Orange hits green button on LTE-M network

Orange has unveiled its Long Term Evolution for Machines (LTE-M) network in France, with plans to launch in Spain and Romania by the end of the year.

Having launched its first LTE-M network in Belgium in May 2018, the French deployment will enable Orange to build new products and services in anticipation of boomtime in the IoT market. Technology will be deployed in each market dependent on the demand for particular services.

Orange will now begin offering services to all enterprise customers who have subscribed to the Orange full IOT offering, focusing particularly on logistical monitoring, telemonitoring, remote assistance and fleet management. The move underpins Orange’s efforts to diversify its core business, with the ‘connected economy’ high up on the list.

With France and Belgium up and running, plans to open up new networks in Spain and Romania, and other tests running throughout Europe, a pan-European offering does offer Orange an edge in the enterprise IOT game. Looking at the enterprise side of Orange, this is certainly an area which has been given attention in recent months.

Back in August, the cloud armoury was given a shot in the arm with the acquisition of  infrastructure and critical application services company Basefarm for €350 million. Alongside the additional skills, with a presence in Norway, Sweden, the Netherlands, Austria and Germany, the pan-European ambitions are being met.

Google fights back against EU plans to impose its regulations on rest of world

Today the European Court of Justice will make a decision which will impact the global digital economy. Does the European Union have the right to impose its own data protection and privacy standards on everyone else?

The one-day hearing has been brought about because of French data protection watchdog, CNIL, pressing for Google to extend the ‘right to be forgotten’ ruling to all of its domains. When such a request is made and accepted, Google will remove content from search results in the relevant domain (e.g. .fr in France for example), but also when users from that country are searching through other domains (e.g. .com or CNIL argues the content should be removed from all domains, irrelevant where the user is based.

“This case could see the right to be forgotten threatening global free speech,” said Thomas Hughes, Executive Director of free speech advocacy group Article 19. “European data regulators should not be allowed to decide what Internet users around the world find when they use a search engine. The CJEU (European Court of Justice) must limit the scope of the right to be forgotten in order to protect the right of Internet users around the world to access information online.”

While it might not seem like the most damning of cases, the ripples from this ruling could quickly become turbulent waves. Google and numerous other free speech advocacy groups argue this is simply France, and the European Union, pursuing their own form of censorship, imposing their own standards on other nations around the world. Should the judges rule in favour of CNIL precedent would be set and precedent can be very dangerous.

If the European Union can force other countries into complying with its regulations, why shouldn’t others?

“If European regulators can tell Google to remove all references to a website, then it will be only a matter of time before countries like China, Russia and Saudi Arabia start to do the same,” said Hughes. “The CJEU should protect freedom of expression not set a global precedent for censorship.”

The question these judges have to answer is a relatively simple one on the surface; should governments and regulators have influence over those who live in their jurisdiction or should they be afforded power over everyone else as well? For us, the answer is incredibly simple as well; no it shouldn’t.

The whole concept of the CNIL argument is contradictory and patronising; it’s a form of digital colonialism, with France assuming it is the moral, ethical and political authority on such matters. If China or Russia were pressing for their rules to be imposed on the international stage, there would be uproar. Of course, the rules in these countries are backwards, though the principle remains the same. France should not be allowed to dictate to other countries around the world.

This is another example of globalisation trends working against the consumer. Companies like Google make use of the grey areas and cracks between the legislative and regulatory regimes of different countries. They take advantage of lighter-touch regulation in some countries, remaining out of reach of those who are more involved. The absence of an international code or ruling authority simply offers the internet players a blank rule book and encourages lawyers to look for loop-holes to ignore regulations in more privacy-sensitive countries. That said, the will of one nation, or a dozen or 28, should not be imposed on the rest of the world.

For, the decision is a simple one; France should be told to govern its own country and not get involved in jurisdictions which does not concern it. The precedent set would be far too dangerous.

Iliad share price continues to tumble as competition heats up

The share price of French telecoms wild-child Iliad has continued to tumble as lukewarm results fail to impress investors looking for a spark in the broadband business.

Since the turn of the year, the erosion of share price has been quite noticeable. Some companies might be able to accept a small blip in performance, but a 45% decline over the last ninth months will certainly have the executive team shifting uncomfortably. Revenues remained relatively stable, however losing 70,000 subscribers in mobile and 47,000 in broadband over the first half of the year is a worrying trend.

Looking specifically at the financial side of the results, total revenues stood at €2.4 billion, a minor decrease on the same six month period of 2017, with mobile rising 2.4% to just over €1 billion and broadband dropping 2.2% to $1.3 billion. Italy brought in €9 million, though the team has been boasting of reaching 1.5 million subscriptions in early August. This seems to be one of the few bright spots in the six months.

Having kicked off the race to the bottom, causing chaos for the incumbent mobile providers during 2012, Iliad seems to be getting a taste of its own medicine with a competitive market being blamed for the tepid performance. Unfortunately for the telco, the misery is not being equally shared as rivals Orange , SFR and Bouygues Telecom all gained subscribers over the same period. Stability in the revenue column might be an uptick, but investors should be concerned about the first drop in mobile subscriptions since the 2012 launch, and a cash-intensive fibre business which is not hitting the marks.

That said, Iliad caused chaos once and has the potential to do it again.

The management team has excepted this performance is not good enough, though various new initiatives will look to return the business to a new growth cycle. On the mobile side of things, new tariffs have been introduced to diversify the subscriber mix, while incentives have been put in place to upgrade users to the more lucrative 4G contracts. 4G subscriptions did increase by 200,000 over the period, and the team are targeting a 25% market share, though have declined to put any deadlines on the objective. Perhaps this is one of the reasons for a lack of confidence in the business, no commitment to top-line objectives.

In the broadband business, a new promotional campaign with competitive prices has been introduced, as well as a play to catch attention through TV services. The content side is yet to be launched, and it will be interesting to see whether Iliad takes the value add or revenue generation approach to content. We suspect with subscribers numbers going south, a value add proposition would be a much more sensible approach to stemming the consistent flow of customers heading towards the exit.

Orange continues to bang convergence drum

Virgin Media might be struggling to live the convergence dream in the UK, though Orange doesn’t seem to be having any problems as it reports another positive set of results.

Total revenues for the first half came in at €20.2 billion, a year-on-year increase of 0.9%, while operating income grew much more favourable, an increase of 2.8% to €2.35 billion. While this might be the highest profit margin in the industry, Orange has continued to demonstrate it is building for the future investing another €3.36 billion in CAPEX, 16.6% of total revenues delivered over the six month period.

“The 1st half results showed accelerated growth across all the Group’s financial metrics,” said CEO Stéphane Richard. “Revenues grew in all our regions while the strong acceleration in the Group’s adjusted EBITDA, which rose 3.3% during the half, reinforced our strategy of differentiation on the basis of service quality and demonstrated our constant focus on operational efficiency.

“Our investment strategy in fibre and 4G is reflected in the sharp increase in our very high-speed broadband customer base. Orange now has 50 million 4G customers with 13 million in Africa, twice as many as a year ago. In fixed very high-speed broadband, the customer base continued to show particularly strong growth enabling us to reach 5.5 million customers, almost exclusively in fibre.”

Looking at the convergence strategy, the team reported an increase of 9% in convergent offers year-on-year, a total of 10.7 million customers, while the number of SIMs attached to these offers increased to 18 million. Orange often boasts about being the leading convergent player in Europe, and with numbers like these it is hard to argue otherwise.

Spain has continued to be a strong market for the business through this period, and following the conclusion of the spectrum auctions, it is looking to be in a solid position for the 5G race. During the auction, Orange Spain acquired 12 blocks of frequencies, paying €132 million, representing 60 MHz in the priority spectrum band to offer 5G services. Orange is now the only operator in Spain in reach a total of 100 MHz in this spectrum band, which it claims is essential for the development of the new ultra-fast mobile broadband technology.

France targets 2020 5G rollout

French regulator Arcep has laid out its 5G roadmap with ambitions to launch the mobile euphoria in at least one major city by 2020, and provide 5G coverage of the main transport routes by 2025.

The plan, which has been given the thumbs up by both Delphine Gény-Stephann, Secretary of State for Economic Affairs and Finance and Mounir Mahjoubi, Secretary of State for Digital Affairs, will aim to retain French competitiveness in the digital era as Europeans look like they are losing touch with the US and the leading nations in Asia. Along with the headline 2020 and 2025 objectives of the roadmap, Arcep has also outlined the underlying ambitions; free up and allocate radio frequencies, the development of new uses, encourage new infrastructure investments and a communications strategy which will keep the public informed.

Aside from the complicated task of freeing up the 3.4-3.8 GHz, 26 GHz and the 1.5 GHz bands, Arcep will also manage a number of working groups to define the technical conditions for using the bands, to avoid interference between 5G networks and with existing applications, as well establish the allocation procedures and timetable to enable 5G service launches in 2020. Elsewhere, the regulator will also assess the feasibility of network sharing, which might prove to be a complicated task in a market where the telcos are not necessarily on the friendliest of terms.

Although it has been a slow start for the French, there does seem to be some gathering momentum. Arcep opened a 5G Pilot window in January of this year, and has approved 22 trials in the 3.4-3.8 GHz band since that point. The majority of these trials are based in Paris, though Arcep has prioritized cohesion in the ecosystem as a means to success for 5G. Aside from the network sharing ambitions, the regulator is also targeting a mobilisation of the start-up community through briefings and education programmes, ensuring this segment hits the ground running.

Setting out the roadmap for the delivery of 5G is the first step in the right direction, but now comes the complicated jobs for Arcep; making sure everyone does what they are supposed to. Local authorities seem to be playing a more notable role here than in many other areas, perhaps owing to the size of the country and the increased isolation of some communities in comparison to other nations. A necessary step, but making sure these paper pushers do not slow-down the rollout will be a difficult task.

Altice raises €2.5 billion by flogging some towers

Debt-riddled French telco conglomerate Altice has raised some much-needed cash by selling stakes in two of its tower holdings to private equity.

The the total cash consideration is €2.5 billion, with KKR getting half the French towers business, while three quarters of the Portuguese towers business are being snapped up by Morgan Stanley and Horizon. There is much talk of what a good deal this is and how it will enable the relevant bits of Altice to focus on their core stuff, but this is all about eating into its massive debt pile in a bid to repair the catastrophic damage it experienced last year.

“I am enthusiastic about creating new tower partnerships in France and Portugal,” said Altice founder Patrick Drahi. “With KKR, Morgan Stanley Infrastructure Partners and Horizon Equity Partners, we have found long-term partners of the highest-quality who share our vision to invest in leading infrastructure and growth opportunities.

“We will create a leading European tower business, including the number one in France. Both tower businesses will be uniquely positioned to grow as they provide increasingly important infrastructure services to operators in both markets. Simultaneously, these transactions underline our commitment to delever and proactively manage our balance sheet while highlighting the significant underlying value of Altice Europe’s business.”

If Drahi hoped this move alone would have a profound effect on Altice’s share price he must feel pretty disappointed as it has been met with a distinct shrug. The French tower joint venture is called SFR TowerCo, but Altice stock is far more sensitive to the fortunes of the SFR telecoms business than a few towers, and that remains a challenge. You can read further analysis of the move at Light Reading here.

IBM investment shows Macron’s tech mission is working

French President Emmanuel Macron has a mission, and his mission is to take France to the top of the technology rankings in Europe. With IBM adding an extra 1800 jobs and a training centre in the country, he might well be succeeding.

Last year, Macron, a pro-business former investment banker, set up a fund holding $10 billion in state assets intended to be invested in breakthrough technologies, offered flat 30% tax rate on all capital income and also unemployment insurance for people who leave a job to go start a company. The aim was to re-establish France as a home for industry and create an environment which encouraged the growth of start-ups. It was a bold move, but IBM’s announcement is somewhat of a vindication.

Over the next two years, IBM will make a series of investments to create 1800 jobs, 400 of which will be focused on artificial intelligence, coupled with a major expansion ‘new collar’ skills training programme. The investment will focus on technologies such as AI, blockchain, cloud computing and IoT.

“President Macron is making a big bet, and a smart one, that AI is going to transform every job, every profession and every industry,” said IBM CEO Ginni Rometty. “At IBM, we share this belief and see evidence of it every day with Watson driving exponential impact here in France and around the world. That is why we are bringing 1,800 new jobs to France to meet growing demand for AI from our clients.”

The move demonstrates Macron is making the right noises, and must be somewhat of a slap to UK politicians who have been working to make the UK a global centre for artificial intelligence and other breakthrough technologies. London could still be viewed as the centre for start-ups in Europe, there is abundant access to financing in the city after all, but perhaps this is an indication of a loosening strangle hold. Maybe it is a consequence of Brexit, with IBM preferring a HQ within the borders of the EU.

We’re not too sure there is too much weight behind the Brexit argument, but the Macron administration has been doing something the UK hasn’t. Turning daring promises and forthright objectives into actions.

While the UK is still searching for the catalyst to increase FTTH penetration, while also attempting to set the scene for 5G, French infrastructure is getting the investment the digital economy needs. Data released by Arcep demonstrated there is more than simply talk about embracing the digital economy. €9.6 billion was spent over the last 12 months on communications infrastructure, €6.6 billion of which was on the fixed assets. FTTH penetration is still low in comparison to other European nations, but there is certainly gathering momentum.

France Graph

Looking at the regulatory landscape, the government is trying to make it as easy as possible to invest, including creating mechanisms to encourage pooled investment strategies between the operators, and frameworks to manage interoperability so that users perceive them as one. This might be a bit of a pain for the operators in the short-term, but it is much more attractive for consumers and enterprise customers in the long-run.

In short, the French government is creating a landscape which will be deemed much more suitable for the digital economy, but it doesn’t just stop at infrastructure. Education is another area where France is being proactive and forward-looking. A good example of this is also included in the IBM announcement.

IBM is partnering with the French government to roll-out its P-TECH (Pathways to Technology Early College High School) education model. P-TECH was started in 2011 to provide young people the skills and credentials required for 21st century jobs. By September, P-TECH will be in 120 schools in four countries and is on track to prepare more than 75,000 students for ‘new collar’ jobs.

For any company to consider notable investments or expansion in a country there has to be a long-term workforce. To ascertain whether this is going to be the case, looking at education standards is critical and this is another area where the UK falls down. The focus in the UK is too concentrated on traditional subjects, which while very important, are not providing the right skills for the burgeoning technology industry. Countries which incorporate new technology skills, or perhaps introduce writing code as a language alternative to the likes of Spanish or French, will start to look attractive to these multinational corporations.

France might not be the centre of the European technology space as it stands, but Macron is making the right moves to create the perfect environment. Pro-business regulations, actively encouraging investment in the infrastructure which will act as the foundations of the digital economy and an education system which builds skills for the future. The UK could learn a thing or two from France.

French Gov congratulates itself for operator investments

The French Government has decided it deserves to congratulate itself for the money which operators have spent on improving connectivity throughout the country.

The pat on the back comes as French regulator Arcep unveils the how the country is progressing into the digital economy. €9.6 billion was spent over the last 12 months, including spectrum purchases, which is a record for France, with the operators bringing in €36.2 billion over the period.

“Two years ago, I asked operators to break open their piggy banks, to rise to national coverage challenges, and enable France to catch up on the connectivity front,” said Sébastien Soriano, Chair of Arcep. “With an investment of €9.6 billion, we are seeing the sector’s growing commitment to making up for lost time, and coming in line with the country’s infrastructure needs.”

The presence of suitable infrastructure is of course critical for the success the digital economy, and while Arcep is congratulating itself on the progress made, the operators need to do more work. As you can see below, the investment is the highest proportion compared to total revenues for some time, however France is 27th on fixed superfast broadband and 21st on 4G coverage according to stats from the Digital Economy and Society Index (DESI).

France Graph

Looking forward over the next 12 months, the message from Arcep is clear; it needs to carry on the fantastic work it is doing, but operators need to make connectivity better. Part of this will include pooled investments to accelerate digital coverage in the country’s most sparsely populated areas, and a number of initiatives to ease the transition into 5G.

First and foremost will be a public consultation on the system for introducing 5G on the 26 GHz band, and a study on the methods for rearranging the 3.4 – 3.8 GHz band. Next will come a period of preparation of the frequency allocation procedure, as well as co-ordinating with public sector entities to create a positive regulatory environment for rollouts. All of this will hopefully result in commercial launches by 2020.

If you happen to want to congratulate the French for improving broadband coverage and FTTH penetration, send your post cards to the Arcep offices, addressed to Mr. Soriano. Don’t worry about the operators, according to Seb they didn’t do much anyway.

Philosophical transformation and Light Reading both attended Digital Transformation World in Nice, France and it seemed to have been one trade show too many for Scott and Iain, who found themselves in the middle of an existential crisis.


French messaging efforts show how selfish governments actually are

France is reportedly considering building its own encrypted messaging platform to protect itself from espionage, completing the full U-turn from last year’s efforts to limit the encryption powers of messaging services.

According to Reuters, a spokesperson from the Digital Ministry confirmed 20 civil servants are testing a new, encrypted messaging app which has been designed by a state-owned developer. The aim will be for every government employee to use the platform by the summer.

This is certainly a change in opinion compared to last year. During August, French Interior Minister Bernard Cazeneuve and German Federal Minister of the Interior Thomas de Maizière met to discuss how data protection laws could be altered to allow intelligence agencies greater insight into the lives of citizens. The idea would have been to build a back-door in the encryption software, which would allow spooks access and permanently weaken the security feature of the platforms.

It would appear that spying on its own citizens is perfectly acceptable, but the threat of President Emmanuel Macron’s lunch order leaking to the Daily Mail is one step too far. We understand and accept certain aspects of government need to be kept under the strictest of confidence, but privacy is a right to European citizens, even from elected officials.

The ‘do what I say, not what I do’ attitude of governments around the world is starting to taste very bitter.

The French government version of an encrypted platform is based on opensource code found on the web, and could eventually be available for French citizens to use as well. What has not been confirmed is whether the encryption software has had a backdoor built into it, an objective for governments all around the work to improve snooping capabilities. If this was the case, it would surprise very few people, however it would also make the offering fundamentally flawed from the outset. A backdoor is a weakness in the security perimeter, which will eventually be found by hackers; nothing is 100% secure.

To date, French government employees have reportedly been using instant messaging applications from defence group and IT supplier Thales. Citadel instant messaging smartphone app is one offering listed on the website, though President Macron is supposedly a fan of the currently under-fire Telegram platform, which is facing a ban in Russia for refusing to hand over encryption keys to security services.

This is one example of a government which doesn’t like an idea until it benefits the bureaucratic machine. A government owned application will be designed with its own parameters and objectives in mind; this might be another way for intelligence agencies to poke their noses into places they are not wanted.

These agencies and governments have already proved incapable of cracking the encryption software of the likes of WhatsApp and Telegram, therefore a work-around would be required. Considering the scandal Facebook, owner of WhatsApp, is facing, this might prove to be a very good time to pry loyal users onto a platform with zero commercial interests and the promise of never being on your own.