Facebook faces several fines

The company will pay a record-breaking $5 billion fine to resolve a government probe into its privacy practices, among other penalties.
Read time 7min 10sec

Various announcements regarding Facebook dominated the international ICT market last week.

At home, the spectrum policy announcement was the main story.

Key local news

  • A positive trading update from Vodacom Group.
  • Negative trading updates from Ellies Holdings and Telemasters.
  • Naspers led a $30 million investment in Polish-founded peer-to-peer learning community Brainly. The other investors are Runa Capital and Manta Ray.
  • Communications minister Stella Ndabeni-Abrahams has asked ICASA to ensure preferential access to spectrum is given to a new wholesale open-access network (WOAN) to increase competition in SA’s mobile telecoms market. In a long-awaited policy direction to ICASA, the minister asked the regulator to ensure the WOAN is given enough spectrum and other support to ensure its success. ICASA will also license additional available spectrum and it won’t all be assigned to the WOAN, as had previously been envisaged by government. However, those given additional spectrum will have to commit to buying capacity from the WOAN.
  • South African hosting services provider Hetzner has rebranded as Xneelo.
  • A new JSE cautionary by the Huge Group.
  • A renewed JSE cautionary by Ayo Technology Solutions.
  • The appointment of Wilhelm van Rensburg as MD of Mint’s SA division.

Key African news

  • Satisfactory year-end figures from Ethio Telecom (Ethiopia), with revenue up 7%.
  • Good half-year numbers from MTN Nigeria, with revenue up over 10% and EBITDA up 40%.
  • Mixed interim numbers from Maroc Telecom, with revenue down 0.5% but EBITDA up 6.2%.
  • Mixed quarterly figures from Airtel Africa, with revenue up 10.2% but profit down 12%.
  • The appointments of Ernest Ndukwe as chairman of MTN Nigeria; and Johan Scheepers as head of Commvault’s SA operation.

Key international news

  • Apple acquired a majority stake of Intel’s smartphone business for $1 billion.

Naspers led a $30 million investment in Polish-founded peer-to-peer learning community Brainly.

  • Bell Media bought Groupe V Média’s conventional network V, along with related digital assets, including the ad-supported VOD service Noovo.ca.
  • Network has made a - and to pay $5 billion for their wireless assets.
  • Eaton Corporation acquired the Souriau-Sunbank Connection Technologies business of TransDigm Group, a global leader in highly engineered electrical interconnect solutions for harsh environments. The deal was worth $920 million.
  • EY India bought India-based C Centric, a provider of CRM solutions and services.
  • Kontron S&T, a subsidiary of S&T and the world's leading provider of IOT and embedded computing technology, purchased Fujitsu Technology Solutions’ industrial mainboard business.
  • Teledyne Technologies acquired 3M’s Gas and Flame Detection business for $230 million.
  • Verisk bought Keystone Aerial Surveys to expand its aerial survey services.
  • Microsoft made a $1 billion investment in OpenAI and announced the two companies have formed a multi-year partnership to develop artificial intelligence supercomputing technologies on Microsoft's Azure cloud computing service.
  • Facebook will pay a record-breaking $5 billion fine to resolve a government probe into its privacy practices, and the social media giant will restructure its approach to privacy. However, the regulator has opened another probe regarding Facebook’s anti-competitive behaviour.
  • Facebook has agreed to pay a $100 million fine to settle charges by the US Securities and Exchange Commission that it misled investors for more than two years about the misuse of its users' data.
  • Equifax has agreed to a comprehensive resolution ($671 million) of significant US consumer-related litigation and regulatory matters facing the company related to its 2017 cyber security incident.
  • LSC Communications and Quad/Graphics terminated the $1.4 billion merger a month after the US Justice Department filed a lawsuit against the deal.
  • Microsoft has agreed to pay $25 million to settle US government investigations into alleged bribery by former employees in Hungary.
  • The US Justice Department approved the $26 billion T-Mobile US merger with rival Sprint, after the companies agreed to create a new wireless carrier by selling assets to Dish Network.
  • The US Justice Department is opening a broad anti-trust review into whether dominant tech firms are unlawfully stifling competition.
  • Vodafone plans to separate its mobile mast operations in Europe into a new company that it potentially could list.
  • Trading hit a fever pitch, with shares rocketing as much as 520%, as China’s new Nasdaq-style board for homegrown tech firms debuted in Shanghai, only to be followed by a massive drop the following day.
  • SoftBank Group will start a second technology mega-fund and has secured $108 billion in commitments from investors including Apple, Japanese banks, Taiwanese investors and Kazakhstan’s sovereign-wealth fund.
  • Italy's largest phone group Telecom Italia and rival Vodafone have agreed to merge their mobile tower infrastructure.
  • Very good quarterly figures from HannsTouch Solution, Huawei Technologies, Smith Micro Software (back in the black) and Xilinx.
  • Very good half-year numbers from Gresham Technologies (back in the black) and Informa.
  • Good quarterly numbers from Alphabet, BE Semiconductor Industries, Cadence Design Systems, Euronet Worldwide, Interface, Larsen & Toubro, Macronix, Mellanox Technologies, PayPal, Twitter, Universal Microwave Technology and Visa.
  • Good half-year figures from FDM Group Holdings and Ingenico Group.
  • Satisfactory quarterly results from Align Technology, Amazon, Anixter International, AudioCodes, Bharti Infratel, Charter Communications, Computer Task Group, Dassault Systemes, General Dynamics, Lockheed Martin, Logitech International, Nokia, Novatek Microelectronics, Orange, Rogers Communications, Roper Technologies, Sify Technologies, T-Mobile, Teledyne Technologies and VeriSign.
  • Satisfactory half-year numbers from Amphenol, Aptitude Software, Atos, du and Etisalat Group.
  • Satisfactory year-end figures from NCC Group.
  • Mediocre quarterly results from ATN International, AVX, AXT, Benchmark Electronics, CyberOptics, Flex, Intel, Juniper Networks, SK Hynix, STMicroelectronics, Telefonica, Texas Instruments and Visteon.
  • Mediocre half-year figures from Synectics.
  • Mixed quarterly figures from AT&T, Cerner, Check Point Software Technologies, Citrix Systems, Comcast, Equifax, F5 Networks, Facebook, First Data, Fiserv, Flir Systems, Manhattan Associates, Telefonica Brasil, Teradyne, Viad and Yandex, with revenue up but net income down; and from Entegris, Netgear (but back in the black) and TE Connectivity, with revenue down but net income up.
  • Quarterly losses from Agilisys, Atlassian, AU Optronics, Brightcove, Carbonite, Celestica, CoreLogic, Cypress Semiconductor, Diebold Nixdorf, Digimarc, Faro Technologies, Iridium Communications, LG Display, LINE Corporation, LogMein, MaxLinear, Mitek Systems, Proofpoint, PTC, ServiceNow, Silicon Labs, Snap, Sonim Technologies, Tessco Technologies, Vocera Communications and wix.com.
  • Half-year losses from AIQ and IDOX.
  • The appointments of Melissa Di Donato as CEO of SuSE; and Steve Munford as executive chairman and interim CEO of Carbonite.
  • The resignation of Mohamad Ali, CEO of Carbonite.
  • The retirement of Nils Brauckmann, CEO of SuSE; Mark Logan as CEO of LogRhythm; and Philip Mezey, CEO of Itron.
  • The departure of Andy Grolnick, CEO of LogRhythm.
  • A planned IPO from Datadog, a cloud monitoring company.
  • An IPO filing for the NYSE from Dynatrace, an enterprise software business.

Research results and predictions

  • South Africa:
    • IT spending in SA will total R303.46 billion in 2019, a 3.9% increase from 2018, according to Gartner.
  • EMEA/Africa:
    • The EMEA traditional PC market (desktops, notebooks, and workstations) grew 1.1% in Q219 and totalled 16.4 million units, according to IDC.
  • Worldwide:
    • Worldwide semiconductor revenue is forecast to total $429 billion in 2019, a decline of 9.6% from $475 billion in 2018, according to Gartner. This is down from the previous quarter’s forecast of -3.4%.
    • The software-defined wide area network infrastructure market will grow at a 30.8% CAGR from 2018 to 2023, to reach $5.25 billion, according to IDC.

Stock market changes

  • JSE All share index: Down 1.2%
  • FTSE100: Up 0.5% (highest weekend close this year)
  • DAX: Up 1.3% (highest weekend close this year)
  • NYSE (Dow): Up 0.1%
  • S&P 500: Up 1.7% (highest weekend close)
  • Nasdaq: Up 2.3% (highest weekend close)
  • Nikkei225: Up 0.9%
  • Hang Seng: Down 1.3%
  • hanghai: Up 0.7%

Look out for

  • International:

Australia cracking down on the big tech boys.

  • South Africa:

More news regarding Ayo Technology Solutions and EOH.

Final word

Each year, The Africa Report publishes its ‘500’ list of Africa’s largest companies measured by revenue. As has been the case in previous years, there are still no IT companies in the list from outside SA. Included in the top 50, from a technology perspective, are:

  • 7: MTN Group (was 7)
  • 13: Vodacom Group (was 17)
  • 14: Naspers (was 15)
  • 19: Vodacom SA (was 25)
  • 31: Datatec (was 16)
  • 34: Groupe Maroc Telecom (was 32)
  • 39: MTN SA (was 40)
  • 42: Telkom SA (no change)
  • 46: Global Telecom Holding (was 43)
  • 48: MTN Nigeria (was 33)

Further analysis will follow next week.

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