Telenor completes Nordic sweep with DNA acquisition

Norwegian telco Telenor has completed its reach across the Nordics, taking the first steps to acquire Finnish operator DNA.

Telenor has now officially entered into agreements with DNA’s two largest shareholders Finda Telecoms and PHP, who hold stakes of 28.3% and 25.8% respectively. Following approval at the Finda Telecoms and PHP AGMs, and regulatory approval, a mandatory public tender offer will be triggered for the remaining outstanding shares in DNA by Telenor. The current 54% will cost Telenor €1.5 billion.

The transaction is expected to be completed in Q3 2019, with the remaining shares being purchased for the same amount, valuing the entire DNA business at roughly €2.8 billion.

“I am very pleased to announce today’s transaction and our entry into Finland, the fastest growing mobile market in Europe,” said Telenor Group CEO Sigve Brekke.

“DNA is an exciting addition to Telenor Group, and a natural complement to our existing operations in the Nordic region. Not only are we strengthening our footprint in the Nordic region, we are also gaining a solid position across fixed and mobile in the Finnish market and making room for further value creation.”

DNA has been crafting itself a useful position in the Finnish market, with both fixed and mobile offerings. Having been founded in 2000, and restructured through various mergers in 2007, DNA has grown to become Finland’s third largest telco with a mobile market share of 28%. With Finland proving to be one of the fastest growing markets in Europe, this could be a useful acquisition from Telenor.

Having grown its mobile service revenues by at least 9.3% year-on-year for the last three years, Telenor expects to use its own expertise to grow revenues further through a larger product portfolio, though the enterprise market is also a target. On the business side of things, Telenor’s international footprint will certainly help, with operations across the Nordics.

The transaction will also offer Telenor more ammunition as it battles its Nordic competitor Telia,

Although Telenor still does have assets across various Asian markets, Pakistan and Thailand for example, it has been narrowing its focus on the Nordic markets recently. Exiting from India, although this was partly forced due to the success of Reliance Jio, while offloading its Eastern European business units will give the team more resources to dominate the Nordic region, though it will have to deal with Telia.

Should the transaction be approved by all the relevant parties, Telenor will have a presence in all the Nordic markets, pinning it head to head with long-time rival Telia. Aside from the Swedish market where Telia dominates, the pair are largely on level pegging, though the DNA business will add momentum.

Alongside considerable growth over the last three years, Finnish consumers have the biggest data appetites across the bloc. According to data from the OECD, the average Finnish mobile data subscription is a massive 15 GB per month which dwarfs the likes of the UK and France, where the average contract is 2.6 and 3.6 GB per month.

Is telecom losing Europe’s next generation employees?

Telecoms companies did not feature in the top employers’ lists chosen by the current and potential young employees in a recent multi-country survey.

The Swedish consulting firm Academic Work recently published the results of a survey on current and future young employees in six European countries, which asked the respondents to choose their most “aspired” employer, hence the title of the survey “Young Professional Aspiration Index (YPAI) 2018”. Among the three Nordic countries where it broke down the details of the employers the young people most like to work for, Google came on top in all of them (it tied with Reaktor in Finland, the consulting firm behind the country’s big AI drive). None of the telecom companies, be it telcos or telecom equipment makers, made to the top-10’s.

 YPAI 2018

The survey was done in the four Nordic countries (Sweden, Finland, Norway, Denmark) plus Germany and Switzerland. Nearly 19,000 young people, a mixture of students (22%), current employed (59%), as well as job seekers (15%) answered the survey. The majority of the respondents came out of Sweden, while just under 1,000 respondents were registered from Finland and Norway. Presumably the sample sizes were not big enough in the other three countries to break down the top-10 company lists.

YPAI 2018 respondents

In addition to asking the respondents to name their preferred employers, the survey also asked them about their most important criteria when choosing a place to work. “Good working environment and nice colleagues” came on top in four out of the six countries (chosen by 60% of the respondents in Sweden, 78% in Denmark, 73% in Germany, and 66% in Switzerland). It tied with “Leadership” in Sweden. In Finland coming on top was “varied and challenging tasks”, chosen by 60% of those who answered the survey, while in Norway 64% of the young people surveyed chose “training / development opportunities” as the most important criterion.

Once upon a time (i.e. around the turn of the century), telecom was THE industry to work in. It has been losing some of its old lustre to the internet giants. If they “aspire” to re-take the top spot of the young people’s mind share, the Ericssons and Nokias and Telenors of the world may want to refer to these criteria when promoting their corporate image, as a starting point.

Finland’s AI ambitions demonstrate real intelligence

Training 1% of the population is just one part of Finland’s push for AI. The business world and public sector are also fully leaning in.

Recently a story on Finland’s plan to train 1% of its population in Artificial Intelligence has been making the rounds. Starting as a private initiative jointly promoted by the University of Helsinki and the consulting firm Reaktor, an open, free online course, “Elements of AI” was made available to anyone who would be interested in understanding the basics of AI. The initiative was then embraced by the government and has been integrated into a national AI strategy.

By the end of 2018, half a year after the initiative started, more than 40,000 people had started taking the online training, more than 10,000 of them already completed the course. The 1% target implies a total of 55,000 will receive the training, but the number is set be surpassed very soon following the University’s recent release of the Finnish version of the course (earlier the content was only available in English). The University promises “Other language versions are on the way!”

But this is just a part of the Nordic country’s ambition for the so-called “data economy”. Outi Keski-Äijö, the Head of AI Business program at Business Finland, outlined for Telecoms.com the major steps the agency and other institutions have taken as well as their the near-term plans. Her public sector agency is tasked to both support enterprises inside Finland and promote Finnish business interest outside of the country. Over the past two years, the AI-focused team she leads has been working with start-ups and small and medium sized enterprises (SMEs), to drive innovation through funding as well as helping bridge them with business implementation.

On the funding side, Business Finland would invest up to €50,000 in promising projects that are focused on solving concrete problems. Finland’s total public-sector funding over a four-year period will be no less than €20 million, including €6 million in the first year. Business Finland is responsible for over half of the total budget.

When it comes to connecting innovations from start-ups and SMEs to implementation, many innovations have found their way to both the emerging sectors like smart transport management, and traditional industries like ship-building. The innovations in AI have also attracted international attention, hence the success of the second part of the agency’s mission. Companies in Asia and North America have already shown interest in taking on board some of the new output.

When asked how Finns see privacy protection vs. progress in AI, Keski-Äijö and her team introduced us to the work done by one of its sister organisations, the Finnish Innovation Fund (Suomen itsenäisyyden juhlarahasto, Sitra). Sitra is an independent fund overseen directly by the Finnish Parliament. One of its key programs now is to develop the principles, framework, and key components of what it calls “Fair Data Economy”, under the brand IHAN (Ihmislähtöinen datatalous-avainaluetta, literally means “people-centric data economy”).

With GDPR in place, theoretically consumers now have control over their data and can demand to know how their data is being stored and used by any companies. In practice however, it is hardly possible for an individual to chase every single service she uses. Also, as Sitra put it, “GDPR does not define the format, governance or method for consent-based personal data sharing.” As a result a consumer’s data is being managed and analysed in silos, and services provided to her are not necessarily optimised.

What IHAN aims to achieve is to provide a stamp of approval. Services certified by IHAN would be trustworthy for consumers to handle their private data. When enough services are certified the data shared between them will be able to deliver personalisation without comprising privacy. Here Finland’s big ambition kicks in. Sitra is looking to use IHAN as a model to drive EU-wide AI and data economy to a more competitive level. With Finland taking over the EU presidency in the second half of 2019, Sitra is set to promote IHAN more vocally beyond the Finnish borders.

There is nothing wrong with the thinking, but Sitra may find the idea not going down as well in other European countries. The anchor point of the IHAN concept is trust. The Finns, rightly or wrongly, put very high level of trust in the public and social institutions. For example, according to a poll done by TNS Gallup for Sitra in 2016, nearly 80% of Finns trust the police, two-thirds trust in the registration and statistical authorities, but only 14% trust the internet companies. The low level of trust in the internet companies may be indicative broadly across many countries, the high level of trust in the authorities may not.

Finns trust in public sector

Finns launch digital version of driving license

The Finnish Government has unveiled plans to roll out a mobile version of driving licenses which will be available through an app.

The proposed the amendment to the Driving Licence Act will see the mobile version introduced onto the driving license application as an option. The electronic application would be a free, optional service to be used in addition to traditional driving licences.

“The mobile driving licence is one practical example of what can be achieved through digitalisation in the transport sector,” said Minister of Transport and Communications Anne Berner. “The mobile driving licence is a new way for drivers to prove their right to drive when required to do so during traffic surveillance.”

While the technophobes and conspiracy theorists will be pointing to everything which could go wrong or the idea of increased government control, we like the it and are quite surprised it has taken this long to table such a suggestion. From our perspective, it perfectly fits into the evolution of everyday life being supported by digital.

Some might fear the power mobile devices are being given over our lives, though the number of cases of fraud have been minimal over the last couple of years. There are people who are protective over identification and how these documents can be used for nefarious activities, though the mobile money revolution has seemingly been adopted without particular incident. There will of course be incidents of theft or fraud, but these have not been wide-spread enough to cause concern. This should provide confidence in the suitable ability of digital for identification.

Whether this leads to other forms of identification moving across to mobile, such as passports, remains to be seen, though we like the idea.

Telia pays the most in Finnish 5G auction

Finland offered up nearly 400 MHz of mid frequency 5G spectrum to its MNOs and Telia bought the most expensive block.

The whole of the 3410-3800 MHz frequency range, split into three blocks of 130 MHz each. After just a few days of bidding Finland’s three MNOs concluded their business as follows:

Frequency band 3410–3540 MHz (A)

Telia Finland

€30,258,000

Frequency band 3540–3670 MHz (B)

Elisa

€26,347,000

Frequency band 3670–3800 MHz (C)

DNA

€21,000,000

The slightly lower frequency stuff apparently has a bit more value than the rest and it’s worth noting that Elisa is the market leader by subscriber number so it looks like Telia has decided to make a strategic move to close the gap in the 5G era. While Finland is admittedly a much smaller country, €77 million seems like a small return for the government when you compare it to the frenzied bidding we’re seeing in Italy.

Telia declares Finland is ready for the 5G promised land

Finland is set to be one of the first nations in Europe to experience the wonders of 5G as Telia targets the beginning of 2019 for commercial launch.

With tests in the Telia 5G Arena in Helsinki completed, the first base stations in the city operational and the first phase of roll-out set to be completed in the Autumn, Telia has confidently proclaimed full-scale commercial operation will be possible in 2019, just as soon as the 3.5 GHz 5G frequency auction has been conducted.

“For two years we have prepared for 5G with demos and trials,” said Jari Collin, CTO at Telia Finland. “We set up the 5G Finland cooperation network to create and pilot 5G services with our partners, and now we can continue exploring the possibilities of 5G in a real live network.”

It is certainly a bold promise to make, though seeing as this launch will be prior to the availability of 5G devices, who is going to know whether those crafty Finns are telling the truth or not. The on switch could well be hooked up to a couple of dozen pink and green light-bulbs spelling out ‘viides sukupolvi’ and nothing else; who would be able to tell?

Perhaps the reason we can joke about the Finns having a network and no flashy devices is because it’s probably a better way to have it than the other way around. Some might mock the idea of boasting of 5G with no consumer devices to make use of it, but upon the launch of said devices, consumers in other nations will own very expensive, glitzy smartphones, connected to an imaginary 5G network.

Progress has been steady in the Telia business. It is now boasting of getting to a point where all 5G network components are available, from 3GPP specification-based radio access to high capacity IP networks, virtualized core and the massive computing capacity offered by its Helsinki data centre.

“We are pleased to begin the deployment of the first 5G base stations in Finland – the Nokia AirScale radio access –  and we will continue working with Telia Company to identify the technologies and services that meet the demands of consumers and industries in the 5G era,” said Jan Lindgren, Head of Telia Customer Team at Nokia, a key partner of the project.

While the 5G posturing has largely been left to telcos in the US, China or Korea, Telia has slipped through the peloton relatively undetected, and could in fact be one of the first worldwide to hit the on-switch. Considering the rather humble progress made by the Telia team, who would have thought we would have been saying that.

The security of Polar users’ data could be comprised, in a big way

The Finnish fitness device and software maker Polar has found itself in the centre of a data leaking scandal, which it’s feared could jeopardise the security of personnel on sensitive missions.

In a country where personal space and privacy is highly respected, Finland can be rather transparent too. Every year at the beginning of November, the tax office will grant public access to data on how much income and capital gains made by everyone in the previous year as well as how much tax has been paid.

The country also produced Polar, the company that invented the portable heart beat reader. More recently its professional heart beat monitor system was credited to be largely behind the scientific training at Leicester City Football Club, which went on to win the Premier League in 2016.

But it is safe to say Polar has taken transparency too far. After months’ investigation, the Dutch independent media De Correspondent, in conjunction with the British “citizen journalism” website Bellingcat, and the Finnish investigative journalist Hanna Nikkanen on Long Play (in Finnish), published the findings on how anyone with a Polar account was able to see all the details of anyone else who publicly shared their workout sessions on Polar’s user interface app Flow.

Data extracted include the names, as well as time-stamped GPS data of all the workouts uploaded since 2014. When zoomed out, the aggregated data would generate a clustered view of the user’ activity pattern on the map. This could lead to a rather accurate estimate of the user’ home base, where most exercises started and ended, including places in sensitive locations, e.g. military bases in Iraq or Afghanistan. With some additional cross-search on social networks, the user’s professional affiliation including those of the military and secret service, could be made available.

By the time they published their reports, the journalists had managed to gather personal and professional details of more than 6,000 Polar users, including those working for the NSA of the US, Britain’s GCHQ and MI6, Russia’s GRU and SVR RF, France’s DGSE, the Finnish military, as well as the Dutch MIVD.

The journalists notified the Dutch and Finnish authorities as well as reaching out to Polar before they published the findings. The app was disabled remotely on official phones issued to its employees by the Dutch and Finnish Defence Ministries, and warnings were sent out to private device users. However Polar did not formally take down the feature until yesterday (9 July), more than two weeks after being contacted by the journalists and after a forlorn attempt to defend itself by claiming that the company had not leaked the users’ data.

Finland’s Data Protection Ombudsman is looking into the matter. Because its failure to safeguard user data has affected users in other EU countries, the possibility that the case could be brought under the new GDPR cannot be ruled out.

Polar was not the first fitness app to score own goals. As a matter of fact, it was the high-profile case of Strava leaking training data in military bases, which made headlines at the beginning of the year, that prompted the independent journalists to look into the vulnerability of other apps, including Polar. What makes the Polar case stand out is the ease with which users’ private data could be extracted, and the slow reaction from the company.

The ramification of the case could be profound. The journalists have found that similar data could also be extracted from other fitness apps like Endomondo, Runkeeper, Garmin, albeit with a bit more skill. This could result in authorities banning all similar apps from use by employees in sensitive functions, just to be on the safe side. The Finnish military had already banned the sharing of location data on social networks even before the Strava case, but the rank and file servicemen and the reservists largely ignored the order, according to Long Play.

In her testimony to the Congress, the newly appointed Director of the CIA, Gina Haspel, declared she has no social network accounts. This could move from voluntary decision to mandatory order for employees on sensitive missions. Profiles on social networks like LinkedIn and Facebook have made it straightforward for the journalists to join dots and put together the Polar users’ personal and family details, functions, and locations.

In our latest annual survey published at the end of last year, nearly 95% of the network operators called security as being either critical (69%) or important (25%) to their company’s overall technology and business. Clearly other service providers including device makers and app developers should also enhance their awareness and subject their products to more rigorous security tests.

Deregulation in Finland: Uber Black may be back, but UberPOP is popped, again

Finland’s new Act on Transport Services has opened its taxi market to competition. 90 per cent of taxi rides in the future are expected to be booked on mobile apps, estimated the authorities.

To call Finland an expensive country to live in is a fair comment. To say hiring taxi in Finland is expensive is an understatement. The country had rigid restrictions on cab fare and high entry barriers which have fended off competition. Uber was banned from operating in 2017. Uber drivers’ earnings were confiscated, and its country manager’s assets were seized by Helsinki district court.

This all changed on Sunday 1 July, when the new Act on Transport Services came into effect. It did away with regulated fares, lifted the cap on the number of taxi licences to be issued, and loosened requirements on cab driver qualification. Trafi, the traffic safety agency told the media that its online platform received more than 700 applications for permits to operate taxi service on the first day the new law became effictive. The authorities are taking on additional staff to process the applications and permits will be granted within a day or two.

All this may spell good news for Uber. Drivers holding a permit will be able to take business on the Uber app, providing the so-called Uber Black service. However, because the law specifically requires drivers to apply for permit, UberPOP, which enables unlicensed drivers to provide rides, and has been at the heart of Uber’s legal issues with authorities in different parts of the world, will continue to be banned.

The direct beneficiaries of the new law are the customers, who will have more choices and will likely enjoy more competitive fares. But the deregulated market also opens a new business opportunity for the technology industry. There are more than a dozen taxi hiring apps in Finland now, including Uber, and more are expected to be launched. This is not sustainable. It would not be too much of a stretch to see aggregation and price comparison apps coming to the market. They will be the customer facing front end, and can take a cut from every ride booked on the platform, similar to what Skyscanner does for air travel and Booking.com does for hotels.

Elisa claims world’s first commercial 5G launch

Finnish operator Elisa says it has become the first operator in the world to begin commercial use of a 5G network and starts selling 5G subscriptions.

Not only that, the network was kicked off by an international video call – from Finland to Estonia. In Tampere, Anne Berner, Finnish Minister of Transport and Communications called Kadri Simson, Estonian Minister of Economic Affairs and Infrastructure, in Tallinn.

“We aim to make Finland the leading nation as a developer of 5G mobile services,” said Berner. “The Ministry of Communications is ready to allocate the first 5G licences to the 3,400–3,800 megahertz frequency band in autumn, which will make Finland among the first countries in the world to start building 5G networks.”

“Elisa actively enables Finland to continue leadership in mobile data usage by opening commercial 5G network first in the world,” said Elisa’s CEO Veli-Matti Mattila. “With the help of 5G services, consumers as well as corporate and institutional customers will get lots of new value when modern applications can be used more efficiently and it becomes possible to develop new applications. For example, it will be possible in the future for all viewers to watch the same football match as a high-quality live broadcast without delay using any terminal device.”

Elisa was keen to remind everyone it made the first GSM call too and it’s good to see Europe is still capable of leading the way in telecoms. The bigger picture still seems to be that Europe will lag the US and the Far East in 5G, but this sort of thing indicates that if the EU and regulators can get their act together we might be able to close the gap a bit.

Finnish Gov looks to influence Nokia strategy through 3.3% holding

Solidium, the investment arm of the Finnish government, has announced acquired 3.3% of the shares in Nokia for approximately €844 million as the organization looks to take a more active role in a nationally important business.

The share were acquired over the first couple of months of 2018, with Nokia now accounting for 11% of Solidium’s €8.4 billion portfolio. Other companies in the Solidium portfolio are Elisa, Kemira, Konecranes, Metso, Outokumpu, Outotec, Sampo, SSAB, Stora Enso, Tieto and Valmet.

“The divestment of our stake in Telia in the beginning of the year made it possible for us to invest into Nokia, which fits perfectly into Solidium’s portfolio,” said Solidium’s CEO Antti Mäkinen.

“The appealing factors for us are the company’s strong market position combined with broad technological expertise, which provides opportunities for value creation. In line with our mandate, we hereby strengthen and stabilize the domestic ownership in this nationally very important company.”

Such moves should not be considered incredibly unusual, but putting such an emphasis on Nokia in the Solidium portfolio does indicate how important the vendor is to the Finnish economy. Finland has never necessarily a one-firm country, but such was the reputation of Nokia during the feature phone days, it was a company which the Finns could be proud of and rely upon to help a small country have influence on the global stage.

Looking at the statistics demonstrates why this company was so important to the ambitions of the country. According to Statistia, ten years ago during the first quarter of 2008 Nokia held a 48% share of the global mobile devices market, though the brand was not able to live with the iPhone revolution or the countless other players which entered the market. Just to give a comparison, net sales across 2008 for Nokia were €50 billion, compared to €23 billion last year. Since this downsizing, GDP per capita has shrunk from $53,785 in 2008 to $43,356 in 2016. Finnish fortunes could be said to be linked to Nokia’s.

The only reason the Nokia brand is experiencing a bit of a resurgence nowadays is down to nostalgia and the novelty factor. This trend will pass and the feature phone will buried in the history books again, but the current euphoria is for the benefit of HMD not necessarily Nokia.

5G is an opportunity for Nokia to continue the recovery which we have been witnessing over the last couple of years, but it might have to put up with the Finnish government whispering in its ear. Last month, during Solidium’s half year report announcement, Mäkinen confirmed the organization would look to play a more active role in the operations of the companies it had invested in.

“During the review period, Solidium completed the work on its strategy update, where the key change concerns a more active role as an owner,” Mäkinen said in the statement. “As to the events after the review period, the effects of this strategy update are visible among others in candidacies for board members in our holding companies.”

Solidium has not yet stated who will be put forward to be considered as a representative on the Nokia board, but this is a clear aspect of the Solidium strategy. It has been very bullish in its intentions to influence the strategic direction of its investments and have a member on the board of every single company in its portfolio.

What remains to be seen is how happy Nokia will be with this arrangement. The company has been performing pretty well through the tricky inter-G years so it might think additional help is not required at the moment; trends are heading in the right direction and you know what they say about too many cooks.