In 2015 Google undertook a major restructuring designed to bring order to its sprawling company. It separated non-core operations from its Internet business and made them all – Google included – wholly-owned subsidiaries of a new parent company called Alphabet Inc.
That gave us at Total Telecom an idea. A major part of our role as purveyors of telecoms news is to bring order to the vast and sprawling world that is our industry. So read on, for the highlights of the past 12 months, in a familiar format.
We’ll begin at the beginning…
A is for Altice, the aggressive French firm that is making its presence felt in the global telecoms market. Having closed the acquisition of SFR in late 2014, it added to its European portfolio with the acquisition of Portug al Telecom this year, made a failed bid for Bouygues Telecom and has been linked with KPN. It also announced its arrival into the U.S. with the purchase of cable operators Suddenlink and Cablevision, and hinted that it has half an eye on Cox Communications.
Brussels is our B, with European competition authorities having made life difficult for certain telcos this year. Competition Commissioner Margrethe Vestager famously derailed Telenor and TeliaSonera’s plan to merge in Denmark in September, leaving other M&A-embroiled operators fearing the worst for their own proposed transactions.
At C we have Cable & Wireless, an elder statesman of the telecoms industry whose days are numbered – in its current form, at least – after it agreed an US$8.2 billion takeover deal with Liberty Global. The merger will create a company with significant scale in and around the Caribbean, C&W having closed its $1.85 billion acquisition of Columbus in April.
D is for Dish, which fell foul of the U.S. telecoms regulator this year and was forced to give back some of the spectrum it obtained at a discount in this year’s AWS-3 auction by participating through designated bidding entities. The long-running auction drew to a close in January, raising a staggering $44.9 billion.
E stands for the European Union, which bid farewell to roaming charges this year after the European Parliament approved a telecoms reform package that also enshrines net neutrality rules into law. Despite its best efforts, the creation of a digital single market is still some way off though.
Our F is the FCC, which also had net neutrality on its ‘to do ‘ list this year. The U.S. regulator’s net neutrality rules came into force in June; protests and legal action are still ongoing.
G stands for the Global 100, the annual ranking of telecoms operators by revenue, published by Total Telecom. It has been a busy year for perennial leader AT&T, which closed its $48.5 billion acquisition of DirecTV and started offering mobile services in Mexico on the back of its Iusacell and Nextel buys.
Hutchison is H, having been instrumental in a pair of European M&A deals in the past nine months. The Hong Kong firm’s proposed acquisitions of O2 in the U.K. and Wind in Italy – it aims to merge each with its local 3 operation – are at the mercy of the European Commission’s competition body.
I brings us to India, where activity in the telecoms space is always frenzied. This year we have seen the conclusion of a 1.099 trillion-rupee (€16 billion) multi-band spectrum auction; regulatory intervention on spectrum sharing and trading, and dropped calls; and early consolidation moves: Reliance Communications agreed to take over Sistema Shyam Teleservices (SSTL) in November.
J is for Jazztel, which was taken over by Orange this summer; the merged entity is a strong number two operator in Spain. The French incumbent has featured in many, apparently groundless, merger rumours in Europe this year, but most of its activity has come further afield. It sold out of Kenya and Armenia in the second half of 2015, but increased its stakes in Morocco’s Meditel and Mobinil in Egypt earlier in the year.
Kogan Mobile gives us a K. The Australian mobile virtual network operator (MVNO) came back from the dead with a relaunch in October, more than two years after it claimed to have been forced out of business by "the industry".
L sees us back with Liberty Global, whose failed asset-merger talks with Vodafone hit the headlines mid-year. The U.S.-based cable group was involved in European M&A activity though, its Belgian Telenet unit agreeing a €1.33 billion deal for KPN’s Base that is still being examined in Brussels, and UPC Ireland agreeing to pay €80 million for free-to-air TV broadcaster TV3. And in the U.K., Virgin Media is working on a £3 billion network infill plan, known as Project Lightning.
M is for mergers, too many to mention. But we should highlight the ongoing U.S. cable industry mega-deal that has made headlines on and off all year. Charter Communications started the ball rolling when it agreed to pay $10.4 billion for Bright House Networks in March. Less than a month later rival Comcast abandoned its $45.2 billion plan to acquire Time Warner Cable (TWC) in the face of staunch opposition from competition authorities, leaving the way open for Charter to swoop in with a $56.7 billion deal of its own and plan for a three-way merger, including Bright House. As the year draws to a close, opponents are still urging regulators to block the deal.
N stands for Nokia, which as the year draws to a close is on the verge of swallowing up major rival Alcatel-Lucent following a €15.6 billion takeover announcement in April. In the interim, the Finnish vendor sold off its mapping business Here to a group of German car makers comprising Audi, BMW and Daimler; it netted €2.55 billion from the deal, which closed in December.
O is for Ofcom and for Openreach. The U.K. regulator is undertaking a strategic review of the market and is facing growing calls to enforce the structural separation of BT’s infrastructure arm. Naturally, BT is keen to hang on to Openreach, which is looking for a new leader following the resignation of CEO Joe Garner in November.
P is Google’s Project Fi. The Internet giant launched its first MVNO service under the Project Fi brand in April. It is a WiFi-first service that roams onto the cellular networks of Sprint and T-Mobile US where necessary.
Q brings us to quad-play, the growing trend that is driving M&A activity in the telecoms sector. BT’s £12.5 billion agreement to acquire EE, signed in February, is a prime example, bringing together the U.K.’s fixed incumbent and burgeoning TV player with its largest (at present) mobile operator. The deal got the preliminary green light from the U.K.’s Competition and Markets Authority in October.
R stands for Robbins. Chuck Robbins, that is, the new man at the helm of Cisco following the retirement of longtime chief executive John Chambers in July. Robbins said the beginning of his tenure marked the start of a new chapter at Cisco and within a matter of months he had written some pretty interesting pages: Cisco and E ricsson signed a broad partnership deal in November, but insisted that a full merger is not an option.
S gives us spectrum, the lifeblood of the mobile industry. 2015 brought with it myriad frequency auctions across the world in markets including Turkey, Canada and Thailand. Western Europe marked the first 700-MHz auctions; Germany sold off the band for just over €1 billion in June as part of a wider auction, while France followed suit in November, raising €2.8 billion from its 700-MHz sale.
Malcolm Turnbull represents T in our list, starting the year as Australia’s communications minister and ending it as prime minister. In between, Turnbull focused on driving forward the country’s scaled-back next-generation broadband network (NBN), which had 610,712 active customers at the end of September, more than 505,000 of whom had a fibre-to-the-premises (FTTP) connection.
U is for Uzbekistan, a market that has continued to prove troublesome for a handful of international telcos. Corruption investigations affecting TeliaSonera, Telenor and Vimpelcom are ongoing; heads have rolled and potential damages payments are looking high. The Nordic operators are looking for the exit though. TeliaSonera aims to sell all of its Eurasia operations; partner Turkcell has made an offer to take control of four of them. And Telenor plans to offload its 33% stake in Vimpelcom, through which it has a presence in Uzbekistan.
Verizon is our V. The U.S. operator has had a busy year, a particular highlight being the $4.4 billion acquisition of AOL in June.
W stands for Wembley stadium, where the World Communication Awards – the culmination of the telecoms year – took place in December, bringing together the many worthy winners in the sector this year. Deutsche Telekom’s Tim Hoettges stole the show, picking up the CEO of the Year prize, while AT&T was named Best Global Operator.
X is for Xavier, or Mr Niel if you prefer. The French businessman is a key player in the ongoing intrigue surrounding Telecom Italia. Vincent Bolloré’s Vivendi became the Italian incumbent’s biggest shareholder in June and surprised the industry by adding to its stake; it now holds 20.12%. But Niel really put the cat amongst the pigeons by spending €225 million to take his potential stake in the operator to 15.14%; he was forced to deny any collusion with Vivendi for the benefit of the stock market regulator. Niel’s motives are still not wholly clear, but an SEC filing in December suggests he is taking a strategic interest in the company.
Y, well that’s You, dear reader! Thank you for your support during 2015 and for reading this far in our A-Z. Almost at the end now; just one more to go…
We end on Z for Zettabyte. Our whole industry is based on the transfer of information, one way or another, and our appetite for it is growing. Global IP traffic will reach 1 zettabyte (or 1 trillion gigabytes) in 2016, according to the Visual Networking Index published by Cisco in May.
It will be a very happy new year indeed for the companies that can monetise that traffic!
Additional reporting by Nick Wood.
