TIM follows Orange into the finance fracas

Telecom Italia and Spanish bank Santander have entered into a joint venture to offer consumer banking products to Italian customers.

The joint-venture, 51% owned by Santander and 49% Telecom Italia, will start rolling out financial services through TIM’s retail footprint in the coming months, beginning with financing plans for devices and progressing into consumer loans, credit and insurance in the future.

Like Orange in France, it appears TIM has spotted an opportunity to disrupt the traditional banking industry with a digital-native finance service for Italian customers.

Launched in 2017, following the acquisition of Groupama Banque, Orange Bank now has more than 500,000 customers, offering a full range of consumer banking products from current accounts to personal credit and insurance. Part of the success of this venture has been attributed to cross-selling opportunities created through the telcos retail footprint. The team aim to have 5 million customers by 2023.

Although diversification is a key trend in the telecommunications industry, the more drastic ventures have more often than not dwindled into obscurity. However, Orange Bank is the poster child of successful diversification, and it appears TIM wants to get in on the act.

Like Orange, TIM will start with simple financing products. Once the relevant authorisations and licenses have been secured, the team will aim to move into additional products such as credit cards and consumer loans.

Perhaps the most interesting element of this story is the potential for success. Digital banking services are becoming increasingly popular with consumers, especially with digital natives taking over society, though the traditional banking companies have been unable to most appropriately capitalise on the trend. Digital products and applications have been largely cumbersome, opening the door for digitally native alternative to gain traction.

Monzo, Revolut, Starling Bank and Doconomy are examples of companies who have adapted the financial services industry for the digital consumer, though there is still plenty of room for disruption. One thing which Orange has shown is that a trusted brand can be translated into a completely unrelated industry.

TIM is of course in a strong position in the Italian market with 31 million mobile subscribers and 7.5 million broadband customers, offering plenty of opportunity to cross-sell services. For Santander, it certainly offers an interesting opportunity to branch out into a market where it has no consumer presence currently. Should TIM and Santander be able to replicate the success of Orange it would certainly be welcomed by the battered financial spreadsheets at the telco.

It’s déjà vu all over again as Vivendi suffers another Italian defeat

Italian Media company Mediaset wants to merge its Italian and Spanish businesses, something that significant shareholder Vivendi opposes.

The combined company would be called MediaFor Europe and a Mediaset EGM recently voted to go ahead with the merger plan. French conglomerate Vivendi owns around 30% of Mediaset, but two thirds of its stake is held in a trust by a company called Simon Fiduciaria, following a ruling by the Italian telecoms regulator that owning big chunks of both Mediaset and operator group TIM violates media plurality laws.

Subsequently it seems to have been decided that Simon Fiduciaria doesn’t get a vote in Mediaset general meetings, thus greatly diminishing Vivendi’s voice at such events. Vivendi reckons that’s the only reason the Berlusconi family, which owns almost half of Mediaset via its investment vehicle Finnivest, won the recent vote and it’s not happy about it.

Vivendi deplores today’s irregular approval by the Mediaset Extraordinary Shareholders Meeting of the new merger plan regarding MediaForEurope,” said a Vivendi press release. “The new plan has only gained approval because of the unlawful refusal to allow Simon Fiduciaria (which holds 19.9% of Mediaset share capital) to vote, relying on an interpretation of the Italian media law which is contrary to the EU Treaty.

“In addition, the new plan was adopted ignoring Italian law procedures regarding trans-border mergers, including the withdrawal rights for shareholders, and has merely removed some blatantly abusive clauses, without modifying the disproportionate rights granted to Fininvest.

“All recent judicial decisions and opinions, in particular from the Advocate General of the Court of Justice of the European Union in December, have not discouraged Fininvest’s representatives in the Mediaset Board from depriving minority shareholders of their most basic rights. The Mediaset Board has once again placed the company in a situation of serious legal uncertainty.”

All this huffing and puffing from a massive conglomerate that routinely tries to hijack the running of large companies without going to the trouble of buying them is a bit rich. Last year Vivendi’s protracted attempt to do so at TIM failed and history seems to be repeating itself, with Mediaset regarding Vivendi’s interests in the company as hostile. Vivendi’s principle objection to this merger seems to be a dilution of its shareholding in the combined entity, rather than anything to do with the strategy and health of the company as a whole.

TIM claims 5G speed record with help from Ericsson and Qualcomm

A trio of telecoms trailblazers managed to break the 2 Gbps barrier with 5G over 26 GHz, which is apparently a European record.

TIM, Ericsson and Qualcomm have a rich history of collaborating in the name of self-promotion over 5G and there’s nothing like a speed record for a bit of corporate chest-beating. TIM has a whopping 400MHz of spectrum in this millimetre wave band, which is the main reason it’s able to set records such as this. Meanwhile, as ever, Ericsson provided the radio and Qualcomm the modem.

“This milestone paves the way to the development of new 5G solutions to grant fixed ultrabroadband to families, companies and public authorities not yet covered,” said Michele Gamberini, TIM’s CTIO. “This also includes coverage dedicated to the development of robotics and automation digital services in the smart manufacturing area. All of our customers will therefore be able to take advantage of a wide range of integrated solutions that will allow them to fully enter the digital society”.

“We are extremely pleased that TIM has chosen Ericsson’s 5G technology to achieve this important milestone, placing our country at the forefront of the commercial implementation of the fifth generation of mobile networks,” said Emanuele Iannetti, Country Manager at Ericsson Italy. “Ericsson thus confirms its technological leadership and its readiness to anticipate any market demands.”

“Qualcomm Technologies congratulates TIM on this significant milestone which again demonstrates the potential of 5G mmWave technology and shows how operators are able to use a wide range of spectrum bands to deploy 5G,” said Enrico Salvatori, president, Qualcomm EMEA. “2020 will see a significant expansion in 5G coverage and the use of mmWave bands will play a clear role in the build-out.”

The rest of the TIM press release was mostly spent going on about how this proves the company was right to blow loads of cash at the last Italian spectrum auction. It still remains to be seen how useful high frequency spectrum will be in real life, or indeed how much use there will be for such high data rates, but it’s always nice to be able to claim you’re at the cutting edge regardless.

TIM dabbles in 5G surgery

Italian telco TIM is the latest to showcase 5G’s low-latency feature by enabling a surgeon to remotely get involved in an operation.

Remote surgery has been at the forefront of 5G hype ever since low latency became a thing. Being able to communicate over long distances with virtually no delay between sending and receiving data opens up all sorts of remote control opportunities. Remote surgery is the most graphic and emotive of these because it’s literally a matter of life and death, so it has become the default means of bringing publicity to the technology.

Professor Giorgio Palazzini used a VR visor to allow him to interact live with a surgical team in Terni, Italy, even though he was in Rome. The operating theatre had three video cameras, including a 360-degree 4K one and a laparoscopic one, which allowed the Prof to zoom in on the important bits when he felt the need. All this, we’re told, enabled him to offer real-time advice and guidance, but he didn’t get involved via robotic arms or anything like that.

“This is only the start of a new era of e-learning in all branches of medicine,” said Palazzini. “But its short-term future will be remote surgery, made possible by robots and 5G with virtually no latency. That means being able to operate on patients in any hospital that has 5G connectivity and robots, and real-time sharing of data-intensive diagnostic exams such as CT and MRI.”

“Today we have taken an important step forward in the world of surgery, made possible by bringing together the technological and healthcare capabilities of the future,” said Elisabetta Romano, TIM’s Chief Innovation & Partnership Officer. “New opportunities are arising for the sector to benefit from innovative solutions that serve both patients and the entire scientific community.

“TIM’s innovative 5G Digital Business Platform, combined with the specific characteristics of 5G, as well as robotics, artificial intelligence and the Internet of Medical Things, are opening up some exciting but challenging scenarios. It is TIM’s goal to play its part in driving the growth of Italy and the company aims to extend the cutting-edge knowledge and techniques available in this area to as many people as possible.”

While the technology may exist to enable robo-surgery, there is likely to be a significant regulatory, legal and cultural lag before it becomes a regular fixure in the field. In that sense it has a fair bit in common with fully autonomous driving and it will probably take a while before people are relaxed about there being no human being physically present in high risk environments like roads and operating theatres.

With Vivendi subdued, TIM Chairman Conti calls it a day

Fulvio Conti, who was appointed as Chairman of Italian telecoms group TIM after Vivendi lost control of its board, thinks his work there is done.

“The Board received the resignation of Fulvio Conti who stepped down as Chairman of the board and Director of the company as of the end of the meeting,” said a TIM statement. “Mr Conti stated that he believes his mandate has been completed, in light of the Board achieved stability in its operations and the renewed focus on creation of sustainable value for all the company’s stakeholders.”

Conti got the gig back in May 2018 after activist investor Elliott succeed in wresting control of the TIM board from French conglomerate Vivendi. His appointment, along several other Elliott nominees, was resisted by Vivendi on the reasonable assumption they were inclined to accommodate Elliott’s wishes in board meetings. Even if that was the case, however, it was hard to see how it was any different to the situation when Vivendi nominees dominated the board.

There followed months of moaning from Vivendi as it attempted to persuade TIM shareholders to get rid of the of the offending board members, but to no avail. In April of this year Vivendi officially threw in the towel, and has maintained a sulky silence ever since. Conti seems to have interpreted this as Vivendi permanently getting back into its box and, as a result, likely to be a corporate good boy from now on.

Conti’s departure could be viewed as confirmation that his main function was the taming of Vivendi, and now that job has been done he’s free to spend more time with his yacht. The TIM board couldn’t resist one last dig, however, noting “the positive contribution, the complete correctness, the institutional sensible approach and respect for the rules during his mandate in the interest of the company, its shareholders and all stakeholders.”

Network slicing is becoming the unescapable buzzword of the month

Every couple of months a new buzzword emerges, and it starts to emerge in pretty much every conversation. Now its network slicing staking a claim for the title.

Featuring in almost every presentation at the 5G Core conference in Madrid this week, the technology certainly has a lot to live up to. However, like the cloud, virtualisation or digital transformation, it is claiming its 15 minutes of fame, though the promise and potential is very grand.

Although it might not should like the most revolutionary aspect of the quickly evolving telco landscape, it offers so much opportunity to evolve the business and grow revenues. As Franz Seiser of Deutsche Telekom put it, the one-size-fits-all 4G network cannot deliver the fortunes investors have been promised so frequently as the industry wades through this tenuous period.

Network slicing is critical. The idea of creating customisable networks and specific products for enterprise is only achievable through the implementation of network slicing. Or, it can be achieved through more traditional means of network deployment, but this would not be commercially attractive. Soon enough, a slice could be designated for low-latency services in the energy industry, the high-speeds demanded by broadcasting or the resilience and reliability insisted upon in the manufacturing space.

It also adds into the drive towards network convergence.

As Maria Cuevas of BT pointed out during her presentation, network convergence has been attempted in the past, though it has failed. However, baby-steps are being made towards realising the convergence dream, as well as the operational and financial benefits, and network slicing will add further to the momentum.

This is not the only trend which Cuevas is keeping an eye-on, but the ability to designate traffic to specific slices adds notable momentum to the operational side of a converged network.

However, there are still challenges. The next 3GPP standards release in March 2020 should add some much-needed clarity, though many of the questions which telcos are facing today are operational not technical.

Technical challenges are not a problem realistically, according to Telecom Italia (TIM) SVP Lucy Lombardi; a solution will always emerge. The issues which are currently being dealt are much more business focused. Does TIM want slices to be fixed or dynamic? Who will control the functionality of the slice, TIM or the customer? Will roaming be a slice? What kind of industry collaboration does it need?

The technical challenges will gradually dissolve as vendors propose new ideas and telcos present success stories at conference, but the business questions which have been mentioned above are perhaps more challenging. This is where a telco can add value, create differentiation and attract customers.

The 5G networks which are currently being deployed are no-longer driven by the demands of the consumer. The consumer is of course still important, but the 5G network is being designed and deployed to realise the benefits of the enterprise connectivity world. And network slicing is a critical component of this dream.

Vodafone Italia and TIM join the network sharing bonanza

Vodafone’s Italian business and Telecom Italia are the latest pair to join the sharing euphoria which seems to be sweeping the Vodafone group.

After network sharing agreements were signed in Spain with Orange and O2 in the UK, Vodafone has swept across to Italy to join forces with market leader, albeit a stressed business currently, Telecom Italia.

“This agreement will enable us to step up the rollout of 5G for the benefit of our customers and the community as a whole,” said Aldo Bisio, CEO of Vodafone Italia. “5G has a key role to play in modernising the country.

“It will provide the technology platform from which to launch innovative new services capable of making business models more efficient and improving productivity throughout the value chain, helping to build a more competitive digital economy. Network sharing reaps the benefits of 5G and at the same time reduces the impact on the environment and lowers rollout costs, allowing more investment in services for customer.”

This announcement actually has two components to it. Firstly, in pursuit of an accelerated 5G deployment plan, Vodafone Italia and TIM will enter into a network sharing partnership which will include active equipment. Secondly, the Vodafone passive tower business will be merged with INWIT, TIM’s own tower business.

Starting with the first component, once again Vodafone has decided to go down the route of sharing active equipment. This was the case when pooling resources in the UK with O2, though it is a slightly unusual approach as the only differentiator now is the spectrum which the duo has acquired individually. However, like the UK the larger cities will be excluded from the network sharing partnership.

Although sharing active equipment has been viewed as relatively unusual in the past, perhaps this is an indication of Vodafone’s position in both of these markets. In the UK, it is sitting firmly in third place in the market share rankings with a lot of ground to make up, while in Italy there are financial pressures thanks to the pricing disruption of Iliad. In both cases, Vodafone will welcome opportunities to free-up cash.

Using this approach, Vodafone suggests it will be able to free-up €800 million over the next 10 years which will certainly be useful for other R&D or reallocating for customer acquisition efforts.

The second aspect of this deal will see the Vodafone Italia tower business merge with TIM’s INWIT, with Vodafone taking a 37.5% and a lump sum of just over €2 billion. What we’re not too sure about is how this will impact the potential spin-off of Vodafone’s tower business in the future.

This was an announcement which got investors excited last week, as Group CEO Nick Read suggested monetizing the tower infrastructure business alongside declining revenues for the latest quarterly statement. This seemed to have forced a positive reaction from the market, though presumably any Italian assets would now have to be excluded from a European-scaled tower infrastructure business.

TIM hits the 5G go-button

Telecom Italia is the latest telco to join the 5G bonanza, announcing launch of its own network in Turin, Naples and Rome.

The launch is limited for the moment, though it seems TIM is confident it can scale very quickly. By the end of the year, an additional six cities (Milan, Bologna, Verona, Florence, Matera and Bari) will be added to the list, as well as 30 tourist destinations, 50 industrial districts and 30 specific projects for big business.

By 2021, TIM has set itself further ambitious targets; coverage for 120 major cities, 200 tourist destinations, 245 industrial districts and 200 specific projects for big business. The dreaded ‘up-to’ metric has also made an appearance, with speeds ‘up to’ 2 Gbps promised by the end of the year, progressing to 10 Gbps by 2021, when it is also promising 22% population coverage for 5G.

What hasn’t been detailed is the number of base stations which will be upgraded to 5G over the coming months and years. It’s all well and good to ‘have’ 5G in Turin, Naples and Rome, but without knowing the number of base stations which are 5G there is little way to gauge the coverage footprint. It might end up meaning very little unless you are stood in the perfect spot just outside the entrance to Vatican City.

Onto pricing, TIM has elected to take the SIM-only approach, with the option to bolt on a subsidised handset as an additional product. For €29.99 a month, users will have a data allowance of 50 GB, with unlimited calls and SMS, while the data pool is increased to 100 GB for €49.99 a month.

Interestingly enough, the most attractive offers which we have seen around the world for 5G have been SIM-only plans. Vodafone in the UK has taken this approach, while T-Mobile US has done the same also. Telcos have wanted to distance themselves from the profit churning subsidised handset model for years and perhaps this is further evidence of this. Whether a SIM-only approach to 5G, with optional bolt-ons for subsidised handsets, becomes a defining trend, only time will tell.

Another excellent move from TIM is the roaming. Although there are few telcos who have announced roaming plans, Vodafone is one of the only ones to do so, TIM has suggested it will offer 5G roaming in six countries, starting within July in Austria, the UK and Switzerland and moving on to Spain, Germany and the UAE soon after.

The announcements are coming think and fast as we move closer to the 5G dream, but this looks like one of the more comprehensive ones to date.

Q&A with Elisabetta Romano, CTO at TIM

Elisabetta Romano is Chief Technology and Innovation Officer for TIM and is responsible for ensuring TIM’s technological innovation, the evolution of the networks, and for the Information Technology required to support TIM’s digitization process at Group level. The 5G World team interviewed Elisabetta ahead of the show to gain a sneak peek for what we can expect at our upcoming conference.

TIM invested 2.39 billion euros on 5G spectrum in late 2018 for expansion of mobile network. Why has TIM invested heavily on spectrum? What monetisation opportunities does TIM expect from 5G?

Spectrum is one of the key assets for telco operators.  Through such investment, TIM has secured both the best coverage – with the 700 MHz bandwidth – and the highest speeds through higher bandwidths such as the 3.6 GHz and the 28 GHz, necessary to provide specific services. Business and consumer use cases are increasing every day: constantly growing mobile traffic, increasing demand of dedicated networks for industry automation, and we are seeing the first requirements for guided vehicles both in private spaces or in smart cities.

‘TIM has done a lot of tests on SMART cities, industry 4.0, entertainment, public safety etc sectors’

What new (5G) enterprise services should we expect TIM to bring to market, and why?

Since the beginning of the trials, we have had more than 70 partners in Turin, San Marino, Bari and Matera, including private big and small enterprises, P.A., universities and research centres. I believe that the industrial sector will have the greatest demand first. IoT services, particularly security and video surveillance, will also benefit from the upcoming development of 5G.

What do you expect the consumer pick up of 5G products and services will be? What services should TIM consumers expect?

Of course, ultra-broadband Internet access will be one of the key services.  As we know, video is one of the main traffic drivers, video services like our TIMVISION are growing, also sports events are growing in terms of consumption via the Internet, particularly when on the move.  This said, the availability of new devices and particularly of 5G smartphones is crucial for the consumer segment.

What are the main (market, technology, business, regulatory or other) challenges in achieving 5G rollout and what needs to be done to further unlock innovation in the telecoms industry (globally, in Europe or Italy)?

5G is a ground-breaking technology, which will need several factors being coordinated in order to have a quick deployment. The regulatory framework in Italy is challenging, for example, because of very low EMC limits in comparison to other European countries. Also, the financial commitment is demanding, first to acquire the spectrum, then to roll out the technology, which means that the operators will need to find innovative approaches to infrastructure development.  Then there are the new devices that need to be tested.  Last but not least, 5G demands a new approach in developing the network function and core network: cloud-native microservice based architecture with strong API exposure to enable a rich ecosystem of developers and business partners, is by itself a challenging effort.

You will be delivering a Keynote speech at the 5G World (11-13 June 2019, Excel, London). Could you give us a sneak peek of what our audience should expect to hear from you and what are you looking forward to at the Forum?

I don’t want to reveal too much. I can tell you I will describe our trial experience and how we are working to make 5G real a business development platform, with a new cloud-native architecture that leverages AI and extensive API for both internal to the company and external, open ecosystem development.

It’s your chance to hear from Elisabetta Romano directly at 5G World 2019 which is taking place on 11-13 June, at the ExCeL in London. Register now as a free visitor to join us at the largest 5G show featuring 30+ hours of free content delivered by CxO telco executives like Elisabetta

Vivendi conditionally concedes defeat in TIM board battle

French conglomerate Vivendi withdrew its bid to replace five TIM board members at the 11th hour but doesn’t seem happy about it.

TIM shareholders were due to vote on Vivendi’s request to replace those board members it had identified as acting in bad faith last Friday. But at the meeting itself TIM CEO Luigi Gubitosi apparently had one last attempt to get Vivendi to back down and, amazingly, it did. Presumably it had realised it wasn’t going to win the vote and not to have it rather than suffer a humiliating defeat.

Here’s what Caroline Le Masne de Chermont, Vivendi Group Head of Legal Affairs (why do Vivendi execs all sound like aristocrats?), had to say at the meeting:

“As extensively expressed in our request, we asked the shareholders to vote for a change of governance, because what happened in and around the Board since last May has affected the stock price, and the whole functioning of the company.

“However, there is no point in revisiting here and now the events of the last year, particularly those that cannot be changed. Let’s focus instead on the changes we would like to see in the near future. Vivendi wishes TIM’s board to be more reflective of the company’s shareholder base and to be led in an independent, transparent and fully inclusive manner.

“To conclude, we are prepared to give credit to the CEO. Accordingly, following his suggestion, Vivendi has decided not to pursue today its proposal to revoke and replace five Board members, provided that this has the support of the shareholders’ meeting.

“What needs to occur next, may at this stage be left in the hands of the Board members and their individual conscience. What we can say is that if change does occur as the CEO announced, he can count on our loyal and stable support as the company’s largest shareholder.”

Essentially Vivendi seems to be conceding defeat, for now, in its battle to control the TIM board, but reserves the right to kick off again if the current board doesn’t start raising its game sharpish. Vivendi has presumably realised its open hostility to the TIM board isn’t a great look and its sudden conciliatory stance about letting bygones be bygones is just hilarious.

In response Elliott issued the following statement: “Elliott welcomes Vivendi’s decision to withdraw its request to shareholders to revoke five of TIM’s Directors, a clear sign that Vivendi understands that there is broad support for TIMs existing independent Board.

“This outcome is a victory for the company and paves the way for stability and sustained value creation for all of TIM’s stakeholders. Elliott remains fully supportive of CEO Luigi Gubitosi, the Company’s management team and the existing independent Board, and looks forward to constructive dialogue with all stakeholders to pursue a value maximising path forward for the company.”

Gubitosi himself apparently struck a cautiously conciliatory tone, calling the move courageous and a first step towards peace. TIM shareholders will presumably be happy that this period of corporate turmoil has been concluded, although shares were only up a few percent on Friday. Maybe this muted optimism was a consequence of the veiled threats contained within Vivendi’s climb-down. It may have exhausted this strategy but this is unlikely to be the last time Vivendi clashes with Elliot over TIM.