Telenor Norway goes all-in on Ericsson for 5G RAN

Norwegian vendor Telenor has announced Ericsson will be the sole vendor for its 5G radio access network, replacing incumbent Huawei.

“We are happy to announce that we have chosen Ericsson to start building the future 5G radio network in Norway, and I am confident we now are perfectly positioned to be in the forefront of the country’s network modernisation,” said Petter-Børre Furberg, CEO of Telenor Norway.

“As the first mobile operator on 5G in Scandinavia, Telenor will ramp up the roll out of 5G to our customers in Norway in 2020. The full modernisation of the mobile network in Norway is an ambitious undertaking, and something we are excited to get started on.”

A wholesale change of vendors such as this is a tricky process if you want to avoid any disruption to the service. The modernisation of the RAN, which currently uses entirely Huawei kit, is expected to take 4-5 years. So Huawei will be in play during that time, including some of the 5G upgrade work. That implies this is a business decision rather than a security one, which is consistent with the Norwegian governments apparent decision not to ban Huawei from 5G.

“We expect 5G to be the one technology that will transform our society the most in the next decade,” said Sigve Brekke, CEO of Telenor Group. “We have been through a thorough process to evaluate all the main vendors’ ability to deliver on Telenor’s requirements for the future mobile network.

“When selecting the vendor for the radio access network, we have considered important factors like technical quality, ability to innovate and modernise the network, commercial terms and conditions, as well as carried out an extensive security evaluation. Based on the comprehensive and holistic evaluation, we have decided to introduce a new partner for this important technology shift in Norway.”

This news comes hot on the heels of Telia Norway making exactly the same decision, so Ericsson has Norway pretty much sewn up when it comes to RAN work for the foreseeable future. In the core Ericsson has to coexist with Nokia and that is set to continue with 5G. For Huawei, being frozen out of a market in which it is being allowed to compete freely must be a significant blow.

Telenor finally gets rid of its stake in Veon

Years after beginning the process, Norwegian telco group Telenor has flogged its remaining Veon shares.

“Telenor has today sold its remaining 157 million shares in Veon,” said a Telenor filing. “The total consideration amounts to USD 362 million (around NOK 3.3 billion), with cash effect in the fourth quarter of 2019. This transaction is in line with the previously communicated strategy and concludes the final sell-down in Veon.”

The previous communication was over four years ago and it’s not clear what took it so long. Telenor has been offloading chunks of Veon, which does much of its business in Russia, at regular intervals ever since. Telenor has been in the process of retreating from its more exotic ventures for a while, having apparently decided it’s more comfortable with the relative stability of the Nordics.

So much so, in fact, that it has now formed its operations in that region into a cluster, no less. At the start of the month it announced that Jukka Leinonen, CEO of DNA Finland, which is owned by Telenor, would be in charge of said cluster. That means he’s now Chair of Telenor Sweden and Telenor Denmark too.

“I am honoured to head the new Nordic cluster and look forward to further developing Telenor Group’s position in the region through strengthened collaboration between the Nordic Telenor companies,” said Leinonen. I see great potential for value creation, for instance better roaming for customers, developing the B2B segment in the cluster, 5G and IoT.”

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.

Telenor and Axiata pull the plug on mega-merger

Operator groups Telenor and Axiata had intended to merge their Asian operations but have now decided it’s just too much hassle.

The proposed merger was announced back in May. “We are on the verge of making a new history,” said Axiata Group CEO Tan Sri Jamaludin Ibrahim, at the time. “This proposed mega merger of equals would create a Global Champion, headquartered right here in Malaysia.”

But by the time we got to Axiata’s quarterlies last week, there was talk that the move was set to fall through. Ibrahim wasted little time in scotching those rumours, insisting that the talks were still on track, but that they were always bound to take a while due to the complexity of the deal.

Well now it looks like that priced-in complexity is the reason for the whole deal collapsing, respite recent reassurances to the contrary. “Over the last four months, both parties have been working on due diligence and finalising transaction agreements to be completed within the third quarter of 2019,” said the short announcement. “Due to some complexities involved in the Proposed Transaction, the parties have mutually agreed to end the discussions.”

This is pretty embarrassing for both companies. Of course due diligence needs to be followed but what could have taken them four months to uncover? No more details have been revealed but you have to assume that either some corporate skeletons in the closet were uncovered or one of the parties involved has gone off the whole idea for some reason.

Telenor and PCCW question the need for speed

There are telcos who are rushing to launch 5G services, there are some who simply aren’t ready and there are a few who don’t seem that bothered right now.

During a panel session at 5G World, an interesting point was put forward by both PCCW and Telenor; if you don’t need 5G, why bother rushing to the finish line?

PCCW Group CTO Paul Berriman pointed to the current state-of-play. Data consumption is increasing, though the network is not being strained as it is elsewhere. Hong Kong as an incredibly high penetration in terms of FTTH, so the fixed wireless access usecase falls through. PCCW is also waiting on the release of 3.5 GHz spectrum, which will add impetus to the 5G mission. Right now, Berriman doesn’t feel that compelled to act as the business case is yet to present itself.

Telenor is taking a similar stance, in the sense it is not being rushed. Ingeborg Øfsthus, CTO of Telenor Norway, pointed to the tsunami of unknowns. The maturity of the technology is a worry, as is the development of the business cases. Øfsthus said the team does not have the pull from the verticals to rush a launch, and while there are some interested parties, there would have to be demonstratable scale before they are interested.

Another interesting factor to consider is the disruption to the management of a telco as a business.

“The real challenge for us is to go from 3,000 base stations in Hong Kong to 30,000 base station,” said Berriman. “Going from 4 million smartphones to 40 million connected objects. Going from $20 ARPU to $2. We need to understand the business model behind it.”

The drive towards 5G has been breathless for some, but there are telcos who are waiting for the right conditions before entering the fray; the ‘built it and they will come’ attitude is not being shared by everyone.

“It is early in the cycle, but it is evolving rapidly,” said Channa Seneviratne, Executive Director at Telstra.

Seneviratne suggested Telstra was one of the first companies worldwide to launch 5G, but this was entirely based on circumstance. With 60-70% year-on-year growth on data consumption, Seneviratne couldn’t afford to sit back and wait for the technology to mature or the business case to be fully understood; the demand for capacity-offloading was today.

Another interesting case of rapid deployment is with Elisa. Here, VP Of Telco Efficiency Kirsi Valtari said 5G is absolutely perfect for their business model. Elisa operates slightly differently, selling unlimited tariffs which are tiered on download speeds. The faster download experience you want, the more you pay, but you never run out of data. 5G just allows them to create more products and expand horizons.

While desire for 5G keeps everyone busy assessing who has launched the fastest, it is always worth remembering that sometimes it just isn’t necessary.

Telenor makes some IoT predictions

The IoT bit of Norwegian operator group Telenor has had a go at predicting the IoT market, with a bit of help from its friends.

Telenor Connexion partnered with telecoms consultant Northstream (which is quite fond of predictions) to come up with five predictions, which probably means it got Northstream to do 99% of the work and then stuck its name at the end of it. For some reason they decided to conflate IoT with digital transformation – perhaps they could only think of three or four IoT ones. Anyway here they are.

  1. Enterprise data will take the lead in data trading

Enterprises will generate loads of IoT data and they’re not as uptight about things like privacy as consumers so they can flog it to whoever they want.

  1. Digital value will be unlocked faster

The work done by IoT trailblazers has lowered the barriers to entry for newcomers, which in turn will result in greater innovation.

  1. Connectivity will be at the centre of digital product innovation

Right now connectivity is still a bit of an afterthought when developing digital products but increasingly it will be factored in right at the start.

  1. Connectivity will push eCommerce even further

Logistics are improved by better connectivity, which in turn improves the service offered by ecommerce companies.

  1. Managed connectivity will be even more important

As industries become ever more dependent on connectivity, the importance of reliability will increase.

As luck would have it Telenor Connexion can help with all this. “Beyond simply connecting products, Telenor Connexion is dedicated to helping our customers identify the business value in connectivity,” said Mats Lundquist, CEO at Telenor Connexion. “This report is part of that commitment, designed to help enterprises find their way in an evolving business landscape.”

“The business landscape is changing rapidly, which means all types of companies need to consider where they fit in to new digital business processes.” said Bengt Nordström, CEO at Northstream. “With this analysis we also want to highlight the challenge for businesses to face digital transformation on their own – and thus the need to build partnerships with other actors in the ecosystem.”

While it predates 5G, IoT is considered one of the major commercial justifications for moving to the next generation of wireless technology. Not only are the enterprise applications of it easier to monetise, they’re also more likely to be genuinely useful than smart plat pots or whatever. But it’s all about the big data at the end of the day.

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.

TDC hoovers up Danish spectrum in latest auction

The Danish Energy Agency has completed its latest spectrum auction, with TDC running away with the majority of the available assets.

Of the 20 blocks in the 700, 900 and 2300 MHz frequency bands, TDC won 14, the maximum available to the telco at this auction. 3 Denmark acquired two 10 MHz blocks in each of the 700 and 900 MHz bands, while TT Network, Telia and Telenor’s joint venture, two 5 MHz in the 700 MHz and two 10 MHz in the 900 MHz band.

“Several frequency blocks provide higher speed, longer range and stronger indoor coverage, which gives us a unique position to strengthen and develop the best coverage in Denmark,” said TDC CEO Allison Kirkby.

“TDC has connected all over Denmark for almost 140 years, and the new licenses ensure that Danish consumers, companies and society enjoy new experiences, services and the many opportunities that 5G offers.”

With ambitious plans to rollout 5G across Denmark by the end of 2020, this is certainly an aggressive sign of intent from TDC. The telco paid NOK 1.6 billion, roughly €210 million, for its haul, while 3 Denmark paid a total over roughly €68 million. TT Network paid €14 million for its 700 MHz assets and nothing for 900 MHz, though it will be charged with coverage obligations.

As it currently stands, according to Ovum’s WCIS database, TDC is currently the market leader with 42% market share, TT Network controls roughly 40% of subscriptions, while 3 collects the remaining 18%.

While these prices might seem ludicrously cheap in comparison to other spectrum auctions which have been taking place around the bloc, Denmark’s population of 5.8 million ranks it at 111th worldwide, while its land mass ranks at 130th.

Ericsson gets multinational 5G core network win with Telenor

Swedish kit vendor Ericsson has got a nice lot of fresh 5G work from Swedish operator group Telenor.

The win is all about 5G core network transformation, featuring a nice lot of NFV goodness. Since the point of issuing press releases about deal wins is to generate a sense of commercial momentum, this is a pretty handy one for Ericsson as it implies an endorsement of its NFV offerings.

Since this still a relatively new, unfamiliar field, any show of commercial faith at this stage counts double. Furthermore the deal encompasses Telenor’s core networks in Sweden, Denmark and Norway, so in terms of publicity, Ericsson gets three for the price of one.

“Ericsson’s portfolio of VNF enables Telenor to become more agile while reducing costs through improved operations,” said Morten Karlsen Sørby, Telenor’s EVP and Acting Cluster Head for Scandinavia. “This transformational deal is an important step towards future-proofing our core network as we look towards 5G. It provides us with state-of-the-art virtual core applications that serve mobile and fixed access and extend the lifecycle of our legacy network.”

“Ericsson is a long-term partner to Telenor in Scandinavia, supporting the company across multiple engagements in fixed and mobile networks in the region,” said Arun Bansal, Ericsson’s Head of Europe & Latin America. “This deal strengthens that partnership by evolving Telenor’s existing network to the cloud, ensuring continued exceptional services to their customers. As we move together towards 5G it also opens up new opportunities in the IoT space.”

In other Ericsson news, the company has quietly launched a new division called Edge Gravity. As Light Reading reports, it seems to be a semi-autonomous unit within Ericsson that focuses on edge computing and “operates a global edge cloud network that links together a core network of data centers with the last-mile networks of more than 80 partners that include cable operators, telcos and mobile service providers.”

Ookla says Telenor is the world’s fastest mobile operator

Telenor Norway registered an average download speed of 72 Mbps in Q2 2018 according to measurement service Ookla.

In a blog post Ookla, which has Telenor as an enterprise client, was able to shed some light on how such speeds are achieved. There doesn’t seem to be anything too surprising; carrier aggregation , 256QAM, 4×4 MIMO and all that jazz all add up to a nice lot of bandwidth. On top of that it seems to have largely shifted voice traffic over to LTE, which presumably frees up more spectrum to widen the 4G pipe.

As a consequence Ookla has Norway in second place in its global wireless speed rankings, although its average speed of 57 Mbps indicates the other Norwegian operators are way behind Telenor and need to introduce some QAM and MIMO into their diets. Qatar is the clear number one and UAE is third, indicating the Gulf has been investing heavily on infrastructure, while Singapore and Iceland are in the top five for both mobile and fixed speed. The UK is 51st on mobile and 30th on fixed.

Ookla speedtest July 2018