From M&A to open RAN: 5 things to watch in Europe in 2024

It’s shaping up to be a busy year in Europe’s wireless communications industry, with some unfinished business to complete as well as the ongoing launch of technologies from open radio access network (RAN) through to generative artificial intelligence (GenAI) and standalone 5G cores.

Below, we’ll take a look at some of the bigger events on the horizon that we will be keeping a beady eye on as the year progresses.

1. M&A deals pending

Last year saw some significant M&A activity on the European continent as some of the region’s Tier 1 operators attempted to tidy up their sprawling operations.

Vodafone stands out here, with a number of transactions still in the pipeline. Under relatively new CEO Margherita Della Valle, the group has been seeking options for its businesses in Italy, Spain and the U.K., while Vodafone Germany has also required a “re-engineering” of its commercial model.

In the U.K., the proposed merger of Vodafone UK and Three UK continues to grind on with regulatory approval still up in the air. The planned transaction has in fact been cleared by the European Commission, but all eyes are on the U.K. Competition and Markets Authority (CMA), the primary body in charge of investigating the “anticipated joint venture” between Vodafone Group and CK Hutchison.

Della Valle has said she expects the merger to close before the end of December 2024. Vodafone would then own 51% of the combined business and CK Hutchison 49%.

Elsewhere, Vodafone has agreed to sell 100% of its Spain-based operating company to U.K.-based telecom investment firm Zegona Communications. In Italy, no decision has yet been reached, although the France-based Iliad Group has offered a solution to the U.K. headquartered group by suggesting the two should merge their respective operations in the Italian market into a 50:50 joint venture.

Meanwhile, the European Commission is responsible for clearing the proposed merger between Orange Spain and Masmovil. Here, the two operators recently agreed to sell spectrum assets to Romania-based Digi Communications in order to secure merger approval. The Commission has subsequently set a date of February 15, 2024 to reach a decision on the deal.

In other markets, Deutsche Telekom and Greek subsidiary OTE Group have agreed to sell Telekom Romania Mobile Communications (TRMC) to Quantum Projects Group, which is controlled by Adrian Tomșa, the owner of Romanian media group Clever Media Network (CMN). The transaction is subject to approval by the Romanian government. In Portugal, Iliad Group and Saudi Arabia’s stc Group are reportedly interested in Altice Portugal.

In addition to the sale or merger of businesses, a close eye should also be kept on investors that have been buying up stakes in some of Europe’s biggest operators.

For instance, the Spanish government recently signaled its intention to take a share of up to 10% in Telefónica Group in order to balance Saudi interests in the operator. stc Group acquired a minority stake in the former Spanish incumbent in September. The Saudi operator currently owns a 4.9% stake, and is set to increase this to 9.9% should it receive regulatory approval.

e& (formerly Etisalat) also acquired a stake in Vodafone in May 2022, gradually raising it to 14.6% over subsequent months. As noted by Liberty Global CEO Mike Fries, it has been “entertaining to say the least,” with other investments including those in BT shares by both Altice UK and Deutsche Telekom, as well as Iliad owner Xavier Niel’s acquisition of a 6% stake in Belgium’s Proximus.

2. The expanding CEO “squad”

Just to borrow a term from U.S. politics that initially applied to an informal grouping of four female Democratic members of the U.S. House of Representatives, this year sees the arrival of another female chief executive at a major European operator.

Joining Vodafone’s Della Valle and Christel Heydemann at Orange Group, Allison Kirkby is taking over from BT Group CEO Philip Jansen in January. She’s the first female chief executive in BT’s nearly 180-year-old history.

Kirkby brings with her considerable experience of turning around European telcos, having been president and CEO of Sweden-based Telia since early 2020. She started her telecom career at Virgin Media in 2010 and also held the CEO roles at Tele2 Sweden from 2015 to 2018 and at TDC Group from 2018 to 2019.

BT operates the EE mobile network and is focused on extending 5G coverage as it invests heavily in building a national fiber broadband network. At the time of her appointment, Kirkby said she’s fully supportive of the company’s current strategy. She certainly has a big task ahead of her, not least in terms of achieving what Jansen failed to do: improving BT’s share price.

3. Hopes for open RAN

Open RAN has not yet set the world alight, but it picked up pace in Europe in 2023, and indications are that we should see further deployments of the technology in 2024.

For example, Deutsche Telekom has just kicked off its rollout of multi‑vendor open RAN technology in Germany in collaboration with Fujitsu and Nokia, building on existing trials in the operator’s O‑RAN Town in Neubrandenburg near Berlin, and a Memorandum of Understanding signed at last year’s Mobile World Congress. DT said it plans to operate more than 3,000 O-RAN-compatible antenna sites by the end of 2026.

Also in Germany, greenfield operator 1&1 AG announced it is now operating Europe’s first fully virtualized 5G network based on open RAN technology. Although the network is still very small, 1&1’s ambition is to become the fourth mobile network operator in the market underpinned by a new kind of network infrastructure, with support from Rakuten Symphony, Mavenir and others.

In terms of open RAN announcements, Vodafone has been one of the more active operators to date, with more to come. Indeed, the operator made a splash at last year’s Telecom Infra Project (TIP) conference Fyuz in Madrid, among other things confirming that it is on track with its goal to deploy 2,500 open RAN sites.

Furthermore, Vodafone seems to have adopted the role of global open RAN cheerleader. During the TIP event, Andrea Dona, chief network officer with Vodafone UK, said that the open RAN work in the U.K. is a “blueprint for success” and that Vodafone can “lift and shift” it to other parts of its global footprint.

Speaking during a Talking Telecoms Week panel, Francisco Martin Pignatelli, head of open RAN at Vodafone Group, also highlighted that open RAN is “a lot about collaboration,” and said large telecom groups such as Vodafone have “both the responsibility and the opportunity” to help smaller operators “get on to the open RAN journey.”

4. Will this be the year when 5G standalone gathers speed?

Three Ireland may well have been the last operator globally to launch a 5G standalone network in 2023, in what was otherwise a fairly disappointing year for proponents of mobile networks based on a 5G core.

Indeed, in a recent update on the mobile core network market, Dell’Oro Research Director Dave Bolan commented that after five years into the 5G era, “we are still seeing more 5G non-standalone (5G NSA) networks being launched than 5G SA, and the pace of 5G SA networks has slowed from 17 launched in 2022 to only seven so far in 2023.”

However, Bolan said Dell’Oro expects more 5G SA networks to be deployed in 2024 than in 2023. Deutsche Telekom for one has already flagged the launch this year of its 5G SA offering in Germany, becoming the last of the three incumbent mobile network operators (MNO) to take this step.

According to a November 2023 update from the Global Mobile Suppliers Association (GSA), 43 operators have deployed, launched or soft-launched 5G SA networks. Dell’Oro puts the number at 45 as of the third quarter of 2023.

5. Nokia braces itself for a new year

There would of course be no networks without vendors. And despite the arrival of a plethora of new players in the era of open networks, Ericsson, Huawei and Nokia continue to play a pivotal role in the construction of mobile networks globally.

Although Huawei has seen its influence wane because of geopolitical pressures, it remains confident about its performance this year. Indeed, in his New Year Message for 2024, Ken Hu, rotating chairman of Huawei, claimed the China-based vendor has “managed to weather the storm” and is “pretty much back on track.”

Nokia, meanwhile, has experienced a fairly torrid few months, not least sparked by the loss of AT&T’s open RAN business to Ericsson. In early December, the Finnish vendor announced plans to revamp its Mobile Networks business to safeguard future growth and also downgraded its comparable operating margin target to be achieved by 2026 from at least 14% to at least 13%.

Just after Christmas, Nokia then conceded that it will not achieve its 2023 financial outlook as licensing renewal discussions are expected to continue into 2024.

The vendor nevertheless added that it has seen “clearly improving order trends in the fourth quarter” that support its assumptions made for 2024. Nokia will provide a group financial outlook for 2024 with its fourth quarter results on January 25.