The Wall Street Journal in America recently ran an alarming multipage story that warned of how lead-insulated telecoms cables, which were installed decades ago, had been found to allegedly be poisoning the ground and nearby water. Similar cables were installed by BT (GPO) in the UK, but do they still pose a risk? We asked […]

Alternative fixed wireless access (FWA) ISP WeLink Communications UK, which had been offering wireless broadband speeds of up to 1Gbps to poorly served homes and businesses in the city of Edinburgh (Scotland), has confirmed to ISPreview that they are “withdrawing” from the market. The situation first came to our attention after a number of WeLink’s […]

Ofcom has proposed to tweak how it calculates one of Openreach’s regulated Quality of Service (QoS) standards for Ethernet and Dark Fibre repairs, which would replace the current “on-time repair” target with a “mean time to repair” target. The change reflects the fact that the operator’s performance has improved, not worsened. The regulator currently sets […]

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

 

Ericsson’s Q2 sales drop 

In a recent financial report, Swedish telecoms equipment vendor Ericsson noted that while the company’s net sales were up 3% from last year, to SEK 64.4 billion $6.3 billion, the company’s Q2 sales had fallen. The company’s organic sales fell by 9% in Q2 and EBITA halved from SEK 7.5 billion ($730 million) to SEK 3.7 billion ($360 million).  

Network sales fell by 13%, despite vast sales improvements in Oceania, Southeast Asia, and India, where the company now has a leading market share. The steep fall in North American sales was not offset by the improvements in Eastern markets. 

The tech giant cited the knock-on effects of high inflation and rising interest rates for their falling sales. 

Indeed, Börje Ekholm, President and CEO of Ericsson, noted the challenging market conditions, stating “performance in Q2 was in line with our expectations, despite the uncertain macro backdrop and significant changes in market mix.” 

“The firm forecasts similar outcomes for Q3 and hopes for improvements by the end of the financial year: Q3 will benefit from an early impact of our strong focus on cost-out execution. Overall, we thus expect Q3 EBITA margin to be in line with or slightly higher than Q2, followed by a seasonally stronger Q4,” he added. 

“Based on the expected recovery of the mobile networks market towards the end of the year, we remain focused on reaching the lower end of the 15-18% EBITA margin long-term target range in 2024.” 

After the report’s release this morning, Ericsson’s shares were down 8%. 

 

Nokia reduces annual sales forecast 

Nokia is one of many companies feeling the effects of slower consumer spending and a reduction of consumer inventory levels, because of rising interest rates and high inflation. 

In an effort to combat this, the firm has lowered their net sales forecast from €24.26–26.2 billion to €23.2–24.6 billion. They have also narrowed their operating margin from 11.5–14% to 11.5–13%.  

The company commented that that “Nokia will continue to take measures to ensure it remains on track towards its long-term targets of growing faster than the market and delivering a comparable operating margin of at least 14%.” 

Despite the announcement, the firm still expects net sales of £4.8 billion this quarter. 

Since the news, Nokia’s shares were down 9.6%, the lowest since April 2021. 

 

Cisco suffers from Bank of America downgrade 

This week, Bank of America analysts lowered Cisco Systems share rating from ‘buy’ to ‘neutral’.  

“Street estimates are looking for a soft landing to Cisco’s product revenue growth, expecting it to grow 3% year-over-year in fiscal 2024 and 2% in fiscal 2025, after (estimated) growth of 13% in 2023 and 6% in 2022,” noted Bank of America analyst Tal Liani, who is responsible for the stock’s downgrade.  

He added: “However, these estimates lead to fiscal 2024/2025 product revenues that are much higher than historical levels. Since fiscal 2012, Cisco’s product revenue has remained at around a $36 billion to $39 billion range, mostly attributed to the timid growth of Cisco’s legacy products. It appears that the analysts deem the expected revenue too high, and therefore too much of a risk. The downgrading of the stock is a reflection of these concerns. 

Cisco shares dropped by 18% on the news. 

 

Huawei seeks to increase intellectual property revenue 

The firm, which made $560 million from licensing last year, is looking to increase total in 2023, this week releasing new royalty rates. 

Huawei’s smartphone revenue has taken a huge hit since US sanctions began in 2019, thus increasing revenue from other streams is now increasingly important. 

The new rates will apply to a number of Wi-Fi 6 devices, IoT products, and 4G and 5G handsets. The royalties for Wi-Fi 6 consumer devices is $0.5 per unit, while the rate caps for 4G and 5G handsets are $1.5 and $2.5 per unit, respectively. For IoT, the standard rate is 1% of the net selling price, capped at $0.75, while ‘IoT-Enhanced devices’ range from $0.3 to $1 per unit. 

Huawei currently has nearly 200 patent licensing deals, which it hopes to increase in the future. The company is the one of the largest patent holders in the world, with only IBM, Samsung, and Taiwan Semiconductor Manufacturing Company (TSMC) holding more patents as of 2022. 

 

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The partnership will enhance collaboration on digital issues to strengthen supply chains and reduce reliance on China for key technologies

Following the first Japan–EU Digital Partnership Council meeting held last week, Japan and the EU have signed two Memoranda of Cooperation (MoC) to advance work in crucial areas in connectivity.

As part of the deal, the two parties plan to support the development submarine cable connectivity via the Arctic, which will provide secure, reliable, and sustainable connectivity between the EU and Japan. If successful, there is possibility for these submarine networks to be extended to a wider parts of Southeast Asia and the Pacific.

The partners also signed a second MoC on semiconductors, focusing on enabling greater cooperation on R&D, advancing skills for the semiconductor industry, and subsidy transparency. The partnership will also see the formation of an early warning system for supply chain disruption, allowing each nation to better prepare for shortages should they occur.

The subtext to this agreement is the perceived need to build self-sufficiency and diversity in the global semiconductor supply chain, with both parties increasingly wary of their technical reliance on China for chip manufacturing.

“Economic security is a common concern for Japan and the EU. We share similar dependencies, and we both need to de-risk our supply chains. One of our objectives is to reduce overreliance for products that are vital for our economies, like critical raw materials and semiconductors on a handful of suppliers – many of them based in China,” said President of the European Commission, Ursula von der Leyen.

Additionally, the EU and Japan have agreed to enhance cooperation on several other, wider issues, such as generative artificial intelligence, quantum computing, data governance, and cyber security.

The co-chairs of the Japan-EU Digital Partnership Council are set to meet again in 2024 to reviews the progress of the deal.

Join in the conversation about digital security at this year’s Total Telecom Congress live from Amsterdam

Also in the news:
Connectivity between Iceland and Japan through new Pan-Arctic Fibre cable
Construction begins on Medusa submarine cable system
What’s hot in the submarine networks industry today? 

 

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Following new technological developments, the firm plans to release new 5G smartphones within the year, according to reports 

Recent technological advancements from both Chinese chip firm Semiconductor Manufacturing International Co (SMIC) and Huawei’s own semiconductor design capabilities means that Huawei are now able to procure their 5G chips domestically, according to sources at unnamed research companies.  

This could allow Huawei to establish a reliable supply chain without involvement from US-based companies, with sources suggesting the company could release a 5G-capable version of its P60 smartphone later this year.   

New 5G smartphone models are expected to be announced next year. 

Huawei has been banned from engaging in business with the US since President Donald Trump issued an executive order in May 2019. The ban, which is still in place, extends to all international firms that the US government deems a national security risk.  

As a result of the order, Huawei’s US business with firms such as Google, Microsoft, and Intel quickly dried up, denying the company access to its vital American chipmaking partners. Without these partners, Huawei was unable to produce its most advanced phone models and therefore compete with market leaders like Apple and Samsung. 

Since the ban, consumer business revenue nosedived from 483 billion yuan ($67 billion) in 2020 to almost half that the following year, leaving Huawei struggling to keep their head above water in the smartphone market.  

Last year, Huawei reported their biggest annual profit decline on record, with their $5.18 billion in profits down 69% year-on-year. 

But while these new domestic 5G chip manufacturing capabilities are surely a positive sign, questions are being raised about the extent to which their quality can be compared to premium chips manufactured by the likes of Qualcomm and Intel.  

Additionally, critics such as research company Radio Free Mobile argue that as long as the US trade ban is still in place, Huawei’s lack of access to Google technology will make it difficult for their new phones to gain traction in markets outside China. 

Although the news may be a considerable progression for Huawei, whether it could result in them regaining their once dominant position in the global smartphone market remains to be decided. 

How will the tensions between China and the US affect the global telecoms market? Join the discussion at this year’s Connected Britain

Also in the news:
Concerns raised over government transparency relating to Huawei
Huawei’s European future in jeopardy as EU mulls blanket ban
China Mobile Ningbo leads the way in building 5G infrastructure for business growth 

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A report from the Commons Public Accounts Committee (PAC) said the Home Office still had no “realistic plan” for the new Emergency Services Network (ESN), with the delay costing the UK’s emergency services millions of pounds every year

The government’s plan to create the new 4G-based ESN was first announced in 2015, initially aiming to launch the system in 2017 and completely replace the existing Airwave network by 2019. At the time, the project was expected to cost around $5 billion.

However, progress on the ESN has been glacial. Eight years have passed, and the government still does not know when the system will be in place, with some reports estimating it will not be operational until 2029.

The government has reportedly spent around £2 billion so far on developing the ESN with no tangible progress, while the initiative’s projected budget has swelled massively to over £11 billion.

Today, the PAC has announced the results of its fourth inquiry into the ESN’s delays, being highly critical of the lack of progress or planning on the part of the Home Office.

“The ESN project is a classic case of optimism bias in Government,” said the committee chair Dame Meg Hillier. “There has never been a realistic plan for ESN and no evidence that it will work as well as the current system.”

“Assertions from the Home Office that it will simply ‘crack on’ with the project are disconnected from the reality, and emergency services cannot be left to pick up the tab for continued delays. With £2 billion already spent on ESN and little to show for it, the Home Office must not simply throw good money after bad,” she added.

The report itself detailed the costs the UK’s emergency services are facing in keeping the existing Airwave system running.

The ambulance service said it had spent £9.5 million towards making the transition, while the fire service had spent £6 million, along with an additional £2 million for early versions of the ESN which had since been replaced.

The police force, meanwhile, estimated that purchasing additional Airwave devices had cost them £125 million since 2018 and would cost them a further £25 million by 2026.

It is worth noting here that Airwave’s parent company, Motorola, was originally contracted to help deliver the ESN itself, but withdrew from the project at the end of last year. The US-based mobile device company seemingly feared that it would be forced to sell Airwave by the UK Competitions and Markets Authority (CMA), after a recent CMA consultation estimated that Motorola stood to make excess profits of £1.3 billion from the Airwave system over a decade.

The Home Office is now in the process of finding a new supplier to replace Motorola.

The PAC closed their report by recommending the Home Office appoint an Independent Assurance Panel to oversee progress on ESN. The Home Office has until the end of the year to produce a suitable outline for the ESN project and must create a new business case in Q1 2024.

How is the UK telecoms market evolving in 2023? Join the operators in discussion at this year’s Connected Britain conference

Also in the news:
Netomnia passes half a million premises with full fibre
Telefónica sells majority share of Peruvian fibre network to KKR
5G NTN-mobile market revenue to hit $18bn by 2031

VIEWPOINT

Fiber-based connectivity is emerging as a key driver of economic growth in the post-pandemic era as people carry out more and more tasks on digital platforms. Be it shopping, working, learning or staying in touch with your loved ones, digital platforms have become our preferred mediums for executing professional and personal tasks. Further, it is not possible to deploy fiber in remote and difficult-to-reach areas.

Adopting an Innovation-Oriented Approach

Jordan’s FiberTech has adopted an innovative approach to making fibre-based connectivity to a greater number of people in the country. Founded in 2019, the company is working with the vision of providing access to affordable but quality broadband to every household in the country, irrespective of economic feasibility. It is Jordan’s first wholesale Fiber-to-the-Home (FTTH) network committed to providing ultrafast internet to Jordanians.

“FiberTech is a collaboration between two industries, the energy industry and the telecommunications industry, because we use legacy electricity poles to bring broadband to every Jordanian home and business in the area where we operate,” says Sami Jarrar, CEO of Jordan FiberTech during an interview with Shaun Collins, Executive Chairman at CCS Insight.

“Another innovative thing about FiberTech is our business model, which is based on infrastructure sharing. We believe this is more cost-effective as well as environment-friendly. Our model is based on the wholesale model. So, as owners of the infrastructure, we enable our clients, who are ISPs and telecom operators, to take care of their customers and provide the best possible service,” he adds.

FiberTech was established as a joint venture between Jordan Electrical Power Company (JEPCO) and Umniah Mobile Company. FiberTech provides reliable connectivity at affordable rates and endeavours to connect 1.4 million homes and enterprise premises in Amman, Zarqa, Madaba and Balqa. FiberTech signed a Memorandum of Understanding with Huawei to boost the infrastructure and operational efficiency of its network.

 

Focusing on Marketing and Training to Maintain a Business Edge 

Besides engineering and technology, the company is also focusing on carrying out promotions and marketing campaigns to deliver delight to the users.

“Apart from engineering and technology, it is the promotions with which we approach the public. We know the means of the public. So, we make propositions that are balanced so that the end user can enjoy the benefits of broadband,” says Sami Jarrar.

The outbreak of the pandemic made people aware of the vast potential of broadband as people were dependent on using digital infrastructure for professional as well as personal tasks. This awareness created a strong foundation for FiberTech to create relevant products for its customers.

FiberTech also believes in providing required continuous training and exposure opportunities to its employees to ensure the company continues to innovate and is always able to maintain a competitive edge.

Setting Robust Foundation for Economic Growth

Commenting on the value FiberTech brings for the economic progress of the country, Sami Jarrar says, “If we’re talking about digitization today, we’re talking not just about the digitization of services provided by the private sector, but also about the services delivered by the government. And for digitization to become a reality, broadband has to become itself a reality. Broadband has to be at the fingertips of all users of these services. Unless people have access to quality broadband, digitization cannot fly. So, we see ourselves as enablers for the digitization drive within our aspiring country.”

As the digital economy continues to move from strength to strength, FiberTech is playing a crucial role in improving the digital infrastructure of Jordan. This will lead to the overall social and economic growth of the country while enabling Jordanians to grow their profile in the all-pervasive digital economy.

Homes and businesses in the Northumberland (England) town and civil parish of Blyth have been named as some of the next to benefit from Grain‘s (Grain Connect) ongoing roll out of a new gigabit-capable Fibre-to-the-Premises (FTTP) broadband ISP network – using Point-to-Point (PTP) architecture. Grain says they’ve already started work on their latest addition of […]

The Comms Council UK, which represents the United Kingdom’s national Unified Communications and Voice-over-Internet-Protocol (VoIP) phone industry, has today published their annual shortlist of finalists for the organisation’s 2023 industry awards event. Eli Katz, Chair of Comms Council UK, said: “It is very exciting to be celebrating CCUK’s 15th Awards this year, and it is […]