With 2024 now properly and really underway, we check out a few of the high developments that GlobalComms subscribers can count on to see much more of this yr.
The Rise of the Fiber Wholesale Supplier
As cost-conscious telcos all over the world search to release funds to proceed their fiber-to-the-home (FTTH) community rollouts, the fiber wholesale enterprise mannequin is more and more coming into play.
In Latin America, Telefonica is a driving pressure behind this enterprise mannequin. The group entered into fiber-centric tie-ups with traders in Brazil, Chile, Colombia, and Peru, promoting strategic stakes to Caisse de depot et placement du Quebec (CDPQ) and KKR to bankroll future fiber exercise.
Money-strapped Brazilian telco Oi spun off—after which bought off a strategic stake in—its fiber unit, which is now often called V.tal. The latter firm’s networks now move 22 million houses with FTTH know-how.
Exterior of Latin America, Telefonica entered into plenty of fiber-optic joint ventures (JVs), specifically: Bluevia in Spain, Unsere Grüne Glasfaser in Germany, and UK-based nexfibre.
Certainly, Europe proves to be a selected hotbed of fiber JVs, with telcos embarking on tie-ups with deep-pocketed traders in most main markets.
Tower Energy: Monetizing Cellular Masts
One of many largest telecom offers of 2024 up to now includes a tower sale in India.
In January, Information Infrastructure Belief (DIT)—an infrastructure funding belief sponsored by an affiliate of Canada’s Brookfield Asset Administration—signed a definitive settlement with American Tower Company (ATC) to amass 100% of the fairness pursuits in American Tower’s operations in India (ATC India).
ATC India at present presides over a 76,402-strong tower portfolio. The whole money proceeds owed to American Tower at closing (topic to sure pre-closing phrases) may attain INR210 billion ($2.52 billion). Presently, DIT homes Brookfield’s telecom infrastructure companies in India through Summit Digitel, which owns 175,000 cell towers throughout the nation.
Very similar to the regular stream of stake gross sales in fiber opcos, the sale of tower firms and tower portfolios reveals no indicators of slowing down, with common offers introduced all over the world.
The sale of tower firms and tower portfolios reveals no indicators of slowing down, with common offers introduced all over the world.
In November 2023, Liberty Latin America reached an settlement with Phoenix Tower Worldwide (PTI) to monetize roughly 1,300 cellular tower websites throughout Latin America, spanning Panama, Jamaica, the Bahamas, Puerto Rico, Barbados, and the British Virgin Islands. The deal is value a minimal of $355 million.
In the meantime, in December, Qatar-based Ooredoo Group, Kuwait-based Zain Group, and UAE-based TASC Towers Holding signed a definitive settlement to create the most important telecom tower firm within the Center East and North Africa area, in a money and share deal.
The enlarged TASC, made up of roughly 30,000 cellular community towers in Qatar, Kuwait, Jordan, Iraq, Algeria, and Tunisia, has a mixed estimated present enterprise worth of $2.2 billion.
Elsewhere, a consortium comprising BlackRock and Grain is shut to purchasing a 20% stake in PTI from funds managed by Blackstone. The deal is allegedly valued at $1.3 billion, giving the towerco a complete worth of $6.5 billion.
The Satellite tv for pc Broadband Area Race
Whereas Elon Musk’s SpaceX-powered Starlink enterprise continues to dominate headlines, the entrepreneur is ready to face stiff competitors within the low earth orbit (LEO) satellite tv for pc broadband sector over the approaching yr.
Starlink ended 2023 with its service out there in 70 markets and a reported 2.3 million satellite tv for pc broadband customers on its books. Nevertheless, it faces an uphill battle to consolidate its place within the coming years, with plenty of new gamers poised to enter the sport.
Eutelsat and OneWeb concluded their merger in September 2023. The newly-formed entity will search to mix the community density and excessive throughput of Eutelsat’s geosynchronous equatorial orbit (GEO) fleet with the low latency and ubiquity of OneWeb’s LEO constellation to supply prospects international, absolutely built-in connectivity companies.
The next month, on October 6, 2023, the Amazon-backed Venture Kuiper enterprise efficiently launched two prototype satellites from its LEO satellite tv for pc broadband initiative.
Development of the business spacecraft launch for China’s proposed LEO satellite tv for pc rival is now underway near the Wenchang Area Launch Web site in Hainan. The positioning will primarily be utilized by the China Satellite tv for pc Community Group—based in 2021 and wholly owned by the federal government—through State-owned Property Supervision and Administration Fee. The group plans to launch 12,992 satellites as a part of its LEO community.
The Rise and Rise of Xavier Niel
If Elon Musk has appeared omnipresent lately, one other determine who we’re more likely to see much more of in 2024 is Xavier Niel.
This French billionaire has amassed telecom belongings, together with Iliad (France/Italy), Salt (Switzerland/Liechtenstein), Epic (Cyprus/Malta), and Monaco Telecom. He additionally has main stakes in different telcos comparable to eir (Eire), Telma Comoros, and a number of Latin American operators through his 29% stake in Millicom Worldwide Mobile.
On December 29, 2023, whereas everybody else was nonetheless digesting their Christmas lunch, Niel swooped for what’s more likely to be his first takeover of 2024. By way of his NJJ Capital holding firm, Niel agreed to purchase Ukrainian cellular operator Lifecell from Turkcell in a deal valued at round UAH12.71 billion ($331 million).
Again in 2014, Niel made a surprising $15 billion takeover bid for T-Cellular US. This was soundly rejected, and considered as fanciful inside the trade. Quick-forward a decade and Niel presides over a sprawling, eclectic telecom empire.
By snapping up the unloved belongings of bigger teams, Niel is actually succeeding the place others have failed.
By snapping up the unloved belongings of bigger teams, Niel is actually succeeding the place others have failed.
In December, Iliad proposed to merge Iliad Italy and Vodafone Italy. The proposal valued Vodafone Italy at EUR10.45 billion ($11.4 billion) and Iliad Italy at EUR4.45 billion. The enlarged firm will probably be a 50:50 three way partnership.
If native press reviews are to be believed, Niel additionally has his eye on Altice Portugal (MEO), which is valued at a cool EUR6 billion.
Staking a Declare: Surprising Shareholder Shuffles
Current years have seen a sequence of shock share offers, with the aforementioned Xavier Niel initially snapping up a 6.99% stake in Millicom earlier than build up a formidable 29% shareholding.
In September 2022, Atlas Investissement—an funding automobile not directly held by Niel—introduced the acquisition of a 2.5% stake in Vodafone Group. Atlas known as Vodafone Group “a beautiful funding alternative, as per the standard of its belongings portfolio and the strong underlying developments within the international telecommunications sector.”
Vodafone Group additionally caught the attention of UAE-based e& (previously Etisalat Group). In Could 2022, e& spent round $4.4 billion to amass a 9.8% stake within the UK agency, changing into its largest shareholder within the course of. After asserting the expansion of its stake in Vodafone Group no fewer than 5 instances, e&’s shareholding elevated to 14.61% in April 2023.
Additionally within the UK, in Could 2023, Altice UK—a unit of Luxembourg-based holding firm Subsequent Alt—elevated its stake within the UK’s BT Group from 18% to 24.5%. At that juncture, Patrick Drahi, founding father of Altice, confirmed that there have been no plans to make a full takeover provide for BT. Altice UK first took a stake in BT Group in June 2021 when it acquired a 12.1% holding, upping this to 18.0% in December that yr.
In the meantime, in September 2023, Saudi Telecom Firm (stc) acquired a 9.9% stake in Telefonica for a complete consideration of EUR2.1 billion ($2.2 billion). stc famous that it doesn’t intend to amass management or amass a majority stake.
The shock transfer reportedly prompted the Spanish authorities to weigh up plans for its personal stake in Telefonica through the sovereign wealth fund Sociedad Estatal de Participaciones Industriales, within the curiosity of safeguarding nationwide pursuits.
It’s clear that the established telecom world order goes by way of a interval of main upheaval.
It’s clear that the established telecom world order goes by way of a interval of main upheaval. Legacy telecom giants are being dismantled, and new gamers are making themselves comfy on the high desk.
5 years in the past, all of those offers would have appeared extremely unlikely; 5 years from now, the telecom panorama may properly be unrecognizable.
