Optus has acknowledged new legal action by the Australian Competition and Consumer Commission and “admitted its mistake,” after the regulator today instituted proceedings in the Federal Court against the Singtel-owned telco, alleging it misled consumers about the need to move to the NBN or risk being cut off.
According to the ACCC, on 24 May 2018 Optus sent an email offering its NBN broadband services to 138,988 of its mobile customers, advising them that their broadband service would be ‘disconnected very soon’ and encouraging them to ‘make the switch, before it’s too late.’
The ACCC said it alleges this was a false or misleading claim, adding that when the email was sent, Optus knew the recipients of the email were already being provided with NBN-based services by another company, and Optus did not have any reasonable basis for saying they would be disconnected.
“Optus acknowledges the ACCC’s action today and its mistake,” said the telco’s VP of regulatory and public affairs Andrew Sheridan. “Optus has apologised to customers who received the mistaken communication and offered a costless exit for those who took out the offer.”
The ACCC – which is now seeking declarations, injunctions, pecuniary penalties, compliance orders and costs – also reiterated how on 22 May 2018, following the regulator’s action, the Federal Court ordered Optus pay penalties of $1.5 million for making misleading representations to customers about their transition from the telco’s HFC network to the NBN.
“Moving to the NBN is an important decision for consumers, and it can also be a confusing process,” ACCC Commissioner Sarah Court said today. “The ACCC has had to take action about Optus’ advertising on several previous occasions, and it is concerning that we are again having to take them to court for alleged misleading statements about this issue.”
“We are keeping a close eye on this sector and we will continue to take enforcement action where appropriate,” Court added.
Huawei has filed a complaint in a U.S. federal court that challenges the constitutionality of Section 889 of the 2019 National Defense Authorization Act (NDAA). Through this action, the Shnzen-bsed firm will seek a declaratory judgment that the restrictions targeting Huawei are unconstitutional, and a permanent injunction against these restrictions.
“The U.S. Congress has repeatedly failed to produce any evidence to support its restrictions on Huawei products. We are compelled to take this legal action as a proper and last resort,”explained Guo Ping, Huawei Rotating Chairman said. “”This ban not only is unlawful, but also restricts Huawei from engaging in fair competition, ultimately harming U.S. consumers. We look forward to the court’s verdict, and trust that it will benefit both
Huawei and the American people.”
The lawsuit was filed in a U.S. District Court in Plano, Texas. According to the complaint, Section 889 of the 2019 NDAA not only bars all U.S. Government agencies from buying Huawei equipment and services, but also prohibits them from contracting with or awarding grants or loans to third parties who buy Huawei equipment or services, without any executive or judicial process, added Huawei.
“This violates the Bill of Attainder Clause and the DueProcess Clause. It also violates the Separation-of-Powers principles enshrined in the U.S.Constitution, because Congress is both making the law, and attempting to adjudicate and execute it,” it said.
Huawei Chief Legal Officer Song Liuping emphasized: “Section 889 is based on numerous false, unproven, and untested propositions. Contrary to the statute’s premise, Huawei is not owned, controlled, or influenced by the Chinese government. Moreover, Huawei has an excellent security record and program. No contrary evidence has been offered.”
“At Huawei we are proud that we are the most open, transparent, and scrutinized company in the world,” said John Suffolk, Huawei’s Global Cyber Security Privacy Officer. “Huawei’s approach to security by design development and deployment sets a high standards bar that few can match.”
From Huaweis perspective, the NDAA restrictions prevent the company from providing more advanced 5G technologies to U.S. consumers, which it strsesed will see the commercial application of 5G significantly delayed, in turn, impeding efforts to improve the performance of 5G networks in the U.S.
“Beyond this, network users in rural and remote regions of the U.S. will be forced to choose between government funding and high-quality, cost-effective products. This will impede the network upgrade process, thus widening the digital divide. Even worse, the restrictions on Huawei will stifle competition, leaving U.S. consumers paying higher prices for inferior products,” the firm said.
According to Huawei, estimates from industry sources show that allowing the company to compete would reduce the cost of wireless infrastructure by between 15% and 40%.
“This would save North America at least US$20 billion over the next four years,” Guo Ping added,
“If this law is set aside, as it should be, Huawei can bring more advanced technologies to the United States and help it build the best 5G networks. Huawei is willing to address the U.S. Governmen’t’s security concerns. Lifting the NDAA ban will give the U.S. Government the flexibility it needs to work with Huawei and solve real security issues.”
Casa Systems, ultrabroadband firm and NetComm Wireless have entered into a definitive agreement under which the US firm will acquire 100% of the equity interests in NetComm through a scheme of arranprovedesgement which valued NetComm’s issued equity at approximately $161 million.
NetComm shareholders will receive cash consideration of A$1.10 per NetComm
ordinary share (Scheme Consideration) and NetComm will become a wholly-owned . The transaction – subject to NetComm shareholder approval and court approval – will be funded from Casa Systems’ existing cash on balance sheet.
NetComm said each of its directors consider the Scheme to be in the best interests of NetComm’s shareholders and unanimously recommend that shareholders vote in favour of the Scheme, subject to no interests of NetComm’s shareholders.
The Lane Cove company also announced that due to family health issues Ken Sheridan has stepped aside from the role of Managing Director and CEO, effective immediately. Sheridan will continue as an Executive Director on the Company’s Board.
NetComm Chairman Justin Milne said Sheridan had been a vital contributor to the growth of the company during his eight year stretch as CFO and later CEO. “He has been a key member of the executive team that transformed the company, delivered record results in FY2018 and put in place a strong team to execute our growth strategy. On behalf of the Board, I want to thank Ken for his leadership and commitment, and I look forward to continuing to work closely with him in his new role.”
Prime minister Scott Morrison will reportedly today announce Adelaide as the home of Australia’s space agency, with a A$41 million investment “to open doors for local businesses and Australian access to the US$345 billion global space industry”.
According to The Australian, the Prime Minister, who will host a meeting of premiers and territory leaders in Adelaide, looks set to tip South Australia as a crucial centre for innovation and the tech sector, flagging it as the ideal location for the country’s first dedicated space agency.
Discount bundles to deliver improved experience for businesses
NBN Co is set to introduce new wholesale discount bundles over its fixed line NBN access network to help improve customer experience and better meet the demands of Australian businesses.
With its new ‘business NBN’ service, the company will for the first time combine access to high speeds, committed bandwidth and premium service levels in a discounted charge in a move designed to deliver significant savings for retail providers.
“We recognise some businesses are on NBN powered plans that have not been optimised for their needs,” said NBN Co Chief Customer Officer for Business Paul Tyler.
“Businesses should speak to their service provider about whether they require high-speeds for cloud applications, committed and symmetrical information rates for audio and video conferencing or increased service assurance for business-critical applications.”
The bundles will include:
Wholesale speeds of 50/20Mbps* optimised for smaller businesses;
Wholesale speeds of 100/40Mbps* with support for multiple phone lines for medium-sized businesses;
Wholesale symmetrical committed speeds of 20/20Mbps and a 100/40Mbps peak information rate**; and
Wholesale symmetrical committed speeds of 50/50Mbps and a 250/100Mbps peak information rate for data-intensive and multi-site organisations**.
Each discount bundle option will include a minimum 12 hour enhanced service level agreement with 24/7 support between NBN Co and retailer, as well as bandwidth which incrementally increases with higher bundles.
The company is currently working with industry to implement the discounts, with the aim of releasing them on its fixed line network to service providers from early 2019.
IBM and Red Hat have reached a definitive agreement under which IBM will buy all of the issued and outstanding common shares of Red Hat for US$190.00 per share in cash, representing a total enterprise value of approximately US $34 billion.
“The acquisition of Red Hat is a game-changer. It changes everything about the cloud market,” said Ginni Rometty, IBM Chairman, President and CEO. “IBM will become the world’s no. 1 hybrid cloud provider, offering companies the only open cloud solution that will unlock the full value of the cloud for their businesses.
“Most companies today are only 20 percent along their cloud journey, renting compute power to cut costs,” she said. “The next 80 percent is about unlocking real business value and driving growth. This is the next chapter of the cloud. It requires shifting business applications to hybrid cloud, extracting more data and optimizing every part of the business, from supply chains to sales.”
“Joining forces with IBM will provide us with a greater level of scale, resources and capabilities to accelerate the impact of open source as the basis for digital transformation and bring Red Hat to an even wider audience – all while preserving our unique culture and unwavering commitment to open source innovation,” said Red Hat President and CEO Jim Whitehurst.
IBM said the deal brings together the best-in-class hybrid cloud providers, enabling companies to securely move all business applications to the cloud.
“Companies today are already using multiple clouds. However, research shows that 80 percent of business workloads have yet to move to the cloud, held back by the proprietary nature of today’s cloud market. This prevents portability of data and applications across multiple clouds, data security in a multi-cloud environment and consistent cloud management,” it said.
“IBM and Red Hat will be strongly positioned to address this issue and accelerate hybrid multi-cloud adoption,” the firm added. “Together, they will help clients create cloud-native business applications faster, drive greater portability and security of data and applications across multiple public and private clouds, all with consistent cloud management.”
In doing so, they will draw on their shared leadership in key technologies, such as Linux, containers, Kubernetes, multi-cloud management, and cloud management and automation.
Digital Realty’s Brazilian subsidiary, Stellar Participações has entered into a definitive agreement to acquire Brazil-based data centre firm Ascenty from private equity firm Great Hill Partners in a transaction valued at approximately US$1.8 billion.
Digital Realty has separately entered into an independent bilateral equity commitment letter with Brookfield Infrastructure, under which Brookfield has committed to fund half of the required initial equity investment, currently estimated to be approximately US$613 million, excluding Brookfield’s share of the transaction costs, in exchange for 49% of the total equity interests in a joint venture entity expected to ultimately own Ascenty.
Digital Realty said the move will see it position itself as a primary provider in the rapidly growing Latin American region.
It tipped Ascenty as a leading data centre provider in Latin America with an in-service portfolio of eight state-of-the-art data centres strategically located in the key Brazilian metro areas of São Paulo, Campinas, Rio de Janeiro and Fortaleza.
Most of the Ascenty facilities have been designed and built to Tier III standards and meet internationally recognised facility and service standards.
Given its high-quality portfolio, Ascenty serves a blue-chip customer base comprised primarily of leading global hyperscale cloud providers, with over 90% of Ascenty’s contractual cash rent attributable to customers whose parent entities have investment-grade or equivalent credit ratings. In addition, leases representing approximately 75% of Ascenty’s contractual cash rent, including signed but not yet commenced leases and leases pending execution that are subject to closing or other conditions, are denominated in U.S. dollars, substantially mitigating foreign currency exposure.
Digital Realty flagged the Latin American region as a key opportunity for future data centre growth, driven by growth in the working age population and rapid digitisation.
“Brazil is the fifth-largest country in the world by area and population as well as the eighth-largest economy by gross domestic product, and is poised to become the hub of Latin America’s future technological expansion,” the firm said. “Ascenty has a significant opportunity for growth through future development in Brazil and is well-positioned to meet growing demand through expansion across the Latin American region.”
Ascenty’s portfolio features 106.2 megawatts of total planned capacity, including 39.2 megawatts of capacity currently in-service, 34.0 megawatts of capacity under construction and 33.0 megawatts of potential additional capacity. “In addition, Ascenty has options or leases on five separate sites representing up to an estimated incremental 66.5 megawatts of potential future growth capacity,” said Digital Realty.
“We are pleased to expand our global footprint into Latin America and to partner with the Ascenty management team and Brookfield. We expect this acquisition will further accelerate our growth while enhancing our ability to support our customers’ digital transformation across the globe,” said Digital Realty CEO Bill Stein.
“This transformative transaction represents consistent execution against the new market strategy we articulated at our Investor Day last December, and immediately establishes us as a market leader within an historically under-served region poised for rapid growth.
“This acquisition advances our strategy of sourcing strategic and complementary assets to strengthen and diversify Digital Realty’s data centre portfolio and expand our product mix and global footprint.” said Stein.
Transaction Details and Financial Impact
The gross purchase price for Ascenty is approximately US$1.8 billion (before contractual purchase price adjustments, transaction expenses, taxes and potential currency fluctuations), in addition to approximately US$425 million of capital expenditures to fund the completion of data centre development currently under construction and to build out additional capacity to meet near-term customer demand. The US$2.25 billion of total estimated capital invested represents a multiple of approximately 15.0 – 15.5 times underwritten forward stabilised EBITDA.
The transaction is expected to close in the fourth quarter of 2018 and is subject to customary closing conditions. Digital Realty’s agreement with Brookfield is subject to certain closing conditions and is expected to close in the fourth quarter of 2018.
Upon consummation of the transaction, Ascenty will enter into a US$50.0 million senior secured first lien revolving credit facility, a senior secured first lien term loan facility of up to US$650.0 million, and a US$75.0 million senior secured first lien delayed draw term loan facility. Citi, ING and Natixis are acting as joint lead arrangers and joint bookrunners on the facilities.