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Press Release

The decision comes after a Phase 2 review revealed Viasat and Inmarsat will likely face significant competition from both emerging and established players as the sector expands

Satellite communications firms Viasat and Inmarsat – which agreed to merge in November 2021 – supply businesses globally with satellite connectivity that enables services such as internet, email, and video calling, including for use in aircraft.

The Competition and Markets Authority (CMA) referred the deal to an in-depth Phase 2 inquiry after identifying competition concerns during its initial, Phase 1, investigation.

Over the past 4 months, an independent CMA panel has gathered and scrutinised a wide range of evidence in order to better understand the sector, as well as the potential impact of the deal. This included internal documents from Viasat and Inmarsat, as well as the companies’ competitors (including their plans for future expansion); evidence from airlines; the CMA’s own analysis of sector conditions – and how these could change.

In a Phase 2 review, the panel considers whether it is more likely than not that a deal will lessen competition – a higher threshold than Phase 1. Accordingly, some mergers that are referred to Phase 2 will ultimately be cleared.

The CMA’s investigation into the Viasat/Inmarsat deal has provisionally found that, while the companies compete closely in the aviation sector – specifically in the supply of satellite connections for onboard wifi – the deal does not substantially reduce competition for services provided on flights used by UK customers.

The CMA’s investigation has found that the satellite sector is expanding rapidly – a trend the evidence suggests is likely to continue. This is due to increased demand for satellite connectivity, driven in large part by the ever-growing use of the internet by businesses and consumers both at home and whilst travelling.

The satellite industry has seen a number of new players entering – or planning to enter – the sector, including Starlink (operated by SpaceX), which is rapidly increasing its presence in the provision of satellite connections to aircraft. During our investigation, the firm has launched a significant number of additional satellites and won its first contract with a European airline, airBaltic.

Established competitors, such as Panasonic and Intelsat, are also investing and entering into new partnerships. For example, both firms have signed agreements with recent entrant OneWeb to use its satellite fleet to enhance their offerings to airlines.

Richard Feasey, chair of the independent inquiry group carrying out the Phase 2 investigation, said:

“This is an evolving and rapidly expanding sector, in which there have been significant developments even during the course of our 4-month investigation. We see this continuing as demand for satellite connectivity increases.

While Viasat and Inmarsat compete closely, the evidence suggests that the merged company will face significant competition in the coming years – from both emerging players like Starlink and from established firms like Intelsat and Panasonic.

This competition has led us to provisionally conclude that airlines and their UK customers will not be adversely affected by the deal.

Today’s findings are provisional, and the CMA will now consult on its findings and listen to any further views before reaching a final decision.”

The CMA welcomes responses from interested parties to its provisional findings by 21 March 2023. These will be considered ahead of the CMA issuing its final report, which is due by 30 March 2023.

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News

Changes include CFO Matt Ellis will stepping down for his role, as well as new CEO appointments for Verizon Consumer Group (VCG) and Verizon Business Group (VBG)

Verizon’s latest financial results, reported in January, were something of a disappointment, with the company suggesting that strong competition coupled with a tough global economy had forced it to lower its forecasted profit for the financial year.

Perhaps this is why today we are seeing a wave of executive changes across the company, with the company aiming to “further strengthen [its] competitive capabilities”, according to Verizon chairman and CEO Hans Vestberg.

Perhaps the largest of these changes is that EVP and CFO Matt Ellis stepping down from his role after seven years to pursue other interests. He will be replaced by SVP and controller Tony Skiadas, who, in turn, will be replaced by Mary-Lee Stillwell, currently VP of accounting and external reporting.

“I appreciate the contributions Matt has made to Verizon in his 10 years with the company, shaping our organization with his strong leadership and financial aptitude. He’s been an influential member of my executive leadership team and a trusted partner. I wish him all the best for the future as he now moves on to new opportunities,” said Vestberg.

Other changes include the appointment of Sowmyanarayan Sampath, currently head of VBG, as EVP and CEO of VCG.

The vacant CEO role at VBG will be taken by Kyle Malady, Verizon’s current head of global networks and technology.

As the final step in the reshuffle, Joe Russo, SVP and chief network officer, will succeed Malady as head of global networks and technology.

“One of our strengths at Verizon is the depth of our leadership and the breadth of skills they bring to the table. Sampath, Kyle and Joe are long-time Verizon veterans,” explained Vestberg. “I am confident these leaders will best position Verizon for the new era of customer growth. These transitions will begin immediately and all will report directly to me.”

How is the US telecoms market evolving in 2023? Join the telecoms industry in discussion at this year’s live Connected America conference in Dallas, Texas later this month!

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News

The penalty comes as a result of having breached their Deferred Prosecution Agreement (DPA) with the Department of Justice (DoJ) from back in 2019

This week, Swedish mobile network equipment vendor Ericsson has announced that it will pay the US DoJ the sum of $206.7 million, settling a legal battle related to a highly publicised bribery scandal.

Back in 2019, following an investigation, the DoJ and the Securities and Exchange Commission (SEC) accused Ericsson of having bribed officials in China, Djibouti, Indonesia, Kuwait, Saudi Arabia, and Vietnam during the period between 2010 and 2016.

To resolve this conflict, Ericsson signed a DPA with the DoJ, agreeing to pay the US government $1.06 billion to settle the matter.

However, last year, Ericsson announced that an internal investigation had revealed the company may have made bribery payments to the Islamic State terrorist group in Iraq, dating back to 2011.

This revelation, as well as further questions about Ericsson’s activities in Djibouti and China, led the DoJ to accuse the vendor of violating the terms of its DPA.

“When the Department afforded Ericsson the opportunity to enter into a DPA to resolve an investigation into serious FCPA violations, the company agreed to comply with all provisions of that agreement,” said Assistant Attorney General Kenneth Polite. “Instead of honoring that commitment, Ericsson repeatedly failed to fully cooperate and failed to disclose evidence and allegations of misconduct in breach of the agreement.”

As a result, this week Ericsson is once again being forced to pay its way out of trouble, settling this latest clash by agreeing to a settlement with the government worth $206.7 million.

The company had been expecting a fine of some sort from the DoJ for some time, having set aside around $220 million in its budget to cover this expense back in January.

“Taking this step today means that the matter of the breaches is now resolved. This allows us to focus on executing our strategy while driving continued cultural change across the company with integrity at the centre of everything we do,” explained Ericsson CEO Borje Ekholm.

In related news, Ericsson recently revealed that it would cut around 8,500 jobs globally as part of efforts to cut costs and streamline its operations. Around 1,400 of these roles will be in the vendor’s home market of Sweden.

The company is currently seeking to reduce its costs by around $880 million by the end of 2023.

Keep up to date with all the latest telecoms news with Total Telecom’s daily newsletter

Also in the news:
AT&T signs up to use Frontier’s fibre to connect mobile towers
UScellular urges customers to put down their phones in latest initiative
VMO2 and Vodafone give rural Scotland a 4G boost

VIEWPOINT

Over the last few years, the 5G ecosystem has moved from strength to strength, with the technology emerging as the fastest-growing communications technology ever.

“5G is developing three times faster than 4G and reached the milestone of crossing one billion subscribers by the end of 2022. There are now around 243 5G networks and more than 3.85 million 5G sites globally,” said Yang Chaobin, Senior Vice President and President of ICT Products and solutions at Huawei. He was speaking at the 5.5G is Coming Summit at Mobile World Congress 2023.

The growing 5G ecosystem means the new service requirements are becoming more diverse and complex. The 5G networks will not be able to meeting the growing requirements. For instance, 1 Gbps uplink is required to support high-precision industrial vision for AI-based inspection, remote control in mining industries and self-driving vehicles, among others.

At the same time, the next evolution in communications standards, 6G, is still being developed and is likely to become a reality only by 2030, seven years away. In this scenario, the telcos must adopt 5.5G to improve the 5G customer experience and to ensure that they continue to bring new and innovative use cases to their subscribers.

“5.5G is necessary to improve 5G, which has become an industry trend and an established consensus. Now, the industry has defined clear roadmaps for 5G-Advanced (5.5G), F5G-Advanced (F5.5G), and Net5.5G standards and introduced clear spectrum strategies. Key technologies and applications have been verified, and the industry consensus has steadily progressed to best practices. With all these developments, 5.5G is arriving at an accelerating rate to improve network capabilities by 10 times for various industries looking to unleash stronger digital productivity,” elaborated Yang Chaobin.

Developing 5.5G Ecosystem 

The industry is realizing the growing importance of 5.5G as a natural evolution of 5G. Now the industry must come together to promote and jointly develop 5.5G technology. He elaborated on four areas of standardization, spectrum strategy, steady implementation and smooth evolution for maximized ROI, in which the industry must work to develop the technology.

A clear roadmap for industry standardization is a must for the growth of the technology. The technical specifications of 5.5G need to be defined in 3GPP Release 18, 19 and 20. While 3GPP Release 18 will be frozen in the first half of 2024, F5.5G has progressed from proposals to specification design. So, the industry stakeholders are coming together to accelerate the development of the 5.5G ecosystem.

Industry standardization needs to be followed with a clear and well-defined spectrum strategy. Yang mentioned in his speech that the 5.5G industry is now promoting the use of sub-100 GHz frequency band to support New Radio via a two-fold strategy. First, the legacy spectrum will be refarmed to ensure smooth evolution to 5.5G, and secondly, joint efforts will be made to ensure that large-bandwidth spectrum mmWave and the upper part of 6 GHz (U6GHz) will be allocated to 5.5G.

Further, all the industry stakeholders need to work in tandem to ensure that 5.5G technology develops so they are able to address the growing demands from 5G networks. Several developments point to the fact that there is an increasing consensus in the industry to support the development of 5.5G. For instance, industry partners led by GSMA have established a 5.5G community at Mobile World Congress 2023. Further, World Broadband Association (WBBA) recently released its “Next Generation Broadband Roadmap” white paper for F5.5G. Besides, leading analyst and consultancy firm Omdia released Net5.5G white paper recently to align industry roadmaps to accelerate progress in technical evolution, application scenarios, and industry ecosystem.

Yang mentioned that 5.5G supports critical technologies such as spectrum refarming and equipment multimode multiplexing, thus enabling service providers to maximize the use of the existing 5G network resources and ensuring smooth evolution to 5.5G. This is crucial to help service providers protect their investments.

5.5G: Setting New Milestones 

Thanks to the industry’s efforts, 5.5G has already achieved several milestones. Yang shared that several operators in different geographies have successfully verified innovative technologies such as Extremely Large Antenna Array (ELAA) and Multi-band Serving Cell (MBSC), making 10 Gbps a reality for 5.5G. Further, the standardization of 50G PON for F5.5G as next-generation PON by the ITU-T and the maturing key technologies such as uplink and downlink symmetry and multi-band in one is paving the way for a seamless evolution to F5.5G.

The growing popularity of 5G use cases like immersive services such as XR and holographic communications and customers are demanding further improvement in experiences. Further, the growth of Internet of Things connections and growing digitalization is pushing the industry to upgrade the networks for 5.5G era.

He mentioned that Huawei will continue to develop products and solutions that will help the industry to seamlessly transition to 5.5G so they are able to leverage the emerging market opportunities.

 

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