http://www.telecomlead.com/ The latest posts from TelecomLead.com. en-us Wed, 27 Sep 2023 11:12:28 +0000 Wed, 27 Sep 2023 11:12:28 +0000 https://www.telecomlead.com/5g/telecoms-capex-drops-5-8-as-mobile-operators-start-readjusting-5g-investments-112628 Capital expenditure (capex) in the telecommunications sector experienced a notable decline during the 2Q23 period spanning April to June 2023 following a modest recovery in 1Q23. Major telcos in the US, China, and Europe are strategically readjusting their 5G capital investments, aiming to fortify their financial positions amidst decreasing top-line figures, macroeconomic pressures, and concerns about economic slowdown, according to MTN Consulting. Comparing year-on-year data, capex saw a sharp decline of 5.8 percent, marking the steepest fall since 2Q20, reaching $76.0 billion in 2Q23. Moreover, the annualized capex decreased by 2.0 percent YoY, amounting to $324.9 billion in the same quarter. This decrease had an impact on the annualized capital intensity, dropping from 18.7 percent in 1Q23 to 18.5 percent in 2Q23, although it remains relatively high within the industry. Factors contributing to this trend include the increased deployment of fiber and upgrades to support fixed broadband and necessary infrastructure for 5G, especially in markets like India. These endeavors have helped maintain the annualized capital intensity at record-high levels. On a company level, Rakuten displayed the highest capital intensity, with a capex-to-revenue ratio of approximately 159.3 percent for 2Q23 on an annualized basis. India’s state-owned telco, BSNL, prepared for the phased rollout of 4G and 5G services, boasting a capital intensity of 75.5 percent for the annualized 2Q23 period. Frontier Communications and Reliance Jio also reported notable capital intensity, standing at 66.9 percent and 63.3 percent, respectively. China Mobile emerged as the leading capex spender for the annualized 2Q23 period, investing $25.1 billion, albeit showing a 14.3 percent reduction compared to the same period in the previous year. Notably, four out of the top 20 operators demonstrated double-digit growth rates for the same period, including Reliance Jio, Airtel, Charter Communications, and Comcast. Despite declining revenues and macroeconomic challenges, telcos have maintained stable profitability margins by effectively managing costs. EBITDA margins stood at 34.8 percent, and EBIT (operating) margin at 15.6 percent in the annualized 2Q23 period, surpassing figures from two quarters ago. Telcos are strategically reducing sales & marketing and G&A spending by embracing digital platforms and automation, foreseeing a continued reduction in the workforce through modernization and automation. Looking ahead, telcos are expected to optimize their cost structures through technology-enabled solutions and collaborations. Initiatives such as core network sharing, network slicing, and partnerships with cloud providers are anticipated to reduce costs and transform the telco business model. In terms of workforce, the industry witnessed a slight decline, but major telcos in China and India experienced an increase. With a continued focus on automation and optimizing labor costs, the average cost per employee is expected to rise, hitting $66.0K per year in 2027. In the global scenario, Asia retained its lead in market revenues, capturing 37.4 percent of the total share, narrowly surpassing the Americas region at 37.0 percent. However, the Americas region maintained its position as the highest spender in capex, primarily driven by major US-based telcos like Comcast, Charter Communications, and Frontier Communications. Despite a YoY decline in capex spend in Asia, Europe continued to lead in regional capital intensity, followed closely by the Americas. Meanwhile, telecommunication operator revenues experienced a decline of 1.3 percent on a year-on-year basis, amounting to $443.6 billion during the 2Q23 period spanning April to June 2023. This downturn marked the seventh consecutive quarterly slump, although the pace of decline notably slowed. In the preceding three quarters, revenues plummeted by 6.3 percent, 9.3 percent, and 3.5 percent in 3Q22, 4Q22, and 1Q23, respectively. The market decline’s deceleration was attributed to the diminishing impact of AT&T’s spinoff of its WarnerMedia unit and an upswing in service revenue growth for numerous mobile operators. Nonetheless, the sharp declines observed in the latter half of the previous year and the initial half of this year significantly affected the revenues and their growth rate for the annualized 2Q23 period, amounting to $1,757.9 billion. This showcased a 5.1 percent downturn compared to the previous year. Currency fluctuations played a substantial role, particularly in regions like Japan, where revenues for KDDI, Softbank, and NTT plunged by 12.4 percent, 10.6 percent, and 8.8 percent YoY, respectively. Furthermore, inflationary pressures and the energy crisis left a mark on European telecom giants like BT (-10.5 percent) and Vodafone (-8.4 percent). In a closer look at the top 20 companies based on annualized 2Q23 revenues, Airtel demonstrated the most robust revenue growth, boasting an increase of 8.3 percent. This growth was fueled by escalating ARPU (Average Revenue Per User) and a surge in service subscriptions in the domestic market, coinciding with the onset of the 5G shift. Other telcos within the top 20 that witnessed revenue growth in the annualized 2Q23 period included Saudi Telecom (6.5 percent), Charter Communications (2.6 percent), China Unicom (1.2 percent), Verizon (0.5 percent), China Telecom (0.3 percent), and China Mobile (0.2 percent). Notably, two of the major Chinese telcos, China Mobile and China Telecom, experienced revenue declines in the single quarter of 2Q23, following a recovery in 1Q23. Although they attributed growth in the annualized period to surging "emerging businesses" revenues, certain operators in less mature 5G markets credited their growth to 5G-related equipment revenues. Looking forward, telcos are pinning their hopes on 5G-enabled devices already deployed to potentially generate new revenue streams in the remainder of 2023 and beyond. However, this prospect appears uncertain, prompting expectations for major strategic changes and cost transformation programs in the near future. Recent successes in operational expenditure (opex) reductions contributing to profit growth are anticipated to embolden numerous telcos. Among the top 20 operators, AT&T endured the most substantial decline in annualized telco growth for the 2Q23 period, with a stark drop of 23.9 percent. This was primarily attributed to the spinoff of WarnerMedia in early 2022. Besides AT&T, 12 other top 20 operators witnessed a decline in revenues during the annualized 2Q23 period, with no significant asset sales accounting for the drop. Notably, KDDI and Softbank, mentioned earlier, along with BT, also showcased revenue declines exceeding 10 percent during this period. Wed, 27 Sep 2023 10:32:43 +0000 https://www.telecomlead.com/5g/telecoms-capex-drops-5-8-as-mobile-operators-start-readjusting-5g-investments-112628 https://www.telecomlead.com/semiconductor/intel-appoints-gokul-subramaniam-as-india-president-to-lead-engineering-and-design-operations-112625 Intel Corporation made a significant announcement today, appointing Gokul Subramaniam as the President of Intel India. In his new role, Gokul Subramaniam will oversee and lead Intel’s engineering and design operations across the country, emphasizing innovation, cross-group efficiencies, and the successful execution of Intel’s products. With over 11 years of dedicated service at Intel, Gokul Subramaniam has held various technical and business leadership roles within product and systems engineering. Presently situated in Bengaluru, he currently serves as a Vice President in the Client Computing Group (CCG) and holds the position of General Manager of Client Platforms and Systems. Alongside his existing role, Gokul will now take on the responsibilities of Intel India President. “As a critical engineering and design center for Intel, Intel India plays a vital role in our company’s transformation journey and the trajectory towards product leadership,” Gokul Subramaniam said. Gokul’s educational background includes a bachelor’s degree in electronics and communications engineering from the University of Madras, a master’s degree in computer science and engineering from the University of Texas, and the completion of an executive program in general management from MIT Sloan School of Management. Furthermore, Gokul Subramaniam is the inventor on six patents, with an additional five filed in the areas of compute, wireless, power management, industrial design, system, and software. In addition to this appointment, Santhosh Viswanathan, Vice President and Managing Director-Sales, Marketing, and Communications Group (SMG) for Intel India, will maintain his role and responsibilities overseeing Intel’s overall business in India. His purview includes driving new revenue and growth opportunities for the company. Wed, 27 Sep 2023 10:26:39 +0000 https://www.telecomlead.com/semiconductor/intel-appoints-gokul-subramaniam-as-india-president-to-lead-engineering-and-design-operations-112625 https://www.telecomlead.com/telecom-equipment/fujitsu-delivers-5g-virtualized-ran-solution-for-ntt-docomos-5g-network-112620 Fujitsu has made a significant announcement regarding its successful delivery of an O-RAN ALLIANCE-compliant 5G virtualized RAN solution to be used in NTT Docomo’s 5G network services starting in September 2023. This development showcases Fujitsu’s commitment to supporting its customers and advancing the Open RAN ecosystem through technological innovation on a global scale. The key aspects of Fujitsu’s virtualized RAN solution include: Components and Architecture: The solution comprises the “Wind River Studio” cloud platform from Wind River, an NVIDIA converged accelerator, the NVIDIA Aerial vRAN software development kit responsible for physical layer control, and a general-purpose Intel Architecture (IA) server. Fujitsu has implemented an open fronthaul interface adhering to O-RAN ALLIANCE specifications to achieve multi-vendor connectivity with various wireless devices (O-RUs) from global suppliers. Features and Benefits: The solution offers potential customers greater flexibility in selecting equipment, ensuring commercial-grade reliability and cost-effective infrastructure for the deployment of 5G commercial network services. The architecture enables multi-vendor connectivity, allowing for equipment selection from different suppliers and contributing to the overall efficiency and reliability of the network. DOCOMO Collaboration: NTT Docomo has chosen Fujitsu’s base station as the first O-RAN compliant 5G virtualized base station in its 5G commercial network, recognizing its high-performance GPU, flexible open fronthaul architecture, and power consumption reduction capabilities. Environmental Considerations: Fujitsu emphasizes its commitment to environmentally-friendly network solutions, aiming to potentially reduce total CO2 emissions by 50 percent or more compared to conventional technologies by 2025. Sadayuki Abeta, OREX Evangelist, Global Business Department, NTT Docomo, said: “Development of high performance vRAN with Fujitsu base station software and NVIDIA GPU as hardware accelerator has been completed. It will contribute to further development of DOCOMO’s network, and will promote more efficient global deployment of Open RAN by accumulating commercial know-how.” Ronnie Vasishta, Senior Vice President, Telecom, NVIDIA, said: “In the development of O-RAN, Fujitsu and NVIDIA have collaborated to provide a software-defined, scalable and flexible vRAN solution with NVIDIA Converged Accelerators including GPUs and DPUs.” Paul Miller, Chief Technology Officer, Wind River, said: “With the integration of our distributed cloud platform and Fujitsu’s vCU and vDU applications, Wind River can continue to deliver proven technology based on Wind River Studio that is live with operators in global deployments.” Masaki Taniguchi, SVP, Head of Mobile System Business Unit, said: “Fujitsu’s embrace of open network architecture is central to our efforts to develop secure mobile solutions, contributing to the business development and digitalization of DOCOMO.” Wed, 27 Sep 2023 08:00:35 +0000 https://www.telecomlead.com/telecom-equipment/fujitsu-delivers-5g-virtualized-ran-solution-for-ntt-docomos-5g-network-112620 https://www.telecomlead.com/5g/t-mobile-launches-network-slicing-beta-for-developers-at-mobile-world-congress-112617 At the Mobile World Congress in Las Vegas, T-Mobile’s Chief Technology Officer, John Saw, announced the much-anticipated launch of the Un-carrier’s network slicing beta, now available to developers nationwide. This groundbreaking program has been expanded to Android developers seeking to harness the potential of 5G standalone (5G SA) to optimize video calling applications commercially on the Samsung Galaxy S23 series. T-Mobile said its move aims to streamline the application testing process, allowing developers across the United States to experiment with their newly enhanced applications utilizing a customized video calling network slice on T-Mobile’s robust 5G SA network, using a commercial device. John Saw, EVP and Chief Technology Officer at T-Mobile, emphasized, “We want our network to serve as a platform for innovation. I am incredibly proud of my team and our partners who are pioneering new technologies like network slicing to help bring the true promise of 5G to life.” Jude Buckley, Corporate Executive Vice President of Mobile eXperience Business at Samsung Electronics America, added, “At Samsung, we aim to provide our users with the best possible experience using the technology they rely on daily. The Galaxy S23 series offers a remarkable video call experience, and innovations like network slicing can further enhance it.” Starting today, T-Mobile’s network slicing beta is accessible to both Android and iOS developers across the nation. Video calling app developers, regardless of size or scale, can enroll in the beta through the Un-carrier’s developer platform, DevEdge. Additionally, developers in the greater Seattle area have the opportunity to collaborate with T-Mobile engineers at the 5G Hub to test and validate this capability on their applications. T-Mobile has plans to broaden the network slicing beta to encompass various application types and use cases in the near future. T-Mobile, recognized as the leader in 5G technology, operates the country’s largest, fastest, and most acclaimed 5G network. Covering an extensive 326 million people across two million square miles, T-Mobile’s 5G network exceeds the coverage of both AT&T and Verizon combined. Moreover, 285 million individuals nationwide are enveloped by T-Mobile’s Ultra Capacity 5G. The Un-carrier is committed to reaching 300 million people with Ultra Capacity by the end of this year, essentially covering nearly everyone in the country. Wed, 27 Sep 2023 05:26:47 +0000 https://www.telecomlead.com/5g/t-mobile-launches-network-slicing-beta-for-developers-at-mobile-world-congress-112617 https://www.telecomlead.com/semiconductor/semiconductor-industry-urges-resolution-of-double-taxation-issue-between-u-s-and-taiwan-112615 John Neuffer, President, and CEO of the Semiconductor Industry Association (SIA), On September 18 addressed a letter to congressional leaders highlighting the pressing need to resolve double taxation issues between the United States and Taiwan. The SIA emphasized the urgency of addressing tax matters and creating a formal tax treaty, given the critical role Taiwan plays in the global semiconductor ecosystem and its standing as a top trading partner for U.S. semiconductor companies. Despite being major trading partners, the U.S. and Taiwan currently lack a formal tax treaty, leading to complexities and barriers in trade for companies operating in both jurisdictions. The semiconductor industry, a vital contributor to the U.S. economy and national security, has been specifically impacted. This issue gains significance as the industry is gearing up for significant investments in U.S. semiconductor manufacturing, catalyzed by the CHIPS and Science Act signed into law last year. The act allocates $52 billion in government investments to boost domestic semiconductor production and innovation. The letter, sent to Speaker Kevin McCarthy, Senate Democratic Majority Leader Chuck Schumer, Senate Republican Minority Leader Mitch McConnell, and House Democratic Minority Leader Hakeem Jeffries, emphasized the critical need for a tax agreement between the U.S. and Taiwan. This agreement is seen as essential to enhance competitiveness and facilitate substantial investments in the U.S. semiconductor industry as encouraged by the CHIPS and Science Act. Without a tax treaty, businesses conducting operations between the U.S. and Taiwan face unnecessary hindrances, including the risk of double taxation and complications related to multinational sales. Moreover, employees from either jurisdiction may experience challenges with duplicative and complex income tax regulations. The SIA expressed its support for congressional efforts and legislation aimed at achieving the objectives that a formal treaty between the United States and Taiwan would address. A positive step forward was noted in the Senate Finance Committee, which unanimously approved the U.S.-Taiwan Expedited Double Tax Relief Act. This bill, once enacted and mirrored in Taiwan’s tax laws, is expected to mitigate the taxation challenges faced by companies and individuals. Additionally, the Senate Foreign Relations Committee advanced legislation (S. 1457) for the conclusion of a tax agreement between the U.S. and Taiwan, with corresponding companion legislation being considered in the House by the Ways and Means Committee and the House Foreign Affairs Committee. The resolution of double taxation and related tax matters is considered a vital step in fostering a conducive environment for the semiconductor industry, ultimately benefitting the economic and technological progress of both the United States and Taiwan. Further legislative actions are anticipated to solidify the commitment to this imperative issue. Wed, 27 Sep 2023 05:24:07 +0000 https://www.telecomlead.com/semiconductor/semiconductor-industry-urges-resolution-of-double-taxation-issue-between-u-s-and-taiwan-112615