Iliad's take-over of eir, CityFibre's new fibre deal and Vodafone's new head of IoT feature in our round-up of the major news stories from the holiday period.

M&A – Iliad, DT and Telia go on holiday shopping spree

Acquisition activity in the telco sector heated up over the festive period with three operators announcing new deals.

France’s Iliad and its owner Xavier Niel are paying €3.5 billion for a majority stake in eir.

As part of the 20 December announcement, the Irish operator revealed that its CEO would be stepping down.

The transaction will see Niel’s investment vehicle NJJ Telecom Europe holding a 32.9 percent of the operator while Iliad, of which Niel is the majority owner, will own 31.6 percent.

Iliad and Niel are buying the operator from a consortium composed of multiple firms, including Anchorage Capital Group and Davidson Kempner.

These two companies between them will retain a combined 35.5 percent stake.

The transaction is set to be completed in the first half of this year.

As a result of the takeover eir CEO Richard Moat will step down after over three years in charge of the company.

Plans for a replacement were not revealed, however.

eir posted a two percent rise in EBITDA in the three months to 30 September, while underlying revenue fell two percent to €322 million.

In Austria, Deutsche Telekom is set to acquire Liberty Global’s subsidiary in an effort to create a new converged operator.

The €1.9 billion transaction will combine the mobile operator T-Mobile Austria with cable provider UPC Austria, with an expected €800 million expected to be achieved through “synergies”.

The move will create a new quad-play provider for the country, rivalling market leader A1.

Srini Gopalan, Board Member Deutsche Telekom for Europe, said: “With this acquisition Deutsche Telekom is taking another major step to realise our strategy to become a fully converged operator in our European footprint.”

Finally, Telia announced plans to acquire a Finnish IT provider on 18 December as it seeks to expand its offer to the SME segment.

The operator has paid €75 million for Inmics, which works as a local IT partner, reselling IT equipment, software and managed services.

Inmics will operate as an independent subsidiary of Telia, working with the operator’s May acquisition Nebula to provide a full portfolio to Finnish SME companies.

The acquisition is expected to be completed in Q1 this year.

Telia CEO Johan Dennelind said the new buy would fit well with Nebula and “further strengthen [its] Finnish enterprise proposition”.
Fibre broadband – CityFibre, Deutsche Telekom boost footprints

UK wholesale FTTH provider CityFibre won its largest ever deal on 20 December, a £15.7 million contract with Glasgow City Council.

CityFibre will connect 506 sites across the council’s estate with 243km of new network infrastructure.

The services will be marketed by CommsWorld, a Scottish business telecoms provider.

Greg Mesch, CEO of CityFibre, said: “The city’s full-fibre spine will be built with the future in mind, capable of supporting 5G mobile networks and laying the ground-work for an inevitable roll-out of fibre to every home and business in the city.”

The deal adds to CityFibre’s existing footprint of over 3,200km of fibre across 42 UK towns and cities.

Last November, it signed a deal with Vodafone to connect up to five million premises with FTTH by 2025.

In Germany, Deutsche Telekom signed partnerships with five local broadband operators to expand its fibre footprint in the south of the country.

The agreements will see the operator using the infrastructure of R-KOM, SÜC // dacor, SWU Telenet, Stadtnetz Bamberg and Telepark Passau in Bavaria and Baden- Württemberg to reach 125,000 households.

Half of the premises are covered by FTTH/B technology and half by FTTC .

Deutsche Telekom will resell FTTC connectivity in the spring, with FTTH/B and FTTB on sale later in the year.

The operator already has similar infrastructure-sharing partnerships with NetCologne and EWE.

Deutsche Telekom said it laid 40,000km of fibre optic cables in 2017, up form 30,000km in 2015 and 2016.

It is aiming to hit 60,000km in the future by using “alternative” installation methods, such as furrowing, above-ground installation and trenching.

Regulation – USO and mobile switching to come to the UK

The UK government rebuffed BT’s proposals for a voluntary commitment to provide broadband in favour of a regulatory universal service obligation (USO) on 20 December.

The Department for Digital, Culture, Media and Sport announced it would be implementing a USO allowing everyone in the UK to request access to a 10MBpconnection by 2020.

The news is a blow to BT, which had made a voluntary commitment to offer 10MBps download and 1MBps upload speeds to 99 percent of premises by the end of 2020.

In a statement, the government said while it welcomed BT’s proposals, it believed “only a regulatory USO offers sufficient certainty and the legal enforceability that is required to ensure high speed broadband access for the whole of the UK by 2020.”

Meanwhile, UK mobile subscribers will be able to change provider by sending an SMS under a major overhaul unveiled by Ofcom on 19 December.

Customers will be able to send one of two memorable short codes to their provider, which will be the same across all operators, depending on whether they want to keep their existing phone number.

The current provider will then need to respond by text with either a number porting code (known as a PAC) or a cancellation code.

Providers will be banned from charging for notice periods running after the switch date.

A Three spokesperson said: “While we are pleased that there is now a simpler process, we believe that Ofcom’s decision not to prevent ‘last ditch’ deals means that the UK still lags behind its international peers in terms of consumer rights.”

The changes will come into effect from July 2019.
People - Vodafone fills IoT vacancy as Tele2 picks new Chairman

Tele2 and Vodafone have marked the new year by announcing new exec appointments, as Swisscom joined the board of industry body ETNO.

Vodafone appointed insider Stefano Gastaut as the new global Director of its IoT division on 18 December.

Gastaut comes from a two-year tenure as CEO of Vodafone Egypt, where he oversaw the operator’s launch of 4G services and increased its market share from 40 to 45 percent.

Prior to this the exec headed Vodafone’s Partner Market business, which manages Vodafone’s relationships with local operators around the world.

Vodafone Group Enterprise Director Brian Humphries said: “Stefano is joining our IoT business at an exciting time in its development.  

“We believe that he will build on our leading position in IoT and open up new opportunities with customers worldwide.”

Gastaut replaces Ivo Rook in the role, who left last summer.

Vodafone’s IoT business generates over €700 million in revenue and manages 62 million devices worldwide.

Meanwhile, Tele2’s Chairman will step down in May, clearing the way for a new appointment from the operator’s biggest investor.

Mike Parton, along with Board member Irina Hemmers, announced on 16 December that he will not seek re-election at the company’s next Annual General Meeting.

Parton will be replaced by Georgi Ganev, a Board member since 2016.

Ganev’s tenure as Chairman will follow his appointment on 1 January as CEO of investment firm Kinnevik, which owns a 28 percent stake in the telco.

Enterprise – Proximus taps Infosys for transformation

Proximus is set to overhaul its IT systems and deploy new services for its enterprise customers through a new business transformation programme.

Indian IT company Infosys will implement its Excite programme at the Belgian operator, consolidating 40 legacy IT systems into six new platforms to improve product lifecycle management.

Bart Van Den Meersche, Chief Enterprise Market Officer at Proximus, said: “In the course of the next years, we want to manage all professional products through easy-to-use digital interfaces."

Meanwhile, Orange’s enterprise arm is to provide cloud services to support the European Space Agency’s new open database.

The agency will use Orange Business Services’ Flexible Engine public cloud solution to support its Copernicus project.

Set to launch within six months, this will provide free and open access to data, models and forecasts about Earth.

OBS will also provide consultancy services to help the agency define its roadmap for cloud, as well as help it find new business cases.

Financial details of the deal were not disclosed.

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