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Eurobites: DT Slams BT 'Legal Separation' Proposals

Paul Rainford
12/6/2016

Also in today's EMEA regional roundup: Ofcom puts forward duct-and-pole proposals; Fastweb buys Tiscali Business; Vodafone gets busy on IoT; ZTE buys into Eurasian growth.

  • Deutsche Telekom AG (NYSE: DT) has slammed the proposal from UK regulator Ofcom for a "legal separation" of BT Group plc (NYSE: BT; London: BTA) from its Openreach network access unit, the Financial Times reports (subscription required). Writing in a submission response to Ofcom's Digital Communications Review, the German giant said: "We fail to see clear evidence that would justify such an extreme intervention, considering its impact on domestic and international property rights," adding, "There is good reason no other major economy has considered what you are proposing -- it won't work." Deutsche Telekom currently owns 12% of BT, and was thought to be looking at a full takeover of BT in due course, but DT says that a legal separation would make the UK "less investable." (See Only BT's Dismemberment Will Sate Rivals, Openreach Gets Chairman as Ofcom Berates BT and DT's Biggest BT Bother: Break-Up, Not Brexit.)

  • And, speaking of Ofcom, the regulator has today put forward proposals that it says will make it easier and cheaper for BT's rivals to lay ultrafast broadband using the UK incumbent's poles and ducts. Reforms are being proposed that would, among other things, force BT to streamline the process of conducting site surveys for its competitors and to provide service-level agreements and guarantees. (See BT, Ofcom & the Battle of Britain.)

  • Italian broadband provider Fastweb SpA (Milan: FWB) has agreed to buy Tiscali Business for €45 million ($48.3 million), €25 million ($26.8 million) of which is in cash and the rest in services, La Stampa reports (in Italian). In addition to the acquisition, Fastweb and Tiscali (the remaining parent company) signed a strategic cooperation agreement: Tiscali will be granted access to Fastweb's fiber network to deliver ultra-broadband services to its residential and SME customers, while Fastweb will be granted access to Tiscali's 3.5GHz frequencies as part of a plan to create a fully fixed-mobile "converged" network.

  • Vodafone Group plc (NYSE: VOD) has signed a deal with Arrow Electronics whereby the electronics components distributor will integrate Vodafone's Internet of things (IoT) technology into its IoT-related eVolve offering.

  • IoT will also form part of the job responsibilities of Brian Humphries, who has been recruited from Dell EMC to head up Vodafone's group enterprise business. He starts in February, reporting directly to Group Chief Executive Vittorio Colao, succeeding Nick Jeffery, whose appointment as chief executive of Vodafone UK was announced in July.

  • Chinese vendor ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) has acquired a 48% stake in Netaş, a Turkish systems integrator, to support growth in Turkey and Eurasia. Financial details of the deal were not disclosed. Netaş recorded revenues of $371 million for the fiscal year 2015 and counts customers among telcos, banks, governments and enterprises.

  • Colt Technology Services Group Ltd , the pan-European services provider, has appointed TS Narayanan as its new vice president and CIO. Narayanan joins Colt from Tech Mahindra Ltd. , where his most recent role was SVP/head of delivery and solutions for Europe.

  • Telia Carrier has added another point of connectivity in the Hungarian capital, Budapest, to meet a growing demand for wholesale IP transit and Ethernet services.

  • UK cable operator Virgin Media Inc. (Nasdaq: VMED) is in talks to poach the head of Tesco Mobile, the Financial Times reports. According to the newspaper, Anthony Vollmer is being lined up to replace Peter Kelly as head of Virgin's mobile arm.

    — Paul Rainford, Assistant Editor, Europe, Light Reading

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    iainmorris
    iainmorris
    12/6/2016 | 8:21:21 AM
    Legal separation is the best deal DT will get
    It's interesting that Deutsche Telekom seems to have interpreted "legal separation" as structural separation. The former is supposed to be about building bigger walls between Openreach and the rest of the BT Group, while the latter would see Openreach spun off as a separate company. Neither looks great for shareholders, of course, but given the current sentiment in the UK market some form of legal separation is really the best DT can hope for. 
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