What’s up with… Liberty Global, Apple, the impact of AI – TelecomTV
Feb 19, 2024
In today’s industry news roundup: Liberty Global shuffles its European pack; Apple is reportedly facing a massive fine from the European Commission; the increasing use of AI is set to impact the messaging and search sectors, according to new industry studies; and much more!
Liberty Global is revamping its operations across Europe as it adopts an updated corporate strategy and tries to light a fire under its stock. The communications networks and technology group, which reported a 1.5% year-on-year decrease (on a rebased/like-for-like basis) in revenues to almost $7.5bn for the full year 2023, a 10.8% decrease (rebased) in adjusted EBITDA to $2.37bn, and an operating loss for the year of $3.87bn, followed its full year financial report with a presentation about its strategic changes. As we have already reported, UK operator Virgin Media O2 (in which Liberty Global holds a 50% stake) plans to create a new standalone wholesale high-speed fixed broadband access (fibre and cable) unit dubbed NetCo that will compete directly with BT’s Openreach division and CityFibre. In addition, Liberty Global is to list its shares in Sunrise, a major network operator in Switzerland, on the SIX Swiss stock exchange in the second half of this year and then spin out its entire holding to Liberty Global shareholders. It has also formed a holding company called Liberty Global Benelux to manage its operation in Belgium, Telenet, and its 50% stake in Dutch operator VodafoneZiggo. Liberty Global is also raising $400m from its share in the sale of TV production and distribution company All3Media to RedBirdIMI for £1.15bn (the other shareholder is Warner Bros. Discovery). The full year financial report sent the company’s share price down by more than 6% last Friday to $18.10, but it is hoping that the asset restructuring and new business plans will spark a revival in its fortunes and in its share price.
Apple is headed for a €500m fine from the European Commission over allegedly circumventing competition law by favouring its music streaming services on the App Store, the Financial Times has reported. According to the media outlet, the European Commission is set to announce the penalty early in March as the result of an antitrust probe that was launched following a complaint filed by music streaming giant Spotify in 2019. The investigation was aiming to determine whether Apple has favoured its own services over rival ones by blocking competitors from notifying iPhone users of cheaper alternatives to access subscriptions to music streaming outside the App Store. The newspaper added that the EU’s governing body will rule that Apple had been abusing its position and has breached competition laws, and that the authority will ban Apple from behaving in such a way in future. If officially announced, this would be the first fine issued by the European Commission against the tech giant. In 2020, Apple was slammed with a €1.1bn penalty in France for accusations related to anticompetitive practices (though this amount was later trimmed down to €372m after an appeal by the company). The move comes in light of new rules for digital platforms that act as gatekeepers, such as Apple, Google and Amazon. By 6 March 2024, such companies must abide by stricter regulations, such as allowing rivals to inform users about their services, under the Digital Markets Act.
Global enterprise spend on generative AI (GenAI) over mobile messaging channels is expected to hit a whopping $11bn by 2028, up 1,250% from the $830m predicted in 2024, according to a new report from Juniper Research. This growth will be driven by the ability to automate content personalisation, including marketing efforts and customer interactions over chatbots. The study suggests messaging vendors apply GenAI across all rich media messaging channels, including chatbots and RCS (rich communications services), to help unify customer experiences across different channels. “Creating personalised marketing campaigns will enable mobile messaging to become viable sales channels; competing with established online apps and brick-and-mortar stores for revenue,” noted research author Molly Gatford.
More on AI-powered chatbots… The number of queries carried out on traditional search engines is expected to decline by 25% in 2026, with users instead turning to AI chatbots and other virtual agents, according to analyst firm Gartner in a new report on the impact of GenAI on tech marketing. However, search engine algorithms will place a higher value on the quality of content, the analyst added, in order to offset the sheer amount of AI-generated content brought about by the lower cost of producing it with GenAI. Gartner predicts that watermarking will be increasingly used to authenticate high-value content. “Companies will need to focus on producing unique content that is useful to customers and prospective customers,” said Alan Antin, vice president analyst at Gartner. Find out more.
And still with AI… The technology is set to take centre stage at this year’s Mobile World Congress (MWC) in Barcelona. Prime examples include SK Telecom (SKT) and Verizon, both of which have recently announced plans to demonstrate AI innovations and their role in unlocking future technologies.
T-Systems, the enterprise services division of Deutsche Telekom (DT), has launched a new private cloud region for southern Europe, in the Spanish city of Barcelona. Comprising two datacentres that will act as one (referred to as Twin-DC), the infrastructure is an expansion of the company’s Future Cloud Infrastructure (FCI) private cloud platform. According to DT, the system will allow businesses to operate their services on “a single hybrid cloud, increasing their flexibility and reducing costs”, and provides built-in security and data protection. “This new cloud region is a sign of T-Systems’ strong commitment to developing a robust and high-quality technology infrastructure that will support digitalisation and the European data economy for years to come,” noted Ferri Abolhassan, T-Systems CEO and DT board member. Read more.
Over recent months, the media in India, and in other parts of the world, has hyped up the sub-continent’s potential to quickly turn itself into a global semiconductor powerhouse. The Indian government believes this to be the case and is tireless in boosting its claims. Certainly, at first glance, the assertion has merits, not least because India has been involved in the manufacture and packaging of semiconductors for a long time and, last year, the national and state governments of India announced that they would, together, put up $10bn of subsidies under the aegis of Semicon India. This programme aims to provide companies wanting to participate in the building of an indigenous semiconductor industry and willing to develop and design microprocessor fabs up to 50% of the building costs (“pari-passu” or “on an equal footing”). However, the billowing sails of government optimism have lost some of their warm, moist air following the publication of a new report from the Washington DC-headquartered Information Technology and Innovation Foundation (ITIF), a nonprofit, nonpartisan, public policy US think-tank, which concludes the Indian government’s claims are premature. The ITIF report, Assessing India’s Readiness to Assume a Greater Role in Global Semiconductor Value Chains, says that despite the lure of the $10bn scheme, (which it describes as “currently the world’s most generous”) the net result will be no more than “five modest fabs by 2029”. What’s more, the semiconductors manufactured will be no more sophisticated than today’s 28nm chips – and such chips will be well along the road to obsolescence by the time the Indian fabs come online. For example, by 2029, massive planned investments in the US state of Arizona alone, by the likes of Intel, Samsung and Taiwan Semiconductor Manufacturing Company (TSMC), will be creating smaller and more powerful chips than the five new Indian facilities will be able to make.Meanwhile, other facilities, either planned or already under construction in the US, Europe, Japan and Taiwan “will eclipse” what India can produce by that same date. The ITIF report accepts that India does “have the potential to play a much more significant role in global semiconductor value chains” and accepts that within the five-year timeframe it “could expand its presence in the semiconductor assembly, test and packaging (ATP) segment to as many as five facilities while attracting fabs that produce legacy semiconductors in the 28nm or higher range. But to capitalise on that opportunity, the government must uphold key investment policies and maintain a conducive regulatory and business environment while avoiding measures that create unpredictability.” (The subtext here being that maybe it won’t.) Stephen Ezell, vice president of global innovation policy at the ITIF and the report’s co-author, commented: “India is well positioned to capitalise as industries and nations reassess the structure of global value chains in a quest for cost and innovation competitiveness…[and]… expanding India’s presence in semiconductor manufacturing would build on its decades-long experience in chip design, but time is short and the race to be a global leader is already on.” Global competition for semiconductor investment is fierce and expanding into the semiconductor manufacturing supply chain will require significant investment in infrastructure and incentives, is cut-throat, and countries, regions, cities and municipalities often vie by offering blandishments and inducements to attract investment in sectors such as semiconductors. Money is mobile and can be routed more or less anywhere. The trick is to hang on to it when you’ve got it. The report also emphasises that India’s chips sector is not yet a complete ecosystem and it will take many years to achieve that status. Tellingly, the ITIF report also points out that while India’s integrated circuit design capability is very important, “most of India’s design talent works for foreign companies.”
Nigeria is far and away the biggest ICT market in Africa. It accounts for 82% of the entire continent’s telecoms subscribers and for 29% of all its internet usage. For the past 15 years, the sector has contributed more than 10% of Nigeria’s GDP so, on first sight, it seems surprising that new figures from the regulator, the Nigerian Communications Commission (NCC), show that the number of active telephone lines across the huge county have been falling, consistently, month-by-month, and continues to do so. It seems counter-intuitive given the vibrancy of Nigeria’s retail market, but the NCC’s “Subscriber/Teledensity Data January 2023 – December 2023’’ shows that at the start of last year Nigeria had 226.2 mn subscribers but by the end of 2023 the total had dropped to 224.7 million. That’s not a massive number given the size of the market but is a quantifiable loss of revenue for Nigeria’s mobile network operators (MNOs) and indicative that something odd is going on. According to Nigeria’s second-largest circulation newspaper, The Nation, (which is very much an up-market establishment publication) the country’s MNOs are experiencing a serious downturn in revenues as a result of what it describes as “an excruciating operating environment”, which is giving them a sharp pain in the wallet. The Association of Licensed Telecom Operators of Nigeria (ALTON), the country’s biggest trade body, is lobbying hard for the government to permit a series of hefty price rises on the grounds that energy costs are now so high they account for between 40% and 45% of all operating costs. The executive secretary of ALTON, Gbolahan Awonuga, ascribes the problems to “economic hardships” and the rampant inflation that is giving a “twist in the economic fortunes of subscribers”. Another, and intriguing, factor is “multi-SIMming”, a phenomenon prevalent across Nigeria where many mobile users have at least two SIM cards and a sizeable percentage have 10 or more, swapping them in and out of a device as and when they perceive the need. The trend is based on the legislative linkage of SIMs to the country’s biometric National Identity Numbers system, which has resulted in increased government surveillance of mobile subscribers and unease among the population. Since 2020, it has been a legal requirement in Nigeria that SIM cards be registered and linked with a citizen’s digital ID, and the biometric data that it contains. In addition to deep concerns about the effect this may have on the privacy rights of individuals, the policy also excludes marginalised groups (including ethnic minorities) from obtaining a SIM and locks them out of both the digital economy and government services. The new NCC figures also show that in 2023, 2G remained the dominant mobile comms technology in Nigeria with a penetration rate of 57.8%, 3G penetration stood at 9.8%, 4G at 33.31% and 5G at just 1%. Meanwhile, subscriptions to internet services continue to grow and stood at 163.8 million on 31 December 2023, when Nigeria’s total population was estimated to be 226 million.
Research into and development of solid state batteries (SSBs) continues apace with big motor vehicle manufacturers leading the pack, The Guardian has reported. It’s not that solid state batteries don’t already exist – they do but they are small, with the batteries in wrist watches or in mobile handsets being obvious cases in point. What’s desperately needed to turn electric vehicles (EVs) into a mass market proposition are solid state batteries that are able to at least double the current ranges of EVs and are less than half the weight of those that power today’s EVs; batteries that will take half as long to recharge and batteries that will greatly reduce, or at least all but eliminate, the danger of lithium-ion battery fires. BMW, Ford, GM, Toyota, Volkswagen and many others are working to timetables that, they claim, will see SSBs in commercial use by autumn 2028 or the spring of 2029. Indeed, Toyota alone already has more than 1,300 patents for SSB components and says it plans to launch a hybrid solid state automobile by sometime next year. According to a recent report from McKinsey, the global lithium-ion battery market will be worth $400bn by 2030. Meanwhile, it is hoped that developments in silicon-based solid state battery components in general and silicon anodes and lithium metal in particular will lead to a breakthrough. There are three basic parts to a battery: The negative anode, the positive cathode and an electrolyte. The anode releases electrons into a circuit and the cathode takes them up. Then the electrolyte permits ions to transfer between them. This process determines a battery’s ‘energy density’, which is the amount of energy it can hold relative to its weight. The greater the density, the higher the charge, and a very high change is needed to power electric vehicles. The batteries in current EVs have liquid electrolytes and graphite anodes. In SSBs, the entire battery comprises solid materials, including the electrolyte. Not only are they safer than lithium-ion batteries, they can also hold a lot more charge and hence will power an EV further. However, the new battery technology is expensive, prohibitively so at scale when compared to the cost of a traditional petrol-powered, diesel-powered or hybrid EVs. Furthermore, solid electrolytes degrade over time, but one promising potential answer seems to be to wrap them in polymer-based fabric. Honda is known to be working on such a solution. Another problem facing manufacturers of SSBs is the ‘electric double layer’ (EDL), which is an unpredictable surface-resistance phenomenon that occurs at the interface of the solid/solid electrolyte. It’s a problem that doesn’t apply with liquid chemical batteries but could be of immense importance in SSBs. It’s one of the reasons why large solid state batteries are not yet available. However, given that so much money is being channelled into continuing SSB research, it seems evident that EV manufacturers are very optimistic they can be overcome before the end of the decade.
– The staff, TelecomTV
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