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Eurobites: Pressure Grows on Ericsson's CEO

Paul Rainford
7/20/2016
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Also in today's EMEA regional roundup: Deutsche Telekom gets cautious go-ahead for vectoring plan; Telia sees sales fall in second quarter; Vodafone UK gives Cisco's SON tech a whirl.

  • Two of Ericsson AB (Nasdaq: ERIC)'s biggest shareholders, who held a combined 37% of voting rights in the company in 2015, have said that current CEO Hans Vestberg needs to step down as soon as possible, reports Reuters, citing business newspaper Dagens Industri. On Tuesday the Swedish vendor issued another weak set of quarterly results, with sales slumping in the face of competition from the likes of Huawei Technologies Co. Ltd. and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763), and its stock fell more than 5%. (See Ericsson CEO: Cisco Merger Not On the Cards and Ericsson 'Doubles' Savings Goal as Sales Slump.)

  • The European Commission has accepted in principle a redrafted proposal from the German telecom regulator that will allow Deutsche Telekom AG (NYSE: DT) to upgrade its network with so-called vectoring technology, which "turbocharges" legacy copper lines. But the Commission is insisting that further concessions be made that will allow alternative operators to provide Internet access over the upgraded networks. Vectoring has the potential to restrict competition by effectively excluding competitive unbundling of the affected lines -- Vodafone Group plc (NYSE: VOD) and others had been concerned about the proposed introduction of the technology in Germany.

  • Nordic operator Telia saw net sales fall 2% year-on-year in the second quarter, to 21.13 billion Swedish kronor (US$2.45 billion), though EBITDA rose 4.1% to SEK6.38 billion ($741 million). Telia, formerly known as TeliaSonera, is in the throes of pulling out of Eurasia, but it still has some operations there which have been hit by fierce competition and negative currency movements. (See TeliaSonera to Quit Eurasia, Focus on Europe and TeliaSonera: Timing May be 'Wrong' for Eurasia Sale.)

  • TalkTalk , the UK broadband provider that is still on the slow road to recovery following a major cyber attack in the fall, is claiming a strong fiscal first quarter. That's it even though revenues were flat year-on-year, reflecting a 9,000 fall in its broadband customer base during the quarter. Hopes are high for its enterprise business -- 2,000 new Ethernet lines were added in the quarter, and corporate revenue grew 7.5%. The provider is in the midst of an FTTP trial in the northern city of York, which currently reaches nearly 11,000 homes in the area. (See Eurobites: TalkTalk Rocked by Cyber Attack, TalkTalk Plummets on Security Woes and TalkTalk Unveils Cut-Price Gigabit Service.)

  • Orange Belgium has appointed Michaël Trabbia as its new CEO, effective September 1, replacing Jean-Marc Harion, who has been appointed CEO of Orange Egypt. Trabbia joined Orange in January 2011, though before that he was in charge of mobile licenses at French regulator ARCEP.

  • Vodafone UK is claiming to be the first British mobile operator to give Cisco Systems Inc. (Nasdaq: CSCO)'s self-optimizing networking (SON) technology a whirl. The operator hopes that SON will improve the quality of its voice calls and reduce network congestion across London and the south of England.

  • BT Group plc (NYSE: BT; London: BTA) has responded to the criticism levelled at its Openreach network access division by a UK parliamentary Select Committee on Tuesday. MPs accused BT of under-investing in Openreach, and using its income to subsidize its other, possibly more glamorous activities, such as its BT Sport TV channels. In a blog post, BT said that investment in Openreach is 30% higher than it was two years ago, and stated its belief that separating Openreach from BT "would lead to less investment, not more, and would fatally undermine the aims of the [parliamentary select] committee."

  • UK cable operator Virgin Media Inc. (Nasdaq: VMED) has announced the next phase of its Project Lightning fiber broadband investment plan. The expansion will potentially reach 6,000 premises in the central London borough of Westminster, as well as 40,000 homes and business in the outer borough of Barnet.

    — Paul Rainford, Assistant Editor, Europe, Light Reading

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