CORPORATE FORTUNES

Telcos, Vendors & Industry Update

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Nokia reported better than expected financial results for the first quarter of the year, with revenues up by 1 per cent at constant currency conversion rates to €5.35 billion(US$5.63billion), driven mainly by healthy growth by the network infrastructure (fixed access, optical, routing) division, which reported a 9 per cent year-on-year increase in sales to €1.97 billion. The vendor’s Cloud And Network Services unit also registered sales growth of 5 per cent, while the number of private wireless network customers increased to 450. But it wasn’t all good news for the Finnish firm: its mobile networks division, while improving its margins, reported revenues of €2.7 billion, which represented a 4 per cent dip in sales at constant currency rates, and in general the vendor suffered from ongoing supply chain issues and inflationary pressures on the goods and services it needs to acquire for its business. Those factors weighed on the minds of investors, it seems, as the Nokia share price lost almost 3.2 per cent of its value to dip to €4.66 on the Helsinki exchange.

Huawei’s numbers took a bit of a hit too in the first quarter, though of course it is still a giant company. Revenues came in at cny131 billion (US$19.8 billion), down almost 14 per cent year on year, while its net profit margin tanked to 4.3 per cent from 11.1 per cent in the same period a year earlier. “In Q1, our overall business results were in line with forecasts. Our consumer business was heavily impacted, and our ict infrastructure business experienced steady growth,” stated Huawei’s rotating chairman, Ken Hu : “We have yet again increased our investment in R&D to harness the momentum of our innovation and create new value for customers.”

Meanwhile, it’ll be all smiles at european optical equipment vendor Adva (and at Adtran, with which it is set to merge). The German company reported record first quarter revenues of €170.5 million, up 18 per cent year-on-year driven by greater demand from telcos and ‘internet content providers’, though its earnings before interest and tax (EBIT) margin slipped to 4.6 per cent from 8.9 per cent a year earlier due in part to increased costs related to component price inflation. “We have good momentum and started well in this new business year. The expansion of communications networks is progressing rapidly and is fueled by public funding programmes in many regions and countries. This environment should continue to positively impact demand for our products for the foreseeable future,” said  CEO Of Adva, Brian Protiva,. “Our investments in innovation in recent years have provided us with an outstanding, differentiated portfolio of solutions with which we will gain market share. The transformation of our business towards growth markets with a higher proportion of software and services and more verticalization is progressing well. In addition, the merger with Adtran will open up completely new opportunities for us in the usa, europe and the global market.”

This seems to be a hot week for SD-WAN action. Following last Tuesday’s news involving Orange business services, Siemens, Softbank and Aryaka, Colt Is To Add To Its Existing SD-WAN Portfolio For Enterprise Users By Launching “A New Managed SD WAN Solution To The Global Market By Combining Vmware’s Industry-Leading Sd Wan Solution With High Performance Connectivity And Best-In-Class Customer Service From Colt.” Colt’s VP, Product, Peter Coppens Noted: “The past few years have shown us that SD WAN is a true enabler for the way enterprises do business and provides an enhanced, seamless user experience, regardless of location, device or application. Colt was an early adopter of true sd wan services and has continued to invest in the technology over the past few years. the strength of our global network with vmware’s deep expertise can expand WAN service options for enterprises across the world.”

Despite group revenue falling by 1.2 per cent to CHF2,768 million (US$2.8 billion) in q1 2022, Swisscom CEO Urs Schaeppi described the operator’s performance as “pleasing” in the period, pointing to a “strong operating income” which was up by 1.2 per cent to chf1,137 million. The Switzerland-based operator recorded a decline in its core telecoms services business which it highlighted was offset by growth in the it solutions segment, as well as ongoing measures to reduce costs. Schaeppi noted that the company was “achieving success with our products, service and infrastructure” in a highly competitive market, adding that “our bedrock is our network”.

Adding to the Fibre Diet… The COVID-19 pandemic, political tensions with China and Russia’s unprovoked invasion of Ukraine have severely disrupted global telecoms industry supply chains and, as a result, plans by telcos to expand their networks are suffering. Order lead times are increasing as a shortage of raw materials is constraining manufacturing capacity. In response, up-state New York headquartered Corning, the world’s biggest fibre optic company with a 16.3 per cent global market share, is to expand its manufacturing capacity to help meet burgeoning demand. Last year the us senate passed the infrastructure investment and jobs act that set aside us$565 billion to pay for the deployment of broadband infrastructure with the proviso that telcos wanting to take advantage of the scheme must ‘buy american’ technology. However, things have become so bad that telcos are now asking the us government to grant them exceptional waivers from those provisions so they can source products elsewhere. The ongoing and worsening disruption is also likely to delay payments being made to operators from The FCC’s Rural Digital Opportunity Fund. Corning Says it’s in a position to help alleviate some problems as it is now able to access raw materials from “secondary or alternative sources” and is continuing to construct a new production facility in Mszczonów, Some 45 Kilometres From Warsaw, Poland. When completed, the new factory will be one of the biggest optical-fibre manufacturing plants in the EU. Plans are for it to be commissioned later this year when it will “free up us fibre capacity for us Demand.” However, given the war in Ukraine, Poland’s direct neighbour, concerns are mounting that the opening of the new facility could be delayed or severely disrupted by developments over the border.

China’s ‘New IP’: In Far Cathay, China’s Central Cyberspace Administration is pushing for IPv6 quickly to be rolled-out across the entire country. A wordy paper “2022 work arrangement for further promoting the large-scale deployment and application of IPv6” is generously larded with owellian-style “newspeak” phraseology including, “under the guidance of Xi Jinping thought on socialism with Chinese characteristics for a new era, especially General -Secretary Xi Jinping’s important thought on strengthening the country through the internet, The ‘Notice On Accelerating The Large-Scale Deployment And Application Of The Internet Protocol Version 6 (IPv6)’ shall be implemented in depth.” It will, “highlight innovation and empowerment, stimulate the vitality of the main body, open up key links, consolidate the industrial foundation, enhance endogenous power, improve security, solidly promote the in-depth development of IPv6 scale deployment and application, and accelerate the transformation of network performance from convergence to optimisation, from end-to-end to end-to-end, change from end-use to easy-to-use, from surface transformation to in-depth support, from user quantity to quality of use, from external promotion to endogenous drive, comprehensively improve the level of IPv6 development, and take practical actions to welcome the victory of the 20th party congress.” Easy Peasy! I’ll bet you’re glad you read that deathless prose, aren’t you? Under the “work arrangement,” this year’s 10 key goals include increasing the number of active IPv6 users to 700 million, the number of IoT IPv6 connections to 180 million, the boosting of fixed network IPv6 traffic to 13 per cent of the national total and mobile network IPv6 traffic to 45 per cent. interestingly, “the new factory home wireless router fully supports IPv6, and the IPv6 address allocation function is enabled by default.” what’s the betting that in the none-too-distant future the stated aims of “network security protection, network security management, supervision and inspection” will be applied to curtail remaining vestiges of the individual privacy of Chinese citizens. Big brother’s watching them alright.

“A rose by any other name would smell as sweet.” It’s heartening to be able to report that overheated bugle oil continues to be pumped around and out of the pipes of corporate PR and Marcoms departments. the latest to massively overhype the announcement of a rebranding exercise is global professional services strategy and consulting company Accenture which, with more than 700,000 personnel, proclaims “leading capabilities in digital, cloud and security.” here’s the news in a nutshell: one of its arms, Accenture Interactive, which “offers a range of data analytics, strategic planning, technological, and digital-marketing solutions to clients” has been renamed as Accenture Song. that’s it. now here’s the overblown corporate explanation. “the name Accenture Song conveys an enduring and universal form of human craft, connection, inspiration, technical prowess and experience – unleashing the imagination and ideas of its people to deliver tangible results.” it also “symbolises the post-pandemic growth journey we’re on with our clients” (apparently). the reality is that it just puts people in mind of a song they may like (or dislike) and when they read puffed-up rationale like this – “Accenture Song is uniquely operating at the intersection of creativity, technology, intelligence and industry…. to help our clients reinvent connections and meaningful experiences, including in the metaverse continuum” – if they are anything like me they snort with derision. it’s not so much an intersection that is being described as a spaghetti junction leading perhaps to Mark Zuckerberg’s disturbing virtual island. The “Iterative Process” necessary to come up with the new name and logo took a mere seven months. Accenture has not revealed how much the exercise cost but it’ll be peanuts to a business whose worldwide revenue in 2021 was US$12.5 billion. CEO and Creative Chairman, David Droga, says the rebranding consolidates more than 40 creative agencies under the one new name of Accenture Song, Which Is Fair Enough. But Oh, The Corporate Gobbledygook. “Attention all staff! You are instructed to join in the company song, ‘Accenture-ate the positive’… Altogether now!”

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