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Regulation

Eurobites: Ericsson at Center of Corruption Probe

Also in today's EMEA regional roundup: UK broadband providers slam "fiber taxes"; DT considers bid for web hosting firm; Liberty Global backs Remain campaign.

  • Ericsson AB (Nasdaq: ERIC) is being investigated by the US Securities and Exchange Commission (SEC) over possible corruption linked to its business in China, reports Reuters, citing Swedish newspaper Svenska Dagbladet. The newspaper alleged that a former Ericsson executive in Asia had held a business interest in a supplier to Ericsson, but it was not clear that this formed part of the investigation. In a statement, Ericsson said that the SEC's request for information was received in March 2013 and "relates to Ericsson's anti-corruption program and questions related to the Foreign Corrupt Practices Act."

  • Cable operator Virgin Media Inc. (Nasdaq: VMED) and fiber infrastructure firm CityFibre have both complained to the UK government about an increase in the taxes on their assets -- or "fiber taxes," reports the Financial Times (subscription required). Virgin says it is facing a quadrupling of the business rates -- a form of tax on commercial premises and assets -- and may decide to appeal against the rise. Brigitte Trafford, chief corporate affairs officer at Virgin, described the increase as a "real kick in the cabinets," which Team Eurobites considers a better class of soundbite. CityFibre, meanwhile, claims that it pays taxes between ten and 30 times higher than BT for a comparable fiber connection, and is pressing the government to reform the ratings system.

  • Deutsche Telekom AG (NYSE: DT) is considering a bid for web hosting company Host Europe Group to help bolster its cloud offer, according to Reuters. The report says that DT is looking to team up with US private equity firms to fund the transaction, which command around €1.7 billion euros (US$1.9 billion), according to Reuters' sources.

  • MegaFon says it is the first operator in Russia to demonstrate mobile data transfer speeds of close to 1 Gbit/s. The test, carried out during the St Petersburg International Economic Forum, used Huawei Technologies Co. Ltd. equipment and a prototype user device based on the Qualcomm Snapdragon X16 LTE modem.

  • The latest operator to nail its colors to the mast in the UK's EU referendum debate is cable giant Liberty Global Inc. (Nasdaq: LBTY), which owns Virgin Media. According to the Financial Times, Liberty Global CEO Mike Fries warned that if the UK votes to exit the European Union -- the so-called "Brexit" -- his company "will probably deploy capital elsewhere," making a repeat of its current £3 billion ($4.2 billion) Project Lightning fiber rollout highly unlikely. Putting its money where its mouth is, Liberty Global has donated $1 million to the Remain campaign, which wants the UK to stay in the EU. (See Virgin Media Plots £3B Invasion of BT Turf.)

    — Paul Rainford, Assistant Editor, Europe, Light Reading

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