Xiaomi apologises for misleading UK consumers

Chinese smartphone vendor Xiaomi says an apparent £1 smartphone offer was meant as a raffle, blaming marketing message lost in translation.

At its launch event in London, Xiaomi announced that for a limited period, users would be able to buy Mi A2 and Mi 8 Lite,  both launched earlier this year, for only £1 from its web-shop. When the time came however, social media was flooded by complaints from frustrated hopefuls who have failed to scoop the jackpot.

Some users decided to take the matter into their own hands. Phil Williams from Stockport managed to dig out the browser script as well as checked the online shopping platform’s developer page, and shared his findings on Twitter.

It turned out that the script was written in the way that as soon as a user clicked “Buy Now”, the browser would return an “out of stock” message, without going through the loop to check the inventory status.

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Xiaomi’s official response came in three days later, claiming that it was a lost-in-translation blunder. The so-called “flash sale” in essence was a raffle draw, and only ten smartphones (five pieces of each model) were made available for the lucky ones across three days. Xiaomi explained that “Of the thousands who clicked ‘buy’ simultaneously, our system will randomly select the winners”. However on the Terms & Conditions page linked to the promotion, it was spelled out clearly under “£1 Flash Sale” that “Products available under this sale are limited in quantity and are given away on first-come, first-serve basis.”. Xiaomi has not responded to Telecoms.com’s request for clarification of the contradiction.

There are potentially two issues surrounding this case. At the launch event we never heard any mention of lucky draw type of “flash sale”. Rather the message given was very similar to a “Black Friday”-type of “deal”. The misleading promotion message could fall foul of the Advertising Standards Agency. A more serious issue relates to GDPR. All those entering the raffle needed to log in with their Mi account. This would mean that Xiaomi should not keep their data more than the raffle period if the accounts were created specifically for this purpose. It would be interesting to see if this rule is being followed.

Making the UK a world leader in 5G

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Adam Leach, Director of Emerging Technology at Nominet takes a look at some of the things the UK things to do in order to compete globally in the 5G era.

It may be just one digit up in the numbered ‘generations’ of mobile communications, but 5G presents a heady leap beyond its predecessors when it comes to capabilities and capacities. This next generation connectivity promises to enable a multitude of new use cases beyond our smartphones, with the potential to transform industries from agriculture through to manufacturing.

It is the Government’s ambition for the country to be a world leader in 5G, supporting exploration of the new technology through the Industrial Strategy Challenge Fund. However, this can only be achieved if the existing approach to spectrum policy is changed. According to Ofcom’s latest figures, 43% of the UK is still without 4G; the problem could be significantly worse for 5G unless we act now and amend our approach to telecommunications.

The issues arise from the unintended consequences of a spectrum policy that doesn’t adequately incentivise network operators to deploy infrastructure widely across the whole country. This causes a digital divide which threatens to undermine our country’s long term economic aims by exacerbating various existing social challenges, leaving too many people and businesses behind as we try to digitally advance as a nation. Now is the moment to make the changes that would see connectivity and coverage meet existing needs and cope with the demands of the future.

We are not the only nation aware of these challenges, nor the only one considering making fundamental changes to the way we use spectrum. In the US, the Citizens Broadband Radio Service (CBRS) is underpinned by spectrum sharing, while in Japan, the Ministry of Internal Affairs and Communication is planning to focus on dynamic spectrum sharing, creating a system that allows frequencies to be assigned to providers on demand in a bid to prepare the country for 5G. Considering Japan is consistently ranked as a leading tech nation, with the US not far behind, these international efforts to better manage the use of spectrum to prepare for the rise of IoT and 5G only endorses the use of a similar one here in the UK.

A recent review by the Department for Digital, Culture, Media and Sport (DCMS), the Future Telecoms Infrastructure Review (FTIR), has laid out an alternative model for telecoms in the UK; the market expansion model. I believe this presents the best option for deploying 5G, and it relies on ushering in an improved approach to the selling, sharing and using of spectrum.

Fundamentally, a move towards dynamic spectrum management for pioneer 5G bands will help us realise seamless connectivity across the UK. The approach will facilitate a greater number of smaller players to enter a market currently dominated by the largest telecommunications companies and provide access to unused areas of the spectrum.

Under the existing auction model, the largest companies purchase the rights for nationwide exclusive access to spectrum, often resulting in spectrum being left fallow and citizens without coverage. We can’t be so flippant with this finite resource when it comes to 5G. Dynamic sharing offers a means of maximising available spectrum to support our rapidly growing demands and should help ensure the UK doesn’t fall behind other tech nations when 5G becomes the norm.

We also must be realistic about the sustainability of the existing investment model. Up to now, Mobile Network Operators (MNOs) have shouldered the weight of network development, but the decline in revenues and low growth of recent years underscore how unsuited this approach is for the long term.

It is clear that 5G has moved beyond the mobile network coverage focus of previous generations; we now need a wider market with new players to bring innovation and new technologies to the space. We also require new business models and the higher levels of investment required to achieve the UK’s 5G ambitions. This is only possible if we offer an incentive to invest in and innovate the ecosystem, which the new model would support.

It mustn’t be forgotten that time is of the essence, as the Government seeks to give the majority of the country 5G coverage by 2027. The current spectrum policy means 5G coverage will only be rolled out when (and if) the MNO can make the financial case for deployment, but the new model would allow new players to concurrently deploy their services into the market, making use of the available spectrum without relying on buying a nationwide license. This increased speed of deployment will be a real advantage when businesses and livelihoods rely on 5G coverage.

This in turn makes good economic sense too. The Future Communications Challenge Group of January 2017 estimated that the economic impact of 5G in the UK could be around £112bn in 2020, rising to £164bn in 2030. If the UK was to lead technology development in 5G, the impact would rise to £198bn in 2030; about 5.7% of the UK’s GDP. Considering the various uncertainties around Brexit and leaving the EU, a reliable revenue stream is to be welcomed.

When it comes to connectivity, the game has changed. 5G is the future, and we need a future-ready model that can meet the demands we will place upon it, now and in the years ahead. The new model from DCMS offers us a compelling, fit-for-purpose approach that could overcome the existing issues and pave the way for the seamless connectivity the UK needs to be a world leader in 5G.

 

Adam LeachAdam Leach is Director of Emerging Technology at Nominet, leading innovation and new product development, and serves as Non-Executive Director at the Microbit Educational Foundation. Previously Adam was at Ovum, a global analyst firm, leading research on smart devices to provide market insight and intelligence on consumer technology. Adam’s background is in software engineering and he was the technical lead for the world’s first smartphone, the Nokia Communicator.

Investigation claims most mobile VPN apps are run by dodgy companies

An investigation by Top10VPN.com has concluded more than half of the most popular VPN apps are run by ‘secretive companies with Chinese ownership’.

The whole point of VPN apps is to protect your mobile online behaviour from third party snooping. Chinese companies, however, are regularly accused of collaborating with the Chinese state in order to facilitate espionage activities. While there is limited concrete proof of this kind of activity, VPN users are entitled to know who it is that’s claiming to protect their privacy, and this investigation alleges that is being deliberately concealed.

“What consumers tend to forget is that in order for VPNs to protect their online privacy, all their internet traffic must pass through their VPN provider’s servers and can be potentially logged and shared with third parties,” said Simon Migliano, head of research at Top10VPN.com

“Leading VPN providers have detailed privacy policies that preclude them from monitoring this traffic. Yet many of the most popular free VPN apps for smartphones have nothing of the sort in their policies – meaning that there’s a really disconcerting ambiguity about what is happening to this data.

“To add to this is the fact that so many of these VPNs have Chinese ownership – and some are even based in the country’s flagship technology parks. It’s been widely reported that China has really clamped down on local VPN providers in recent months which raises questions about why these companies – which have such large international user bases – have been allowed to continue operating.”

Migliano is especially appalled at the lack gatekeeping and quality control from Google and Apple in this case. We were genuinely shocked that listings for these apps contained false information and links to such substandard resources that it’s clear there can be but minimal oversight of these apps,” he said. “This is a dereliction of duty from Apple and Google, whose lax controls are potentially leaving their customers open to wholesale data harvesting.”

Top10VPN.com presumably make money by people using its service to switch VPN apps, so it has a clear vested interest in urging people to do just that, but that doesn’t mean it’s findings aren’t significant. At the same time just because an app is Chinese that doesn’t mean it’s dodgy and the substantive issue here is about transparency and quality control in general. It makes you wonder how many other mobile apps are something other than they appear to be.

TIM announces Elliot-proposed board member Gubitosi as new CEO

As anticipated by Telecoms.com last week, Telecom Italia (TIM) has appointed current board member Luigi Gubitosi as its new CEO.

Gubitosi has been given the gig less than a week after the former CEO Amos Genish was unceremoniously shown the door, having been reassured his job was safe. His replacement is a member of the TIM board nominated by Elliott, the activist investor group that wrested control of the TIM boardroom from Vivendi. Genish was a Vivendi appointee and remains on the board.

This is just the latest chapter in the battle for control of TIM with a view to extracting value from it. Last year we asked how Vivendi, with less than a quarter of TIM shares, could apparently dictate the direction of the company. Elliot clearly felt the same and successfully challenged Vivendi. But now, with less than a tenth of TIM stock, it’s trying the same move.

You don’t have to be the biggest cynic in the world to figure both parties are in it for themselves. The biggest apparent difference between their competing visions is a matter of short-termism. The rhetoric coming from the Vivendi camp is that it’s interested in the long-term health of the company, while Elliot is effectively engaged in asset-stripping in order to give it a more immediate return and exit on its investment.

The main manifestation of this is the plan to spin off TIMs network holdings into a separate company, imaginatively called Netco, that would still be wholly-owned by TIM. This feels like a cosmetic change but it would apparently free up some value, for some reason, perhaps by saddling it with loads of debt. The longer-term danger is that this would be a precursor to disposing of those assets entirely in the long term.

Genish is not a fan of this approach, and recently offered the following statement: “Any decision to break up the company, including losing control of the fixed network, must go back to the shareholders for a vote.” He will apparently seek shareholder support for an extraordinary shareholder meeting to address this, which shouldn’t be a problem if Vivendi is still backing him, but it’s not yet clear whether this will amount to an attempt to regain control of the board.

Elliot affiliation aside, Gubitosi looks pretty well qualified for the gig. He did a couple of decades at Fiat before joining MNO Wind, where he was CEO between 2007-2011. He moved on to be General Manager of state broadcaster RAI and, like any self-respecting member of the elite, is on a bunch of boards, committees and that sort of thing. His rich history of working with the Italian state might come in handy in the network spinoff process.

It’s very unlikely that Vivendi and other shareholders will take this further power grab by Elliott lying down, so this story is likely to keep giving for a while yet. Both parties will spout rhetoric about how invested they are in the future prosperity of TIM, but they only differ in their value-extraction strategies. In the meantime TIM remains hamstrung at a time when new entrant Iliad Italy is taking massive chunks of mobile subscriber share. It’s hard to see how that’s going to benefit anyone with a stake in TIM.

Is China’s AI industry much ado about nothing?

Investment in China’s AI companies has plummeted after hitting a high in 2017, amid inflated valuation and unfulfilled promises.

In July the research firm ABI Research released a report tracking investment in AI. China’s AI industry attracted $4.9 billion private sector investment in 2017, overtaking the US for the first time as the world’s biggest AI investment destination. Barely four months have passed when the firm published an update to show that the investment in China’s AI sector has plummeted in the first half of 2018, attracting only $1,6 billion, less than one third of the level of its biggest rival.

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A couple of factors may have contributed to the decline in the investment level. Valuation of start-ups has soared. According to Kai-Fu Lee, a former Google senior executive who nowadays runs a venture capital investing in China’s technology sector, the reasonable valuation of a typical AI start-up in China is less than half of the price level it was a year ago. This may well have put off some investors.

Another factor could be the speed of progress. “[We’re] at a juncture where the generic use cases have been addressed,” Lian Jye Su, the firm’s principle analyst spoke to the Financial Times. “And building generic general purpose chatbots is much easier than specific algorithms for industries like banking, construction, or mining because you need industry knowledge and buy-in from the industry.”

But specialised AI products are hard to come by and take a long time to develop. So, some companies chose to take a short-cut to show their progress. Natural language processing is one such competitive sector. Not too long ago a controversy arose when a simultaneous translator claimed that the company that hired him at a conference in China used a voice-to-text engine to display his translate to the conference audience, pretending the live speech was AI machine-translated. The company explained that it was using a hybrid solution.

The much hyped, and feared, “social credit” system is also moving at a slow pace. Recently a university in southern China, instead of using AI to troll internet traffic, decided to resort to the analogue way of detecting dissent: it required all students and staff to hand in their computers, mobile phones, and USB sticks to be inspected by the school authorities. It backfired badly, and the university told the media that it would “rethink” the scope of its approach.

At the end of the day it falls to the technology heavyweights rather than the start-ups to take charge. Huawei and Alibaba have both started developing their own AI chips to shore up its vertical integration capability. This will take much longer than developing a gimmicky application, hybrid or not, but will be much more specialised and more powerful, especially supported by the large amount of data the companies possess.

FCC permits SpaceX to launch additional 7,518 broadband satellites

SpaceX has been granted approval by the Federal Communications Commission to launch a further 7,518 broadband satellites.

FCC Chairman Ajit Pai said today:

"From providing high-speed broadband services in remote areas to offering global connectivity to the Internet of Things through 'routers in space' for data backhaul, I'm excited to see what services these proposed constellations have to offer.

Our approach to these applications reflects this commission's fundamental approach: encourage the private sector to invest and innovate and allow market forces to deliver value to American consumers."

Earlier this year, SpaceX was permitted to launch 4,425 low-orbit satellites for its global broadband ambitions. The company requested its next batch to be operated even closer to the ground.

SpaceX gave two key reasons for wanting to operate satellites in lower orbit:

  • Performance – SpaceX claims that operating closer to ground will reduce latency and boost capacity. Latency could be just 25ms, similar to current fibre broadband.

  • Reducing debris – SpaceX requested 1,584 of its latest satellites to be authorised for operation at 550 kilometres instead of the 1,110-1,325km of the others. Moving the satellites lower means they can get the same results with 16 fewer in orbit.

SpaceX also claims operating in lower altitude means when the satellite is no longer operational it’s more likely to be dragged towards the planet. That means dead satellites will burn up in the atmosphere rather than remain and increase the likelihood of collisions.

A recent NASA study (PDF) found 99 percent of satellites will need to be taken out of orbit, reliably, within five years of launch – otherwise, the risk of satellite collisions goes up substantially.

The FCC is seeking public comment (PDF) on debris mitigation plans. SpaceX has submitted its own, but the FCC said:

"While we appreciate the level of detail and analysis that SpaceX has provided for its orbital-debris mitigation and end-of-life disposal plans, we conclude that the unprecedented number of satellites proposed by SpaceX and the other NGSO FSS systems in this processing round will necessitate a further assessment of the appropriate reliability standards of these spacecraft, as well as the reliability of these systems' methods for deorbiting the spacecraft."

Following the newly-approved satellite launches, SpaceX will have a total of 11,943 in orbit.

The company’s satellite broadband programme hasn’t always run smoothly. Earlier this month, Telecoms reported SpaceX CEO Elon Musk fired several execs over an alleged lack of progress.

In addition to SpaceX’s satellites, the FCC also approved today similar systems developed by Kepler Communications, Telesat Canada, and LeoSat.

Interested in hearing industry leaders discuss subjects like this? Attend the co-located IoT Tech Expo, Blockchain Expo, AI & Big Data Expo and Cyber Security & Cloud Expo World Series with upcoming events in Silicon Valley, London, and Amsterdam.

The two favourites for TIM CEO job revealed – source

A source close to Vivendi has revealed the names of the two people they think are most likely to get the TIM CEO job vacated this week by Amos Genish.

They are Alfredo Altavilla and Luigi Gubitosi, both current TIM board members, who were proposed by activist investor group Elliott when it purged the board after winning its struggle with Vivendi in May of this year. If Altavilla got the gig he would have the added benefit of being the Chairman of the TIM Nomination and Remuneration Committee, which sets executive pay.

The same source, who spoke to us on condition of anonymity, also advised that Genish was about to get on the plane to Korea to sign a new 5G deal with Samsung last Sunday (11/11) when he read rumours of his demise. Apparently he got in touch with TIM Chairman Fulvio Conti, also proposed by Elliott, who gave him written confirmation that they were greatly exaggerated and that no board meeting had been scheduled. On the back on this Genish got on the plane, only to be told just two days later that the meeting had taken place and that he was history.

“It is ironic that the people who worked together to oust Amos Genish are now fighting for his job and the company is in more disarray than ever,” said the source. They also advised that Genish feel betrayed by the people who conspired to get rid of him, although he plans to fight on as a board member.

If our admittedly pro-Vivendi source is correct and Elliott is successful in installing once of its people as CEO then it will have run out of scapegoats. TIM will have an Elliot board and an Elliott CEO, so the buck stops there regarding its business performance. How Vivendi reacts to such an outcome will be critical and it could push for another AGM and board vote.

We have contacted TIM for comment and are awaiting response.

Rural connectivity still a minor concern for some people, finds uSwitch

Price comparison service uSwitch has done a survey that found some people are deterred from moving to the country because they’re worried about connectivity.

Yes, we know, not the most earth-shattering revelation, but it’s a Friday and some people might care. The table below shows how urban survey respondents answered when asked “Have you read or heard about any of the following issues used to describe living in the countryside?” Just over half (around 900 respondents) flagged up connectivity issues and uSwitch has decided that’s enough data to justify the following headline for its press release: “Dodgy broadband deters nine million from rural living”.

Rural living concern % of people concerned
Poor transport links 61%
Slow or unreliable broadband connections 58%
Poor or no mobile signal 55%
Lack of public services (eg doctor surgeries, schools etc) 48%
Lack of activities available (eg cinemas, restaurants etc) 42%

“It’s ludicrous that in 2018 broadband and mobile phone signal is a factor influencing where in the UK people choose to live,” said Ernest Doku of uSwitch. “The only explanation is that providers have been guilty of a ‘build it and they will come’ mentality – simply assuming that their work is done as soon as they have provided the infrastructure for faster services and not doing enough to make sure that their customers are aware that better services are available.”

So the big scoop seems to be that, despite rural connectivity infrastructure being quite good, a few people don’t realise that and so factor that into their thinking when contemplating a move to the country. Cost, commuting, other infrastructure and their feelings about the smell of dung may also play a part too, of course.

Even by the standards of politicians, the canned quote uSwitch got from Shadow Digital Minister Liam Byrne was shamelessly opportunistic. “These Teletext Tories are simply failing to provide the investment we need to rollout high speed broadband in areas that are harder to reach,” he whittered. “This has not been helped by the fact we’ve seen four different culture secretaries in just two years and now we’re lagging behind our European neighbours. The Tories seem determined to leave Britain as a cyber slow coach.”

It’s not obvious what the point of all this was. USwitch has a strategic interest in making everyone in the UK as dissatisfied with their utilities as possible, because then they’re more likely to go to uSwitch and use it to shop around, resulting in revenue for uSwitch. But which demographic is more likely to change CSP as a result of this news?

EE and Virgin Media fined for ripping off customers when they leave early

UK telecoms regulator Ofcom has fined EE and Virgin Media millions of pounds for excessive early-exit charges.

Churn (loss of customers) is a constant worry for communications service providers and the best way to reduce it is to provide such a good communications service that subscribers don’t want to leave. Another way is to make it so odious and costly to leave that most people just can’t be bothered with the hassle and it seems EE and VM went a bit too far with the latter strategy.

Ofcom says it’s OK for CSPs to attach conditions to the early exit from contracts, but that those must be ‘clear, comprehensive and easily accessible’. Furthermore Ofcom stipulates “Communications providers shall ensure that conditions or procedure for contract termination do not act as disincentives for end-users against changing their communications provider”. It thinks thinks that’s what happened with EE and VM, which is why it has fined them £6.3 million and £7 million, respectively.

“EE and Virgin Media broke our rules by overcharging people who ended their contracts early,” said Ofcom’s spectacularly-named Director of Investigations and Enforcement, Gaucho Rasmussen. “Those people were left out of pocket, and the charges amounted to millions of pounds. That is unacceptable. These fines send a clear message to all phone and broadband firms that they must play by the rules, in the interests of their customers.”

VM doesn’t see it in quite the same way and is appealing the ruling. “We profoundly disagree with Ofcom’s ruling,” said Tom Mockridge, CEO of Virgin Media. “This decision and fine is not justified, proportionate or reasonable. A small percentage of customers were charged an incorrect amount when they ended one or more of their services early and for that we are very sorry.

“As soon as we became aware of the mistake we apologised and took swift action to put it right by paying refunds, with interest, to everyone affected. For those few people we could not locate, we have made an equivalent donation to charity.  We also reviewed our internal processes and systems, and improved our customer communications to make sure that this does not happen again.

“We wholeheartedly reject the claim by Ofcom that our ETC levels dissuaded customers from switching. This unreasonable decision and excessive fine does not reflect the swift actions we took, the strong evidence we have presented, or our consistent, open and transparent cooperation with the regulator.  We will be appealing Ofcom’s decision.”

EE hadn’t sent us a statement at time of writing, nor had it issued a press release. Read into that what you will but the fact that Ofcom reduced its fine by 30% in return for it not kicking up a fuss would seem to be significant.

Mockridge’s moan can be interpreted in a few ways. Taken at face value it’s easy to feel some sympathy. If indeed it was a small, innocent mistake that VM moved to correct as soon as it was aware of it, then the fine does seem excessive. If, however, VM knew what it was doing and thinks it should be able to get away with it just by saying sorry after it was caught, then it doesn’t.

At the very least the relative fines seem disproportionate. EE over-billed 400,000 of its customers for a total of £13.5 million in early exit charges over a six year period, while VM only rinsed 82,000 of its punters for £2.8 million in less than a year. Surely the scale of EE’s breach was far greater and it looks like it’s being too generously rewarded by Ofcom for its capitulation.