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Deutsche Telekom seeks investors to bankroll German internet overhaul

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Deutsche Telekom is offering investors stakes in a company it is creating to overhaul Germany’s internet cables to help foot the bill for much-needed network modernisation, three people familiar with the matter said.

The deal is part of a German bid to catch up with other European countries such as Spain, which has outpaced Europe’s industrial powerhouse by laying high-tech glass fibre cables while Germany is mainly stuck with old-fashioned copper lines.

Deutsche Telekom, Germany’s main telecoms company, has come under increasing pressure to act quickly as the coronavirus pandemic has forced more people to work from home and rely on fast, stable internet connections.

The sources told Reuters that Deutsche Telecom and its adviser Deutsche Bank are targeting investors such as Dutch funds APG and PGGM and Canada‘s Brookfield and CDPQ, as well as sovereign wealth funds.

Deutsche Telekom’s initial plan is to roll out fibre cables to 4 million households and investors will be offered stakes equivalent to up to half of the project’s equity, the sources said. Further extensions of the network are likely.

The German company is following the strategy adopted by rivals, such as Spain’s Telefonica, which have struck similar deals with investors to help pay for network upgrades.

Deutsche Telekom, Deutsche Bank and the prospective bidders all declined to comment.

At the same time, the German telecoms giant is kicking off the sale of its T-Mobile Netherlands business to cut its debt and free up cash for investment in infrastructure.

FOREIGN INVESTORS

Deutsche Telekom is a laggard when it comes to fibre as it bet on improved copper cables to supply internet connections and only switched to focusing on faster fibre cables in 2019.

Its move is part of a trend among German companies of turning to foreign investors to fund parts of the infrastructure that keeps the wheels of industry whirring, such as energy.

Power network 50Hertz, for example, is now majority owned by Belgium’s Elia while gas-power firm Open Grid Europe is part-owned by Australian investor Macquarie.

Investment by China, however, is viewed sceptically. When China’s State Grid wanted to take a stake in 50Hertz in 2018, German state lender KfW prevented the move.

Fibre networks are typically financed with 30% equity and 70% debt and Deutsche Telekom is looking for investors to contribute half of the equity with it providing the rest.

Telefonica struck a deal in October 2020 with German insurer Allianz to develop a fibre optic network in Germany for 2.2 million households in a project valued at 5 billion euros ($6.1 billion).

Assuming a similar valuation, Deutsche Telekom’s project to supply about 4 million households would be worth some 10 billion euros, meaning investors would need to contribute 1.5 billion euros, or half of the 30% equity.

At its capital markets day in May, Deutsche Telekom Chief Executive Tim Hoettges underlined the company’s commitment to accelerating the rollout of fibre in Germany, taking it from 600,000 households last year to 2.5 million in 2024.

He said the company plans to invest 2.5 billion euros a year in fibre infrastructure.

DUTCH MOBILE SALE

Deutsche Telekom’s plan would still leave it trailing countries such as Spain and Sweden, where more than 60% of homes already get their internet via fibre cables. In Germany, only 5% of homes have fibre, slightly lower than Italy.

Deutsche Telekom executive Dominique Leroy has said its goal is to reach 10 million households with fibre by the end of 2024 and that it would seek partnerships where it makes sense.

While Deutsche Telekom is preparing to invest billions, it is also faces a large bill to exercise options to raise its holding in T-Mobile U.S. to more than 50% from 43%.

However, it is already saddled with 130 billion euros of debt and is now selling businesses to reduce the pile.

First in line is its subsidiary T-Mobile Netherlands, which is estimated to be worth up to 5 billion euros. The Dutch mobile business has 6.8 million customers and its sales last year came to 1.9 billion euros.

Deutsche Telekom’s adviser on the deal, Morgan Stanley, has sent out first information packs to prospective bidders asking for offers by the end of July, people familiar with the process said.

Suitors including buyout groups KKR, EQT and Warburg Pincus are expected to take part, as is French telecoms entrepreneur Xavier Niel, the people said.

Warburg Pincus, which employs former Deutsche Telekom CEO Rene Obermann, came close to buying the business in 2015.

Morgan Stanley and the potential bidders all declined to comment.

Once that sale is out of the way, Deutsche Telekom may look to sell its telecom towers division, the people said, adding that while conversations with banks are taking place no decision has been taken.

($1 = 0.8248 euros)

 

(Editing by John O’Donnell and David Clarke)

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Whitehead becomes 1st CHL player to verbally commit to playing NCAA hockey

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Braxton Whitehead said Friday he has verbally committed to Arizona State, making him the first member of a Canadian Hockey League team to attempt to play the sport at the Division I U.S. college level since a lawsuit was filed challenging the NCAA’s longstanding ban on players it deems to be professionals.

Whitehead posted on social media he plans to play for the Sun Devils beginning in the 2025-26 season.

An Arizona State spokesperson said the school could not comment on verbal commitments, citing NCAA rules. A message left with the CHL was not immediately returned.

A class-action lawsuit filed Aug. 13 in U.S. District Court in Buffalo, New York, could change the landscape for players from the CHL’s Western Hockey League, Ontario Hockey League and Quebec Maritimes Junior Hockey League. NCAA bylaws consider them professional leagues and bar players from there from the college ranks.

Online court records show the NCAA has not made any response to the lawsuit since it was filed.

“We’re pleased that Arizona State has made this decision, and we’re hopeful that our case will result in many other Division I programs following suit and the NCAA eliminating its ban on CHL players,” Stephen Lagos, one of the lawyers who launched the lawsuit, told The Associated Press in an email.

The lawsuit was filed on behalf of Riley Masterson, of Fort Erie, Ontario, who lost his college eligibility two years ago when, at 16, he appeared in two exhibition games for the OHL’s Windsor Spitfires. And it lists 10 Division 1 hockey programs, which were selected to show they follow the NCAA’s bylaws in barring current or former CHL players.

CHL players receive a stipend of no more than $600 per month for living expenses, which is not considered as income for tax purposes. College players receive scholarships and now can earn money through endorsements and other use of their name, image and likeness (NIL).

The implications of the lawsuit could be far-reaching. If successful, the case could increase competition for college-age talent between North America’s two top producers of NHL draft-eligible players.

“I think that everyone involved in our coaches association is aware of some of the transformational changes that are occurring in collegiate athletics,” Forrest Karr, executive director of American Hockey Coaches Association and Minnesota-Duluth athletic director said last month. “And we are trying to be proactive and trying to learn what we can about those changes.

Karr was not immediately available for comment on Friday.

Earlier this year, Karr established two committees — one each overseeing men’s and women’s hockey — to respond to various questions on eligibility submitted to the group by the NCAA. The men’s committee was scheduled to go over its responses two weeks ago.

Former Minnesota coach and Central Collegiate Hockey Association commissioner Don Lucia said at the time that the lawsuit provides the opportunity for stakeholders to look at the situation.

“I don’t know if it would be necessarily settled through the courts or changes at the NCAA level, but I think the time is certainly fast approaching where some decisions will be made in the near future of what the eligibility will look like for a player that plays in the CHL and NCAA,” Lucia said.

Whitehead, a 20-year-old forward from Alaska who has developed into a point-a-game player, said he plans to play again this season with the Regina Pats of the Western Hockey League.

“The WHL has given me an incredible opportunity to develop as a player, and I couldn’t be more excited,” Whitehead posted on Instagram.

His addition is the latest boon for Arizona State hockey, a program that has blossomed in the desert far from traditional places like Massachusetts, Minnesota and Michigan since entering Division I in 2015. It has already produced NHL talent, including Seattle goaltender Joey Daccord and Josh Doan, the son of longtime Coyotes captain Shane Doan, who now plays for Utah after that team moved from the Phoenix area to Salt Lake City.

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AP college sports:

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Calgary Flames sign forward Jakob Pelletier to one-year contract

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CALGARY – The Calgary Flames signed winger Jakob Pelletier to a one-year, two-way contract on Friday.

The contract has an average annual value of US$800,000.

Pelletier, a 23-year-old from Quebec City, split last season with the Flames and American Hockey League’s Calgary Wranglers.

He produced one goal and two assists in 13 games with the Flames.

Calgary drafted the five-foot-nine, 170-pound forward in the first round, 26th overall, of the 2019 NHL draft.

Pelletier has four goals and six assists in 37 career NHL games.

This report by The Canadian Press was first published Sept. 13, 2024.

The Canadian Press. All rights reserved.



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Kingston mayor’s call to close care hub after fatal assault ‘misguided’: legal clinic

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A community legal clinic in Kingston, Ont., is denouncing the mayor’s calls to clear an encampment and close a supervised consumption site in the city following a series of alleged assaults that left two people dead and one seriously injured.

Kingston police said they were called to an encampment near a safe injection site on Thursday morning, where they allege a 47-year-old male suspect wielded an edged or blunt weapon and attacked three people. Police said he was arrested after officers negotiated with him for several hours.

The suspect is now facing two counts of second-degree murder and one count of attempted murder.

In a social media post, Kingston Mayor Bryan Paterson said he was “absolutely horrified” by the situation.

“We need to clear the encampment, close this safe injection site and the (Integrated Care Hub) until we can find a better way to support our most vulnerable residents,” he wrote.

The Kingston Community Legal Clinic called Paterson’s comments “premature and misguided” on Friday, arguing that such moves could lead to a rise in overdoses, fewer shelter beds and more homelessness.

In a phone interview, Paterson said the encampment was built around the Integrated Care Hub and safe injection site about three years ago. He said the encampment has created a “dangerous situation” in the area and has frequently been the site of fires, assaults and other public safety concerns.

“We have to find a way to be able to provide the services that people need, being empathetic and compassionate to those struggling with homelessness and mental health and addictions issues,” said Paterson, noting that the safe injection site and Integrated Care Hub are not operated by the city.

“But we cannot turn a blind eye to the very real public safety issues.”

When asked how encampment residents and people who use the services would be supported if the sites were closed, Paterson said the city would work with community partners to “find the best way forward” and introduce short-term and long-term changes.

Keeping the status quo “would be a terrible failure,” he argued.

John Done, executive director of the Kingston Community Legal Clinic, criticized the mayor’s comments and said many of the people residing in the encampment may be particularly vulnerable to overdoses and death. The safe injection site and Integrated Care Hub saves lives, he said.

Taking away those services, he said, would be “irresponsible.”

Done said the legal clinic represented several residents of the encampment when the City of Kingston made a court application last summer to clear the encampment. The court found such an injunction would be unconstitutional, he said.

Done added there’s “no reason” to attach blame while the investigation into Thursday’s attacks is ongoing. The two people who died have been identified as 38-year-old Taylor Wilkinson and 41-year-old John Hood.

“There isn’t going to be a quick, easy solution for the fact of homelessness, drug addictions in Kingston,” Done said. “So I would ask the mayor to do what he’s trained to do, which is to simply pause until we have more information.”

The concern surrounding the safe injection site in Kingston follows a recent shift in Ontario’s approach to the overdose crisis.

Last month, the province announced that it would close 10 supervised consumption sites because they’re too close to schools and daycares, and prohibit any new ones from opening as it moves to an abstinence-based treatment model.

This report by The Canadian Press was first published Sept. 13, 2024.

The Canadian Press. All rights reserved.



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