News

A group of 37 shareholders are suing Sweden’s Ericsson for a combined total of SEK 1.8 billion ($170 million) over claims the company withheld information regarding its internal investigation into its dealings in Iraq 

A report by Dagens Industri says that the shareholders are seeking compensation after revelations of Ericsson’s potential wrongdoings in Iraq last year saw the company’s share price tumble. 

Ericsson has been quick to dispute the shareholders’ claims, saying it will ‘defend itself vigorously in this matter’. The share price has since halved, to 52.71 crowns on Friday. 

The report of the internal investigation, which published back in February 2022, saw Ericsson CEO Borjie Ekholm disclose “unusual expenses dating back to 2018” relating to their activities in Iraq, which may have included bribery payments to Iraqi terrorist groups. 

Ericsson said that the money was used for access to alternative transport routes which avoided Iraqi customs.  

“What we are seeing is that transport routes have been purchased through areas that have been controlled by terrorist organizations, including ISIS,” said Ekholm. 

The report saw Ericsson’s share price collapse and now, over a year later, it still sits at roughly half the value it held before the report was released.  

The Ericsson shareholders in question accuse the company of deliberately withholding the results of the company’s internal investigation for over two years, a move which they say breaches Market Abuse Regulations. These rules say that share issuers must promptly inform the public about relevant inside information, allowing them to make an accurate assessment. 

Ericsson has been quick to dispute the shareholders’ claims, saying it “disputes the claims in their entirety itself vigorously in this matter”. 

Ericsson is no stranger to accusations of corruption. In 2019, the firm was fined $1 billion by the US Department of Justice in one of the largest ever enforcements of the Foreign Corrupt Practices Act. Charges against Ericsson included bribing government officials in China, Vietnam, and Djibouti.  

“Swedish telecom giant Ericsson has admitted to a years-long campaign of corruption in five countries to solidify its grip on telecommunications business,” said the US Department of Justice in 2019. “Through slush funds, bribes, gifts, and graft, Ericsson conducted telecom business with the guiding principle that ‘money talks.” 

As part of the settlement with the US government, it was agreed that Ericsson would not face criminal conviction if it revealed all company wrongdoings and submitted itself to additional scrutiny. However, in March this year, it was revealed that Ericsson broke this deal by intentionally omitted details about its dealings with Iraq, leading to the company being fined another $206 million. 

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Also in the news:
Ericsson begins 5G manufacturing in Malaysia
O2 Slovakia and Slovak Telekom to share mobile networks
Nokia looks for a slice of BEAD funding with new Sanmina Corporation partnership 

News 

The job cuts represent roughly 5.5% of the company’s 108,500 employees 

Canadian telco Telus has announced that it will cut 6,000 jobs to free up cash flow and remain competitive, the company revealed on Friday.  

According to reports, roughly 4,000 of the jobs will be cut from Telus itself, with a further  2,000 at Telus International.  

In an announcement, company President and CEO Darren Entwistle said were prompted by the “evolving regulatory, competitive and macroeconomic environment.” 

“Against the backdrop of rapid transformation in our industry and the ways in which our customers want to engage with us, today we are announcing a significant investment in an extensive efficiency and effectiveness initiative across Telus,” he explained. 

According to the firm, the company restructuring will cost Telus C$475 million ($356 million) this year but will result in future annual savings of over C$325 million ($243 million). 

The restructuring news comes shortly after Telus revealed that its net income for this year’s second quarter had fallen by nearly 61% compared to last year, down to C$196 million ($146 million). 

As well as job cuts, Telus said it will implement additional cost-saving measures, such as developing more automated and AI-enabled systems to streamline operations. 

Telus are not alone in their restructuring strategies, as other Canadian telcos have also made sizeable job cuts this year. BCE Inc, parent company of network operator Bell Canada, announced in June that it will cut 1,300 jobs to cut costs. Meanwhile, Rogers Communications said earlier this year that it will make job cuts as a result of its merger with Shaw, which was given the green light in April this year. Exactly how many jobs are expected to get the axe is currently unclear.  

In fact, similar job cuts are taking place all over the world in the telecoms sector, with pressures on the global economy and rising inflation taking their toll on operators’ bottom lines. In the UK, for example, BT has announced its intention to reduce its headcount by around 55,000 – around 42% of its global workforce – by 2030, suggesting that greater use of AI will help absorb many of these roles. Similarly, Vodafone has said it will cut 11,000 jobs over the next three years in an effort to accelerate growth. 

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Also in the news:
Virgin Media O2 announces 2,000 job cuts
Vodafone warns of investment cuts if Three merger is blocked
O2 Slovakia and Slovak Telekom to share mobile networks

News

The operator has deployed 100 new 4G sites across the UK, helping deliver much needed connectivity to some of the country’s most remote locations

Today, Three UK has announced its latest achievement as part of the Shared Rural Network (SRN), having now deployed 100 4G sites to some of the hardest-to-reach areas in the country.

The new sites, 65 of which are in Scotland, provide additional mobile coverage of across roughly 2,800km2, as well as bringing 4G connectivity to over 37,000 premises.

“With mobile connectivity becoming increasingly critical to everyday life, it is vital that we provide a network capable of supporting local economies and communities in every part of the UK,” said Iain Milligan, CNO of Three UK. “The 100th site in Three’s SRN network is another significant milestone and will transform rural access to 4G. We continue to deliver on our commitments, but the locations we are focusing on are remote and challenging, and we continue to work with local authorities to try and progress as best as possible.”

The £1 billion SRN is a joint project between the UK’s four mobile operators and the national government, aiming to help expand to expand the geographic coverage of 4G to 95% of UK by the end of 2025. This involves upgrading existing infrastructure as well as the deployment of new equipment, all of which will ultimately be shared between all four operators.

The SRN is backed by £500 million of public funding, with a further £500 million provided by the mobile players.

Since its launch in 2020, progress on the SRN has been fairly modest, due largely to the copious amount of research and planning that must go into deploying new mobile sites in remote areas. Nonetheless, in recent months all four of the UK’s operators have provided related rollout updates, perhaps indicating that the programme is now beginning to pick up steam.

Earlier this month, Vodafone announced the activation of two new sites in Dumfries and Galloway, bringing their total to 49 sites deployed. Virgin Media O2 reportedly has a similar of new sites operational, with 50 sites built or upgraded as part of the SRN as of May this year.

EE, meanwhile, is playing its part in the SRN largely by upgrading its existing sites in selected areas. Earlier this year, the operator said it had upgraded relevant 1,500 sites across the UK, delivering 4G coverage to over 2,000 square miles.

Is the UK on track to meet its lofty coverage goals? Join the operators in discussion at the UK’s largest digital economy event, Connected Britain

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High Court denies BT’s attempts to sue Virgin Mobile

A new survey from mobile operator Vodafone UK has claimed that people are now keeping their mobile devices for longer, with the majority upgrading every 4 years, compared to every 2 years some five years ago. The cost-of-living crisis and rapidly rising prices of high-end Smartphones is no doubt playing a big role here. The […]

Consumers may now have to wait until early 2024 before Ofcom’s new and much delayed One Touch Switch (OTS) migration system is fully ready for prime time. The system was designed to make it easier and quicker to switch broadband ISPs, including via alternative networks, but it has been beset by delays. Just to recap. […]

Network operator Digital Infrastructure and sibling UK broadband ISP BeFibre have today revealed that they’ve entered the construction phase on their recently announced (here) Fibre-to-the-Premises (FTTP) infrastructure builds for the South Yorkshire locations of Thurnscoe, Harlington, Barnburgh, Bolton upon Dearne, and Goldthorpe. Upon completion, approximately 9,700 residents in the large village of Thurnscoe and the […]

Mobile operator Three UK has this morning announced that they’ve so far built 100 new cell sites as part of the £1 billion Shared Rural Network (SRN) project. The new sites are currently providing 4G connectivity (mobile broadband etc.) to over 37,000 rural premises across the country – spanning 2,800 square kilometres. The SRN is […]

News

The two operators say the network sharing deal will help prevent overbuild and accelerate their respective rollouts of 5G

Two of Slovakia’s biggest mobile operators have this week finalised a long-awaited network sharing deal, which will O2 Slovakia and Slovak Telekom share mobile infrastructure across the country.

The duo say the deal will help them to boost service quality for customers and reduce rollout costs, particularly with regards to their expanding 5G networks.

The capital city Bratislava and second-largest city Košice are notably exclude from the arrangement, with both operators maintaining their individual networks in these areas.

“Faster deployment of innovations, better signal quality, saving costs and the environment are just some of the benefits that sharing networks will bring. The improvement of customer experience with operators’ networks will also result, for example, from an increase in the common number of base stations, an increase in network capacity, and at the same time, coverage will improve,” said the operators in a joint statement.

Network sharing will begin gradually over the coming months, with process not expected to be fully complete for two or three years.

Both operators stress that the deal will not reduce market competition, with both operators continuing to compete on mobile services.

“As one of the leaders in covering Slovakia with high-speed connections, we will develop mobile networks even faster than before and bring new technologies to areas where it would have taken longer in the past,” said O2 CEO Igor Tóth.

“At the same time, this agreement will not affect our mutual competition and we will continue to compete for the favour of customers with our unique portfolio of products and services and the quality of customer care,” he added.

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Also in the news:
Comcast talks building a self-healing network at Connected America
1&1 foregoes Telefónica for Vodafone in 5G roaming deal
Is the UK losing the 5G rollout race? 

News 

A summary of all the essential financial news in the telecoms world this week 

Three UK publishes half year results 

In the company’s half-year results, Three saw revenue increase by 4% to £1.23bn due to an increase in the active customer base.  

Net customer service revenue went up 8% to £816 million, up from £754 million last year. 

Profit margins increased by 9%, which Three put down to the development of new business areas, such as the success of its SIM-only brand SMARTY and 5G Home Broadband.  

Operating expenses increased by 19%, largely because of inflationary pressures. These increased costs have exceeded margin growth, says Three, so EBITDA decreased by19% to £163 million. 

“We have successfully grown the business in the first half of the financial year and I’m proud that we have added to the customer base and delivered an increase in margin,” said Robert Finnegan, CEO of Three UK and Ireland. 

“While the ongoing rollout of 5G is a success, we have been clear that we are now at an inflection point. As strong connectivity continues to be critical to how we live and work, we’re planning for the future. Our EBITDA continues to be below our capital expenditure, which is unsustainable going forward.” 

Telecom Italia sees profit rise 

In its second quarter, Telecom Italia (TIM) has reported a 5.5% rise in profits, and a 0.6% rise in domestic revenue for the first time in five years, which reached to €2.9 billion The rise was mainly attributed to the company’s strong performance in the Brazilian market, recording an increase in service revenue of 9.5% to €1.1 billion. 

Ruthless pricing competition in the Italian market has seen the operator’s earnings erode over the last ten years, ultimately leaving TIM burdened with debt over €26.1 billion. In an effort to combat this, TIM is currently seeking to spin off and sell its landline grid, with current bids standing at around €20 billion. 

“The delayering plan for the sale of NetCo is progressing as planned after the decision made by TIM’s Board of Directors last June 22 to start exclusive negotiations with KKR, necessary activities to receive a conclusive binding offer by September 30 are ongoing,” said the company in a statement. 

BT’s price rises boost revenue 

BT Group has reported adjusted revenue of £5.16 billion for its fiscal first quarter, up 4% from £4.97 billion a year earlier. 

The Consumer division saw adjusted revenue rise 3% to £2.42 billion in Q1 and business revenue was up 3% to £2.03 billion. Openreach revenue rose 8% to £1.53 billion, and its adjusted EBITDA increased by 12% to £965 million. 

“We’ve made a strong start to the year, in what remains a very competitive market, with improved customer satisfaction, pro forma revenue growth in all of our business units and pro forma group EBITDA up by 5%,” said CEO Phillip Jansen  

Along with many other providers, BT increased its prices by 14.4% earlier this year. 

Bharti Airtel releases quarterly results 

Indian Telco Bharti Airtel has released its financial results for the April–June quarter, seeing a 14.1% year-on-year revenue increase to Rs374.4 billion ($4.5 billion) 

After accounting for the loss of $156 million, primarily due to currency devaluation in Nigeria, the net income for the quarter was $195 million, up 0.3% on last year. 

Airtel’s customer base reached 528.97 million at the end of the quarter, up from 495.19 million a year earlier. 

“We have delivered yet another quarter of strong and competitive growth across all our businesses. Our consolidated revenue grew sequentially by 4.0 percent, and EBITDA margin expanded to 52.7%, underscoring the simplicity and execution of our strategy,” said Managing Director Gopal Vittal. 

“Our focus on winning quality customers and driving premiumization has helped us add 5.6 million new 4G customers and the highest ever postpaid customers in any one quarter.” 

Qualcomm earnings take a tumble 

Citing reduced consumer spending due to slow economic growth, US chip producer Qualcomm has seen a steep decline in both revenue and profits. Sales amounted to $8.45 billion in the three months to June, a decrease of 23% on last year. 

Projections for the current quarter are equally unfavourable. Sales are expected to be $8.1–9 billion, down from $11.4 billion last year. 

After the release of the report, Qualcommm’s share price dropped by over 9.5%. 

“While we are in the process of developing our plans, we currently expect these actions to consist largely of workforce reductions, and in connection with any such actions we would expect to incur significant additional restructuring charge,” the company noted. 

Want to keep up to date with all the latest news from the international telecoms sector? Click here to receive Total Telecom’s daily newsletter direct to your inbox 

Also in the news:
Comcast talks building a self-healing network at Connected America
1&1 foregoes Telefónica for Vodafone in 5G roaming deal
Is the UK losing the 5G rollout race? 

Press Release

Global 5G leader Ericsson (NASDAQ: ERIC) has increased its socioeconomic contribution to Malaysia by producing its state-of-the-art 5G radio equipment in Penang – the company’s first 5G manufacturing facility in Southeast Asia.

Ericsson has been in Malaysia since 1965 and is rolling out the 5G network for Malaysia, which has already been recognised globally for its performance.

The production was inaugurated by Communications and Digital Minister YB Ahmad Fahmi bin Mohamed Fadzil (who was represented by Deputy Minister YB Teo Nie Ching), Penang Caretaker Chief Minister Tuan Chow Kon Yeow, and Swedish Ambassador to Malaysia, His Excellency Dr Joachim Bergstrom.

The 5G radio equipment being produced in Malaysia includes Ericsson’s industry-leading lightweight and energy-efficient Massive MIMO antenna-integrated radios and is produced in Prai in the northern state of Penang, in partnership with Flex, a global diversified manufacturer that operates across 30 countries.

David Hägerbro, Head of Ericsson Malaysia, Sri Lanka and Bangladesh says: “Ericsson is a world leader in 5G technology, currently powering 147 live networks across 63 countries, including Malaysia. The production of Ericsson’s global 5G radio equipment in Malaysia is our additional socioeconomic contribution to the country and marks the latest in a broad range of initiatives to bring our global experiences, expertise, and insights to Malaysia in support of the government’s ambition to be a digital leader.”

“Malaysia is an important market for Ericsson and domestic manufacturing in Malaysia will contribute to the local economy through employment and the transfer of technical knowledge to the local workforce in areas such as manufacturing, product engineering and equipment testing”, adds Hägerbro.

The resulting technology leadership has seen Ericsson recently topping the Frost Radar: Global 5G Network Infrastructure Market ranking for the third year in a row. It was also named a Leader in the 2023 Magic Quadrant for 5G Network Infrastructure for Communications Service Providers report by Gartner, also the third year in a row that Ericsson has earned this recognition from the independent research and advisory firm.

In addition to delivering a world-class 5G network, the selection of Malaysia for manufacturing also increases Ericsson’s socio-economic contribution to the country. Malaysia already hosts a Global Maintenance Center in Bukit Jelutong, which is one of the largest in the world, a Regional Distribution Centre at KLIA’s Free Trade Zone. It is also the base for a Regional Competence Hub that hosts 5G expertise and regional support functions, as well as promotes local talent globally.

Hägerbro says that Ericsson will continue to deliver a secure, affordable, world-class 5G network and customer experience for Malaysia.

Malaysia has already become a recognized global leader in 5G connectivity with reports stating that Malaysia has achieved outstanding results in implementing and delivering a great 5G experience for consumers as well as the 5G network delivering excellent speed and reliability, outperforming many industrialized nations.

Want to keep up to date with all the latest news from the international telecoms sector? Click here to receive Total Telecom’s daily newsletter direct to your inbox 

Also in the news:
Comcast talks building a self-healing network at Connected America
1&1 foregoes Telefónica for Vodafone in 5G roaming deal
Is the UK losing the 5G rollout race?