A private and public co-operative group is working to roll out a multimillion pound fibre broadband upgrade which will see Blackpool become one of the UK’s best connected towns.

The technology will see the town’s old copper lines replaced with a ‘hyperfast’ fibre alternative, giving residents and businesses the opportunity to access gigabit speeds.

The launch of the Fibre Blackpool initiative is a result of ?3.1m of funding that was secured in Spring 2018 through the Department for Digital, Culture, Media and Sport (DCMS).

The grant has been used to expand a shared fibre infrastructure into Blackpool town centre and along the length of the coast’s tramline, from Squires Gate Lane and Blackpool Airport Enterprise Zone all the way to Fleetwood and Hillhouse Technology Enterprise Zone, thus future-proofing the town with a full ‘fibre to the premises’ (FTTP) connection.

SMEs and residents will be able to claim one-off vouchers to put towards the cost of connecting to the project.

Shaun Fensom,secretary of the Cooperative Network Infrastructure (CNI), said: ?Over the next two years we’ll be working with Blackpool to unlock a state-of-the-art fibre network for the benefit of both residents and businesses.

“The network will enable Internet service providers – members of our cooperative -to deliver some of the fastest internet connections available in the UK.They’ll be investing to connect businesses and residents along the Fylde Coast and in the two Enterprise Zones. That will mean faster, better connections, and bring yet more investment to Blackpool.”

Author? Tim Aldred

The owners of Virgin Media and O2 have confirmed a ?31bn mergerdeal to create a new ?national champion” to challenge BT and Sky in the UK

Liberty Global, which owns the UK’s largestcable company Virgin, and Telef?nica, which owns Britain’s biggest mobileoperator O2, are to merge their UK operations in a new 50-50 joint venture.

Liberty Globalis also ITV’s biggest shareholder, with a 10% stake, and owns half ofAll3Media, the production group that makes shows including Liar, Fleabag andHollyoaks.

The newcompany, which will challenge BT and Sky by offering consumers competitivebundles of TV, mobile and broadband packages, will have 46 million customersand ?11bn in revenue.

Mike Fries, the chief executive of Liberty Global, said it hadbeen only ?a matter of time” until there was more convergence in the highlycompetitive UK media and telecoms market.

?BT and EEtogether are a powerful combination in our minds,” he said, referring to BT’s ?12.5bn deal to buy the mobile company in 2016.?Our rationale was that it was just a matter of time, convergence has beenslower in this market. With Virgin Media and O2 together, the future ofconvergence is here today.”

The new companywill invest ?10bn in areas including gigabit-speed broadband and 5G networks.

?The UK is one of the most attractive markets on Earth,” saidJos? Mar?a Alvarez-Pallete, the chief executive of Telef?nica. ?Evenconsidering Brexit, we have been investing heavily in the UK. It is the righttime to commit to the future of the UK by building this value proposition.”

Under the deal,which is expected to complete in the middle of next year, there is an option toperhaps float the venture on the UK stock market in three years.

?We are bothcoming to the joint venture with the expectation we will remain partners,”Alvarez-Pallete said. ?We don’t come into this with the expectation that wewill turn right or left at a certain point of time. If a listing were to come downthe road, it can provide a transparency of value and give people the chance toown part of a national champion.”

Philip Jansen,the chief executive of BT, said the emergence of a new power player in the UKmarket would not make BT speed up its own investment plans.

?We are not going to go any faster,” he said. ?We have acomprehensive five-year plan. This deal is not a surprise, I think the industryneeds consolidation. It follows our strategy four years ago [buying EE].Competition is good, it drives innovation.”

The new jointventure will be overseen by an eight-strong board of directors, four each fromLiberty Global and Telef?nica, with the chairman rotating every two yearsbetween the two companies. Liberty Global’s Fries will be the first chairman.

The deal willinclude recapitalisations under which Telefonica will receive ?5.7bn inproceeds and Liberty Global ?1.4bn. The new venture will be laden with ?18bn inlong-term debt.

Vodafone, whichhas previously held talks with Liberty Global about a similar UK tie-up, couldyet look to make a counter offer.

When consummated, an event the two parties expect will take place by the middle of next year, the joint venture will serve more than 46 million video, broadband, and mobile subscribers and boast ?11 billion of revenue.

Author – Stephen Hardy May 2020

Liberty Global plc (NASDAQ: LBTYA, LBTYB and LBTYK) and Telefonica SA (Madrid stock exchange: TEF) have reached an agreement to merge their operations in the UK into a joint venture. The merger, valued at ?31.4 billion ($38 billion) will see the combination of Liberty’s Virgin Media cable MSO with Telefonica’s O2 mobile services provider. When consummated, an event the two parties expect will take place by the middle of next year, the joint venture will serve more than 46 million video, broadband, and mobile subscribers and boast ?11 billion ($13.6 billion) of revenue. The joint venture does not include Liberty Global’s operations in Ireland.

The joint venture, which doesn’t yet have a name, would pose a significant rival to British Telecom in the UK residential and business services markets. Liberty Global and Telefonica say the new entity will invest ?10 billion ($12.36 billion) in the UK over five years.

?Combining O2’s number one mobile business with Virgin Media’s superfast broadband network and entertainment services will be a game-changer in the U.K., at a time when demand for connectivity has never been greater or more critical,” commented Jose Maria Alvarez-Pallette, CEO of Telefonica. ?We are creating a strong competitor with significant scale and financial strength to invest in UK digital infrastructure and give millions of consumer, business, and public sector customers more choice and value. This is a proud and exciting moment for our organizations, as we create a leading integrated communications provider in the UK.”

?We couldn’t be more excited about this combination,” added Mike Fries, CEO of Liberty Global. ?Virgin Media has redefined broadband and entertainment in the U.K. with lightning fast speeds and the most innovative video platform. And O2 is widely recognized as the most reliable and admired mobile operator in the U.K., always putting the customer first. With Virgin Media and O2 together, the future of convergence is here today. We’ve seen the benefit of FMC first-hand in Belgium and the Netherlands. When the power of 5G meets 1 gig broadband, U.K. consumers and businesses will never look back. We’re committed to this market and are right behind the Government’s digital and connectivity goals.”

The board of the joint venture will have eight members, four from each of the two participating companies. Fries and Alvarez-Pallette will be among the board members. The post of board chairman will be held for alternating two-year periods by someone from each company, with a Liberty Global executive holding the position first.

The deal involves a somewhat complicated recapitalization scheme involving multiple financings that will leave the joint venture a target closing net leverage ratio of 5.0X, or approximately ?18 billion ($22.25 billion) of long-term debt. Net new proceeds from the recapitalizations are expected to be approximately ?6 billion. With the recapitalizations, Telefonica expects to receive ?5.7 billion in total proceeds and Liberty Global ?1.4 billion ($1.73 billion), including approximately ?800 million from the recapitalization of its Virgin Media Ireland business. As part of the deal, a syndicate of banks has underwritten a ?4 billion standalone undrawn financing on the O2 business.

The transaction also includes equalization payments, based upon the enterprise value of each business involved in the joint venture. Within this context Liberty Global will make a cash payment to Telefonica of ?2.5 billion ($3.1 billion). Liberty Global expects this payment will be offset by funds from the recapitalizations, which will result in the Liberty Global netting cash from the deal.

The two parties expect the joint venture generate estimated run-rate cost, capex, and revenue synergies of ?540 million ($667.63 million) on an annual basis by the fifth full year after closing. Approximately ?430 million ($531.63 million) of this total would come from cost and capex synergies, say Liberty Global and Telefonica.

The transaction is subject to regulatory approval and the completion of the recapitalizations, but not shareholder approval.

Infinera(NASDAQ: INFN) has revealed partnerships with II-VI Inc. (NASDAQ: IIVI) andLumentum (NASDAQ:LITE) to advance the development of optical transceivers basedon the systems house’s XR optics technology. While the timeframe forcommercialization of such modules was not revealed initially, sources atInfinera tell Lightwave that products should be announced at some point thisyear.

XR opticstechnology made its debut at ECOC 2019 last September in Dublin. The technologyenables point-to-multipoint coherent transmission (see ?Infinera unveils XR optics single-source coherentpoint-to-multipoint transmission technology”), leveraging Infinera’sInfinite Capacity Engine and what Infinera terms ?coherent subcarrier aggregation”to enable Nyquist subcarriers or subcarrier bundles generated by a singlecoherent transmission source to be assigned to various endpoints. The approachwould significantly reduce the cost of hub-and-spoke architectures, Infinerabelieves.

As describedat the time, Infinera’s strategy is to deliver XR optics in the form ofpluggable coherent modules that could be inserted into router ports. (XR opticsmodules would need to be positioned at both ends of the coherent transmission.)The company said it would seek partners to ensure both the development of suchmodules and multiple sources of them. Infinera itself had announced previouslythat it plans to get into the pluggable module space (see ?Infinera offers Infinite Network pluggable coherent modulestrategy details”), making the company potentially one such source.

It appearsthat the collaboration could result in modules from all three partners. Whilethis conclusion wasn’t clear from the original announcements, a source atLumentum responded via an email to a Lightwave query that “Our intentionis to develop and market the XR Transceiver as a ‘Market Participant.’ Bothparties plan to jointly bring new interoperable transceivers to market based onthe Infinera DSP Device and the Lumentum TROSA.”

?Collaboratingwith Infinera leverages our deep experience in high-speed coherent componentsand pluggable modules to bring an innovative solution like XR optics tomarket,” commented Beck Mason, senior vice president and general manager ofLumentum’s Telecom Transmission Business, via Infinera’s press releaseannouncing their partnership. ?The XR optics concept aligns with our corestrategy to provide scalable and flexible coherent optical network solutionsthat enable higher speeds for next-generation transport networks.”

A sourceat Infinera wrote via email that the company and its partners would support aseries of XR optics modules in a variety of form factors and with varioustransmission rates. “Specific product announcements along with features,form factors, and implementation will be announced later this year,” thesource added.

A requestfor additional comment from II-VI remains unfulfilled. ?We are looking forwardto leveraging our highly integrated laser technology platform, coupled with ourindustry-leading optics and module expertise, together with Infinera’s coherentsubcarrier aggregation DSP and transmission expertise, to achievenext-generation coherent transceiver solutions,” said Matthias Berger, vicepresident, Coherent Optics Business Unit, at II-VI, in the press release thatannounced the company’s work with Infinera. ?This collaboration will enable usto jointly deliver digital coherent optics in small pluggable form-factors andwith low power consumption.”

StephenHardy Feb 2020

More thanhalf of the data center switch ports shipped in 2024 will operate at data ratesof 100 Gbps or greater, predicts Dell?Oro Group in a new report. The high-speedport shipments will occur within the context of an overall market in 2024 ofmore than 60 million ports shipped, the marketresearch firm states in its new Ethernet Switch ? Data Center Five YearForecast Report.

While 100-Gbpsports have shipped for some time, Dell?Oro analysts expect deliveries of400-Gbps ports will begin to ramp by the end of this year and into early 2021.These 400-Gbps ports will be followed at some point during the forecast periodby 800-Gbps ports. Ports at 400 Gbps and greater will compose more than 25% ofshipments by 2024, Dell?Oro predicts.

?800 Gbps,400 Gbps, as well as new waves of 100 Gbps will be enabled by faster SerDestechnologies and higher -speed optics,? said Sameh Boujelbene, senior directorat Dell?Oro. ?Optics will continue to play a vital role in the data centerswitch market. The availability of high-volume, low-cost optics is crucial indriving any speed transition.

?Additionally,as network speed increases beyond 800 Gbps, pluggable optics will hit densityand power issues. Hence it will become imminent for the industry to adoptalternative options such as co-packaged optics (CPO). We expect such transition tobring major disruptions to the supply chain as it requires new business andserviceability models,? Boujelbene added.

The Ethernet Switch ? Data Center Five Year Forecast Reportdescribes market trends and includes tables covering manufacturers? revenue,port shipments, and average selling price forecasts for various technologies:Modular and Fixed by Port Speed; Fixed Managed and Unmanaged by Port Speed.Port speed demand assessed in the forecast include 1 Gbps, 10 Gbps, 25 Gbps, 40Gbps, 50 Gbps, 100 Gbps, 200 Gbps, and 400 Gbps.

The company asserts the platforms are the most compact available to businesses and mobile network operators (MNOs), as well as the only to offer uncompromised line-rate 100-Gbps activation testing.

Stephen Hardy FEB 2020

BusinessWire

ADVA (FSE: ADV) has unveiled the ADVA FSP 150-XG400 Series of demarcation and aggregation platforms for the delivery of MEF 3.0-certified 100-Gbps services to the network edge. The company asserts the platforms are the most compact available to businesses and mobile network operators (MNOs), as well as the only to offer uncompromised line-rate 100-Gbps activation testing.

Available in a 1RU or 2RU form factors, the FSP 150-XG400 Series features platforms with 1, 10, 25, 40,or 100 Gigbit Ethernet interfaces. They benefit from carrier-class Ethernet OAM and Y.1564 feature sets, including the aforementioned full line-speed activation testing for services up to 100 Gbps. The platforms support network overlay capabilities for the delivery of MEF services over IP networks and provide standard SDN interfaces for direct control from open source and commercial SDN controllers.

?Our newest product family removes all the roadblocks and makes the task of transforming metro networks simple. With our FSP 150-XG400 Series delivering high-density demarcation and aggregation, businesses can expand and embrace the potential of IoT, and operators can deliver the next level of resilient SLA-based Carrier Ethernet services,” commented James Buchanan, GM, Edge Cloud, ADVA.

For mobile network applications such as radio access networks, the environmentally hardened platforms also support hardware-based timing for precise frequency and phase synchronization.

?The arrival of 5G is bringing unprecedented data speeds, but mobile applications can only be as fast as the back haul network. That’s why MNOs are now looking to upgrade their access infrastructure from 10-Gbps to 100-Gbps line rates. Our FSP 150-XG400 Series supports a smooth and extremely cost-effective migration to higher capacity while also enabling the distribution of precise network synchronization that next-generation services require,” said Stephan Rettenberger, senior vice president, marketing and investor relations, at ADVA.

Swiss operator Sunrise announced that Liberty Global will invest up to CHF 500 million in a combination of tradable rights and subsequent subscription of newly issued shares in the capital increase to finance the acquisition of UPC Switzerland. This was a demand of some Sunrise shareholders, who found the price of the takeover too high, and called for Liberty Global to share in the risk of merging the two operators.

As a result of the new terms, Liberty Global will hold a 7.8 percent stake in Sunrise at current market prices, and Sunrise will provide Liberty Global with the right to propose a representative for election to its board of directors at the next AGM. The terms of the takeover of UPC worth CHF 6.3 billion remain unchanged.

Mike Fries, CEO of Liberty Global, believes that the combination will create a challenger to Swisscom in the market, while Sunrise is convinced that investment in the rights issue by Liberty Global will lessen the financial commitment needed from its shareholders. Sunrise’s shareholders will vote on 23 October to approve the capital increase.

The Swiss regulatory authority, WEKO, has approved the deal without conditions, citing the fact that it will create the second largest telecommunications carrier in Switzerland and that the combination will stimulate competition.

Meanwhile,proxy advisors Glass Lewis, Ethos and zRating have announced their support for the proposed capital increase to finance the acquisition of UPC Switzerland.

Last week, proxy adviser ISS recommended that shareholders of Sunrise should reject the proposal for a capital increase. ISS noted that the “fair value”of UPC ranges from CHF 4.6 to CHF 5.2 billion, making the current valuation of CHF 6.3 billion excessive. Sunrise replied in a statement that the ISS report is misleading because of valuation inconsistencies and factual errors that misrepresent the long-term benefits to Sunrise shareholders. Liberty Global said that the report issued by ISS is “flawed” and the adviser”demonstrated a surprisingly poor understanding of the telecom industry”.

Vodafone’s month hints at future strategy

As the operator responsible for the first mobile phone call in the UK,Vodafone has a long and storied history in the world of telecommunications.

But July 2019 will go down as one of the more eventful months in Vodafone’s 30 year history. It started with the launch of 5G services in the UK and concluded with the takeover of Liberty Global’s central European cable networks.

But in truth, the Newbury-based operator has rarely been out of the headlines. Aside from product launches and acquisitions, there have been sales,spin-offs, and tales of boardroom politics.

The events have not only underlined the challenges facing the company but have also given an even clearer indication of the company’s future strategy.

˙ Vodafone agrees deal for Liberty assets

˙ Vodafone-Liberty deal is big for EU telecoms

˙ 5G in the UK: the what,where and how much

Takeovers

Convergence has been the buzzword at Vodafone UK for several years.Achieving growth has become more difficult in the mobile market, meaning the company has moved to aggressively expand its fibre footprint through network builds, acquisitions and partnerships.

The ?18.4 billion takeover of Liberty Global assets in the Czech Republic, Germany, Hungary and Romania was one the final acts of former CEO Vittorio Colao’s tenure and is designed to accelerate this strategy even further.

Earlier in July, Vodafone received EU approval for the transaction ? one of the final barriers to completion? and on the final day of the month, the deal was sealed.

But the takeover has increased Vodafone’s debt and its balance sheet,leading some to question the wisdom of the deal at a time when significant capital is required to invest in the spectrum and infrastructure upgrades required for 5G networks.

The 5G spectrum auctions in Germany and Italy in particular have resulted in a couple of nasty surprises ? and billions of euros in licensing fees.

Dividend cut

These factors, along with others, resulted in the company announcing it would reduce its dividend for the first time as an independent company. Such a move would be unpopular at the best of times, but investors are usually more tolerant if the cut is used to fund a major investment programme that promises long-term gains.

However, Vodafone shareholders ? already concerned at the declining value of their stakes ? were reportedly unhappy at the move because the company had promised only six months prior that the dividend would not be slashed.

In a bid to appease shareholders, both Group CEO Nick Read CFO Margherita Della Valle requested a 20 per cent cut in their share bonuses.

Vodafone has undertaken several measures to reduce its debt pile,including the sale of Vodafone New Zealand for ?2.1 billion ? a deal also completed on the final day of the month.

Tower spin-off

But it is through infrastructure sharing and monetisation that Vodafone sees the most promise ? not just in improving its balance sheet, but also in making network rollout more efficient.

Vodafone has more than 110,00 towers across the continent, estimated to be worth more than ?12 billion. These assets have the capability to generate new revenue streams and accelerate the pace and scope of its 5G rollout.

It’s why earlier this month, Vodafone confirmed plans to create Europe’s largest tower company, commanding control of nearly 62,000 towers in ten countries. The company is tasked with identifying monetisation options -such as offering space to third parties – and could eventually float on the stock exchange.

Any revenue generated from the business or from an IPO would be used to reduce its debt.

Networking sharing

Vodafone itself is pursuing an active and passive network sharing strategy, believing this will enable it to roll out 5G quicker, cheaper and faster, as demonstrated by two other deals this July.

In the UK, Vodafone has expanded its passive infrastructure sharing agreement with O2 to cover 5G. The ‘Cornerstone’ joint-venture will have greater powers will be given to Cornerstone in order to improve efficiencies and identify monetisation options.

And in Italy, Vodafone is merging its masts into TIM’s tower business in exchange for cash and a stake in the company. The enlarged INWIT will now control 22,000 masts, increasing the potential for monetisation, and will have two anchor tenants in the form of TIM and Vodafone Italy.

As one of the world’s largest mobile operators, its never dull at Vodafone. The past decade has seen it contend with challenging market conditions, make major acquisitions and sales, and embark on major investment programmes.

There’s no doubt that there are challenges ahead, but a bounce in the firm’s share price suggests the moves it has made are inspiring some confidence among investors about its future prospects.

For now, however, it will be hoping that August is quieter than July.

By Steve McCaskill