Key developments in telecoms in 2023

Here is a list of things I took note of during 2023. It is highly subjective, and there are probably significant developments missing.

• GenAI. It was hard to avoid AI and, specifically, GenAI in 2023. Perhaps all major telcos have made a GenAI-related announcement, but an obvious key event was SK Telecom's USD100m investment in Anthropic and associated plans for telecoms-specific applications. [link ]. KT is also making some interesting announcements with its MI:DM LLM [link ]. Korean companies are focused on more niche applications and on languages other than English [link ]. We have covered GenAI in our research this year and have more plans for 2024. You can read about our scenarios for telecoms here [link ] or hear the podcast discussion [here ]. A complete list of our research is here [link ].
• Deconsolidation. We are seeing more of this trend as large groups sell off individual countries. Vodafone (more on Vodafone later) closed the sale of Hungary and announced a deal for Spain. There are rumours of a bid for Altice's Portugal assets (what was once Portugal Telecom) [link ]. Another result of deconsolidation, T-Mobile Netherlands, rebranded as Odido. It will be interesting to see how the strategies of these newly independent entities change.
• Delayering. Delayering in telecoms was another theme in 2023. Italy is the most interesting example of this. TIM plan to sell its network to KKR and potentially divest its B2B division. WindTre (potentially) splitting into a networks and services company [link ]. Italy is an extreme case but perhaps a sign of what will come elsewhere, with wholesale operators owning networks and asset-light service providers sitting on top.
• Middle Eastern money (and minority stakes in general). stc is building a stake in Telefónica (around 5% but possibly growing to 10%). E& bought a majority share in PPF's telecoms assets and a significant stake in Vodafone (15% and rising). It wasn't just Middle Eastern operators taking minority stakes – Liberty Global acquired a 5% stake in Vodafone. Xavier Niel bought 6% of Proximus (he also has a small stake (<3%) in Vodafone). Telecom operators may collaborate with their minority shareholders on some strategic projects, but the deals are driven mainly by investors seeking financial returns. They see value in telecoms despite the poor performance of most operators on the stock market.
• Vodafone retrenching. It was only in 2019 that Vodafone was still expanding through the acquisition of cable assets in Germany and Eastern Europe. Now, it is in retrenchment mode. As well as Spain and Hungary, it is looking to merge with 3 in the UK (our article on this is here [link ]) and is exploring options for Italy, as well as selling a stake in the IoT division (article here [link ]). The expansionist strategy is long gone; cross-border synergies are hard to find. If deals in the UK, Spain and Italy happen, it is interesting to think what Vodafone is left with: an opco in Germany, a 50% stake in the UK and a mix of (mostly small) opcos and joint ventures elsewhere. It starts to look more like a holding company than a global telco.
• Cellnex retrenching: Cellnex's strategy reversal was also interesting to watch. After years of growing through acquisition (often at high multiples), in 2023 it got a new CEO, sold off assets in the Nordics and France, and its private networks company Edzcom (for $30 million), with more sales likely to come. (As a side point, my view is that the offload of Edzcom says a lot about Cellnex but little about the private networks market.)
• eSIM. It didn't get much attention, but Airalo raising $60m felt important - an eSIM company receiving a large round of funding with many telco investors – E&, Liberty, DT, Orange, KPN, Singtel, Telefonica [link ]. The initial opportunity is for international roaming, but that is surely (?) just a first step. Digital-only eSIM MVNOs could be disruptive in the longer run (and links to the point about delayering). We have produced a series of items on eSIM during the year, including a webinar [link ], some articles [link ], [link ], and podcasts [link , link ].
• Network APIs. Network APIs were the topic of a fair bit of conversation – as I wrote in my MWC piece [link ], sentiment is still mixed, and there is some way to go on this topic. We saw various announcements in the year (for example, between DT and Vonage [link ] and between BT and Nokia [link ]). The other major news in the year was that Ericsson wrote down the value of Vonage by $3 billion. There is a lot on our website on this topic [link ].

Some other candidates for developments in 2023 were satellite – lots of announcements of deals between telecom operators and satellite operators (which are included in our tracker [link ]), even if these haven't had much impact yet.

Apple's adoption of RCS was another interesting move; seemingly treading a fine line between meeting the EU's requirements while also protecting iMessage (our article on it is here [link ]).

(I realised after I finished the list that I should have saved time by getting GenAI to write the list. I tried this. ChatGPT gave me a regurgitated press release from a vendor while Bard talked about the pending merger between Sprint and T-Mobile…)

What did I miss? Please let me your thoughts in the comments.

As well as the odd item here, I am posting more regularly on Threads. You can find me here [link ].