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Eurobites: Deutsche Telekom Denies T-Systems Asset Sale

Paul Rainford
1/16/2019

Also in today's EMEA regional roundup: Turk Telekom tests Nokia's machine-learning technology for 5G; Orange and Groupama form home surveillance JV; reversal of fortune for Qualcomm in German court.

  • Deutsche Telekom's T-Systems International GmbH IT subsidiary has denied speculation it is poised to sell its mainframes business to IBM Corp. (NYSE: IBM) in an €860 million ($983 million) deal. Instead, says the German company, IBM will provide a "share" of its mainframes services under a new partnership. "It is planned that as part of a services contract IBM will take over worldwide operation of mainframe systems," said a spokesperson for T-Systems. "T-Systems will continue to offer mainframe services, but will subsequently provide these jointly with IBM." The agreement will not affect existing contracts, said T-Systems, and remains subject to approvals from Deutsche Telekom AG (NYSE: DT) and the German Federal Cartel Office. T-Systems did not provide any comment about the financial terms of a deal or confirm reports that around 400 of its employees will move to IBM as part of the agreement. (See T-Systems Offloads Mainframes to IBM in €860M Deal – Report.)

  • Türk Telekomunikasyon A.S. has been testing machine learning-based network management applications from Nokia Corp. (NYSE: NOK) as it prepares for the task of running a 5G network, according to a report from NTV (in Turkish). The Nokia tools used in the trials were the Multi-purpose Intuitive Knowledge Assistant (MIKA) and AVA cognitive services platform.

  • Orange (NYSE: FTE) and Groupama are forming a joint venture, Protectline, that targets the growing home telesurveillance market in France. Orange will hold 51% of the company's capital and Groupama the remainder. It's not the first time the two companies have worked together: Orange's 2016 acquisition of a 65% stake in Groupama cleared the way for the creation of Orange Bank, which the French incumbent operator hopes will become a major financial player in Europe. (See Orange Bank Job Is Going Europe-Wide.)

  • A German court has thrown out Qualcomm Inc. (Nasdaq: QCOM)'s latest patent lawsuit against Apple Inc. (Nasdaq: AAPL), just weeks after the US chip giant had won a court ban against the sale of certain iPhones in the country. As Reuters reports, the regional court in Mannheim dismissed the suit as groundless. In December, the Munich District Court found that Apple was infringing Qualcomm's patented power savings supply technology, and at the start of 2019 Qualcomm posted security bonds totaling €1.34 billion (US$1.52 billion) that enabled it to enforce a permanent injunction against the sale of the iPhone 7 and 8 models in Germany. (See Eurobites: Qualcomm Twists the Knife Into Apple With German Ban Move.)

  • As part of a broader revamp linked to the impending sale of European assets to Vodafone Group plc (NYSE: VOD), Liberty Global Inc. (Nasdaq: LBTY)'s chief commercial officer, Diederik Karsten, is to leave the giant cable operator on July 1 after 14 years of service. A filing with the SEC shows that Karsten, under terms consistent with "standard Dutch legal framework exit provisions," will get a golden goodbye payment of €3,560,494 ($4,083,531) and will "obtain one year of accelerated vesting of his share appreciation rights." That should see him alright… For more on his departure, see this article from Digital TV Europe: Liberty Global commercial chief departs in major reorganisation. (See European Commission Digs Into Vodafone-Liberty Global Deal and Vodafone Strikes €18.4B Deal to Buy Liberty Assets.)

  • Gorgeous Gav (AKA departing BT CEO Gavin Patterson) may be in line for a knighthood for his, ahem, services to the telecom industry, postulates the City Spy column of London's Evening Standard newspaper (print edition only, folks). Spy's thesis is that every one of BT Group plc (NYSE: BT; London: BTA)'s five previous CEOs has been similarly "ennobled" after leaving office: Patterson is due to clear the last few items off his desk and hand over completely to new CEO Philip Jansen on February 1. BT's share price lost nearly a third of its value during Patterson's tenure, while he presided over an accounting scandal in Italy, lavished billions on sports rights and failed to adapt BT to the needs of the coming digital age. But, hey ho, Ben Verwaayen walked off with a knighthood even though he was blamed for major write-downs and losses at BT Global Services, the division that simply won't behave. So abject failure shouldn't necessarily get in the way of a gong. Arise, Sir Gavin. (See BT Waves Goodbye to Gorgeous Gavin and Eurobites: Worldpay's Jansen Lands BT Top Job.)

    Arise, Sir Gavin of Gorgeousness
    Arise, Sir Gavin of Gorgeousness

  • Helena Norrman, Ericsson AB (Nasdaq: ERIC)'s SVP, chief marketing and communications officer and head of marketing and corporate relations, is leaving the company. She has been with Ericsson since 1998, and is leaving, says the Swedish giant, "to pursue opportunities outside the company."

  • Ooredoo Palestine is sticking with Canadian BSS vendor Optiva for its "customer experience" needs, entering into a new multi-year agreement and getting a software upgrade. Optiva (formerly known as Redknee) is claiming some of the credit for Ooredoo Palestine's subscriber base increasing by 57% year-on-year to 1.3 million by the end of September 2018.

    — Paul Rainford, Assistant Editor, Europe, Light Reading

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