News

Nov 25, 2023

What’s up with… Veon and Rakuten, OpenAI, Telefónica, Open RAN

Aug 2, 2023 In today’s industry news roundup: Rakuten Symphony joins forces to resurrect Ukraine’s telecoms infrastructure with the power of Open RAN and digitalisation; Rakuten Group forges a

Aug 2, 2023

In today’s industry news roundup: Rakuten Symphony joins forces to resurrect Ukraine’s telecoms infrastructure with the power of Open RAN and digitalisation; Rakuten Group forges a partnership with OpenAI to integrate AI into its products and services; Telefónica is penalised yet again for allegedly falling short of antitrust commitments; and much more!

Veon, the international operator with mobile networks in multiple countries across Asia, Europe and Africa, has partnered with Japanese company Rakuten Symphony (Rakuten Mobile’s Open RAN vendor offshoot) to speed up the reconstruction of Ukraine’s telecom infrastructure. Under a new memorandum of understanding (MoU), the pair will look to collaborate on Open RAN and digital services, both of which are expected to help the country that has been dramatically affected by the Russian invasion since 2022. The two telco players have committed to creating “a robust and future-proof telecommunications infrastructure” that can “seamlessly deliver high-speed connectivity enhanced with 5G, enabling the next generation of digital services in Ukraine”, Veon explained in a statement unveiling the partnership. “Veon and Rakuten share a similar vision: We are both highly customer-focused, digital experience-oriented companies which redefine communications in our respective markets,” said Kaan Terzioğlu, group CEO at Veon, adding that Ukraine’s reconstruction is “a shared priority” for both Veon and Rakuten. Mickey Mikitani, chairman and CEO of Rakuten Group, as well as chairman of Rakuten Symphony, noted that the Japanese giant is looking forward to “bringing our technological expertise from Open RAN telecom solutions and a broad range of digital services,” including the messaging app Rakuten Viber, to support Ukraine in “transforming its digital landscape”. As part of the MoU, the two companies will also explore opportunities in other Veon markets. In June, Veon pledged to invest US$600m into infrastructure projects in Ukraine, including efforts to roll out 5G – see What’s up with… Veon, Cisco and Accedian, Proximus and Nokia.

Still with Rakuten… The group has also signed an MoU with OpenAI to bring state-of-the-art conversational artificial intelligence (AI) experiences to businesses and consumers globally. As part of the collaboration, the Japanese conglomerate and the US AI company will explore a number of use cases to “revolutionise the way consumers shop and engage with businesses while concurrently enhancing productivity for merchants and business partners in Japan and on the global stage.” Rakuten operates a portfolio of more than 70 services spanning e-commerce, fintech, digital content and telecommunications, with 1.7 billion members globally, which it referred to as “Japan’s largest online shopping mall”. The latest partnership will see Rakuten integrate AI into these products and services, and gain “priority access and support” to OpenAI’s application programming interfaces (APIs). Additionally, “Rakuten Group will bring Rakuten AI experiences into ChatGPT [language model-based chatbot developed by OpenAI] products by leveraging the OpenAI plugin architecture, enabling businesses to use natural language for interacting with AI agents that conduct research, analyse data, optimise inventory, pricing, automate business processes and more”. Find out more here.

Yet another slap on the wrist for Telefónica as it is hit with another fine – this time for €5m – for failing to stick to the anti-trust commitments it made following its merger with the broadcaster DTS in 2015. That deal made Telefónica the largest player in the Spanish pay-TV market and, therefore, subject to appropriate competition remedies. The fine marks the third time the Spanish telco has been punished by the country’s antitrust watchdog for non-compliance in less than a year. Telefónica apparently failed once again to make its premium channels (the ones with the high-value sporting content) properly available on a wholesale basis to other pay-television operators without indulging in a little dodging and weaving to get around the conditions. According to Digital TV Europe, the Spanish authorities had also previously found that Telefónica failed to comply as recently as March, when a €6m fine was imposed, also over non-compliance with the conditions set for DTS merger.

Variations on the ‘streaming tax’ idea appear to be taking hold around the world as media companies look at their finances and audience shares and wonder why they aren’t doing as well as they’d hoped. Perhaps the companies that are doing well can be made to cough up some compensation? South Africa is the latest country to ponder the benefits of a streaming tax. Its Department of Communications and Digital Technologies is mulling a range of measures designed to boost local audiovisual content production, proposals for which have been published in a whitepaper. Like many other countries, South Africa has a long-established regime of mandating a percentage of local content for broadcasters as a way to stimulate local content production. But with the rise of on-demand video streaming that sort of quota system no longer works, letting the likes of Netflix and Disney+ off the hook. Maybe there is another way of getting money out of the on-demand platforms and into local production, including a levy on online streaming? The department is asking for input…

Still on streaming tax, Massachusetts is one of several US states considering a tax on streaming video services, urged on in this case by the state’s community access channels. According to the Boston Globe, hearings are being held for a bill that would require streaming video companies to pay a 5% levy on their in-state gross revenues, with proceeds going to fund local community channels. Currently the cable companies tend to fund local programming, but that money is drying up as consumers cut the cable cord in favour of streaming services. Some sort of streaming tax might be a way of clawing money back for community services. In Europe, such taxes are already well established but the practice is spreading. July saw the Czech Republic introduce a 2% tax on streamers’ revenues for the benefit of its Film Fund, while the Netherlands, Denmark, Germany, Poland, and Romania are either in the process of establishing levies or, like France, already have them well established.

UK broadband service provider TalkTalk is looking into the possibility of breaking up its business and selling off individual parts, as they are seen as more valuable than the whole company, The Telegraph reported last week. According to the report, the firm is contemplating such a move as it is under pressure to meet approaching debt deadlines. The report further suggested that TalkTalk has a £330m revolving credit facility that matures in November next year, plus £685m of debt that is due to mature in February 2025. As interest rates are rising, the company is set to have higher borrowing costs and, therefore, was reviewing its options. The British newspaper added that TalkTalk was cutting down commercial activity and planned to reduce sales and marketing costs by 40%. The broadband firm is allegedly nearing a sale of its business-to-business division (which is set to generate around £150m), and is now looking to legally separate its consumer business and lure potential investor or buyer interest. If such a breakup of the company materialises, this would turn TalkTalk into a solely wholesale business. Last year, Virgin Media O2 (VMO2) was linked to discussions with TalkTalk over a potential acquisition, but such a deal quickly lost its appeal as VMO2 reportedly abandoned such an endeavour – see What’s up with… Virgin Media O2 & TalkTalk, BT, Verizon & T-Mobile.

A networking startup co-founded by the irrepressible former Cisco CEO, John Chambers, has raised $175m in a new funding round designed to build a competitor to Chambers’ former company. The funding effort is being co-led by March Capital and Saudi Arabia's sovereign wealth fund, along with the venture capital arms of Saudi Telecom Company and Liberty Global. Called Nile, the San Jose-based company is developing what looks like a fairly standard network-as-a-service (NaaS) offering technically – the innovation is all around its consumption-based business model, which the company claims could save clients 30% to 50% at each location. “Customers are really looking for something which is invisible. That is the level of ease and reliability and simplicity that people need and that is what we have done,” Pankaj Patel, chief executive at Nile, told Reuters.

- The staff, TelecomTV

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