TV takes a bite out of AT&T and Telia financials

The content business units of both the US’ AT&T and Nordics telco Telia as spreadsheets were strained during the on-going COVID-19 pandemic.

While it is becoming impossible not to mention the coronavirus outbreak at almost every turn, both the telcos have planned the crisis for the financial downturn. Although the top-line figures might show year-on-year declines, it is very difficult to hold anyone accountable as the world ponders this unforeseeable pandemic.

“The beginning of 2020 cannot be characterized as business as usual for Telia Company and society as a whole,” Telia CEO Christian Luiga said in the statement to investors. “Our financial performance is stable within our traditional telco business, with flat service revenues and an underlying growing adjusted EBITDA, whilst COVID-19 has had a negative impact on the TV & Media unit.”

“The COVID pandemic had a 5 cents per share impact on our first quarter. Without it, the quarter was about what we expected — strong wireless numbers that covered the HBO Max investment, and produced stable EBITDA and EBITDA margins,” said Randall Stephenson, AT&T and CEO.

In both of these businesses, the core business of telecommunications stood firm against testing trading conditions, but it was the content units which felt the strain. Most notably, the legacy TV services which both are attempting to shake off moving forward.

Looking at the AT&T financials, revenues fell short of analyst expectations though the coronavirus outbreak is causing chaos in the ranks. With revenues reaching $42.8 billion for the three-month period, down 4.6% year-on-year with $600 million attributed to the COVID-19 crisis. Roaming revenues were a contributing factor though the issue has been largely attributed to dampening demand for advertising.

Like many other businesses throughout the telecoms and technology world, AT&T has decided against giving any guidance for the rest of the year.

Over in Sweden with Telia, although net revenues did increase year-on-year, this is partly down to the acquisition of Bonnier Broadcasting. On a like-for-like basis, comparing what business units existed in Q1 2019, total revenues declined by 2.2%. Data usage has increased, as did wireless revenues, but it was the entertainment and TV unit which suffered.

Coronavirus has had a severe negative impact on the overall business, with demand from advertisers declining through the period. Traditional TV businesses are under considerable pressure during this crisis, quite the opposite of the fortunes being hoovered up by the streaming giants.

While it is interesting to keep an eye on the financials of the telcos during this period, it is very difficult to use these earning calls as a genuine temperature gauge.

Telia Finland is doing its bit to help combat coronavirus

The Finnish branch of Telia is supporting government policy making with real-time, but anonymised, user movement data and helping SMEs  with ad minutes giveaways.

To prevent government policies becoming knee-jerk reactions, precise data is critical. In countries where the population takes privacy rights seriously, there needs to be a fine balance between what the government should know and what should be kept out of its reach.

Telia Finland recently announced it is providing the Finnish government with anonymised data of user movement between cities and regions. The government can evaluate the effectiveness of its policies as well as use the data as basis for new measures to contain and supress the spread of the coronavirus.

Called ‘Telia Crowd Insights’, the data is drawn from Telia’s network, then anonymised and analysed on an aggregated basis. Theoretically, data cannot be traced back to individual customers.

“We collect the information from a large geographical area, which makes it impossible to identify individuals. After this, the fully anonymized and aggregated data can be expanded into views with which decision-makers can draw accurate conclusions on the movements of the masses from,” said Petri Seppänen, Head of Business Development at Telia.

“With our service, we can contribute to controlling the situation with the coronavirus and support authorities with knowledge-based management. We have rapidly tailored a report on top of our standard Crowd Insights product, specifically suitable for this exceptional situation,” Seppänen added. He also suggested that if the current initiative proves useful for the Finnish Government Telia may provide similar support to governments in other Nordic countries

Since the beginning of March, the Finnish government has adopted a phased approached to restraining social contact as a means to break the chain of virus spread. The Telia data will prove useful to test the effectiveness of the most recently policy to put under strict control the transport connection between Uusimaa, the region in south Finland where the capital area is located and where the COVID-19 cases are most concentrated, and the rest of the country.

So far Finland has coped better than her Nordic neighbours. The total number of 28 deaths, at the time of writing, puts the mortality rate per million population at 5, compared with 9 in Norway and 29 in Denmark, both of which have much stricter lockdowns in place for longer. The highest mortality rate per million population among the Nordic countries is seen in Sweden at 36.

Meanwhile it is apparent that the onslaught of COVID-19 and the government policies to lock down social life, has made the small- and medium-sized enterprises (SMEs) particularly vulnerable. This is bad news for countries like Finland where there are only a small number of big, multinational enterprises while over 90% of all the registered companies employ fewer than 10 people.

To help these small business survive, Telia Finland started giving away their national advertising space in Finland, including ad minutes on national television as well as ad space in big newspapers, social media, and online, which would be beyond the financial means of most of these small businesses. Telia aims to help 100 selected companies each week when the campaign is running, including local restaurants, car repair shops, craftsmen, and others. The campaign started in the last week of March.

“We believe that those who can help, should help. This situation affects us all. As a responsible company we want to do our part to ensure that businesses and people in Finland are able to get through this devastating situation,” said Jari Rapo, Vice President and the Head of Enterprise Business at Telia Finland. “As a big ICT and media corporation we have the possibility to offer our platforms and channels to those in need. Situations like this usually force businesses to cut costs from marketing and this is where we can offer our helping hand.”

Telia is calling on other big enterprises to join them in the endeavour to help save the SMEs in the biggest crisis the country’s economy has seen since the early 1990s, when Finland’s biggest trading partner, the Soviet Union, collapsed.

“We try to help as many companies as possible but we cannot do this alone. We believe that by working together and leading with an example we can help hundreds of small businesses stay afloat,” said Kaisa Pajari, Senior Communications Advisor of Enterprise Business at Telia Finland. “This is why we invite other big companies to join our cause by offering their expertise and platforms to those in need. It is not only Finland where small businesses are affected and we hope our example leads to a global movement. Big companies for example offer their advertising space or digital services.”

Telenor and Telia claim Multi-Operator Core Network first in Denmark

Every Nordic country was represented when Telenor and Telia got Nokia to help them build a new shared network in Denmark.

They are collectively laying claim to the world’s most advanced shared wireless network, thanks to the use of a feature called Multi-Operator Core Network (MOCN). This enables distinct mobile operators with their own core network to share a common radio access network infrastructure as well as spectrum resources, according to the announcement.

“This is a major step on our 5G journey, and I really look forward to start testing with real customers and understanding how 5G can provide true value for them,” said Henrik Kofod CTO at Telia Denmark. “I hope this will inspire other operators in the Danish market to move in the same direction. Network sharing is a great choice when it comes to building sustainable 5G networks. When we maximize our resource utilization, we lower our carbon footprint and optimize our investments.”

“Network sharing is a clear strategic priority for Telenor to continuously deliver one of the best mobile networks in the world, supporting safe and reliable connectivity to our private and business users,” said Georg Svendsen CTO at Telenor.

“Deploying 5G networks independently can be an expensive undertaking for mobile operators in the most competitive markets,” said Tommi Uitto, President of Mobile Networks at Nokia. “This trial highlights that through network sharing, operators can drive efficiencies, lower costs and bring the myriad benefits of 5G to businesses and consumers quickly. We hope that this trial demonstrates to operators around the world that there are multiple options open to them to get their 5G networks up and running quickly and at the lowest possible cost.”

Of course network sharing makes sense if the operators involved can halve the cost of network infrastructure while maintaining a similar level of performance. There is a slightly self-harming air to these sorts of announcements from kit vendors as network sharing presumably means they flog less kit. But if that’s what their customers want it would be even more self-defeating not to sell it to them.

Nokia gets some Telia love with 5G mall win

Swedish operator group Telia showed it’s not entirely monogamous with Ericsson by picking Nokia to run its new 5G network in the new Mall of Tripla in Helsinki.

While a single shopping centre might not seem like the biggest deal win, it will serve as a case study into all the capacity goodness promised by 5G. Using both Nokia base stations and small cell gear, shoppers at the mall will presumably be able to download the entire internet in one nanosecond and all the other good things promised by 5G enhanced mobile broadband.

“We are seeing increased demand for better connectivity at shopping centers, stadiums and large events, which is why the 5G network rollout at the Mall of Tripla is a milestone for both Nokia and Telia,” said Ari Kynäslahti, Head of Mobile Networks Product Management at Nokia.

I am particularly proud of the way our 5G AirScale Indoor Radio small cells have been able to be discretely installed inside the mall for excellent, seamless indoor coverage. The retail industry has the potential to be one of the big beneficiaries of 5G and we are excited to see how consumers and businesses benefit from this 5G network at the largest shopping center in the Nordics.”

Of course all that lovely bandwidth isn’t just about downloading movies, etc. There is an expectation that retail will be able to use both augmented and virtual reality to enhance the shopping experience in some way. On top of this being a handy case study for Nokia, it will be pleased to be reminded there is still room in Telia’s heart for it after being snubbed in Norway.

Ericsson benefits from Telia Norway’s snub of Huawei and Nokia

Ericsson has announced it will be the sole RAN vendor for Telia Norway, with the pair driving towards completing a nationwide rollout by 2023.

While the duo already had a relationship in place, Huawei might have hoped this was a market it would benefit in. At the end of September, the Norwegian Government indicated it was not going to pass a wide-spread ban on Huawei equipment, while the Chinese vendor has signed an MOU with the telcos parent company and does have a relationship to supply 4G network infrastructure equipment with the Norwegian subsidiary.

Telia Norway might not be the biggest telco, nor does it have the largest network, though being announced as a sole supplier is an ego boost if nothing else. The fact that this is a Nordic deal win might have some extra significance in Ericsson’s rivalry with Nokia. Being Swedish you might expect Telia to favour compatriot Ericsson, but it has no problem working with Nokia in Finland. Maybe Telia didn’t appreciate having one of its execs poached by Nokia.

“We are pleased to strengthen our position in the Nordic countries,” said Ericsson President of Europe and Latin America Arun Bansal. “As Telia Norway’s sole radio access network vendor, we’re working closely with them to bring the best possible commercial 5G experiences to their subscribers.

“5G is an innovation platform that not only delivers fantastic enhanced mobile broadband experiences but will also enable Telia Norway to pursue innovation opportunities with customers in the Internet of Things (IoT) and Industry 4.0. across industry, enterprise and society.

“We are currently live with commercial 5G in 19 customer networks across 15 countries, spanning four continents. We look forward to adding Telia Norway to that list in 2020, alongside many other new customers in Europe and beyond.”

As part of the agreement, 5G New Radio will be deployed across the network, while Ericsson’s spectrum sharing software will also be implemented, allowing Telia to share its spectrum between 4G and 5G use. The plan is to launch commercial services next year, with the intention of hitting nationwide coverage by the end of 2023.

What is worth noting is that while Huawei might have been in the picture during the trial period, let’s not forget the Telia parent company is headquartered in Sweden, and the business has been running extensive trials with Ericsson for some time.

In Stockholm and Tallinn, TeliaSonera and Ericsson entered into a strategic partnership to let enterprise customers test 5G services in mid-2018, while the pair turned on the country’s first 5G network together at KTH the Royal Institute of Technology in Stockholm in December. Ericsson has also been working extensively with the Telia team in Estonia, focusing on the Port of Tallinn amongst other areas.

The Telia Norway agreement now takes the number of publicly named commercial 5G contracts at Ericsson up to 27. Although this might not be as high as its direct competitors, Nokia has 48 and Huawei has 50, Ericsson equipment is now part of 19 live network launches around the world.

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.

Nokia taps Telia for new head of strategy

Finnish network vendor Nokia has decided its strategy should be directed by Gabriela Styf Sjöman, formerly of Swedish operator group Telia.

Sjöman (pictured) will replace long-time Chief Strategy Officer Kathrin Buvac, who isn’t leaving Nokia, but will now focus entirely running Nokia’s enterprise division. This move would appear to signify that the enterprise business group, which was only created at the start of this year, requires Buvac’s undivided attention. Whether or not this is because it’s going well or badly remains to be seen.

It seems like a good idea to have operator expertise in a networking vendor strategy team and Sjöman is presumably up to speed on the techie side too, her most recent role at Telia being at the head of its networks division. Nokia is also making much of the fact that she has lived all over the world, having grown up in Mexico and got an MBA from Durham University in the UK.

“We are delighted to welcome Gabriela to Nokia at a pivotal moment in our 5G journey,” said Nokia CEO Rajeev Suri. “She brings a wealth of international knowledge and a deep understanding of our industry, its customers and technologies. Her insight will be critical in refining our strategy for the future. I also want to thank Kathrin, who has continued to lead our strategy organization in addition to her role as President of Nokia Enterprise since January this year.”

“I am excited to join Nokia at such a pivotal time,” said Sjöman. “With its broad portfolio and innovative technology, Nokia is well positioned to help its customers realize the full potential of 5G, and I look forward to being part of further strengthening Nokia in this 5G journey.”

Back in Sweden Nokia rival Ericsson has unveiled its replacement for Rafiah Ibrahim, who decided to call it a day back in March. Fadi Pharaon is being promoted from his current position as VP of networks and managed services in the Europe and Latin America group. He is an Ericsson lifer who seems to have had executive roles for the company in every part of the world.

“With the introduction of 5G we are at an exciting time in the industry,” said Ericsson CEO Börje Ekholm. “Our customer relationships are key to build a strong company position in the market for this next phase of industry development. Fadi has the right background, experience and capabilities to lead this work in this Market Area and I am very pleased to see him stepping up to this role.”

“The mobile industry is transforming countries and industries and with 5G becoming a reality, we will see new business opportunities and innovations across our markets,” said Pharaon. “I really look forward to taking on this exciting new role in Market Area Middle East & Africa and work together with both the team in the Market Area as well as the Executive Team. Our abilities to work closely with our customers in our market areas are key to leveraging our technology leadership in 5G.”

We can probably expect every significant announcement from either company to be framed in this ‘now that 5G has arrived’ way. The commercial opportunities presented by 5G are far more diverse and complex than by any previous mobile technology generation, so strategy maybe more important than ever when it comes to capitalising on the 5G opportunity.

Telia toys with facial recognition for ice cream payments

In the ever-lasting search for 5G usecases, Telia has teamed-up with Finnish bank OP to trial facial recognition payment solutions.

While facial recognition technologies are taking a bit of a reputational beating at the moment, there are promising usecases in the pipeline. The issue which is not being discussed here, though certainly warrants more attention in the public domain, is the ethical, responsible and transparent application of the technology.

However, this example, authenticating payments, would appear to be a very logical application of the technology.

Firstly, biometrics are becoming increasingly normalised in payments and financial services authentication through fingerprints or vocal recognition, this is just one step further. Secondly, it is theoretically more secure than current identification and authentication techniques. And finally, banks already have trusted relationships with the consumer, and are yet to be caught up with a privacy scandal.

“Facial payment is a good example of a service that benefits from the capacity increase and lower latency of 5G,” said Janne Koistinen, Head of Telia Finland’s 5G programme. “5G will also take the security of mobile connections to the next level, which is interesting for example for payment and other financial services.”

Using the biometric template uploaded through a camera prior to the purchase with the customers bank, a connected device is used by the merchant to authenticate the individual. The customer then authorises the purchase with a simple click once their face has been recognised.

However, 5G would appear to be key here, largely thanks to the advances in lower latency which can be experienced. Slow service could certainly hinder experience and the commercial benefits promised.

“Besides security, a smooth user experience is important for customers,” said Kristian Luoma, Head of OP Lab. “5G makes the service faster and is therefore the perfect partner for Pivo Face Payment. We believe that the trial with Telia opens a new window to the future.”

Although fingerprints and vocal patterns are theoretically unique to each person, there are environmental factors which might hinder authentication. For example, dirt or grease stop the fingerprint reader from worker, or background noise could impact performance for vocal readers.

Facial recognition is also cheaper. Most smartphones or tablets already have a camera, so no specialist equipment needs to be built into the devices. The camera does not need to be high-end, just functional, therefore the expense is mainly on the software side. It is also a lot more accessible, in that everyone has a face and rarely covers it up when in a store.

For the moment, this trial has been limited to an ice-cream van in Vallila, though it is easy to see the wider applications in numerous different settings.

The challenge which such initiatives might face is the increasingly negative perception of facial recognition. This reputation the technology is working up is largely down to the unethical or secretive application in surveillance. This is a much larger topic which needs to be discussed in the public domain, however this initiative does demonstrate the benefits of facial recognition.

Telia CEO hands in his notice

Johan Dennelind, CEO of Swedish telco group Telia Company, had decided to call it a day after six years at the helm.

Dennelind has a 12-month notice period, however, so he’s going nowhere in a hurry. But he’ll presumably be hoping they find his replacement sooner rather than later so he can have a nice big chunk of gardening leave and get some serious sauna time in.

“It is a true privilege to serve as President and CEO of Telia Company, one of Sweden’s oldest and largest companies,” said Dennelind. “During the last years I have, together with the Board and my team, implemented a transformation and re-alignment of Telia into a company that is well-positioned and well-equipped for the future.

“Telia Company is now entering a new phase with several opportunities for value-creation and with strong commitment from all our more than 20,000 employees. And it is after careful considerations that I now have decided to leave Telia and take on new challenges. I will continue in my role to drive our current agenda forward with full focus and commitment for as long as the Board wants.”

“During his six years as CEO, Johan has vigorously worked with the repositioning of Telia Company,” said Marie Ehrling, Chair of the Telia Board. “The culture and strategy of the company have changed fundamentally and Telia is today a company with strong business focus that truly represents responsible business. Johan’s strong and brave leadership has been crucial for this transformation. The Board and I regret that Johan has chosen to leave the company, but at the same time we respect his decision to take a new step in his career.

“I also want to emphasize the very strong cooperation we have enjoyed during Johan’s tenure as President and CEO. We have had several difficult and tough situations to address and the fact that Johan has always acted with strength and wisdom has been of great importance for the development of Telia. Johan has assured the Board that he will continue in his present role with full force as long as it is needed during his notice period. This secures continuity and focus on several important projects and processes in the company.”

It’s not known whether the new challenges Dennelind alluded to extend to more than sitting in small, hot, humid rooms, but if he does feel the need to get another job it looks like he can count on a good reference from Telia.

Europe wants another look at Telia’s move into broadcasting

Swedish telecoms group Telia wants to buy Bonnier Broadcasting but the European Commission reckons that might be bad for telly in Sweden and Finland.

Last summer Telia announced it was getting its cheque book out once more to buy Swedish company Bonnier Broadcasting, which runs TV channels in Sweden and Finland. At the time this seemed like a classic multiplay move, in which operators get into content in order to offer more complete communications bundles to their customers.

This sort of thing has taken place all over Europe for years, but the European Commission’s current mood seems to be hostile to such moves. “The in-depth investigation we are opening today aims to ensure that Telia’s proposed acquisition of Bonnier Broadcasting will not lead to higher prices for or less choice of TV channels for consumers in Finland and Sweden,” said Commissioner Margrethe Vestager.

The niggle is that Telia already licenses TV channels from broadcasters to put into bundles. “The proposed acquisition of Bonnier Broadcasting by Telia Company would create a vertically integrated player in the audio-visual industry in Denmark, Finland, Norway, and Sweden,” said the EC press release.

This could mean that Telia won’t let its telco competitors license Bonnier stuff, won’t let them advertise against Bonnier stuff and could even deny access to streaming applications to customers of its competitors. Those are all reasonable concerns but surely they apply to most M&A. Furthermore you’d think anti-competitive behaviour by a telco would be a matter for national regulators.

Telia has responded by saying it figured this would happen. In a press release headlined ‘Investigation into acquisition of Bonnier Broadcasting moves into phase 2 in line with expectations’, Telia indicated it had been in the loo-p with the EC’s concerns from the start and will use this phase to put its concerns to rest. It will presumably promise to be really, really nice to its competitors if the EC let it have this one tiny little acquisition.

“A phase 2 investigation into the acquisition of Bonnier Broadcasting is fully in line with our expectations and we now look forward to continuing the constructive dialogue with the European Commission,” said Jonas Bengtsson, General Counsel at Telia. We’re confident that any concerns following the in-depth investigation will be resolved.”