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UK telco group BT is reportedly flogging £100 million of infrastructure assets in The Netherlands as its new CEO strives to make it a leaner operation.
BT doesn’t seem to have said anything official yet, but the Sunday Times got the scoop regardless. Apparently this is part of an attempt to streamline the struggling Global Services business, as BT currently uses its own infrastructure, such as towers and cables, to connect its Dutch business customers.
There’s not much more to the report other than a claim that, while BT is also looking to streamline its Global Services operations in other regions, including Ireland, Spain and Latin America, it doesn’t plan to completely abandon specific countries.
The report also refers to a previous Sunday Times scoop that BT is also flogging a legal software service called Tikit. It’s reasonable to ask what the hell BT was doing in the legal software business in the first place and if this is indicative of the kind of wild tangents the Global Services business has gone off on in the past, we can expect many more such disposals.
This news comes just days after it was revealed that BT was forced to hand over a bunch of cash to Ofcom due to its historical accounting incompetence. In addition BT announced last week that it was delisting from the New York stock exchange and earlier in the month decided to flog BT Fleet Solutions. Sadly for CEO Philip Jansen, none of this tweaking seems to have won over investors, with BT’s share price down by over 30% since he took over at the start of the year.
French media giant Vivendi seems to be a bit short of cash, so it’s thinking of selling 10% of Universal Music to Tencent for three billion euros.
Vivendi primarily concerns itself with the TV and music businesses, having flogger SFR to Altice a few years ago, but that hasn’t stopped it trying to run Telecom Italia despite being a minority shareholder. It has historically been frantically active in terms of M&A and rarely seems to hold on to an acquisition before looking to sell it on
Tencent is a Chinese internet giant that owns IM service WeChat, the Chinese equivalent of Twitter – Weibo, loads of other digital stuff such as gaming and ecommerce, and most of China’s music services. It’s one of the world’s biggest technology companies and is no less fond of M&A than Vivendi.
“Vivendi and Tencent are also concurrently considering areas of strategic commercial cooperation,” said the announcement. “In this context, Vivendi is keen to explore enhanced cooperation which could help UMG [Universal Music Group] capture growth opportunities offered by the digitalization and the opening of new markets.
“Together with Tencent, Vivendi hopes to improve the promotion of UMG’s artists, with whom UMG has created the greatest catalogue of recordings and songs ever, as well as identify and promote new talents in new markets. Vivendi hopes that this new strategic partnership could create value for both Tencent and UMG.”
While improved access to the Chinese market is definitely a positive for UMG, that bit of narrative also feels like an attempt to make this move seem more about business strategy and less about Vivendi needing to raise some cash. Three billion euros would buy you around 30% of Telecom Italia at today’s prices, which would give Vivendi a majority stake. Just saying.
Business consulting giant Accenture has decided this is a good time to raise its telecoms game and is doing so by snapping up specialist firm Northstream.
Founded by former Ericsson exec Bengt Nordström (whose surname translates to Northstream in English – see what he did there?) in 1998, Northstream focuses on the business side of telecoms. Its strengths include industry research, technology assessment and business transformation programmes. Nordström himself regularly appears in the telecoms media and occasionally on its defining podcast.
“With our common cultures of collaboration and client-centricity, Northstream and Accenture are a great fit,” said Nordström. “We’re excited to be able to bring the combined deep industry experience and scale of our two organizations to help clients generate new value and succeed in today’s increasingly competitive market.”
“With Northstream now part of Accenture, we’re in an even stronger position to provide our communications clients with the innovation led services they need to address the challenges they’re facing — including digital-driven disruption, changing customer expectations, and competition from new digital natives,” said Mattias Lewrén, Nordic CMT lead and Sweden Country Managing Director at Accenture.
Accenture seems especially excited with the boost Northstream will give its Nordic efforts. But that still didn’t earn Lewrén a place in the official acquisition photo shoot above, with Nordström on the right joined by co-MDs of Accenture’s Communications, Media & Technology group Anders Helmrich and Anna Weissmann instead.
We spoke to Nordström to get a bit more colour on the move. He confirmed that Northstream will remain a separate enitity within the Nordic comms team and that he himself will hang around for at least another three years. He noted that many of the best telecoms business opportunities lie in the overlap with other vertical industries and that Accenture, with its breadth of industry expertise, is in a great position to make the most of those. He also said he’s very happy to have secured the future for his company. Congratulations Bengt, the beers are on you next time you’re in London.
The $34 billion acquisition of opensource enterprise software vendor Red Hat by venerable tech giant IBM has finally been completed.
The mega M&A was first announced last October and, given the size of it, seems to have gone through relatively quickly. Now begins the significant undertaking of integrating two such massive organisations that may well have quite distinct cultures.
IBM was founded in 1911 and has undergone several transformations to become the enterprise software and services company it is today. Red Hat only came into existence in 1993 and has always focused on the decidedly un-corporate open-source software community. IBM will be hoping some of its youthful vigour and flexibility will rub off, but that remains to be seen.
The official line is that the acquisition makes IBM one of the leading hybrid cloud providers as well as augmenting its software offering. There’s much talk Red Hat’s independence being preserved but, of course, it will now be taking orders from IBM.
“Businesses are starting the next chapter of their digital reinventions, modernizing infrastructure and moving mission-critical workloads across private clouds and multiple clouds from multiple vendors,” said Ginni Rometty, IBM chairman, president and CEO. “They need open, flexible technology to manage these hybrid multicloud environments. And they need partners they can trust to manage and secure these systems.”
“When we talk to customers, their challenges are clear: They need to move faster and differentiate through technology,” said Jim Whitehurst, president and CEO of Red Hat (what’s the difference?). “They want to build more collaborative cultures, and they need solutions that give them the flexibility to build and deploy any app or workload, anywhere.
“We think open source has become the de facto standard in technology because it enables these solutions. Joining forces with IBM gives Red Hat the opportunity to bring more open source innovation to an even broader range of organizations and will enable us to scale to meet the need for hybrid cloud solutions that deliver true choice and agility.”
That’s it really. There’s lots aspirational talk and general banging on in the press release, but you get the gist of it. Whitehurst will join the senior management team and report into Rometty, who seems to possess every senior management position worth having. IBM has been steadily increasing cloud as a proportion of total revenues and the pressure is now on to take that growth to the next level.
The disposal of assets required to sugar the pill of the T-Mobile/Sprint merger looks likely to be completed by US cableco Dish.
The latest goss comes from Bloomberg, which has been chatting to people who reckon they know what they’re talking about. These mysterious oracles say Dish is ready to drop $6 billion on prepaid operator brand Boost as well as a bunch of other unspecified stuff.
Since Boost has been valued at around $3 billion that’s quite a lot of unaccounted for expenditure. Since US regulators would ideally like a new national operator to be created before it will allow two of them to marge, this probably means some spectrum and whatever else Dish needs to become a viable MNO.
Apparently the WSJ had written a similar story last week so these telecoms Deep Throats are being nice and busy. Presumably they’re affiliated to the interested parties in some way and are floating trial balloons to see gauge broader sentiment on such a deal. None of the share prices of the companies concerned did much in response to the revelations.
Light Reading has reported on commentary from an Analyst who doesn’t think this is a great idea. He notes that it looks like a lose/lose since it takes spectrum away from TMUS/Sprint and cash away from Dish, in both cases depriving them of commodities they’re already short of. But big M&A usually ends up being about the egos of the big shots involved and if all those concerned fancy the idea they’ll probably go ahead regardless.
Having recently ditched Intel’s modem business like a bad habit, gadget giant Apple is reportedly now thinking of buying it.
The rumour comes courtesy of The Information, which says it got the scoop from no less than four unnamed people who we’re told have been briefed on the discussions between Apple and Intel. Specifically Apple is said to be interested in Intel’s German modem operations, which is where much of the 5G R7D will have taken place.
Intel found itself as an unwitting pawn in Apple’s legal battle of will with mobile chip giant Qualcomm. Apple wasn’t happy with what Qualcomm was charging for its modems and took to the courts to do something about it. This was always just a form of negotiation, a crucial part of which was Apple’s insistence that it could just walk away from Qualcomm if it didn’t lower its prices.
The problem with this is that there are very few 5G modem players in town and even fewer that aren’t affiliated to a smartphone competitor of Apple’s. One of those was supposed to Intel, which found itself constantly defending its ability to deliver a competitive 5G modem in the face of understandable scepticism from the industry and, increasingly, from Apple itself.
Eventually the Emperor was revealed to be naked and Apple was forced to settle with Qualcomm once it became clear Intel wasn’t able to deliver. Intel wasted little time in throwing in the towel entirely on 5G modems once their only customer had ditched them and promptly retreated into the shadows, vaguely muttering about IoT.
But that doesn’t mean its efforts to deliver a 5G modem were entirely wasted. Through acquisition and organic R&D Intel must have picked up a thing or two about delivering 5G radio over the years. While Apple is forced in the mid term to rely on the loathed Qualcomm, it ultimately aspires to modem self-reliance. Since Intel’s 5G unit is presumably available at a knock-down price following its public humiliation it wouldn’t be at all surprising to see Apple snap it up, if only for a laugh.
It looks like Sprint could trouser up to three billion bucks when it flogs its prepaid subsidiary Boost in a bid to placate antitrust authorities.
The Sprint/T-Mobile US merger saga has been going on for so long that people are starting to not care, but a recent set of negotiated concessions were enough to convince the head of the FCC to wave the deal though. The DoJ isn’t so sure, but they might as well go ahead with the placatory measures in the hope that it comes around eventually.
One of the biggest concessions will be selling Boost, a wholly-owned subsidiary of Sprint that specialises in prepaid contracts. TMUS is pretty hot on prepaid, so regulators concluded their combined efforts would take too much choice out of the prepaid market. Since this public commitment doesn’t put Sprint in the strongest negotiating position, the challenge is to get a decent price for Boost.
According to a Reuters report a company called Q Link Wireless is prepared to shell out somewhere between $1.8 billion to $3 billion for Boost. This is coming from the Q Link CEO, apparently, so we must assume it’s legit, but it also seems like a pretty broad range. What would make him pay almost double his lower figure? Some kind of bidding war presumably, so maybe he’s trying to scare off anyone not prepared to go to three bil.
The official line is that it depends on what he sees once he looks under the hood, with Sprint not yet having publicly disclosed key metrics such as churn, popular tariffs, etc. But FreedomPop is reportedly talking to private equity about getting involved and they would apparently be prepared to go up to four bil, so this has the feel of an auction carried out via the media.
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Continued Portfolio Management through exchange of Agribusiness Portfolio for further scale and capability in Informa Tech.
London: Informa (LSE: INF.L), the International Exhibitions, Events, Information Services and Scholarly Publishing Group, today announces further Progressive Portfolio Management (“PPM”) through an agreement with information services group, IHS Markit, that sees Informa’s Agribusiness Intelligence Portfolio exchanged for IHS Markit’s leading portfolio of TMT brands, further enhancing Informa Tech.
“This agreement is very positive for both IHS Markit and Informa, increasing the focus of each company on core markets where it has particular strengths and a long-term commitment to invest and grow” said Lance Uggla, CEO IHS Markit and Stephen A. Carter, Group Chief Executive, Informa PLC.
The agreement forms part of Informa’s PPM programme designed to focus the Group on brands and customer markets with the greatest opportunities for growth and expansion. It significantly strengthens Informa’s market position in Telecoms Media & Technology, whilst providing an attractive new home for the Group’s specialist information brands within the Agribusiness Intelligence Portfolio, with an owner committed to investing and expanding in this market over the long-term.
The expansion of Informa Tech includes a portfolio of B2B brands providing specialist research and data to customers through a range of subscription products and consulting. It extends and enhances Informa’s international reach through its strong presence in Asia and North America, and further strengthens its position in key sub-sectors of the TMT market, most notably in Information Technology, Communications Technology, Security Technology and Emerging Transformational Technology.
The enlarged Informa Tech will have annual revenues of around $350m and offer a wide range of B2B services, making it an attractive international partner for informing, educating and connecting Technology businesses and professionals.
Stephen A. Carter, Group Chief Executive, Informa PLC, said: “At Informa, we are focused on improving our depth and specialisation around attractive customer markets. Our ambitions for Informa Tech will be further enhanced by the addition of IHS Markit’s TMT portfolio, extending our customer and international reach, creating a strong platform for future growth.”
Lance Uggla, CEO, IHS Markit, said: “The Informa Agribusiness Intelligence portfolio is a clear extension of our Chemical and Downstream businesses and builds our existing data, pricing, insights, forecasting and news services within our Resources segment. Agriculture is the largest end chemical market in the world and this transaction expands our capabilities into fertilizers and chemical crop protection while substantively expanding our capabilities in biofuels.”
The portfolio agreement is structured as two separate transactions that value the two businesses at equivalent EBITDA multiples, with Informa contributing an additional $30m in cash to IHS Markit to reflect the larger EBITDA contribution from the IHS Markit business. The transactions are expected to close in July 2019 and are subject to customary closing conditions, including US regulatory approval.