Mobile World Live (MWL) brings you our top three picks of the week as Virgin Media O2 (VMO2) disclosed a plan to buy spectrum assets from Vodafone and 3 UK’s proposed combined entity, Ericsson reported another impairment charge for its Vonage acquisition and China took the lead in AI patent filing.
VMO2 to bolster spectrum in wake of Vodafone-3 UK deal
What happened: VMO2 revealed it is in favour of the potential merger between Vodafone and 3 UK as it announced plans to acquire spectrum assets from the combined entity, a transaction which the players claimed could lead to “three scaled mobile network operators each with better alignment of spectrum holding”.
Why it matters: The arrangement is apparently designed to alleviate regulatory concerns outlined by the UK’s Competition and Markets Authority (CMA), and is built on VMO2’s long-term network sharing partnership with Vodafone. CEO at VMO2 Lutz Schuler said the deal will allow a “robust, balanced and functional structure in place for the long-term” should Vodafone and 3 UK’s merger gain approval. Senior analyst at Assembly Research James Robinson said the spectrum deal “could help address at least one of the UK CMA’s three theories of harm about the deal, but leaves questions about the implications for BT Group”. BT previously stated the merger would lead to a joint entity with “a disproportionate share of capacity and spectrum”.
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Ericsson to take another $1B hit on Vonage
What happened: Ericsson announced it would report a non-cash impairment charge of $1.1 billion in its next financial results, a sum largely linked to its 2022 acquisition of cloud player Vonage, in what would be the vendor’s second write-down of the business as it blamed a deteriorating “market environment”.
Why it matters: The announcement comes nine months after Ericsson reported a $2.9 billion impairment charge on its Vonage acquisition, which was completed at a value of $6.2 billion. Vonage CEO and Ericsson head of business area Global Communications Platform Niklas Heuveldop said it has “reassessed certain growth assumptions, resulting in a non-cash impairment”, crediting the charge on “lower anticipated market growth in some of Vonage’s current portfolio”. Industry analyst and practice leader at Omdia James Crawshaw wrote the latest write-down means Ericsson “now values the business at around a third of what it paid for it in 2022”. Crawshaw further added Ericsson’s revenue potential on network API “is clearly not enough to offset weakness in Vonage’s core CPaaS business”, despite its expectation on the area.
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China takes significant lead in GenAI patent race
What happened: A United Nations (UN) agency found China-based inventors have filed the highest number of generative AI (GenAI) patents in the period between 2014 to 2023, with 38,000 GenAI innovations coming from the country.
Why it matters: Data by the UN agency WIPO, which recorded 54,000 GenAI inventions in the decade ending 2023, showed China had six times more than that of second-place US, with Korea, Japan and India rounding up the top countries. Among the top applicants of genAI patents in China are Tencent, Baidu, Alibaba and ByteDance, the report revealed. WIPO Patent Analytics Manager Christopher Harrison told Reuters that genAI is “an area that is growing at increasing speed”, noting “Chinese patent applications covered a broad area of sectors from autonomous driving to publishing to document management”.
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