Broadband services

Eurobites: Telefónica Considers Sale of Fixed-Line Stake to Reduce Debt Pile

Also in today's EMEA regional roundup: Tencent teams up with Nokia on 5G testing; Ericsson benefits from ZTE's misfortune; German regulator still has its eye on online giants.

  • Spanish incumbent Telefónica is reportedly considering the sale of a stake in its fixed-line network as it tries to reduce debts and shore up its balance sheet for investment activities in future. According to a report in Spanish newspaper El Confidencial, several Telefónica directors have proposed selling a stake in the fiber-based infrastructure, in which Telefónica has invested about €45 billion (US$52.6 billion) since 2012. The report also flags investor unhappiness with Telefónica's recent share price performance: Since the appointment of José María Álvarez-Pallete as CEO in March 2016, the company's stock has fallen by nearly 26%. Telefónica has been trying to cut debt through the sale of other assets, including a stake in Telxius, its towers subsidiaries. But regulatory opposition forced it to scrap plans for the sale of its UK subsidiary to local rival Three. At about €44 billion ($51.4 billion) in March, Telefónica's net debt was about 2.7 times as much as its operating income (before depreciation and amortization) last year. (See Brexit Batters Telefónica's O2 Sale Plans.)

  • Nokia Corp. (NYSE: NOK) has teamed up with Chinese web giant Tencent Inc. to set up a 5G testbed in Shenzhen. The joint laboratory will be equipped with a range of 5G technologies, including centralized and decentralized split architecture using Nokia Airscale Radio Access Network, 5G Core, MEC framework and third-party devices. Tencent is banking on the testbed revealing potential new applications for 5G in a variety of vertical markets, as well as enhancing its existing services. And we are talking big numbers here: Tencent has 1.04 billion combined monthly active users of its WeChat and QQ social media apps.

  • In Italy, Ericsson AB (Nasdaq: ERIC) has been the beneficiary of the US ban on China's ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) buying any American components for its gear, according to a Bloomberg report. Citing "people with knowledge of the matter," the report says that Ericsson landed a €600 million ($700 million) contract to supply wireless equipment to Italian operator Wind Tre after the ZTE components ban came into force. Light Reading contacted Ericsson, but it refused to comment on the report. This week it was announced that VEON is to sell its 50% stake in Wind Tre to joint owner CK Hutchison Holdings for €2.45 billion ($2.87 billion) to help reduce its debt pile. (See VEON Sells Wind Tre Stake for €2.45B.)

  • German's telecom regulator, the Bundesnetzagentur (BNetzA) , has underlined its desire to see online giants such as Google and Facebook regulated in the same way as traditional telcos, the Financial Times reports (subscription required). "It cannot be right that a company providing traditional telecommunications services has to meet certain regulatory requirements, like those concerning data protection, while a company providing comparable services over the web does not," said Jochen Homann, the regulator's president.

  • Telia Company has shuffled things around in its Baltic operations, replacing Kestutis Sliuzas with Dan Strömberg as CEO of Telia Lithuania. Strömberg is currently CEO of Telia Estonia, and he will be replaced on an interim basis there by Robert Pajos, who has previously held several positions within Ericsson.

  • More uses for artificial intelligence seem to be popping up every day, and here's another one: The European Union Institute in Florence has devised some AI software that it has used to scrutinize the privacy policies of the various online giants (you know who we're talking about) and found them wanting. According to Bloomberg, a third of the policies examined by the software were found to be "potentially problematic," while a fair chunk offered plenty of examples of unclear language. Let's just hope they don't let it loose on telecom news websites…

  • Venerable former Beatle Sir Paul McCartney has lent his support for changes to copyright law within the European Union, which he believes will force "user-upload" content platforms, such as YouTube, to compensate music makers and other creatives for the online exploitation of their work. As the BBC reports, the European Parliament is due to vote on the proposals, which some Internet notables, such as Wikipedia founder Jimmy Wales, are fiercely opposing.

    — Paul Rainford, Assistant Editor, Europe, Light Reading

  • GypsumFantastic 7/23/2018 | 12:17:54 PM
    This EU copyright law... This EU copyright law on content is very sinister, more internet control and censorship by stealth. And whilst the large content platforms will have the resources to manage it, it could be yet another piece of red tape that kills off many small scale start up website ideas.

    I do also appreciate the issue that content originators have, but you would have hoped that musicians and artists would be the type of people who valued fighting against more control and censorship of the internet as a more important issue than protecting their own individual content. Sad times.

    I think we need a Dark Web 2 to keep the internet away from the clutches of governments and global corporates, but also stopping criminals from ruining it.
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