British registered OneWeb, which is part-owned by the UK government, and Eutelsat have demonstrated how fast the company’s new global constellation of Low Earth Orbit (LEO) based broadband satellites can operate when connected to one of Kymeta’s Hawk u8 user terminals, mounted on a 4×4 Land Rover Discovery. The company’s Proof of Concept (PoC) test, […]

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Reports suggest that private equity firm KKR could slightly increase its bid for TIM’s broadband network, while the CDP is unlikely to budge from its original offer

This week marks a major turning point Italy’s incumbent operator TIM, which will soon need to decide whether to move forward with the sale of its fibre network or else rethink its strategy.

At the start of 2022, TIM’s CEO Pietro Labriola outlined a new strategic plan to help the operator cut its roughly €30 billion in debt. Alongside various job cuts and other streamlining efforts, the plan included spinning off the company’s infrastructure into a separate NetCo to entice investment.

Interest in the would-be unit was immediate. US investment firm KKR – already a major stakeholder in the company’s ‘last mile’ network unit FiberCop – quickly presented TIM with a bid for the unit for an undisclosed sum. Shortly after, the state lender the Cassa Depositi e Prestiti (CDP), one of TIM’s major investors, presented a counterbid in partnership with Macquarie Asset Management, prompting TIM to launch a formal auction for the NetCo.

KKR quickly increased its bid to €21 billion, eclipsing the CDP’s bid of €19.3 billion. Subsequent reports last month suggesting that the CDP would be unwilling to increase its own bid any further and could withdraw from the process altogether.

Now, the final deadline for bids for the unit is tomorrow, with insiders suggesting that the CDP’s bid remains broadly unchanged, while KKR may slightly increase.

But despite this bidding improvement, TIM is unlikely to be overjoyed at the prospect of a sale at this price. The operator’s key stakeholder Vivendi has strongly opposed the sale of the network unit under the current conditions, repeatedly suggesting that the company’s assets are being undervalued by up to €10 billion.

According to reports, TIM’s board is divided over whether to move forward with an offer or reject the bids in favour of re-evaluating their options.

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Also in the news:
More than two-thirds of U.S. commercial sites have no optical fibre access
Viasat completes Inmarsat merger deal
EXATEL talks expansion into subsea connectivity sector

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América Móvil’s rivals AT&T and Movistar have already said they will not participate in the auction if spectrum prices are not revised

According to local media reports, América Móvil’s Mexican subsidiary Telcel has confirmed its interest in bidding for 5G spectrum in Mexico’s upcoming spectrum auction.

“We already have 5G spectrum and we will always be evaluating the tenders called by the regulator,” América Móvil’s Director of Legal and Regulatory Affairs Alejandro Cantu told El Economista.

If the company does want to take part in the auction, it could do so uncontested, with rivals AT&T and Movistar having both said that the prices set by the regulator are too high for them to participate.

The Federal Telecommunications Institute (IFT) first announced its intentions for its latest auction back in February 2022, saying that the tender process had been designed “to assign the greatest amount of spectrum possible and to enable new players in the mobile market to access this resource”.

The auction aims to allocate 70MHz of spectrum in the 600MHz band, a 50MHz block in the 3.5GHz band, and 90MHz in 1.5 GHz ‘L-band’. Additional spectrum in the 800MHz, 850MHz, 1.9GHz, 2.1GHz, and 2.5GHz bands could also be made available, according to the regulator.

However, the auction’s initial proposal was immediately lambasted by the local telcos, who argued that spectrum usage charges were too high to make purchasing the spectrum economically viable.

According to the IFT themselves, spectrum usage charges can be up to 186% higher in Mexico than the international average.

As a result of these high prices, both AT&T and Movistar – despite their scale and the depth of their pockets – have said that they will not take place in the upcoming auction.

The high prices also present a significant barrier to entry for new market players, despite this being the IFT’s stated goal.

An official date for the upcoming spectrum auction has yet to be announced, so operators will be hopeful that the regulator will lower the prices to make the auction more appealing.

That Telcel would be the only player willing to potentially take part in the spectrum tender process should not come as much of a surprise. The operator dominates the Mexican mobile market, with over 80 million subscribers and a market share approaching 70%.

The operator launched commercial 5G services in 18 major cities in February last year and has been expanding coverage ever since. These current services, however, make use of the company’s spectrum in the 2.5GHz band, which was previously used to deliver 4G LTE services.

That said, Telcel does already have 5G spectrum in the form of 100MHz in the 3.5GHz band, half of which it purchased from Axtel in 2020, while the other was transferred from América Móvil’s subsidiary Telmex the same year. Bolstering these holdings with additional spectrum should allow for broader 5G deployment and higher speeds for customers.

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Also in the news:
More than two-thirds of U.S. commercial sites have no optical fibre access
Viasat completes Inmarsat merger deal
EXATEL talks expansion into subsea connectivity sector

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Reports suggest the European Commission is unsatisfied by the efforts being made by some countries to secure their 5G networks against perceived high-risk vendors

According to a report from the Financial Times, the EU could be considering a bloc-wide ban on network equipment vendors that are deemed to present a security threat, such as Chinese telecoms giant Huawei.

Anonymous sources suggest that the European Commission is deeply concerned that some members states have taken too little action with regards to securing their 5G networks; in particular, some states are failing to follow the security guidelines published by the Commission and unanimously agreed by the bloc back in 2020.

EU Internal Markets Commissioner Thierry Breton reportedly revealed last week that only a third of EU countries had moved to ban Huawei from critical parts of their 5G networks, a total he deemed “too few” and thereby a risk to the bloc’s collective security.

This news comes just weeks before the Commission is expected to formally report on member states’ implementation of security recommendations, doing so for the first time since July 2020.

The furore over Huawei and 5G network security dates back to 2019, when the US began to implement bans on the company’s technology over perceived threats to national security.

The US government claimed that Huawei had direct ties to the Chinese Communist Party and their 5G network technology could allow the company to spy on US citizens.

To this day, Huawei maintains that these fears are unfounded, noting that they have consistently followed global security standards and operate independently of the Chinese government.

Nonetheless, in 2020 the US undertook a major foreign policy drive to see Huawei equipment similarly banned from its allies’ 5G networks, both in Europe and the rest of the world. Over the following year, these efforts bore fruit, with Denmark, Sweden, Estonia, Latvia, Lithuania, and the UK all implementing bans on Huawei technology and mandating the removal of the company’s equipment from their networks over the coming decade.

Elsewhere in Europe, however, the response was more mixed. While most countries implemented additional security measures of some description – typically in line with the EU’s security toolbox – the severity of these measures differed greatly from country to country. France, for example, issued what was known as the ‘5G law’ in August 2019, requiring the French National Cybersecurity Agency to approve additional 5G network equipment deployments; this practice, this broadly equates to a de facto ban on Huawei equipment for much of the country.

Germany, by contrast, has been reticent to make a direct decision on Huawei, with various reviews delaying the decision-making process to this day. As a result, the Germany operators are now deeply reliant on Huawei for their 5G network equipment, with reports suggesting that 59% of the country’s RAN equipment is provided by the Chinese vendor.

In many countries, the debate over Huawei’s role in their 5G networks remains ongoing. In recent weeks, Portugal – initially one of Huawei’s staunchest defenders in the EU – has announced a new security assessment that could see the implementation a national ban on Huawei technology. Elsewhere, Malaysia is considering whether to allow Huawei to help construct its government-run 5G network, with both the EU and US lobbying against the company’s inclusion.

It should come as no surprise, then, that a more unified approach for the EU would be appealing to the European Commission. It should be noted, however, that actually implementing an EU-wide ban would be no small feat. Such a decision would require the legal approval of the European Parliament and the various member states – approvals that would be very difficult to secure before the expiration of the current European Commission’s term in office in 2024.

Want to keep up to date with all of the latest telecoms news from around the world? Click here to receive Total Telecom’s daily newsletter

Also in the news:
More than two-thirds of U.S. commercial sites have no optical fibre access
Viasat completes Inmarsat merger deal
EXATEL talks expansion into subsea connectivity sector

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