which is best known for its associated NOW TV streaming service, should take note that the provider has today launched a new 75Mbps Full Fibre (FTTP) tier via Openreach’s network and will now only sell new packages via Sky’s website (i.e. NOW no longer has their own order system).

The move reflects a continuation of the strategy that we first saw in February 2024 (here), when NOW introduced their first Fibre-to-the-Premises (FTTP) package (100Mbps “Powered by Sky“) and oddly only made it available via Sky’s website – effectively diluting the somewhat more separate approach and branding that NOW TV had previously been taking.

However, from today, new customers will also be able to purchase a new full fibre product, NOW Full Fibre 75, which adopts the same “Powered by Sky” approach as their 100Mbps tier. Where full fibre isn’t available, NOW Superfast (average speeds of 61Mbps) – a Fibre-to-the-Cabinet (FTTC / VDSL2) product – will be available instead (also via Sky).

As a result, the old NOW Super Fibre, NOW Fab Fibre and NOW Brilliant Broadband packages are no longer available to purchase for new customers via NOW’s own website. Existing NOW Broadband customers will be able to keep their current NOW Broadband contract, at least for now. But they will “have the choice to move to a NOW Powered by Sky package when recontracting.”

Amber Pine, Sky’s MD of Connectivity, said:

“With data consumption exponentially increasing every year, customers need increased bandwidth, better reliability, and ultrafast speeds in the home. Full fibre is essential to the connected home and NOW Full Fibre 75 provides an additional speed choice for NOW customers. ‘Powered by Sky’, both NOW Full Fibre 75 and NOW Superfast packages, enable us to offer the best technology at the best value through the NOW brand.”

The new approach will no doubt be more cost-effective for Sky to maintain, while the refreshed packages also maintain a similar price point to those that came before. But quite why they haven’t gone any faster than 100Mbps yet is unclear, and this does raise questions about the future of the NOW Broadband.

Broadband and telecoms giant BT (EE) has warned the Competition and Markets Authority (CMA) that the mega-merger (here) between rival mobile operators Three UK and Vodafone would give rise to a “substantial lessening of competition“, which they claim would “ultimately [result] in higher prices, poorer network quality, and reduced incentives to invest.”

The merger, which would see Vodafone hold a 51% slice of the business and CK Hutchison (Three UK) retain 49%, has previously been promoted by the parties as something that would be “great for customers, great for the country and great for competition,” while also resulting in a major £11bn investment to upgrade the UK’s 5G mobile (broadband) infrastructure and network coverage.

However, the first phase of the CMA’s investigation of this deal has previously raised concerns, not least that it “could lead to mobile customers facing higher prices and reduced quality” (here). The Phase 1 report noted that Three UK was “generally the cheapest” of the four primary mobile operators and that combining the businesses “will reduce rivalry between mobile operators to win new customers“, thus resulting in higher prices.

“Competitive pressure can help to keep prices low, as well as provide an important incentive for network operators to improve their services, including by investing in network quality,” said the CMA in March 2023. But the authority added that the deal “may make it difficult” for smaller mobile ‘virtual’ operators (MVNO), such as Sky Mobile, Lebara and others, to negotiate good deals for their own customers due to there being fewer suppliers.

In addition, the CMA questioned some of the data and commitments provided by Three UK and Vodafone. For example, the authority said it “does not believe that there is detailed and verifiable evidence demonstrating that any customer benefits from any accelerated roll out of 5G SA would be timely, likely to materialise or sufficient to outweigh the Significant Lessening of Competition.”

Finally, and somewhat contrary to previous statements made by Vodafone and Three UK about being “sub-scale, unable to cover their cost of capital, and constrained in their ability to invest and compete effectively“, the CMA found that both operators were in fact “viable and competitive businesses and that they would continue to invest in their networks absent the Merger“. The CMA therefore noted that if the merger did not go ahead, both operators would in fact “continue to compete with each other, as well as with other mobile operators, in a broadly similar way as today.”

BT’s Scathing Response

Since then, the CMA has been busy conducting a deeper Phase 2 investigation, which this week published the first of several responses from other companies and organisations. But the most important submission came from BT (here), which largely agreed with the CMA’s Phase 1 findings and appeared to spare no blushes in that regard.

Key Points from BT’s Submission

• The proposed deal will create a Merged Entity [Vodafone and Three] with a disproportionate share of capacity and spectrum, unprecedented in UK and Western European mobile markets, which will substantially lessen competition and deter investment (the Asymmetry Concern).

• In addition, BT agrees with the CMA’s Phase 1 conclusion that the Merged Entity’s participation in MBNL [i.e. the network sharing agreement between EE and Three] will result in lower levels of investment arising from its access to commercially sensitive information (CSI) relating to BT’s investment plans (the MBNL CSI Concern).

• Thirdly, BT also agrees with the CMA’s Phase 1 conclusion that the Merger will result in direct harm to BT’s ability to compete, through the Merged Entity’s participation in MBNL (the MBNL Frustration Concern).

• Whilst each of these three concerns is significant in and of itself, their combination exacerbates the adverse impact the Merger will have on competition in UK mobile markets and, ultimately, UK consumers.

• BT welcomes the CMA’s conclusions on the MBNL CSI Concern and the MBNL Frustration Concern at Phase 1 and its intention to further investigate these concerns at Phase 2. However, BT considers that the CMA’s Phase 2 investigation must also consider carefully the Asymmetry Concern, i.e. the direct impact that the Merged Entity’s capacity and spectrum asymmetry will have on rivals’ (and therefore on the Merged Entity’s) incentives to invest.

• BT agrees with the CMA’s conclusions at Phase 1 that the Merging Parties’ claimed efficiencies appear to be unsubstantiated, are not incremental to today’s market outcomes (even if realised), and will not be passed on to UK consumers in the form of lower prices or greater investment.

• Overall, BT believes that the combination of extreme capacity and spectrum asymmetry arising from the Merger, along with the unprecedented access that the Merged Entity will have to BT’s (as well as to VMO2’s) strategic investment plans, and the Merged Entity’s ability and incentive to disrupt the effective functioning of MBNL, will give rise to a substantial lessening of competition in UK mobile telecoms markets, ultimately resulting in higher prices, poorer network quality, and reduced incentives to invest – all to the detriment of UK consumers.

Naturally, BT’s opposition to the deal stems from their own understandably vested interests, as well as legitimate concerns around spectrum ownership and network sharing. But we shouldn’t pretend that they’re seriously worried about consumers paying higher prices. After all, EE itself is far from being a budget level operator, and if any rivals did significantly raise their consumer prices, then that could conceivably benefit EE, at some level.

The strong expectation is that Vodafone and Three UK will end up trying to placate such concerns via a series of binding commitments. In this case, we expect that such commitments may include an agreement to divest some of their radio spectrum holdings to rivals, as well as a pledge to protect prices for an initial period of years, support for MVNO operators and to fix concerns around network sharing.

However, it remains difficult to know how strict the CMA will be on all of this when they give their verdict later in the year, although all signs suggest that they’ll probably attempt to extract a hefty price for approval – assuming the deal isn’t blocked outright. The question will then be whether or not Vodafone and Three UK are willing to pay such a price; we think they will.

News 

This week, the Competition and Markets Authority (CMA) has published ten responses to an issues statement that was released in May, which invited parties to provide submissions commenting on the issues and possible remedies for the merger

Among them is the response from UK incumbent BT, who released a 40-page report. The company claims that the proposed merger will “create a Merged Entity with a disproportionate share of capacity and spectrum, unprecedented in UK and Western European mobile markets, which will substantially lessen competition and deter investment.” According to the report, the merged entity would have a 61% share of the UK mobile network capacity, an unprecedented amount in UK and Western Europe mobile markets. 

BT say that the merger would result in “higher prices, poorer network quality, and reduced incentives to invest – all to the detriment of UK consumers.” 

Such comments from the UK market leader are to be expected, as the merger puts its top position under threat. Speaking to The Times, Ahmed Essam, Vodafone’s chief executive of European Markets, said that the company is not surprised by BT’s comments, but it was pleasing to see support from other big players, such as Swedish giant Ericsson, 

“Currently the UK mobile sector needs investment, with two large and two sub-scale players. We firmly believe creating a third mobile network operator, with the scale to invest and compete, will strengthen competition in the UK’s mobile market, benefiting customers and the wider UK economy,” concluded Essam. 

“Consolidation is broadly seen as a pivotal measure towards helping operators to attain the necessary scale for expanding their future network infrastructure,” said Ericsson’s supportive response. 

“Consequently, it should facilitate the delivery of the high-quality service, high bandwidth, and extensive coverage needed to fully harness the economic and social benefits of nationwide 5G standalone (5G SA) networks,” the response continued. 

Last month, The UK government released a “Publication of notice of Final Order” that provisionally approves the Vodafone–Three merger, subject to certain conditions. The CMA investigation, which is separate and ongoing, began its second phase in April. The results are expected in September. 

Join the conversation around UK telcos at this year’s connected Britain, 11-12 September in London. Get half price tickets this week only!

Also in the news:
Freshwave to deploy small cells in Manchester for VMO2
SGP.32: A reality check on the latest remote SIM provisioning standard
Vodafone Germany partners with FlyNex on industrial drone platform 

Network builder nexfibre, which shares some of the same parentage as Virgin Media (VMO2), has today announced that they expect to cover 12,000 premises across the Rochford District of Essex (England) via their new wholesale accessible 10Gbps capable Fibre-to-the-Premises (FTTP) broadband ISP network.

The company has already covered over 1 million premises across the UK with their new full fibre network, and they’re currently in the process of investing another £1bn during 2024, which should enable them to cover an additional 1 million UK premises (on top of their existing footprint).

Just for some context. Telefónica, Liberty Global and InfraVia Capital Partners originally setup the new £4.5bn nexfibre joint venture in 2022 (here), which aims to deploy an open access fibre network to reach “up to” 7 million UK homes (starting with 5m by 2026) in areas NOT currently served by Virgin Media’s network of 16m+ premises. The funding reflects £3.3bn of fully underwritten financing and up to £1.4bn in equity commitments.

Rajiv Datta, CEO of nexfibre, said:

“We are committed to delivering high quality full-fibre connectivity to communities and business across the UK, including here in Rochford. By boosting access to broadband, we are enabling access to the tools needed to participate and thrive in a modern, digital society and stoking growth in the local economy.”

The move makes sense as Virgin Media doesn’t currently have much of any gigabit broadband coverage in Rochford, although nexfibre’s network will face strong competition from both Cityfibre and Openreach’s rival FTTP networks, which are already widely present.

Press Release

The collaboration will advance Indosat’s AI Native TechCo vision, empowering it to better serve more than 100 million customers across its B2B and B2C segments

Companies to develop enterprise-grade AI solutions for customer service modernization, dynamic content generation and hyper-personalization, geospatial analytics and predictive modelling, augmented network and IT operations, and back-office transformation

Jakarta, June 14th, 2024 – Indosat Ooredoo Hutchison (“Indosat” or “IOH”) and Google Cloud today announced the expansion of their long-term strategic alliance, aimed at accelerating Indosat’s transformation from telco to AI Native TechCo. This collaboration will combine Indosat’s vast network, operational, and customer datasets with Google Cloud’s industry-leading unified AI stack to deliver exceptional experiences to over 100 million Indosat customers, as well as enterprise-grade AI and generative AI (GenAI) solutions for businesses across Indonesia.

AI agents and applications, when effectively grounded in a communications service provider’s securely managed and privacy-compliant data assets, can augment human capabilities with powerful multimodal data analysis, pattern recognition, and recommendations to unlock new revenue streams and efficiencies, and elevate the customer experience. Under this alliance, the companies’ joint innovation initiatives will therefore be focused on creating tailored AI and GenAI solutions to address unique opportunities and challenges in the Indonesian market. These include:

Customer service modernization: Google Cloud’s Contact Center AI solutions will equip call center staff with GenAI tools to enhance their productivity and effectiveness. Specifically, these tools will provide live call transcription; recommended responses derived from knowledge bases; real-time conversation analysis; and post-call sentiment analysis, leading to faster, more accurate, and more effective resolution of customer queries. In addition, GenAI-powered conversational agents will be built and deployed to offer self-service options across Indosat’s digital touchpoints. These agents will be capable of seamlessly switching between topics, addressing complex inquiries, supporting transactions, and operating 24/7.

Dynamic content generation and hyper-personalization: Creative AI agents with multimodal and multilingual capabilities will promote relevant offerings based on a customer’s profile and specific needs. When integrated with customer relationship management and content management systems, they will assist marketers by identifying high-value leads, generating rich content (i.e., text, images, and videos), and engaging customers across channels with personalized offers and messages.

Geospatial analytics and predictive modelling: Google Cloud’s custom machine learning (ML) models, trained on Indosat’s extensive operational datasets, will empower organizations across industries to make data-driven decisions around optimal site selection for strategic expansion; optimize asset management and maintenance based on real-time location and condition data; and model potential natural disaster scenarios to develop proactive mitigation strategies. Indosat will also leverage these tools to identify areas with high growth potential but limited network coverage, informing its strategic decisions to expand network capacity and bridge the digital divide between urban and remote communities.

Augmented network and IT operations: Self-optimizing systems that are powered by custom ML and multimodal models will predict ROI from capital investments; reduce energy consumption; optimize asset design and utilization; and proactively detect and resolve issues. This results in cost savings, more sustainable operations, and improved service reliability. For example, AI can dynamically adjust cell tower power levels during off-peak hours, assist field technicians in rapidly diagnosing and resolving faults based on their verbal and visual inputs, and intelligently reroute network traffic to avoid faulty components while repairs are being made. Additionally, GenAI-powered agents that assist with code generation, completion, and troubleshooting will significantly increase IT teams’ development and delivery velocity, leading to faster time-to-market and time-to-value for reliable software products and services.
Back office transformation: Custom GenAI-powered enterprise search applications will enable HR, legal, procurement, and finance teams to instantly access the precise information they need to excel in their job roles. By simply asking questions in natural language, they will receive accurate, contextually relevant answers or summaries from vast amounts of unstructured data, such as policies, contracts, financial reports, or employee records, thereby eliminating the need for manual searches, accelerating decision-making, and boosting overall productivity.

In addition to implementing these solutions across Indosat’s business operations, Indosat and Google Cloud will also explore joint go-to-market initiatives to empower Indonesia’s digital ecosystem. They will look to provide micro, small, and medium enterprises (MSME), startups, enterprises, and public sector organizations with access to these solutions, alongside Google Cloud’s AI-optimized infrastructure, unified data platform, and unified AI development platform.

Vikram Sinha, President Director and Chief Executive Officer, Indosat Ooredoo Hutchison, said: “As Indonesia steps into the digital era, we remain committed to Indosat’s larger purpose of empowering Indonesia by providing businesses and individuals with the essential tools and technologies needed for success. Our collaboration with Google Cloud is not just a pivotal milestone for Indosat, but also a significant stride in our mission to transform into an AI Native TechCo. Together, we will harness the full potential of cloud and AI to drive innovation, create new opportunities, and propel Indonesia’s digital economy forward.”

Karan Bajwa, Vice President, Asia Pacific, Google Cloud, said: “Indosat’s early adoption of cloud-native architectures and an AI-ready data analytics platform exemplifies its forward-thinking approach. This strong foundation, established through our collaboration from 2021, is now enabling Indosat to pursue a wide range of high-value ML and GenAI use cases at scale—and we’re excited by the possibilities. These initiatives will not only demonstrate the transformative power of AI in telecommunications, but also serve as a blueprint for other sectors seeking to harness this technology to drive growth and nationwide impact.”

It’s been a couple of years since CityFibre first started rolling out their 10Gbps capable Fibre-to-the-Premises (FTTP) broadband ISP network across the West Sussex seaside town of Bognor Regis (here). But the operator has today revealed that they’re now expanding their build into the areas of Middleton-on-Sea, Elmer Sand and Flansham.

The expansion should help to complement their existing deployment in the town, which the operator states has already brought full fibre to the areas of Aldwick, North Bersted, South Bersted, Shipney, Hotham and Felpham. But it remains unclear precisely how many premises will be reached by this build and when it will complete.

The work supports CityFibre’s wider ambition of covering up to 8 million UK premises (funded by c.£2.4bn in equity, c.£4.9bn debt and c.£800m of BDUK subsidy) – across over 285 cities, towns and villages (c.30% of the UK), although it’s unclear precisely when they will achieve this target (the original goal was for the end of 2025, but their current build + M&A plan may only get them to c.6m). The operator currently covers 3.6 million UK premises (3.3m RFS).

Adrian Smith, CityFibre’s Partnership Manager for Bognor Regis, said:

“Our full fibre rollout in Bognor Regis is progressing well and as we expand into new areas, we’re enabling even more residents and businesses to enjoy the benefits of gigabit speeds and ultra-reliable connectivity. Digital infrastructure underpins so much of modern life so we’re excited to see the impact that our world-class network will bring to the town. We’d like to thank residents for their continued support as we work to complete our network.”

The operator’s main FTTP competitor in the town is Openreach.