BT Group Q1 2018/19 results and trading statement
ARCEP takes the "lose-lose" out of competitive fibre-laying
ARCEP is not talking regulation... yet. But nobody is in doubt that regulation will follow if the recommendations are ignored.
According to Luca Schiavoni, an analyst at Assembly Research, the move by ARCEP can be part explained by a long-running dispute between Orange and SFR over their 2011 deal to split the ‘medium density’ territories in France to deploy FTTH. When SFR merged with Numericable the new entity decided it wanted a bigger share of the areas. Unpleasantness broke out between the two telcos with the end-result that Numericable threatened that it would gather investors in a joint venture and cover disputed non-density areas anyway, overbuildiing some of Orange’s infrastructure.
“That didn’t happen, but clearly it would have been undesirable for everyone,” said Luca. “If you duplicate networks you’re likely to remove the case for investment for both yourself and for the other operator.”
So ARCEP wanted to avoid any possibility of this sort of “lose-lose” competitive play ocurring again since it tends to be unnerve potential investors and affect their investment plans.
So is this sort of problem a live issue in other European countries?
“Yes, I think it is a live issue,” says Luca, but we are still at question time, not at answers time. In the UK, for instance, we’re still at the stage where operators are finding out about the viability of their investments.
“In France the regulator has sent a recommendation which means it has no real binding power but it also means that the regulator has sent a message which says, ‘We are watching this and in the future, if needed, we will take action’.
Openreach to cut price of fast broadband
Matthew Howett, founder of research firm Assembly, said the announcement made "commercial sense" because Openreach and others looking to upgrade the UK's infrastructure needed to prove that the demand is out there.
"This does seem like a genuine move to get more people onto the fibre network, and stave off criticism from those that say the UK falls behind," he said.
"It's about Openreach showing the industry and the regulator that it has changed and is implementing the further separation from BT not only to the letter, but also in the spirit of what was agreed."
Virgin Media / UKTV channel dispute
Will EC's Android ruling help or hinder the mobile industry?
“The EC’s fine is quite a slap ... but neither this, nor the remedies Google are being required to put in place are likely to structurally alter the market, suggests Luca Schiavoni, a senior analyst with Assembly Research.
“[It] fails to set out structural remedies for a market which almost inevitably tends towards concentration, and therefore is difficult to break up without significant disruptions. End users value interoperability, and so do application developers, which means the case for more competition in the space of operating systems is not so clear.
“Similarly, search engines are successful because of their algorithm and of the large data pools they can rely on, which creates a spiralling network effect driving users towards the largest providers almost naturally.
“While regulators figure out how to best approach all these issues, fines help the public coffers – but do not solve any market problem."
Broadband speeds in UK slip down global league table
While the speeds in the UK were not the best, there were other measurements - such as availability and speed - where the UK would fare better, said Matthew Howett, principal analyst at research company Assembly.
"Some countries are also of course easier to roll out broadband in. The fastest country in this survey, Singapore, is about the size of London and obviously doesn't have the same challenges with remote and rural areas that we have in Britain," he said.
"Encouragingly, Britain is set for more fibre, with leading operators and their competitors all having committed to deploy so called full-fibre.
"Once those deployments ramp up, they would be reflected in similar league tables."
Europe’s new privacy rules: 1 month in, 7 takeaways
Whisper it quietly, but Europe’s privacy rules are gradually being felt worldwide. Japan and Argentina already have overhauled their domestic rules to comply, mostly to ensure they guarantee so-called adequacy agreements, or data-sharing deals, with the EU. Others like Canada, South Korea and Colombia are similarly tweaking domestic legislation with an eye to the EU’s new standards.
The same, though, can’t be said for many of the global tech companies, many of which have so far limited the data protection rules to their European customers, according to an analysis by Assembly, a regulatory research company. Amazon, LinkedIn, Facebook and others have not extended the rules across their worldwide operations, though Spotify and Sonos, the digital speaker manufacturer, have made the EU rules their global default, according to Assembly’s report.
Gavin Patterson’s time up as BT looks to future
Indeed, others argue that the bold strategy of his early years will remain the basis for a recovery now.
Matthew Howett, founder of Assembly research, said Mr Patterson had acquired a “shining star” in EE — the UK’s largest mobile network — even if he struggled to balance the interests of shareholders, Ofcom and politicians as he tried to turn round a crumbling incumbent. “He couldn’t win,” he said.
EU telecoms rule changes will hinder rather than help 5G, claim industry
Industry observers noted that the additional price regulations appeared to contradict the goals of the EU by adding more rules and that co-investment measures weren’t satisfactory.
“Very often, when regulatory measures are widely criticised and seeming leave everyone unhappy, it often means policymakers have probably struck the right balance,” said Luca Schiavoni, senior analyst at Assembly.
“This might not be the case with the newly approved European Electronic Communications Code however, which has seen both fixed incumbents and alternative operators alike voicing discontent, and left mobile operators disappointed by the unfulfilled promise of 25-years long spectrum licences.
“One winner however does seems to emerge and that is the wholesale-only model. Under the code, wholesale-only networks will benefit from less burdensome regulation. If this results in more wholesale-only networks across the EU, at least it will mean the end of the eternal headaches caused by the existing framework on wholesale access regulation, which has proved very hard to get right and to police across all member states. However, the challenge here will be to ensure that competition at the infrastructure level becomes (and stays) healthy."
Vodafone deal for Liberty Global assets tests EU on telecoms consolidation
It also pits Vodafone against Deutsche Telekom. If the deal is allowed to go ahead, it would make the London-based operator the largest rival to the German company in its home market, just as Deutsche Telekom is looking to build its own regional telecoms network.
"Europe is the size of the U.S., but we have four operators in each of the member states, which is increasingly unsustainable," said Matthew Howett, a telecoms analyst at Assembly, a research firm, in London. "We're gradually shifting away from that. It's hard to see that trend stopping."
By acquiring Liberty Global's assets, Vodafone and its chief executive, Vittorio Colao, plan to add a series of cable assets to the carrier's existing mobile infrastructure to expand the company's footprint across the region.
Ministers urged to force telecoms operators to plug mobile phone not-spots in rural areas
BT to cut 13,000 jobs and ditch central London HQ
Facebook reports first-quarter earnings
Facebook data collection raises questions for mobile operators
The end result of this is likely to be greater regulation of social media platforms, but what this means is still up for debate. It’s possible that the imminent arrival of the EU’s General Data Protection Regulation could be a basis for other regulators.
“In the hearings, Zuckerberg repeated a concept he has been voicing for the last few weeks, and admitted regulation is now ‘inevitable’ for online platforms,” says Luca Schiavoni, an analyst with Assembly Research. “He also added, though, that regulation could be easy to comply with for a large company like Facebook, whereas this could be more difficult for a smaller start-up.
“Size of businesses aside, regulation will have to be designed with two objectives in mind: the improvement of transparency and user awareness; and the flexibility needed to make sure rules do not become outdated too quickly. To this end, well-monitored guidelines could go a long way, so long as there are sufficient incentives for companies to keep a trustworthy behaviour.”
What does the Ofcom 5G auction mean for the UK mobile industry?
Indeed, it will be the 700MHz frequencies used by Digital Terrestrial Television (DTT) that are the next to be made available at auction – possibly next year – so although this was an important development, it wasn’t judgement day.
“An unsatisfactory outcome in this auction was never going to necessarily spell the end to any one operators 5G future given that the technology will ultimately work across a number of spectrum bands, both new ones and ones already held by the mobile operators,” commented Matthew Howett from Assembly Research.
UK’s 5G auction raises £1.35bn from four bidders
The £1.35bn raised is a far cry from the £22.5bn windfall that the Treasury brought in 2000 when it sold 3G licences. It is also less than the £2.3bn raised in the 4G auction in 2013, which was seen at the time as a disappointing result for the government.
Matthew Howett, principal analyst at Assembly, the market research firm, said: “Even though the auction raised a fraction of the amount of the 4G auction or even the 3G auction two decades ago, the prices paid are above expectation which shows how valuable these airwaves are to operators, particularly given the emerging hype around 5G.”
Superfast 5G mobiles are a step closer
Analyst Matthew Howett, founder of research firm Assembly, thinks most customers will not see 5G any time soon.
"Everyone is getting a bit ahead of themselves," he said, "but the industry hasn't yet agreed on how it will be different from 4G".
Mr Howett said it would mean "faster, more reliable connection", but added: "My view is, it's a way off."
He added: "All they are buying is essentially the airwaves that are all around us and have existed since the Big Bang, because there is only a finite amount."
Cambridge Analytica whistle-blower gives evidence to DCMS Committee
5G auction bidding starts in UK
But the case for 5G services still needs to be made, says Matthew Howett, founder of research firm Assembly.
"Everyone is still unsure of the 5G business model and use cases with the hype largely being driven by those who make the network equipment," he said.
"Operators still have so much more they can do with their 4G networks and investment is still going into improving the performance and coverage of those."
5G will work across a number of spectrum bands, so those missing out in this latest auction will still be able to roll out 5G services, he added.
"Naturally all operators will be looking to limit the amount they bid given the reluctance of customers to pay more for faster speeds," said Mr Howett.
"This auction is certainly unlikely to net as much as the last auction for 4G spectrum, and nowhere remotely close to the eye-watering £22.5bn operators paid for 3G licences almost two decades ago."
