News

The divestment will reduce the operator’s stake in the towerco to around 25%

Today, Virgin Media O2 (VMO2) has announced that it will sell an 8.33% stake in mobile towers company Cornerstone to infrastructure investor Equitix.

The deal, which is facilitated by the sale of a 16.6% stake in a holding company, will see VMO2 receive £186 million upon completion.

The stake sale is subject to typical regulatory approvals.

Cornerstone is the UK’s largest tower company, formed in 2012 as a 50:50 joint venture between Telefonica (O2) ad Vodafone. According to the company website, Cornerstone currently operates around 15,700 sites in the UK (the VMO2 press release says ‘around 20,000’) and has a market share of 35%.

Virgin Media has been slowly divesting in Cornerstone for a number of years now. Last year, the company sold a 16.7% stake to GLIL Infrastructure LLP for £360 million. Today’s sale to Equitix follows that same trend, leaving VMO2 with a 25.01% stake in Cornerstone.

“This additional minority stake sale follows the same logic and strategic rationale as our previous deal, allowing us to successfully monetise our infrastructure while retaining a controlling share in an important asset,” explained VMO2 CEO Lutz Schüler. “Equitix is another strong partner to have onboard that clearly sees the long-term value in Cornerstone at a time when we are investing billions of pounds to enhance 4G coverage and bring 5G to new areas of the country.”

The news comes alongside the announcement of VMO2’s Q3 results, which saw the company post a 2.4% drop in revenue, which the company attributed to a fall in handset sales in the UK.

EBITDA also fell 4.1% year-on-year.

How is the UK digital infrastructure market evolving? Join the operators in discussion at Connected North 2025

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The new Chancellor of the Labour Government, Rachel Reeves MP, has today announced her first Autumn 2024 Budget and confirmed that she would commit “over £500m of funding next year” for “improving reliable fast broadband and mobile coverage across our country, including in rural areas“.

Just to recap. The previous Government had two headline investment programmes for improving broadband and mobile. The first one was the £1bn industry-led Shared Rural Network (SRN) project, which aims to boost geographic 4G mobile coverage to 95% of the UK by the end of 2025.

The second was the £5bn Project Gigabit scheme (around £2bn of this has yet to be used), which succeeded in making 1Gbps+ broadband speeds available to at least 85% of UK premises (this has already been achieved) and now aims to deliver “nationwide” (c.99%) coverage by 2030. In addition, they also set a target for “all populated areas to be covered by a ‘standalone’ 5G (5G-plus) [network] by 2030“ (here).

Since the last budget we’ve had a change of Government and the new Labour-led administration has broadly continued to support those programmes by making a “renewed push to fulfil the ambition of full gigabit and national 5G coverage by 2030” (here). But so far, most of their announcements have largely just taken credit for contracts and changes that were already in the works before they came to power (example here, here and here).

The exception has been the new push to reform planning laws (here and here), which may or may not produce a clear benefit for digital network builders (details have yet to be fully revealed). Suffice to say that all eyes were on today’s autumn 2024 budget to see what sort of changes, if any, the new government might make on the telecoms and digital infrastructure front.

Rachel Reeves MP, UK Chancellor, said:

“With over £500 million of funding next year, my right honourable friend for science, technology and innovation secretary will continue to drive progress in improving reliable fast broadband and mobile coverage across our country, including in rural areas.”

At the time of writing, the official budget documents have yet to be published, which means that we don’t yet have the details on what this actually reflects. But on the surface, it sounds a lot like the level of spending that we would have expected to see under the previously committed funding via Project Gigabit and the SRN. However, it’s frustrating when vague terms like “fast broadband“, instead of “gigabit broadband“, are used, which leaves the gate open to speculation about differing performance targets.

Breaking news.. more to follow..

News 

The sale, taking place over the next five years, will help the company improve its cash flow 

Kyocera, a Japanese manufacturer of telecom equipment and semiconductor materials, is planning to sell up to a third its stake in KDDI, Japan’s second largest telco, according to a Bloomberg article published today. 

Kyocera currently holds a 15.3% stake in KDDI, which Bloomberg estimates to be worth roughly ¥1.6 trillion ($10.4 billion).Kyocera says it plans to sell a third of this stake over the next five years to boost its finances.  

The company said it may also use the KDDI shares as collateral to take out loans, and would consider reducing its KDDI stake further as it moves to exit its non-core operations. 

Kyocera’s Q2 financial report highlighted a revenue increase to JPY 1.1 trillion ($7.37 billion) largely driven by demand in components and equipment segments. Operating profit rose by 48.7% year-over-year, reaching JPY 82.5 billion ($552.75 million) due to improved cost efficiency and strategic adjustments.  

However, net profit declined 6.3% to JPY 49.7 billion ($332.9 million), impacted by yen depreciation and inflationary pressures. 

In related news, a joint proposal from KDDI, NTT, Fujitsu, NEC, and Rakuten Mobile has been chosen by the Japanese government to conduct commissioned research for the “Innovative ICT Fund Projects for Beyond 5G/6G”. 

The project aims to develop technologies that will allow multiple providers to work together more effectively, ensuring reliable communication and enabling users to connect to several cloud data centers at once. 

Keep up to date with the latest telecoms news by subscribing to the Total Telecom daily newsletter

Also in the news:
Nokia and Lenovo forge partnership to drive AI and automation in data centers
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“We’re on track to close the loop”: Adtran talks data, AI, and network automation at Connected Britain

Knaresborough-based network operator SICOM, which often works in partnership with local authorities, private enterprises, national carriers, has revealed that they’re looking to expand their open access Dark Fibre network, which is currently primarily located in several major cities across England, Scotland and Wales.

The plan was revealed as part of their applications for Code Powers from Ofcom, which are typically sought to help speed-up deployments of new fibre and cut costs, not least by reducing the number of licences needed for street works. The powers can also help with supporting access to run new fibre via Openreach’s (BT) existing cable ducts and poles (PIA).

Sadly, the application doesn’t say how far and wide SICOM are intending to expand, which leads us to suspect that this may be more about cutting their costs and operating more efficiently within their existing plans for future network expansion.

Press Release

EllaLink, the first high-capacity submarine cable to directly connect Latin America with Europe, announces the expansion of its network to the Start Campus SINES DC, in Portugal. This strategic move strengthens EllaLink’s presence within the Sines Atlantic Hub, reinforcing the partnership with the largest Data Centre being rolled out in Europe.   

EllaLink’s new fibre route to Start Campus – through the 1.2 GW capacity SINES DC-, offers customers reaching the Iberian Peninsula enhanced connectivity, reduced latency, and access to a global network. Start Campus, through the SINES DC project, is enabling a sustainable and interconnected digital ecosystem. This green hub empowers robust interconnection capabilities, benefiting both the tech industry and the local economy. 

EllaLink’s fibre network expansion is clearly reinforcing global connectivity. Through this new expansion, Start Campus SINES DC customers will be able to connect to an 8.000 km optical backbone between Continental Europe, Africa, LATAM and soon to the recently announced French Guiana, one of the outermost European countries. 

Start Campus SINES DC customers will benefit from EllaLink’s global network with enhanced connectivity in an ultra-low latency between several Atlantic landings, representing faster data transfers and improved application performance, providing customers opportunities to reach new markets and grow their businesses. 

“We are thrilled to expand our network to Start Campus,” said Diego Matas, Chief Operations Officer at EllaLink. “This partnership aligns with our commitment to providing innovative and reliable connectivity solutions. By connecting to Start Campus, we are strengthening our local presence in Portugal and offering our customers even more opportunities to grow their businesses.” 

With this expansion, EllaLink continues solidifying its position as a leading provider of submarine cable solutions, connecting continents and driving digital transformation. 

Join EllaLink and the rest of the subsea cable industry at Submarine Networks EMEA in February next year!

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The ITS Technology Group, which operates wholesale full fibre broadband and Ethernet networks (“Faster Britain“) across urban parts of the UK, has today announced that business voice and data solutions provider, VoiceHost, has joined their network as part of a strategic partnership.

The collaboration is intended to help broaden VoiceHost’s own wholesale connectivity portfolio, enabling them to offer their partners a more diverse range of business-grade connectivity solutions. ITS’ network is currently claimed to be ready to serve more than 25% of all UK commercial premises (465,000 business/commercial premises).

VoiceHost separately provides customisable hosted voice services and unified communications also available as white labelled solutions, through its proprietary platform.

Simon Richards, Operations Manager at VoiceHost, said:

“VoiceHost has built an easy to use and scalable platform designed to empower our partners with premium VoIP and connectivity services. Our partnership with ITS aligns with our mission to provide our partners with the best possible connectivity to underpin our solutions.

The agreement with ITS boosts our connectivity offer to deliver access to full fibre services in business dense areas across the UK, providing increased and diverse choice, particularly in locations where there is currently limited full fibre coverage by other operators.

ITS’ extensive network and commitment to quality make them an ideal partner for us as we continue to expand our offer, ensuring reliability and flexibility in an ever-evolving market.”

Dave Ferry, Head of Partner Markets at ITS, said:

“We are delighted to have forged this partnership with VoiceHost. It comes at a critical time for the telecommunications industry, with the planned switch-off of traditional voice services and the increasing shift towards VoIP and full fibre solutions.

Over the last few years our XGS-PON-enabled full fibre network has grown substantially to deliver access to business-dense towns and cities across the UK, ensuring speed and reliability. Our continued expansion reflects our commitment to providing cutting-edge connectivity solutions, enabling our partners to meet the increasing demand for high-performance services.”

Rural broadband ISP Wildanet, which is deploying a gigabit speed Fibre-to-the-Premises (FTTP) network across rural parts of Cornwall and Devon (England), has joined forces with build contractor Dynamic Fibre to help pilot a new cable-laying process that could “dramatically reduce the carbon footprint” of their deployment.

The operator, which originally started life as a Fixed Wireless Access (FWA) broadband provider in the same area, has more recently been deploying gigabit-capable full fibre lines – both commercially and via public investment – and is estimated to have so far covered around 30,000 premises (Ready for Service).

However, anything that can make the civil engineering side of this work less wasteful is always a positive, which is where Dynamic Fibre comes in. The street works firm has secured approval from Cornwall Council highways to use a sustainable trench excavation and reinstatement process – known as SMR (Structural Material for Reinstatement) – which recycles dug material back into excavations, after mixing it with a special binder.

The result is minimal excavated material being sent to landfill; less use of quarried aggregates; a halving of lorry movements; and 50% less asphalt needed to finish the top layer of footways. Wildanet claims the “environmental benefits are significant“, with each kilometre of trenching using the SMR technique saving an estimated:

• 153 tonnes of excavated material going to landfill
• 153 tonnes of quarried aggregate
• 32 tonnes of asphalt
• 20 fewer HGV lorry movements

Julie-anne Sunderland, Wildanet, said:

“Wildanet’s mission is to transform internet connectivity for rural and hard-to-reach communities in Cornwall, through the roll-out of the latest generation gigabit-enabled fibre to the premises, and to do so in the most sustainable way possible.

As a certified B Corp, we’re committed to building sustainability into the heart of everything we do. We are delighted to be working with Dynamic Fibre on the introduction of SMR into street works in Cornwall. We hope that by supporting this initiative we will not only improve the sustainability of our own network build but encourage and enable the adoption of more sustainable practices by other organisations and contractors across the county.”

According to John McGrath, Dynamic Fibre’s UK Operations Director, the company has so far carried out an initial 22km of installations for Wildanet, which is said to be the equivalent of 440 lorry movements saved (i.e. a considerable reduction in the environmental footprint of the network roll-out). Naturally, there’s a video of all this:

Contributed Article

by Rajiv Datta, CEO of nexfibre

In today’s digital age, full-fibre broadband is much more than a faster way to browse the internet; it is the backbone of our modern lives and a critical driver for economic growth. Connectivity has become an essential that touches nearly every aspect of our daily routines. A robust fibre market fuels the broader economy by enhancing productivity, fostering innovation, and making the UK more competitive on the global stage.

Any healthy and successful sector of the economy needs nationwide competition. To achieve this, there must be an appropriate balance of regulation that encourages fair competition, restricts anti-competitive behaviour by dominant players, and fosters a stable environment for investment and innovation. In the UK, the wholesale fibre access market has witnessed remarkable progress in recent years. However, this advancement remains precarious, and significant challenges still need to be addressed to ensure long-term sustainability.

A fibre market fit for the future?

The UK fibre market has come a long way, largely driven by the rise of alternative network providers (altnets). These new players have injected much-needed competition into the market, prompting Openreach, the dominant provider, to accelerate its fibre-to-the-home (FTTH) rollout. This is a positive development, but it is crucial to understand that the progress made is fragile and far from assured.

While the current landscape might seem robust, the underlying market structure is not sustainable in its current form. This was a point our CEO Rajiv Datta made on the “Changing Landscape of the UK Fibre Market” panel at Connected Britain. The upcoming Telecoms Access Review (TAR) arrives at a critical moment and the regulator needs to take action to promote sustainable nationwide competition.

Significant progress, yet much more to accomplish

According to Ofcom’s latest data, the UK has reached 60% fibre coverage. Continued investment is essential to complete this transformation, and fostering sustainable, nationwide competition is key to maintaining momentum—not just for the current generation of technology, but for future advancements as well.

Stability attracts investment

Regulatory stability is crucial for attracting the necessary investment to complete the fibre rollout. Investors are more inclined to commit resources when they are confident that the regulatory environment is fair, predictable, and supportive of competition. A stable regulatory framework is essential to expanding and upgrading fibre networks across the country.

The need for market consolidation

The economics of fixed infrastructure mean there is room for only a small number of sustainable operators in the marketplace. High-interest rates are exerting increasing financial pressure on sub-scale altnets, many of which struggle with low penetration rates and have to juggle both retail and wholesale operations. Given these dynamics, consolidation in the market is both inevitable and necessary.

Working towards a sustainable future

At nexfibre, we are working closely and constructively with the regulator and policymakers to help shape a fibre market that benefits all stakeholders. We exist to provide that sustainable, nationwide competition and act as a platform for progress in the digital infrastructure market.

This commitment is backed by substantial investment. nexfibre is investing £1 billion in broadband infrastructure this year, reinforcing our intent to provide long-term competition in the full fibre market on a national scale, particularly in underserved areas. We are on track to reach 2 million premises before the end of the year, and with network expansion activities ramping up significantly, nexfibre is set to become the second-largest altnet in just our second year of operation.

Connectivity contributes to better outcomes for all

Genuine, lasting competition to Openreach will drive economic growth, help the UK realise its digital potential, and ensure it remains competitive on the global stage. Moreover, it will transform broadband access across the UK, closing the digital divide and reducing regional disparities across the UK. When this happens, everyone benefits—from individual consumers to businesses and the economy at large.

The UK fibre market stands at a crossroads

Despite the challenges facing the market today, we are confident they can be overcome if we create a dynamic market environment conducive to competition and progress. We had productive discussions at Connected Britain and look forward to continuing to work constructively with policymakers, Ofcom, and the rest of the industry as we move towards a digital infrastructure that is fit for the future.

Keep up to date with the latest international telecoms news by subscribing to the Total Telecom daily newsletter   

Also in the news:
Nokia and Lenovo forge partnership to drive AI and automation in data centers
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“We’re on track to close the loop”: Adtran talks data, AI, and network automation at Connected Britain

A new survey of over 1,000 UK smartphone users by Omdia, which was commissioned by network testing firm Ookla (i.e. Speedtest.net, Downdetector.co.uk), has revealed some of the biggest frustrations that UK Smartphone users have with their devices, with spam calls and messages, slow-loading web pages, and network outages as the top pain points.

The admittedly very small survey (i.e. take its results with a pinch of salt) – ‘Smartphone User Trends‘ – claims to have found that 27% of UK smartphone users are experiencing a “network outage” at least once a month and 81% of those are considering switching mobile operators due to poor handling of such outages.

More widely, over a quarter of UK respondents said they were likely to switch mobile providers in the next 12 months, with 54% citing cost savings as the main reason for switching. “As network outages and cost concerns mount, UK smartphone users are more inclined to consider switching providers,” said Luke Kehoe, industry analyst for Europe at Ookla. “Mobile operators in the UK need to differentiate themselves by addressing these pain points to better serve their customers and reduce churn.”

Summary of Key Findings

➤ Frequent network outages impacting user experience: 27% of UK respondents reported experiencing a network outage at least once a month, and 11% faced outages multiple times each month. Network outages were cited as the biggest frustration for 16% of UK respondents.

➤ High likelihood of switching providers: 26% of UK respondents indicated that they are likely or very likely to switch their mobile service provider within the next 12 months.

➤ Frustrations with slow web pages and interrupted streaming: Quality of experience issues like slow-loading web pages and interrupted video streams also proved frustrating, affecting 38% and 19% of users respectively.

➤ Users want more from their mobile contracts: While 54% of UK respondents cited cost savings as their primary motivation for switching providers, 20% are looking for better bundled content, 32% are looking for faster network speeds, and 27% want better reception.

➤ Communication from operators around outages: 89% of UK respondents noted that receiving notifications and status updates about network issues is important or very important to them.

➤ Speed and quality: For UK respondents, having a faster network and receiving better coverage were more important than promotional offers. Nearly a third (32%) of UK respondents, who are looking to switch providers, will do so because they want to get better speed from their mobile connection, and 27% want to improve their coverage experience.

➤ Ability to upgrade: UK consumers surveyed said that the ability to upgrade to the newest device is the least important consideration when selecting a mobile service provider, with only 14% citing it as “critical”.

➤ Consumer blame doesn’t always fall to operators: Although 57% of UK consumers surveyed said they blamed their mobile/home internet service provider when issues are experienced with streaming content, 19% said they would blame their device and a further 24% said they’d blame the streaming platform.

Kehoe added: “Ongoing frustrations with slow-loading webpages and interrupted video streaming highlights the importance of addressing bread-and-butter quality of experience (QoE) issues, even on faster 5G networks. Operators that can demonstrate the superior coverage and performance credentials of their networks, including ensuring there is proactive communication when outages arise, have a clear strategic opportunity to win the hearts of frustrated consumers.”

The catch here is with how you define a “network outage” when moving within a mobile network environment, where signal and service quality can vary significantly between locations, both indoors and outdoors. Not to mention the potential for faults on the Smartphone itself. Naturally, there are some limitations of mobile connectivity that cannot be easily overcome in every scenario, at least not in a way that would be considered economically or even practically viable for commercial operators.

The actual number of real network outages, such as where the network itself fails due to a fault within the operator’s network (as opposed to a failure of the device itself or when moving into an area of weak signal), is usually very low. But experiences do vary between locations, although we tend to only see a handful of major national-scale service disruptions each year.

Mobile network analyst firm Streetwave has used data gathered from across Northumberland (England) and Ceredigion (Wales) to examine the recent switch-off of 3G mobile services in those areas by Three UK, which resulted in median (average) mobile broadband download speeds rising by 22%, but “Essential Coverage” declined by 8%.

In case anybody has forgotten, Three UK is due to fully complete the process of switching off their old 3G network by the end of 2024 (here). Mobile operators have generally been compensating for the 3G switch-off in some areas by introducing upgrades to newer 4G and 5G services. The removal of 3G also freed up some radio spectrum that can be re-farmed for use by those modern services, which could boost network performance.

However, so far none of the mobile network operators have released any solid evidence to show the practical and statistical impacts of the 3G switch-off, which is what makes the latest data from Streetwave so useful when checking against their claims. Not to mention that the company’s approach to such testing goes a lot deeper and is more accurate than most other studies.

Streetwave has been using bin (lorries) collections to map mobile coverage and performance in both areas, in collaboration with the local authorities. In this setup, bin collection vehicles are installed with four off-the-shelf smartphones using software from Streetwave on top, which run continuous tests of signal coverage and network performance (once every 20 metres in rural areas and 5m in urban areas) as the vehicles go about their routes.

The latest work was commissioned following concerns raised by residents regarding potential disruptions to mobile networks after the 3G switch-off. The results reveal that, during the data collection period, the percentage of connections made via 3G on Three UK’s network in Northumberland and Ceredigion have fallen from an average of 6% to 1%.

However, the data also shows that as Three’s 3G connections fell, median throughput speeds improved, yet ‘Essential Coverage’ declined. Streetwave defines Essential Coverage as being reflective of locations where the network provides users with connectivity of above 1Mbps download speeds, 0.5Mbps upload, and below 100ms (milliseconds) of latency (i.e. covering or allowing only the most basic of use cases / needs).

The Results

The median download speeds experienced by users rose by 19% in Ceredigion and 25% in Northumberland. Likewise, the median upload speeds experienced by users also rose by 19% in Ceredigion, but there was no change to median upload speeds in Northumberland. But ‘Essential Coverage’ for Three’s network has fallen across both councils in the period of study – falling by 5% in Ceredigion and 8% in Northumberland between July and October.

Streetwave noted that they also conducted a similar survey with Norfolk County Council to assess the impact of Three’s 3G switch-off in Norwich. However, no 3G connections were made by Streetwave’s data collection equipment in either July or October 2024, which meant they couldn’t create a comparison for that region. In any case, the switch-off is still in progress in other areas and Streetwave plan to continue monitoring related developments.

The company previously posted a similar study covering Vodafone’s 3G switch-off, albeit only in Northumberland, which revealed that the operator was providing ‘Essential Coverage‘ across 92% of locations in Northumberland (up by 3%) and their average mobile (data) download and upload speeds were also faster by approximately 10% after the switch off (here).

However, it’s worth noting that we don’t yet know what kind of baseline of change these areas typically experience over a longer period of time, which makes it difficult to be certain that all of these differences can be directly attributed to the 3G switch-off. Various other impacts, such as tourism (networks often boost capacity around busy periods) and general network upgrades, will also be playing a role.