While announcing its FY23 earnings, UK telecom company, Vodafone Plc said the Group’s carrying value of investment in Indian listed firm Vodafone Idea (Vi) is Zero. Also, that the Group is recording no further losses related to Vi. The troubled-laden Vi is still in need of additional liquidity and plans to raise funds going forward. In its FY23 report, Vodafone Plc said, “VIL remains in need of additional liquidity support from its lenders and intends to raise additional funding.”
Vodafone seems to be backing away from Vi. The business needs more money, that Vodafone is certainly not willing to provide, and that zero valuation indicates that it will put no more effort into saving it. There are significant uncertainties in relation to Vi’s ability to make payments in relation to any remaining liabilities covered by the mechanism and no further cash payments are considered probable from the Group as at 31 March 2023, it added.
“VIL [Vodafone Idea Ltd] remains in need of additional liquidity support from its lenders and intends to raise additional funding. There are significant uncertainties in relation to VIL’s ability to make payments in relation to any remaining liabilities covered by the mechanism and no further cash payments are considered probable from the Group as at 31 March 2023,” Vodafone said, in the notes to its consolidated financial statements for the 2023 financial year.
Furthermore, Vodafone said, “the carrying value of the Group’s investment in VIL is nil and the Group is recording no further share of losses in respect of VIL.”
It should be noted that Vi is the only Indian telco that has NOT yet deployed 5G services. Since the launch of 5G last October, Reliance Jio’s 5G services have become available in more than 400 cities and towns, while Airtel’s 5G services can be accessed in more than 500. Jio plans to provide all-India 5G coverage by December, with Airtel aiming for blanket availability by March next year.
Recently, Vodafone Idea complained to the Telecom Regulatory Authority of India (TRAI), accusing its rivals of predatory 5G pricing. Although it has been shedding customers for years, there can be little doubt that losses have accelerated since the launch of 5G. Vodafone Idea had lost about 7 million in the four months leading up to 5G’s launch in October last year. In the four months following the introduction of 5G services by Airtel and Jio, its losses soared to about 10 million.
Vodafone Idea is known to have a significant percentage of high-spending customers who have remained loyal to it. These customers typically show limited interest in lower tariffs, but many will have been drawn to 5G services available only from other telcos, with Vodafone Idea’s 5G plan nowhere close to fruition. Airtel and Jio, accordingly, are racing to build 5G networks and attract as many Vodafone Idea subscribers as possible.
When Vodafone and Idea Cellular entered into an merger agreement in 2017, the parties had agreed to a mechanism for payments between the Group and Vodafone Idea, pursuant to the difference between the crystallisation of certain identified contingent liabilitiesin relation to legal, regulatory, tax and other matters, and refunds relating to Vodafone India and Idea Cellular. Cash payments s or cash receipts relating to these matters must have been made or received by Vi before any amount becomes due from or owed to the Group.
Hence, any future future payments by the Group to VIL as a result of this agreement would only be made after satisfaction of this and other contractual conditions. Thereby, the UK-based telco said, “Vodafone Group’s potential exposure to liabilities within VIL is capped by the mechanism described above; consequently, contingent liabilities arising from litigation in India concerning operations of Vodafone India are not reported.”
Vodafone Plc’s potential exposure under this mechanism is capped at ₹64 billion n (€719 million) following payments made under this mechanism from Vodafone to VIL, in the year ended 31 March 2021, totalling ₹19 billion (€235 million).
In FY23, Vodafone Plc’s revenue increased by 0.3% to €45.7 billion driven by growth in Africa and higher equipment sales, offset by lower European service revenue and adverse exchange rate movements. While adjusted EBITDAal declined by 1.3% to €14.7 billion due to higher energy costs, and commercial underperformance in Germany.
Vodafone Germany plans to activate 2,700 new 5G cell sites with a total of 8,000 antennas in the first half of 2023, the telco said today in a press release. The company has so far connected 80% of the German population with 5G. It has activated 5G at 12,000 sites with more than 36,000 antennas altogether. For the 5G expansion, Vodafone Germany is relying on frequencies in the 3.6 GHz, 1.8 GHz and 700 MHz bands in large urban areas, residential areas and suburbs, and rural areas across Germany.
During 2022, Vodafone technicians commissioned 5,450 5G sites with more than 16,000 antennas. In total, Vodafone has already equipped 36,000 antennas with 5G, the company has said. The network operator said its 5G network is already providing coverage to 65 million people across the country, representing nearly 80% of Germany’s population.
Vodafone Germany had previously noted that its 5G Standalone (SA) network is currently available to nearly 20 million people across Germany. Vodafone previously said that 5G SA technology will reach nationwide coverage by 2025. The German telco had already deployed over 3,000 base stations for the provision of 5G SA services. Vodafone initially launched its 5G network in Germany in 2019, using 3.5 GHz frequencies that it acquired from Telefónica in 2018.
The telco also said it will continue to expand its LTE infrastructure across the country. Nationwide, Vodafone said it currently supplies around 98% of households with LTE.
“In 2023, Vodafone will bring the LTE mobile communications standard to even more people and to even more places: almost 1,900 expansion measures are pending in the first half of the year to set up new stations, carry out modernization work and install additional LTE antennas at existing stations,” Vodafone said.
“Together with Altice, Vodafone will start Germany’s largest fiber optic alliance in spring 2023, subject to the approval of the antitrust authorities. The goal is to supply up to 7 million households with new fiber optic connections in the next 6 years,” Vodafone added.
Vodafone Germany had recently successfully completed a field test with Open RAN (O-RAN) technology in Plauen, in the Saxony region.
The German carrier had recently announced that it will carry out comprehensive pilot projects for open 5G radio access networks at several locations in Germany. The first two stations for the operator’s O-RAN technology are located in rural Bavaria. The pilots are scheduled to start in early 2023 and mark the beginning of a broader deployment of O-RAN technology in Vodafone’s European mobile networks.
The pilot projects will use O-RAN hardware and software, which Vodafone successfully tested in the U.K. earlier this year. Samsung is currently supplying mobile technology and software for these O-RAN trials.
Separately, Vodafone has agreed to sell its Hungarian division for €1.7billion (£1.5billion) to local telecoms company 4iG and the Hungarian state. The sale is expected to be completed this month, with the proceeds to be used to pay off some of Vodafone’s debt.
Vodafone-UK has opened a new Edge Innovation Lab in MediaCity, Salford – the first of its kind in the UK. The lab will support the development of Manchester, and the surrounding region, into a Northern digital powerhouse, according to the company. The lab will give enterprises in the region an opportunity to trial new use cases that rely on real-time connectivity.
In addition to equipping the lab with dedicated MEC servers, Vodafone has also partnered with Amazon Web Services (AWS) to deploy a distributed MEC zone in Manchester, which will presumably give enterprises a taste of what ‘real-world’ performance might look like. Voda has also roped in IBM’s IT spin-off Kyndryl to offer customers professional and managed MEC and cloud services.
Spending on edge-related hardware, software and services is expected to reach $176 billion worldwide this year, according to IDC, rising to $274 billion by 2025. With figures like this doing the rounds, it’s little wonder that Vodafone is keen to get enterprise customers to buy into the concept.
“The lab offers innovators the opportunity to experiment with next-generation technologies and bring to life ideas that could revolutionise the way we do business and deliver public services,” said Nick Gliddon, UK business director at Vodafone, in a statement. “It will place Manchester and the surrounding region at the centre of the next stage of digital revolution.”
MEC technology enables real time data processing at the network edge, allowing for the creation of low latency services that would not be possible on today’s traditional network infrastructure. This offers innovators in the Greater Manchester area an opportunity to be at the forefront of next generation digital services.
By installing specialist servers either in Vodafone or customer facilities, applications are able to respond to command significantly faster. This time applications take to respond, known as latency, is a barrier for next generation innovations that require almost instantaneous reactions, or are powered by artificial intelligence. When combined with 5G, latency could be reduced to speeds faster than the human brain processes information.
Use cases enabled by MEC include autonomous vehicles, autonomous operations in factories, immersive augmented and virtual reality, remote medicine, cloud gaming and drone transport.
Vodafone has deployed Dedicated MEC servers at the Edge Innovation Lab and has launched a Distributed MEC zone in the Manchester area in partnership with Amazon Web Services (AWS), as part of their AWS Wavelength Zone infrastructure. Vodafone will also showcase Mixed Reality and Visual Inspection services at the lab. Vodafone has partnered with Kyndryl to offer customers professional and managed services for dedicated MEC and wider cloud-managed services to Vodafone customers.
Tosca Colangeli, president, Kyndryl UK&I, said: “We are excited, as part of our strategic partnership with Vodafone, to be supporting the Edge Innovation Lab in Salford and to use the facility as inspiration and co-creation for our joint customer engagements.
“We expect edge technologies to increasingly become an enabler of business outcomes, allowing end users – and machines – and industries including manufacturing, energy and retail, to reap the benefits of traditional cloud computing while gaining advantages such as reduced data latency, better data autonomy and enhanced security.”
This builds on Vodafone’s four-year partnership with HOST in MediaCity, where the lab will be located.
Opinion —Nick Wood of telecoms.com wrote:
Barely a day goes by at the moment without someone opening a lab somewhere.
- Monday saw Nokia cut the ribbon on a 5G and 6G research facility at its campus in Amadora, Portugal. Its focus is software, specifically embedded and real-time software. It wants to employ 100 staff over the next two years.
- Last Tuesday, Ericsson revealed plans to spend tens of millions of pounds over the course of the next decade on a UK-based 6G research programme. A team of researchers, academics, PhD students and CSP and industry partners will look at aspects like network resilience and security, AI, cognitive networks and energy efficiency.
- A day later, UK-based Colt strengthened its partnership with IBM by opening an Industry 4.0 lab, also in the UK. It will offer enterprises in the manufacturing sector hands-on experience with various applications enabled by their respective cloud and edge networking solutions in an effort to lower barriers to adoption and generate a bit of business for Colt and IBM along the way.
- A couple of weeks ago, Orange Belgium opened its second 5G lab. The first is based in Antwerp, but this new one is in Liège, and will focus on standalone (SA) 5G use cases.
The growing number of labs showcasing what can be done with 5G and related tech like MEC and slicing only goes to show just how desperate the industry is to evolve beyond enhanced mobile broadband (eMBB) and into new service categories that will hopefully generate more revenue. Meanwhile, Nokia and Ericsson researching 6G is just prudent planning on their part – they need to have something expensive to sell to operators in 10 years time.
Whatever the motivation, it seems to be a good time to be in the lab-building business.
Vodafone will use OpenRAN technology in 30% of its masts across Europe by 2030, said Johan Wibergh, Vodafone Group Chief Technology Officer, in a speech at Mobile World Congress (MWC) 2022 in Barcelona.
Around 30,000 Vodafone cell sites across Europe will eventually use OpenRAN, he said, with rural areas the first to benefit from the new 4G and 5G masts that use the more flexible radio technology.
When the roll-out reaches cities, the equipment from any existing 5G masts being replaced will then be reused elsewhere to reduce unnecessary wastage, he said.
Vodafone has been one of the key drivers behind the development and use of OpenRAN, building one of the first-ever live OpenRAN masts in Wales. This was followed by the construction of OpenRAN masts in Cornwall, as well as the UK’s first 5G OpenRAN site.
Earlier this week, Vodafone Group CEO Nick Read addressed MWC 2022 attendees in a keynote speech, highlighting the challenges and opportunities facing the mobile industry. Among them are the following:
Europe needs to be digital to remain globally competitive and maintain its leadership role in key sectors such as automotive, aerospace, defence, and agriculture. The regions that have 5G first, will be the regions that innovate fastest.
Yet, at current rates, it will take until at least the end of the decade, for Europe to match the transformational “full 5G experience” that China will already have achieved this year. If we look at 5G population coverage around the world – South Korea is over 90%, China 60%, USA 45%, and Europe under 10% – and with Africa hardly even at the starting line. Europe will only catch up if we reverse the ill-health and hyper-fragmentation of our sector. We must have local scale to close the investment gap. Otherwise, we will be the passive by-stander of the new tech order.
Local scale is needed to close the investment gap and ensure we can deploy 5G at pace. Regional scale is needed to close the digitalisation gap. The combination of local and regional scale ensures our economies and societies can enjoy the full benefits of digital innovation and industrialisation.
We have all seen the impact of global digital platforms. Platforms that change the way we conduct our daily lives. Vodafone continues to invest in regional platforms – let me just give you a few examples. In Europe we created our IoT platform which connects more than 140m devices, across 180 countries. The SIM based IoT market has tripled in the last five years, – and in the next 5 years, will hit 5bn connections. 62% of Europe’s leading automotive brands rely on Vodafone IOT. And with that scale, we are able to evolve from the “Internet of Things” to the “Economy of Things.”
This week, Ericsson installed a new antenna-integrated radio solution (AIR 3227) on the roof of Speechmark, Vodafone UK’s central London office that, according to the telecom vendor, reduced the site’s daily network energy consumption by an average of 43% in direct comparison to previous generations of radio technology, and as much as 55% at off-peak times.
Designed for future-proof and sustainable networks, Ericsson’s new radio is 51 percent lighter than existing radio’s [1.] and its more compact design and improved energy management features will help to optimize overall site footprint, making 5G rollout and 4G upgrades faster and easier.
Note 1. The comparison is with the 64TR antenna units from Ericsson that Vodafone has been rolling out so far, which are very heavy (about 60 kilos) and less energy efficient, noted Vodafone UK’s Head of Performance and Radio, Ker Anderson, at a media briefing earlier this week.
“Vodafone is looking for ways to deploy 5G in a more energy-efficient way. When we started rolling out 5G we were using a 64-by-64 [64TR] panel from Ericsson and it’s close to 60 kilos in weight and burns electricity for fun,” noted Anderson, who added that the new AIR 3227 unit, while on paper having half the capacity of the 64TR units, “performs just as well… two years of technology evolution means we can now get the same performance from a 32-by-32 that we got with the first generation 64-by-64. Plus, they’re half the weight, and we’ve got a 43% energy reduction. So it’s been a real godsend for us for this product to come along and it’s the right thing for us to deploy – it’s cheaper, it’s faster, burns less electricity and the performance is really, really good,” Anderson said.
1,500 of the new energy efficient Ericsson radios will be deployed across Vodafone’s network by April 2022, helping to reduce Vodafone’s forecasted energy consumption of its future 5G network and support a sustainable and responsible 5G rollout.
Andrea Dona, Chief Network Officer, Vodafone UK, says: “Our strategy is simple; turn off anything we don’t need, replace legacy equipment with up-to-date alternatives and use the most energy efficient options available. The success of this trial allows us to explore new ways we can more effectively manage the energy consumption of our network with our partner Ericsson. There is no silver bullet to manage our network energy consumption – it is about putting sustainability at the heart of every decision and adding up all the small gains to make a material difference.”
Björn Odenhammar, Chief Technology Officer, Networks and Managed Services, Ericsson UK and Ireland, says: “Building on the success of an award-winning 5G network in London, it is another fantastic achievement for Vodafone and Ericsson to reduce network energy consumption by a daily average of 43 percent. Sustainability is central to Ericsson’s purpose and our new radio will help Vodafone to reduce network energy consumption, simplify network rollout and efficiently manage the expected growth in data traffic of both current and future 5G networks. Together we are building the 5G network of the future – one that delivers the highest possible performance with improved resource efficiency and low environmental impacts.”
Ericsson and Vodafone UK first launched commercial 5G services in 2019. The strong working partnership was recognised for a high performing best-in-class 5G network in London in 2020. In June 2021, it was announced that Ericsson will be supporting Vodafone’s entire cloud-native 5G Core Standalone for packet core applications – a critical milestone to deliver 5G Standalone connectivity services.
The two companies have also been collaborating to reduce the environmental impact of site upgrades and speed up network deployment through the use of drones and Ericsson’s Intelligent Site Engineering service.