In today’s industry news roundup: Two investment firms are buying US broadband network operator WOW! for $1.5bn; South Korea’s telcos are pitching into an AI startup investment fund; internet exchange giant DE-CIX expects AI to drive the widespread deployment of edge infrastructure to enable low-latency inference; and more!

The US broadband M&A rollercoaster isn’t slowing down, it seems. WideOpenWest (aka WOW!), the fabulously named US broadband network operator that provides services in 18 markets – primarily in the Midwest and Southeast, including Michigan, Alabama, Tennessee, South Carolina, Florida and Georgia – is being acquired for $1.5bn, equivalent to $5.20 per share, by DigitalBridge Investments and Crestview Partners, which will delist the service provider and run it as a privately held company. The two investment firms had been in negotiations for more than a year and had made previous unsuccessful offers. The news, announced after the stock markets closed on Monday, sent WOW!’s share price soaring by 48% to $5.06 in early trading on the New York Stock Exchange on Tuesday. Jonathan Friesel, senior managing director and head of fibre at DigitalBridge, stated: “We are excited to partner with Crestview to support this next phase of growth at WOW! We believe this transaction positions the company to deliver meaningful benefits to its customers and the communities it serves. We intend to invest in expanding and upgrading WOW!’s networks, adopting new technologies and ensuring the organisation has the resources and support needed to continue delivering fast, reliable internet service and a high-quality customer experience at competitive prices.” The team at DigitalBridge and Crestview are clearly confident they can reverse WOW!’s fortunes. In the second quarter of this year, WOW! reported revenues of $144.2m, down 9.2% year on year, and adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of $70.3m, up by just 0.4%. The operator lost 3,900 high-speed broadband customers during the quarter to take its total to 462,000, while its video service customer base declined by 6,400 to 42,500. The WOW! broadband network passes almost 2 million premises. News of the deal comes in the wake of AT&T’s announcement of its planned $5.75bn acquisition of Lumen’s fibre broadband operations, the Federal Communications Commission (FCC)’s approval of multiple broadband deals – Bell Canada’s $5.1bn acquisition of Ziply, the acquisition of Metronet by T-Mobile US and KKR, and Verizon’s $20bn acquisition of broadband network operator Frontier Communications – and the news that Charter Communications is to acquire fellow cable operator Cox Communications in a deal that values the latter at $34.5bn – see M&A megadeals reshape US comms sector.

South Korea’s three major mobile operators – SK Telecom, KT Corp and LG Uplus – have teamed up with the country’s Ministry of Science and ICT to establish a 300bn won ($216m) investment fund in an effort to ensure the country becomes an AI “powerhouse”. The Korea IT Fund, set up by the telco trio in 2002, is to contribute half of the fund, while private investors will pitch in the remainder, the ministry announced (in Korean). The majority of the fund – 240bn won ($173m) – will be invested in startups focused on the development of core and foundational AI technologies, while 40bn won ($29m) will go towards companies dedicated to chip research. “With AI technology serving as the foundation for all innovation, the expansion of investment will offer growth opportunities for AI companies,” stated science minister Bae Kyung-hoon. “The government will also build a strong foundation for investment and cooperation with the private sector to make South Korea one of the world’s top-three AI powerhouses,” he added.

Internet exchange infrastructure operator DE-CIX has just held its Global Interconnection Summit (to celebrate its 30th anniversary), where one of the keynote speakers was Matthieu Bourguignon, head of Europe at Nokia. Bourguignon noted that with the advent of AI, the networking and digital infrastructure sectors “need to invent new networks. Connectivity isn’t peripheral to AI, it’s foundational… If you look at 2030, a significant part of the network traffic will be driven by AI,” which “is changing everything – bandwidth needs, latency expectations, the way datacentres are built, even where they are located.” Ivo Ivanov, CEO of DE-CIX, agrees. “It is clear that the traditional model of centralised cloud and long-haul networking cannot keep pace with the distributed, latency-sensitive nature of AI workloads,” he noted in this blog. “While large-scale AI training can tolerate longer latency, real-time AI inference, which powers everything from autonomous systems to real-time analytics, cannot. Inference is where latency becomes a business-critical factor, and we as the digital infrastructure industry need to push the boundaries of what is possible,” he noted, echoing Bourguignon’s views. That means there’s going to be a much greater focus on edge infrastructure developments in the coming years, explained Ivanov. “AI will increase the need for more agile, sovereign and scalable interconnection models, with hundreds or even thousands of hyper-localised edge servers and exchanges distributed across the landscape. I like to think of this as our journey towards zero-latency. But we must start planning for that now. Traffic growth continues to skyrocket, and AI has in no way slowed this down. We’ve seen it on the DE-CIX exchanges, with traffic growing by 130% in five years,” added the CEO. This view isn’t new or unique but it’s certainly worth highlighting because if there is, as seems likely, a significant uptick in edge AI infrastructure investments in the coming years, with proven and attractive business models to match, this will not only impact the strategies and investments of datacentre operators and their infrastructure suppliers (including Nokia, of course) but of large enterprises and, of course, telcos, which are already being pushed to consider the potential of emerging infrastructure options such as AI-RAN. For more on this topic, and the implications for telcos, check out our recent free-to-download Trends in Telco AI Infrastructure Report. 

TalkTalk, the beleaguered UK broadband service provider, has attracted additional new funding facilities. TalkTalk announced in late July that it had received a commitment from “an existing shareholder” for £100m of “new funding facilities” and now those funding facilities have been expanded by a further £20m, the service provider has announced. 

– The staff, TelecomTV