Ofcom tells off ITV and ESTV over 5G conspiracy theory coverage

Ofcom has concluded its investigations into ITV and ESTV, after both TV stations were seemingly fanning the flames of the conspiracy theories which have linked 5G to the coronavirus outbreak.

Despite the tsunami of statements claiming there is no valid link between the presence of 5G antenna and the spread of COVID-19, there are still those deluded enough to believe the conspiracy theories. The outcome has been vandalism to telecoms infrastructure, the very networks used by the emergency services, as well as verbal and physical abuse to field staff, the individuals who are attempting to improve resilience and reliability of communications networks.

The situation has of course not been helped by TV stations seemingly adding credibility to the idiocy or ITV Presenter Eamonn Holmes casting doubt on the credibility of other news sources who have been denying the validity of the conspiracy theory.

Starting with the ITV debacle, Ofcom has ruled Holmes’ statement had the potential to cause harm because it could have undermined people’s trust in the views being expressed by the authorities.

“In assessing the potential degree of harm, we took into account that Eamonn Holmes did also state that ‘No-one should attack or damage’ mobile phone masts,” the Ofcom statement reads. “However, we considered that his statement overall potentially risked fuelling a volatile situation surrounding the 5G claims.”

The show in question took place on April 13, with Ofcom receiving 755 complaints. During one segment, Holmes was discussing the conspiracy theories with the programme’s Consumer Editor, Alice Beer, when he stated:

The only thing I would say, I totally agree with everything you are saying but what I don’t accept is mainstream media immediately slapping that down as not true when they do not know it’s not true. No-one should attack or damage or do anything like that. But it is very easy to say it is not true because it suits the state narrative. That’s all I would say as someone with an enquiring mind.

David Icke, the conspiracy theorist behind much of the absurdity, retweeted an edited response which seemed to demonstrate Holmes was in support of his messages.

Ofcom has issued guidance to ITV to ensure content does not enflame the current situation or add credibility to misinformation. This is effectively what Holmes did in his egotistical attempt to be philosophical.

Moving onto ESTV, Ofcom has taken a much more hardened approach. After an interview with David Icke on its local television channel London Live, the regulator received 48 complaints after the conspiracy theories went completely unchallenged by host Brian Rose.

Ofcom has concluded the show has the potential to cause considerable harm, as ESTV did not do enough to present Icke’s thoughts as theories. The ruling states:

Ofcom stresses that there is no prohibition on broadcasting views which diverge from or challenge official authorities on public health information, but it was the responsibility of ESTV to ensure viewers were adequately protected from potential harm by, for example, challenging those views and placing them in context. Ofcom’s Decision is therefore that the Licensee did not adequately protect viewers from potential harm, in breach of Rule 2.1, and we considered this breach to be serious.

The Sanction Panel will now consider the evidence to hand out an appropriate punishment.

While there is a risk to free speech principles, a line has to be drawn somewhere. David Icke’s theories about the origin and transmission of COVID-19 are not based on science and pose a risk to society. ESTV should be encouraged to explore such ideas where necessary, but appropriate context should be placed around the discussion. This is where the interviewer Brian Rose failed.

Rose simply sat in his seat and let Icke ramble. Whereas many experienced and respected interviewers might have challenged the pseudoscience and absurdity of the historical context, Rose just allowed the preposterous tale to be told. As such, credibility was offered to the story.

The conspiracy theories should of course be discussed, but balance needs to be offered.

  • Ofcom has recently published test results demonstrating the UK 5G networks continue to operate well within internationally accepted safety levels
  • The International Commission on Non-Ionizing Radiation Protection (ICNIRP), the Germany-based scientific body in charge of setting limits on exposure to radiation, has said 5G poses no more of a threat than other mobile technologies
  • The World Health Organization has denied any link between the spread of coronavirus and 5G
  • Public Health England has pointed out the frequency bands being used by 5G applications have been in use before, for years prior to the COVID-19 outbreak

There is no shortage of experts to decry the link between 5G and COVID-19, but this was not mentioned in the ESTV interview. Little to no balance was offered as the interviewer did an impression of a vase of flowers sat opposite Icke.

Huawei position in UK called into question by rowdy politicians

A small group of UK politicians are gathering steam in opposition of the Telecoms Supply Chain Review, calling for zero involvement from high-risk vendors, and the Government did not directly disagree.

Led by Sir Iain Duncan Smith, a debate in Westminster Hall of the Houses of Parliament took place this morning with several politicians calling for a complete ban for Huawei, aligning the UK to the approach taken in the US and Australia. While the debate itself was full of wild claims and inaccuracies, the message from this small group of opponents was clear; Huawei should be banned from the shores.

There will of course always be opposition to every decision made by the Government, but this is an evolving conversation people should certainly pay attention to.

Smith and other politicians questioned the logic of a 35% limit for companies designated ‘high-risk vendors’, instead asking whether this should be formally reduced to 0% over a definite period of time. Warman, representing the interests of the Government, seemingly agreed with this position. The following exchange should be noted:

Warman: We want to get to a position where we do not have to use a high-risk vendor in our telecoms network.

Smith: I think this is a very important point. I want to know, and I think the rest of the House would like to know, is it now Government policy to drive to 0% involvement by Huawei and other non-secure vendors? Is that now the policy not just 35%?

Warman: Our aim is to not be reliant on high-risk vendors at all and I appreciate he would like me to set out a timetable for that, and I can’t do that today.

What Warman appeared to state is that the Government intends to reduce the involvement of high-risk vendors to 0% at some point in the currently undefined future.

Without an official statement from the Department of Digital, Culture, Media and Sport, it is difficult to understand the consequences of these comments. However, Warman agreed with the opponents that high-risk vendors should be gradually removed from communications infrastructure. For the moment, the approach of mitigated risk will be maintained, though the Government does seem to back tracking on statements that it can manage high-risk vendors in the network.

This is a statement of some intent from the Government. There is clear and very vocal opposition to the Telecoms Supply Chain Review conclusion, and it does appear the fate of those companies deemed high-risk vendors is once again unknown.

While Huawei might be sitting comfortably today, these comments paint a slightly different picture. What should be worth noting is the language which is currently being employed, as should Huawei be able to prove it is not a high-risk vendor, this developing conversation would be redundant, but even the bravest optimist would admit it is going to be very difficult, if not impossible, to remove this tag.

Once question which will sit rather uncomfortably with those in the telecoms industry is where were these opinions during the Supply Chain Review? Sir Iain Duncan Smith, Chi Onwurah and Stewart McDonald are just some of the opponents to the Telecoms Supply Chain Review, but surely it would have been more useful to speak to the experts, understand industry nuances and competition to raise concerns during the summer of 2019 whilst the Review was taking place?

John Nicolson, the Scottish National Party MP for Ochil and South Perthshire, even suggested the UK should hit the brakes on the deployment of 5G. This motion seemed to attract some interest from other members of the debate.

Over the course of the session, which lasted for roughly 90 minutes, some very bold and strange statements were made. Smith suggested Samsung had stated in a letter that Huawei could not be trusted, Fujitsu is apparently a credible alternative, and one backbencher even suggested Huawei was involved in illegal organ harvesting. Some of the claims are of course very questionable, but the opposition to Huawei is gathering steam.

One point which was touted, and there is some credibility, is whether the Huawei restrictions are somewhat of a homage towards the Chinese Government as the UK pursues a valuable trade deal with the nation. In the Brexit-driven world of today, this is not entirely unbelievable, though it does beg the question as to whether the Government is prioritising the right objectives.

What this does seem evident of is a change in policy for the UK Government. Suggestions high-risk vendors should be reduced to 0% in the future have not been made by the Government to date, and this does appear to be the first signs of a new approach.

For the industry, this is a worrying sign of inconsistency so soon after a collective sigh of relief was made following the conclusion of the Supply Chain Review. It might be costing the telcos a substantial amount to adjust deployment plans to meet the new restrictions, but these comments will need to be clarified and validated by the Government very quickly to avoid any more confusion.

At the time of writing, no clarity has been offered by the Department of Digital, Culture, Media and Sport.

This is an interesting position for Huawei. The Government has seemingly set its sights on irradiating high-risk vendors from communications infrastructure, perhaps thanks to pressure from certain allied nations. If it can remove the ‘high-risk vendor’ tag from its biography, all these problems would disappear for Huawei, though this might well be an impossible ambition considering the global political climate.

Iliad is starting to look very light on infrastructure

French telco Iliad has confirmed a deal to sell 51% ownership of its fibre assets to InfraVia for roughly €300 million.

As part of the deal, Iliad spun off its fibre assets into a company which will now be known as Investissements dans la Fibre des Territoires (IFT). The enterprise value of this venture will be €600 million, which will now be 51% owned by French private equity firm InfraVia.

The separation of network infrastructure from retail business units is becoming an increasingly attractive strategy for the telcos. As the value and ROI of the network will no longer be tied to the commercial performance of the retail business following a separation, it looks like a much more attractive investment to companies like InfraVia.

InfraVia is a company with notable experience in the telco world. The firm is an investor in Cignal, an independent telecom tower companies in Ireland, as well as Celeste, a digital infrastructure-provider in France and data-centre company Etix Everywhere.

While this is further evidence of the attractiveness of the connectivity industry for long-term investors, it is also demonstrative of the financial strife the telcos find themselves in.

In pursuit of investment to fuel the next generation of connectivity, Iliad has resigned itself to selling off 51% of its fibre company. Free, Iliad’s mobile brand, will act as the anchor tenant of the network though IFT is now free to engage other operators to offer the same services.

Elsewhere in the Iliad universe, the team also found it necessary to sell passive infrastructure assets for its mobile network. In May 2019, Iliad signed a deal with tower company Cellnex. Cellnex would receive 5,700 sites in France currently operated by Free and 2,200 Iliad sites in Italy, as well as 70% of the new company that will manage the sites. The deal brought in €2 billion for Iliad.

The telcos are in a difficult position. Key revenue streams have been destroyed over the last decade, voice and SMS for example, though these are the companies which are being asked to invest more in network than ever before. Divestment, partial or full, in assets such as towers or fibre networks is becoming an increasingly common way to balance the equation, but this might be a case of ‘short-term gain, long-term pain’.

In selling assets, the telcos will have to accept they will be tenants on this infrastructure in the future. The consequence of this trend will not be seen for some time, but owning infrastructure is certainly a more sustainable and healthy position to be in than lease agreements.

Brookfield finds more cash for $2.6bn Cincinnati Bell purchase

Brookfield Infrastructure has continued its Christmas spending spree with the acquisition of Cincinnati Bell for $2.6 Billion.

Shareholders will welcome a 36% premium on share price, with Brookfield Infrastructure paying $10.50 in cash at closing of the transaction. The proposal has already been unanimously approved by Cincinnati Bell’s Board of Directors and now moves through to the regulatory approval process.

“The transaction strengthens our financial position, enabling accelerated investment in our strategic products that is not presently available to Cincinnati Bell as a standalone company,” said Leigh Fox, CEO of Cincinnati Bell. “This will allow us to drive growth and maximize value over the long term to the benefit of all our stakeholders.”

“This investment represents an opportunity for Brookfield Infrastructure to acquire a great franchise and leading fiber network operator in North America,” said Sam Pollock, CEO of Brookfield Infrastructure. “We are excited to leverage our operating expertise to work with the company’s management team as it completes its industry-leading fiber optic rollout plan. Cincinnati Bell is a great addition to our data infrastructure portfolio, and we expect it will contribute strong utility-like cash flows with predictable growth.”

For Brookfield Infrastructure, this closes a very busy end to 2019, with the team investing considerable funds in the telecom infrastructure business. Aside from this transaction, the team has confirmed the acquisition of Reliance Industries’ mobile infrastructure business unit in India and also a 93% stake in Wireless Infrastructure Group (WIG), an operator-neutral infrastructure provider in the UK.

Looking at Cincinnati Bell, the attractive fibre assets in Hawaii, Ohio, Kentucky, and Indiana will now be offered a super-charge with additional investments from the seemingly cash-rich Canadians. The telco currently has a footprint of over 1.3 million homes, delivering broadband, video and voice services to consumer and enterprise customers. 17,000 miles of dense metro and last-mile cables have been ‘future-proofed’, and with the customer appetite for fibre and 5G backhaul getting more evident, it makes sense the money-men are starting to get more interested in communications infrastructure.

The industry does seem to be demonstrating a useful convergence trend in recent months. Investment funds are becoming more interested in infrastructure investments, while the telcos are getting more desperate for additional funds to fuel deployment strategies. It might not be a surprise to see more of these deals over the early months of 2020.

Brookfield expands telco footprint with WIG stake

Brookfield Infrastructure has expanded its communications infrastructure portfolio to the UK through the acquisition of a 93% stake in Wireless Infrastructure Group (WIG).

Acquired from 3i Infrastructure for £387 million, WIG manages a portfolio of more than 2,000 ‘communications assets’ across the UK, including mobile network masts in rural and suburban areas, as well as wireless access infrastructure in stadiums, other buildings, along streets and transport routes. The company has also recently expanded into the Netherlands and Ireland.

Brookfield, which owns and operates assets (including data centers) in the utilities, transport, energy and data infrastructure sectors across the Americas, Asia-Pacific and Europe, is developing its ‘neutral host’ wireless access network infrastructure portfolio, having just completed a $3.7 billion deal to acquire mobile tower assets in India from Reliance Jio.

Closely-related investment firm Brookfield Asset Management, meanwhile, was part of a consortium that acquired Vodafone New Zealand earlier this year.

Norway says yes to Huawei

The Norwegian Government has said it will not ban Huawei from providing network infrastructure equipment or services to fuel the drive towards 5G.

According to Reuters, Cabinet Minister Nikolai Astrup, the man who leads digital efforts across the government, has confirmed Huawei is free to operate in the country. While it is not the largest market for telco vendors, it is another positive sign that not everyone around the world will side with the US.

“We have a good dialogue with the companies on security, and then it is up to the companies themselves to choose suppliers,” said Astrup. “We haven’t got any bans against any suppliers in Norway.”

For Huawei executives, there will be a sigh of relief. Norway was one of the countries which was considering a ban on the grounds of national security, though this now appears to be a process designated to the past. It also demonstrates decisive action from a government; others around the world should take note.

Although Norwegian telcos fall into the fast-follower category for 5G deployment, they now have the advantage of certainty. Other countries, where services are already launched, do not have this confidence as decisions are still currently being made. The UK is a prime example of this.

The Supply Chain Review, on which Huawei’s hopes are pinned, is still under consideration. EE, Vodafone and Three might have already launched 5G services, though they are currently sitting in a state of purgatory. Without absolute confirmation of Huawei’s role in the UK’s digital infrastructure future, aggressive deployment plans are tricky. This is most apparent for Three and Vodafone, where Huawei is pencilled in to play a very significant role.

This dilemma is not present in Norway anymore. Telenor, Norway’s largest telco, plans to launch commercial 5G services in 2020 and can drive towards full-scale network deployment without any limitations on vendor selection from the government. We do not expect any single vendor will be a single-supplier, though it does have increased choice of suppliers compared to other nations.

Elsewhere in the Norwegian telco space, Telia and Ice will also be prepping themselves following the country’s first 5G spectrum auction in June. At the end of the auction, Telenor and Telia each walked away with two 10 MHz blocks 700 MHz spectrum, while Ice collected two 10 MHz blocks in 700 MHz and two 15 MHz lots in the 2100 MHz band. Further auctions are planning over the next few years, with the valuable 3.4-3.8 MHz and 26 GHz bands up for bid next year.

Looking at the relationships which are currently in place, Telenor and Telia have a partnership with Huawei, while Ice has elected to side with Scandinavian neighbour Nokia. Most recently, Telenor has been working with Huawei to trial 5G in the 26 GHz spectrum band, while Telia’s Swedish parent company signed a 5G MOU with Huawei in 2016. Both of the companies have Huawei equipment present in the 4G networks.

Ice is the smallest telco in Norway, it doesn’t have nation-wide coverage just yet, and has elected to work with Nokia. Nokia appears to be providing an end-to-end solution for the challenger telco, which is claiming to have already deployed 1000 5G-ready base stations in its network. Ice is an interesting telco to keep an eye-on, as while it is driving towards 5G connectivity, it still has a significant amount to invest to gain nation-wide coverage for its 4G network, which currently stands at 75% geographical coverage. This might not sound too bad, though when you consider the environmental challenges Norway’s landscape presents, it will be very difficult to improve this footprint quickly.

Another interesting element to consider here will be the impact this has on the relationship between the US and Norway. The US is continuing to pressure partners to place a ban on Huawei, and despite making progress in Poland, more countries are choosing to ignore the demands of the White House.

Looking at the Norwegian export statistics, you can see why the US does not have the same influence as it does with other states. Norway is the 36th largest export economy in the world and the 22nd most complex economy according to the Economic Complexity Index (ECI). Exports stood at $106 billion at the end of 2017, with crude petroleum and petroleum gas topping the list.

In terms of destinations, Europe accounted for 80% of all exports from the country, the UK led the way with 20%, while the US accounted for 4.7%. This is still a substantial number, though the US cannot force its will on the politicians in the same way.

Although the continued conflict between the US and China, in which Huawei is somewhat of a proxy for collateral damage, is causing discomfort for the vendor, it could be a lot worse. Worse case scenarios were drawn-up when the tension got to breaking point, though with numerous governments choosing to ignore the severity claims from the US, Huawei remains in a healthy(ish) position.

Utilities to focus on disrupting pedestrians not vehicles

The UK Department of Transport has unveiled a new consultation which proposes new utilities infrastructure would have to be installed under pavements as opposed to roads.

The aim is to reduce disruptions to traffic across the country. Said disruptions to people’s journeys and congestion are estimated to cost the economy around £4 billion, though the new proposition is supposedly one which can address this. This new approach will be applicable to telcos for fibre, but also electricity, gas and water companies.

The consultation document states:

“Unless the Permit Authority consents to the placing of apparatus under the carriageway including to assist with the roll-out of national infrastructure projects or to enable urban greening and street trees, it is a condition of this permit that activities placing new apparatus underground should, where possible and practical, be placed under the footway, footpath or verge.”

The concept of the consultation is simple. When laying new infrastructure utilities and telcos will have to dig up pavements not the road anymore. It seems it is a lot more important to get people to work than to keep the pavements safe, though this might be an interesting approach to reduce the disruptions caused by 2.5 million road works each year.

As part of a wider scheme which will be known as ‘Digital Street Manager’, the Department of Transport also intends to force the utilities to be much more organized when deploying or upgrading infrastructure. It seems residents and local authorities are sick of roads being repeatedly being dug up, when realistically multiple projects could be completed back-to-back, minimising disruptions.

While this is not the sort of consultation which will have people rioting in the streets, there are pros and cons to both sides of the argument.

The idea of digging up pavements as opposed to roads has been the norm in some countries around the world for some time, such as Germany, and it does reduce disruptions. This is not to say it can be applied every time, but however it is sensible. Most roads have pavements on both sides of the road, therefore pedestrians can simply cross the road should there be work being done.

That said, there is criticism. Some might suggest the work would still overflow onto the road as there are few pavements which are wide enough to house a digger and several workmen. You also have to wonder what those with front doors which open directly onto the pavement would do during the works. Presumably in some awkward situations they would have to just give up on going in or out of their home until the work has been completed.

Another point to consider is the ‘real estate’ which is actually available. Gas or water pipes are not exactly small, and most pavements are not exactly wide. When you have to find space for the pipes, electricity wires and fibre cabling, you might run out of room rather quickly. In some cases, it might simply be impossible.

It is an interesting idea, and while something does need to be done to ensure civil engineering projects are completed in the most efficient manner, the industry has been calling for less red-tape not additional regulations…

Vodafone ponders spin off of European tower business

After reporting declines in group revenues, Vodafone needed to bring some good news to the earnings call, and it seems the creation of a standalone tower business has done the job.

CEO Nick Read announced during the Q3 earnings call work had begun to legally separate the European tower infrastructure business, with plans to have the new organization up-and-running by May 2020. The team intends to monetize the tower business through an IPO or disposal of a minority stake in the next 18 months, dependent on market conditions.

“We will capture industrial efficiencies through network sharing agreements signed in multiple markets, and today we are announcing the decision to create Europe’s largest tower company,” said Read. “We believe there is a substantial opportunity to unlock the embedded value of our towers, and we have started preparations for a range of monetisation options over the next 18 months, including a potential IPO.”

Looking at the revenues, total group revenues declined by 2.3% year-on-year for the quarter to €10.6 billion, with Europe accounting for a 2.1% decline. Italy and Spain accounted for the biggest drops across the continent, though the operational challenges faced here are well-known to all. Germany and the UK both offered marginal growth, but there is hope on the horizon for these two markets.

In both the UK and Germany, Vodafone is readying itself for a more aggressive push into the convergence game with broadband offerings. In the UK, it has partnered with the rapidly expanding CityFibre and launched a 5G FWA offering, while in Germany, the recently approved Liberty Global acquisition will give it more of a presence in the cable market.

“Modest results in a challenging competitive European environment,” said Paolo Pescatore of PP Foresight. The move to lead in 5G with punchy pricing gives it a perfect opportunity to gain momentum. But margins will continue to be under immense pressure with unlimited price plans.”

On the network side, Vodafone is readying itself for an expansive rollout into the 5G world. Being one of the world’s largest operators does sound nice, however the catch is that there are massive financial commitments when it comes to infrastructure overhauls, such as the one the 5G era presents. With a new network sharing partnership in the UK with O2, a tie-up with Orange in Spain and potentially one with Telecom Italia in Italy, the burden could certainly be lessened.

While this is all good news for the operations, the tower infrastructure business will steal the headlines. This is becoming an increasingly common trend in the telco world as operators look to appease the financial appetites of investors by monetizing tower infrastructure assets. On the surface, it does seem to have worked, share price has risen almost 9% in early morning trading.

“Exploring options to float or monetise infrastructure assets is becoming a fashionable play among some network operators, motivated by driving greater value from them and reducing costs,” said Kester Mann of CCS Insight.

“Better asset utilisation and driving greater efficiency has been a leading part of Vodafone CEO Nick Read’s strategy so far. The company has also established a number of 5G network-sharing deals, increased focus on online sales and customer care and replaced many legacy tariffs with new simplified plans.”