FTI Consulting News Bytes – 28th January 2022

This week’s news

China cools the metaverse hype

However confident Mark Zuckerberg may be about meetings in the metaverse, one group that is looking to curb enthusiasm – at least for now – is the Chinese Government.  As the South China Morning Post reports, Chinese authorities have begun denying the majority of metaverse-related trademark claims made in the country, particularly those including yuan yuzhou, the Mandarin translation for metaverse. While the move is aimed to slow the frenzied pace of metaverse-related hype in China, Xi Jinping’s Government is far from an outright meta-sceptical one. The metaverse was a major focus of the country’s recent ‘14th Five-Year Plan for the Development of the Electronic Information Industry’. Instead, the move is likely, at least in part, a way for China to control and closely monitor the development of its part in the metaverse, which, as Reuters argues, is likely to be stridently ‘clean, censored, compliant and crypto-less’, setting a strong regulatory hand in the space from the outset.

3G’s a Crowd

Vodafone is planning to retire its 3G network in the UK in 2023.  This forms part of its network modernisation programme and its plan to improve its 4G and 5G coverage. The use of Vodafone’s 3G network has fallen dramatically as 5G has rolled out, with less than 4% of data carried on 3G, compared to 30% in 2016. This news follows a similar move announced by EE in July 2021, which according to TechRadar, was the first UK operator who confirmed its plans to switch off its aging 3G network. While this is good news for the growing number of 5G handset users, as The Times points out, there are concerns in some quarters that the move could deepen the digital divide and disadvantage rural and elderly consumers in particular who rely on 3G, with an estimated two million Britons currently on 3G-only handsets.

A red card for NFTs

NFT hype has shown no signs of abating in 2022. Whether it’s K-Pop idols BTS announcing supposedly ‘eco-friendly’ NFTs, or John Lennon’s son selling various pieces of Beatles memorabilia in NFT format, the non-fungible wave shows no sign of cresting yet. YouTube is the latest player to get in on the trend, with CEO Susan Wojcicki indicating in a recent letter to users that the platform is looking to enter the NFT space as an additional revenue stream for creators, saying, “We’re always focused on expanding the YouTube ecosystem to help creators capitalize on emerging technologies, including things like NFTs, while continuing to strengthen and enhance the experiences creators and fans have on YouTube”. Not everyone is in on the hype, however, as The Telegraph reports, the UK’s Premier League is preparing to take action against footballers including John Terry and Ashley Cole for promoting NFTs featuring images of the Premier League trophy.

‘On Your Bike!’ says Peloton Investor

Peloton is still caught in a vicious cycle.  Shares have plummeted as they announced they are stopping bicycle production.  This has prompted activist investors to call for the resignation of Chief Executive and Founder John Foley, the Financial Times reports. Activist investor Blackwells Capital LLC wants the exercise equipment company to fire Foley and explore a sale to the likes of Nike, Disney, or Sony. With Peloton’s share price plummeting 84% in the last year, the pressure is perhaps not surprising. Whether Foley stays at his post remains to be seen.  If he is looking for distraction from this bout of bad news, the TV drama series Billions is unlikely to provide much light relief – it is the latest television show to feature a character falling victim to the exercise bike. Peloton’s investors will be hoping the company has better luck in the real world.

Investment powers up British gigafactory

Britishvolt, the start-up building the UK’s new gigafactory, has secured £1.7bn of private funding from global investment company abrdn and logistics real estate fund manager Tritax. The private investment was also backed by £100m government grant from the UK’s Automotive Transformation Fund. Britishvolt plans to manufacture power cells for 300,000 electric vehicle battery packs a year at a new factory. As Sky News reports, Business Secretary Kwasi Kwarteng said the investment was a vote of confidence in the UK and the North East, stating, “In this global race between countries to secure vital battery production, this government is proud to make the investment necessary to ensure the UK retains its place as one of the best locations in the world for auto manufacturing”.

Top Tweets of the Week

• Meta Newsroom: Today we’re introducing the AI Research SuperCluster (RSC), which we believe is among the fastest AI supercomputers running today — soon to be the fastest. RSC will help our researchers build better AI models and lay the groundwork for the metaverse.
• Bloomberg Technology: Deutsche Telekom is weighing a potential merger of its mobile towers with those of rivals including Vodafone and Orange, in a move that could create a European behemoth in the sector
• Bloomberg EMEA News Director Stuart Wallace: The quantum apocalypse: a world where encrypted, secret files are suddenly cracked open (https://bbc.co.uk/news/technology-60144498)

Number of the Week

$1 trn. – The value (in USD) lost across the crypto market since November 2021, according to Bloomberg.

What’s happening next week?

• 31 January: Devolver Digital trading update
• 2 February: Meta Q4 and full year results; Spotify Q4 results; Vodafone trading update; Sony Q3 results; Fortune’s World’s Most Admired Companies list revealed
• 3 February: Dassault Systemes Q4 earnings; BT Group Q3 results; Amazon Q4 results; Snap Inc Q4 results; Pinterest Q4 results
• 4 February: Beijing Winter Olympic Games Opening Ceremony
• 6 February: 70th anniversary of The Queen’s accession to the throne, aka Platinum Jubilee

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