Verizon makes 2018 fixed 5G commercial launch pledge

OMG some people in the US are going to get 5G, like, next year. We’re sooo jealous!

Before we get too excited it should be noted that what we’re talking about here is fixed wireless, used to deliver domestic broadband services. At an analyst day Verizon said it plans to launch this 5G-infused broadband in 3-5 US markets next year, starting with Sacramento.

Details and specifics were thin on the ground, leading many analysts to note that it was hard to draw any concrete conclusions from it. This piece on Barron’s seems to sum the mood up nicely and it seems they were hoping for some proper 5G announcements. One of the few commentators to get any additional details was Light Reading, which found out the kit being used is supplied by Ericsson and Samsung.

“This is a landmark announcement for customers and investors who have been waiting for the 5G future to become a reality,” said Hans Vestberg, Verizon CTO. “We appreciate our strong ecosystem partners for their passion and technological support in helping us drive forward with 5G industry standards, for both fixed and mobile applications. The targeted initial launches we are announcing today will provide a strong framework for accelerating 5G’s future deployment on the global standards.”

This 5G FWA will use the 28 GHz spectrum band and Verizon reckons the total addressable market for this sort of thing in the US is around 30 million homes. FWA seems like a great idea, considering you don’t have to lay cable, dig up streets, etc, but it also has many challenges, including the poor propagation characteristics of millimeter wave spectrum. Here are some slides and a vid, you can’t say fairer than that.

Verizon fixed 5G slide 1

Verizon fixed 5G slide 2

Verizon fixed 5G slide 3

Verizon fixed 5G slide 4

Once you let the gigabit genie out of the bottle, it won’t go back in

Over the last couple of months the holy grail has started to take shape, and it is beginning to look like the gigabit speed landmark. The big question is what do telcos do when they can actually achieve it?

This point was raised by Adtran’s Ronan Kelly at The Great Telco Debate in London. Do telcos have a clue about what their ambitions are? Do they know how to make money out of incredible speeds and capacity? Will the telcos give into the low hanging fruit and screw themselves over in the long run?

This is the argument which leads back to the statement made in the headline; once you let the genie out of the bottle, it is almost impossible to squeeze it back in. Taking this metaphor into the realms of reality, once you offer consumers ridiculous speeds and capacity, you won’t be able to take it back, or up the price.

The major trend over the last couple of years for the telcos has been offering more for less. It is crippling the telcos on a profitability perspective, and managing the strain on the network is becoming increasingly complex. When gigabit speeds appear, the telcos might be tempted to continue this trend, snatching the low hanging fruit in terms of attracting new customers with more attractive data tariffs.

But one question you have to ask is whether this is the most profitable use of the network. Is there more money in continuing to encourage the customers insatiable appetite for data, or would it be better to serve the B2B community, who might come up with an idea which could actually make use of gigabit speeds for a price which reverses the spiralling nature of telco profitability?

Once the gigabit milestone has been reached, the innovators of the world will start to get to work. The applications which need gigabit speeds will follow the milestone, but telcos need to ensure the strain on the network is managed effectively so there is a suitable environment to allow these applications to flourish.

This is the question which Kelly proposed to the room; can the telcos demonstrate patience and long-term ambition to reap the greatest rewards, as opposed to the soonest. One of the themes throughout the day is the commoditization of data. Margins in the consumer world will get smaller, and the B2B world will become more attractive. But the telcos need to ensure they haven’t given the gigabit away for free, before they can actually make some genuine cash out of it.

Part of managing this ROI will be managing the expectations of investors. The fund manager who represents thousands of different faceless bank accounts needs to understand the ROI from these network infrastructure investments is a slow burner. If the ROI is managed responsibly, it can be a long burning fortune, but only if patience is shown and the telcos reach for the ripper fruits at the top of the tree.

Amazon launches a bunch of machine learning goodies for developers

At the AWS Re:Invent event Amazon Web Services served up a large number of initiatives designed to make machine learning more accessible to developers and data scientists.

Even these are just a small part of an orgy of announcements from the enterprise cloud market leader, with nine press releases sent out yesterday alone. The plucky hacks at Enterprise Cloud News are living the AWS dream over in Vegas and even managing to extract themselves from the casinos and night clubs to cover the event, so we’ll leave the in-depth stuff to them.

Here are the six bits of machine learning cleverness revealed in the culminating release

  • Amazon SageMaker is a managed service to help developers and data scientists to build, train, deploy, and manage their own machine learning models
  • AWS DeepLens is a deep learning-enabled wireless video camera that can run real-time computer vision models
  • Amazon Transcribe is an AI-infused speech-to-text tool that can deal with low quality audio
  • Amazon Translate does what it says on the tin using state of the art neural machine translation techniques, apparently
  • Amazon Comprehend is an intriguing tool that is designed to understand natural language, including nuance, context, etc, and analyse it
  • Amazon Rekognition Video provides real-time facial recognition, as well as other objects, from video, which can then be ordered and analysed.

“Our original vision for AWS was to enable any individual in his or her dorm room or garage to have access to the same technology, tools, scale, and cost structure as the largest companies in the world. Our vision for machine learning is no different,” said Swami Sivasubramanian, VP of Machine Learning, AWS.

“We want all developers to be able to use machine learning much more expansively and successfully, irrespective of their machine learning skill level. Amazon SageMaker removes a lot of the muck and complexity involved in machine learning to allow developers to easily get started and become competent in building, training, and deploying models.”

As ever, advances in AI and machine learning bring with them a conflicting mixture of awe and unease. This latest batch of announcements from Amazon seem to be heavy on the surveillance side of things in so much as they will make it easier for other people to track our activities. Anyone already concerned about data privacy is unlikely to be reassured by this sort of thing.

Nokia is so not buying Juniper Networks

A recent report that it’s thinking of buying US fixed networking gear provider Juniper Networks has been flatly refuted by Nokia.

The report came from CNBC, which is so committed to the story, originally entitled ‘Nokia prepares offer to buy Juniper’ (according to the URL) that it has changed the headline to ‘Nokia denies that it’s preparing offer to buy Juniper Networks’ once Nokia denied that it’s preparing an offer to buy Juniper Networks.

“Nokia is not currently in talks with, nor is it preparing an offer for, Juniper Networks related to an acquisition of that company,” said the Nokia statement produced in response to the original story.

Stories like these often originate as a ‘trail balloon’ leaked by someone contemplating a significant corporate move, to see how the market responds to the story. Juniper Networks stock was up 5% yesterday but had lost all of that and then some in pre-market trading at time of writing. Nokia’s shares seem to have been largely indifferent.

The latter fact seems to be most significant to our hypothetical trial balloonist, and may have indicated to them that the market wasn’t very keen. Additionally, since acquisitions are typically at a 30-50% premium on the current share price a spike of just 5% for Juniper is pretty underwhelming. Then again most investors may have merely discounted the story as the thin speculation even its publisher now seems to think it is.

Virtualization is going to happen, but that isn’t the point

A question was raised at The Great Telco Debate event which caused a stir: will virtualization make telcos agile and competitive? Of course it will, but it needs to happen faster was the feedback.

This is perhaps the point which the industry doesn’t seem to be getting at the moment. Virtualization is critical for the telcos to operate in the digital economy, but progress has been slow. The question of whether virtualization is important is a moot point, everyone gets it, but what doesn’t seem to have sunk in is the fact it needs to happen quicker.

Colt is a great example of what is achievable when virtualization projects are accelerated. Mirko Voltolini, Colt’s Head of Network on Demand, gave some great insight on the Network on Demand product during his talk, which is essentially the delivery of connectivity through a cloud business model. Customers can scale up and scale down, while being billed by the hour. It is the flexibility and scalability which the digital economy demands.

This is only one product which the Colt team offer, but the concept of virtualization is one which has enabled this change. “We can fail fast and fail often, which is something we have not experienced before,” Voltolini said. It allows Voltolini and his colleagues to create and tweak products, learn from experiences and launch new services quicker. It is the OTT business model, which is proving so successful.

But to create this concept, Voltolini highlighted that virtualizing the network is a key aspect of any progression towards the digital economy, but then so are DevOps and business transformation projects. This is perhaps where many of the telcos are falling behind the times; virtualization is being viewed as a network initiative, whereas there are wider needs and implications if a telco is to remain relevant in the connected community. From Voltolini’s perspective, a successful virtualization project marries the needs and demands of the network, IT and the business in one.

One point which was raised from the audience was virtualization is like electricity, necessary but not sufficient alone. This was backed up by another frustrated voice, virtualization is like asking turkeys to vote for Christmas; there are too many people, both internally and externally, at the telcos who will lose out through the process of virtualization.

So why is virtualization taking so long? Let’s get the obvious point out of the way first and foremost, it is difficult and expensive. But now onto the more interesting point, the projects are too narrowly focused. Some telcos are resisting the idea that every company is now a software company, some individuals are stuck in the analogue age of business and some parties have not evolved to the digital world yet and therefore want to don’t want to lose out just yet.

Virtualization is going to happen quite simply because it has to. But when it is going to happen is a difficult question. The tide is turning more quickly than the super tankers can turn which is very worrying for the longer standing players in the telco vertical. The younger players, such as Three for example, might be holding back smiles as they are not as burdened by the legacy of the industry, but whether this enthusiasm is held by everyone else remains to be seen.

Openreach use drones to connect rural areas with fast broadband

Openreach is using drones to quickly bring high-speed fibre broadband to rural areas.

The drones help to lay a fibre cable across routes that would have been difficult to deploy across. Due to the small drones used, the actual fibre cable was too heavy for them to lift directly.

Instead, Openreach engineers are using the drones to fly a high-strength fishing line around 100 meters and drop it across the top of the trees. That line was attached to a draw-rope which pulled the fibre cable along the unobstructed route laid by the drone.

One rural village, Pontfadog in Wales, now has access to full FTTP (Fibre-to-the-Premises) as a result. Residents can pick their package from 38 Mbps all the way up to 300 Mbps.

“There’s a particularly steep drop-off from these houses back down the valley, and it’s covered in dense trees and scrubland. We also had the river running along the bottom to contend with, so dragging a cable and digging it in wasn’t really an option,” explains Openreach’s Chief Engineer Andy Whale.

“If we tried running the cable through woods it was also very likely we’d get it caught up in branches and other natural obstructions, so we figured the best option was to fly it in over the top of the tree canopy and then lift it up to make sure it was clear of the tree line.”

These speeds are faster than most UK premises, even in major cities, where FTTC (Fibre-to-the-Cabinet) is still primarily used. The use of FTTP will help to ensure the connection is future-proof for quite some time.

Villager Chris Devismes is one of the first to get connected up to the new high-speed network. He said: “I’m an aspiring writer, I work from home and publish my work online - so I do send full novels over the web to my editor or to readers. Before I would go away and cook tea whilst a file upload went through, but now it literally takes a matter of seconds.”

While impressive, Openreach did not undertake this important task purely from kindness or even profitability. The infrastructure provider is rushing to connect Wales due to a contractual deadline of 31st December fast approaching.

“Had we tried to lay the cable using standard methods, even if it were possible, this process would have taken days — but in the event, it took us less than an hour,” comments Whale.

Imminent drone regulations

Right now, it’s quite simple to obtain and operate a drone. However, new UK regulations are set to come into force which is going to put more restrictions on their usage following serious incidents such as drones having near-misses with aircraft.

The proposed regulations will require drone users in the UK to undertake safety awareness tests — operators will be banned from flying near airports or above 400ft, and police will get new powers to ground and seize drones if they suspect they had been used in unsafe or criminal activity.

"We're bringing forward this legislation in order to ensure that drones can be used safely, whilst also addressing some of the safety and privacy concerns that people have," says Lady Sugg, Transport Minister.

Openreach has shown how drones can be used safely to make difficult tasks simpler and quicker to complete. We hope the new regulations strike a good compromise between safety and ease-of-access to allow positive and innovative uses to flourish.

Are you impressed with Openreach’s use of drones for rural broadband deployment? Let us know in the comments.

What the hell is going on at Synchronoss?

The appointment of former AT&T exec Glenn Lurie was the third change of CEO at Synchronoss in a year that has seen enough corporate drama to last a lifetime.

When we got the opportunity to interview Lurie recently, it was the first time we had checked in with Synchronoss for a while. Reviewing the Synchronoss press page immediately before and then after the interview revealed some rather intriguing announcements, so we decided to dig a bit deeper. Here’s what we found.

At the start of this year we reported that Synchronoss had moved out of its legacy handset activation business by selling it to a company called Sequential, which soon after appointed former AT&T exec Kent Mathy as its new CEO.

This disposal had been performed hand-in-hand with the acquisition of secure cloud messaging provider IntraLinks in early December 2016. The whole manoeuvre was positioned by Synchronoss founder and CEO Stephen Waldis, a former AT&T exec, as a strategic pivot to become a more general B2B cloud services provider. The incoming IntraLinks CEO, Ron Hovsepian, was appointed as CEO of the combined company, still called Synchronoss, with Waldis moving up to the Chairman role.

But before long there was significant turmoil at the top. Long-standing CFO Karen Rosenberger retired in February 2017 and was replaced by former Avid exec John Frederick. Just two months after Frederick’s appointment, however, it was announced that both he and recently appointed CEO Hovsepian would be leaving, with the latter serving as a consultant ‘to ensure a smooth transition.’ Waldis once more took the reins as CEO.

Within days Synchronoss had rescheduled its Q1 2017 earnings call, filing and release, prompting a letter from the NASDAQ notifying it of non-compliance with its rules. On 8 June Synchronoss announced its financial statements for the whole of the 2015 and 2016 fiscal years could no longer be relied upon and would need to be restated. All of the stuff we have covered so far had sent the Synchronoss share price right down the toilet – with the company losing around 80% of the value it had before the IntraLinks/Sequential move was announced.

Synchronoss Google Finance screen

It seems this caught the attention of Siris Capital Group, which knew a potential bargain when it saw one, and in June Synchronoss announced it had received an indication of interest from Siris to buy the whole company for $18 per share, which promptly stabilised the share price at that level.

The next few months were spent ‘reviewing strategic alternatives’, which usually means working out whether there is more value to shareholders from selling or from likely future growth. By October Synchronoss announced it had concluded the best strategic option would be to sell IntraLinks to Siris for around $1 billion and receive a further investment from Siris of $185 million in the remaining company. This investment would be convertible into 19.8% of Synchronoss common stock.

By 14 November that process was completed and Lurie was announced as the new CEO of Synchronoss two days later, with the strategic imperative of doubling-down on the white-label cloud business. As part of his inducement package Lurie was granted extensive stock options at an exercise price of $10.04 per share.

All of the above is taken from Synchronoss public statements, but, as you might expect from such a rollercoaster ride, Synchronoss has caught the eye of other market observers. The most significant of these has been an organisation called the Southern Investigative Reporting Foundation, which has the stated aim of ‘providing in-depth financial investigative reporting for the common good.’

SIRFing the web

On 24 February 2017 SIRF published a story entitled Synchronoss Technologies: The Friends and Family Plan. It started by outlining the IntraLinks/Sequential transaction and highlighted the extent to which the Synchronoss share price had already declined by that date. It also noted that Synchronoss had been trying to lure Hovsepian away from IntraLinks since May 2016.

But the most remarkable aspect of the SIRF piece was its finding that Sequential had only been formed in the month before the transaction and that its website was registered by one John Methfessel, who also became its Chairman. SIRF said Methfessel was also a former neighbour of Waldis as well as an early-stage investor in Synchronoss.

Also uncovered was a research note from Stifel Analyst Tom Roderick that stated Sequential Technology International is a unit of Omniglobe International, which is a business process outsourcing company that works with Synchronoss on its AT&T activation work. Omniglobe was also listed as a ‘related party’ in the 2006 Synchronoss IPO prospectus, which included details of an equity interest on the part of Waldis and three other Synchronos execs. Those investments were made through a holding group called Rumson Hitters, other members of which eventually bought out the Synchronoss execs’ stakes in Omniglobe.

SIRF then interviewed Omniglobe President and Chairman Jaswinder Matharu, who revealed that Rumson Hitters owns half of Omniglobe and that its investment is controlled by John Methfessel. Sequential’s press page has no releases other than the 12 January announcement about the Synchronoss transaction and the appointment of Mathy. The only other item is a 27 February interview conducted by Sequential CSO Tom Miller, who was an EVP at Synchronoss before its IPO.

So intrigued was SIRF by all this that it published a follow-up piece a month later entitled ‘Synchronoss Technologies: You Probably Wouldn’t Buy a Car From These Guys’. The piece took a closer look at Synchronoss accounting practices and was published long before the company announced its previous two years’ accounts could no longer be relied upon.

The picture this second SIRF piece paints is of a company constantly looking to maximise the revenues from its cloud business and resorting to some questionable book-keeping to achieve that. Among those include the allegation that the revenue contribution from the acquisition in March 2016 of Openwave, a messaging software firm, was deliberately downplayed, and the accounting of $9.2 million of the Sequential deal as revenue. The piece also claims the company’s three most senior execs sold an exceptional number of their shares over the past two years.

By far the most dramatic apparent consequence of the SIRF reports is the commencement of a class action civil law suit against Synchronoss ‘for violations of the federal securities laws’, and on behalf of anyone who bought Synchronoss shares during a period that was eventually extended to between 3 February 2016 and 13 June 2017. The suit was initiated on 1 May 2017 but has since been joined and amended several times.

Class acts

What follows is a summary of version 38 of the suit, filed on 21 November 2017.

Allegations

  1. CEO Waldis and CFO Rosenberger implemented a fraudulent scheme to conceal the company’s deteriorating financial condition by:
    1. Prematurely recognising contractual revenues
    2. Inflating revenues through a deal with Sequential that, unbeknownst to investors, added a $9.2 million licensing fee to Synchronoss’s bottom line that the company booked as revenue in Q4 2016, thus allowing it to meet earnings targets
    3. Therefore issuing falsely inflated earnings guidance
  2. To obscure that fraud they borrowed $900 million to buy IntraLinks and installed its CEO as the head of the whole company. The company simultaneously divested its activation business in the Sequential transaction.
  3. A 24 February 2017 piece by SIRF accused Waldis of having personal connections with Sequential. Days after, Synchronoss disclosed the $9.2 million licensing fee for the first time. Specifically, from the filing: “On December 22, 2016, the Company entered into a non-exclusive perpetual license agreement with STIH, in the amount of $9.2 million, which is included in net revenues in the statement of income, for the use of the Company’s Analytics software.”
  4. On an 8 Feb earnings call Rosenberger and Waldis misleadingly concealed both the existence of the $9.2 million licensing fee and the fact that it had been included in fourth quarter 2016 revenues.
  5. Less than two months after the new CEO and CFO took charge they resigned and the company announced a large miss of earlier earnings guidance, causing the stock to fall 46% in one day.
  6. In June 2017 Synchronoss announced its financial statements for the previous two years would need to be restated, and that its revenue during that time had been overstated by as much as 10%, which could amount to $100 million.
  7. Company management collectively unloaded at least $14 million worth of Synchronoss stock in insider trading sales during the Class Period (February 3 2016 to June 13 2017). Waldis sold 221,486 Synchronoss shares worth around $6.6 million and Rosenberger sold 29,583 shares worth around $800,000.
  8. Rosenberger sold shares between December 2016 and February 2017 at a far higher rate than she had in the same period in previous years.

Company background

Synchronoss was set up by former AT&T exec Stephen Waldis to offer mobile device activation services to AT&T. In the light of the expiration of AT&T’s five-year license to exclusively distribute the Apple iPhone, Synchronoss started to reposition itself as a consumer and enterprise cloud services provider in 2013.

The cloud business grew rapidly and by 2015 accounted for a greater proportion of revenues than the activation services. The company publicly acknowledged the attention investors were paying to the cloud business and also prioritised the cloud business in executive compensation.

On 5 December 2016 Synchronoss acquired IntraLinks and at the same time divested the bulk of its activation business to Sequential. There was no mention of the $9.2 million licensing deal in the associated filing.

Fraudulent accounting practices

These were committed in part because the company was struggling to maintain the rapid growth of the cloud services segment and took the form of manipulating accounting rules to make it look like the company had hit financial targets when it had actually missed them.

The Sequential licensing transaction is a likely illustration of this, as the $9.2 million licensing fee should not have been recognised as revenue because it was a component of the transaction to sell the activation business to Sequential. This is likely to be recognised in the financial restatement along with the accounting for a contract with Verizon and certain transactions with AT&T – its two biggest customers – with two anonymous insiders providing testimony to support those assertions.

Other significant details highlighted in the court document

Sequential was a new company that, according to the 24 February SIRF piece, is owned primarily by people affiliated to Synchronoss executives. Sequential was previously known as Omniglobe, which was part owned by Waldis. Synchronoss sold 70% of its activation services business to Sequential for $146 million, although only $18.1 million of that was paid in cash up front.

On the same day Synchronoss announced the acquisition of IntraLinks for $821 million in cash, some of which was paid for by $900 million of new debt. The incoming IntraLinks CEO – Ronald Hovsepian – would take over from Waldis as overall CEO of Synchronoss.

Rosenberger got a ‘release agreement’ payoff in the region of $2 million.

Hovsepian resigned on 27 April and received a lump-sum of $3.2 million as well as a two-year consulting contract worth $1.5 million. Waldis was re-appointed as CEO. A conference call was announced at which all this stuff would be discussed, but it was subsequently cancelled and soon after the company announced the need to restate its financials. This still hasn’t happened. Synchronoss is currently under pressure from NASDAQ to demonstrate compliance with its rules or face delisting.

The SEC repeatedly asked Synchronoss to make public the details of some of its deals with Verizon and the company refused. The allegation is that the timings of these deals would have revealed accounting fraud. A former company insider alleges that Synchronoss booked $7 million in revenue from two AT&T transactions in late 2015 that never materialised, which in turn allowed the company to show cloud growth in a quarter that would have otherwise been flat.

The desired outcome of this civil action is for a jury trial to be granted.

Analyse this

Mentioned in both the first SIRF piece and a prominent questioner on the 8 February 2017 earnings call was Stifel Analyst Tom Roderick. SIRF had been unable to reach him for comment but we were more fortunate and started our phone interview with him by asking what he thought of all the stuff that has been going on with Synchronoss.

“This is, without a doubt, the most head-scratching story I’ve followed in 15 years,” said Roderick. He went on to say that three or four years ago he was recommending Synchronoss stock but then started to be less keen on what he saw. It seems some of the aforementioned accounting irregularities caught his eye and he was especially struck by his inability to find any record of Sequential when the IntraLinks deal was announced.

Here’s the opening paragraph from Roderick’s 4 February 2016 research note in which he downgraded his recommendation for SNCR from ‘buy’ to ‘hold’. His target price for the stock prior to his downgrade had been $60 and he declined to state an updated target price in lieu of greater clarity.

Following Synchronoss’ Wednesday morning earnings call, shares of SNCR dropped nearly 11%, which we perceived all day to be an attractive entry point. However, as we evaluated our model more completely, and after examining the implications of the company’s “Net Income Attributable to Noncontrolling Interest” line, we have become convinced that the quality of the 4Q15 Cloud outperformance wasn’t nearly what we thought it was. We believe the Verizon Joint Venture contributed at least $18mn in one-time Cloud revenue in 4Q, leaving us incrementally concerned about what positive factors need to emerge to drive the company’s Cloud business up by 24% in FY16, as guidance suggests.

On 20 February 2017 Roderick wrote a research note entitled ‘Crossing “The Bridge”: Making Sense of SNCR’s Continuing Operations Figures’. The ‘bridge’ is a reference to reconciling Synchronoss historical financials and its projected estimates. “Let’s start with what many people don’t understand: ‘Cloud’ now includes a sizable chunk of historical ‘Activation’,” opened the analysis. It went on to say that isolated ‘cloud’ growth is more like 9%, far lower than the 30% investors had been used to, and to express scepticism that growth can ‘re-accelerate’. That report put a price target of $32 on Synchronoss shares, but by the time Hovsepian and Frederick had left the building Roderick had cut that to $10.

We asked Roderick what he thought of the civil suit and he described it as “a shocking development,” adding that actions like these often take years to play out and are often settled out of court. If that does turn out to be the case it will surely be another dark day for Synchronoss shareholders.

On the likely future of Synchronoss, Roderick reckoned the most positive set of circumstances would be for Siris to continue to back the company as it did with Xura (now known as Mavenir). On the flip side he thinks it’s imperative that Synchronoss diversify away from CSP white-label cloud, which is becoming commoditised, and its over-reliance on the two big US operators. To be fair that’s pretty much what Lurie told us it wants to do.

Asked for a summary of everything that had occurred, Roderick said: “At the very best it will be a case study in poor communication with Wall Street and at worst it’s a case of classic financial manipulation.”

Roderick has just published an update on the Synchronoss situation, focusing on the civil lawsuit, entitled ‘Another Brick in the Wall’. While he has sadly refrained from further Pink Floyd analogies he focuses on the testimony of the two anonymous insiders we mentioned in our summary of the case, referred to in the document as CW1 (confidential witness) and CW2. Here’s his summary of that.

It goes without saying that interviews in a civil lawsuit cannot be verified as fact, nor do we claim to have direct conversations with either CW1 or CW2. It also goes without saying that such civil suits will often cherry pick the most damning commentary and facts. However, given that we have also been on the record as being critical of what we have perceived to be SNCR’s aggressive accounting and weak financial disclosure policies – dating back to our downgrade of the stock on February 4, 2016 – such allegations from former employees do not strike us as altogether shocking.

Distilling all this information into one paragraph, the impression is given of a senior management intoxicated by the rewards associated with the initial rapid growth of its white-label cloud business and then becoming increasingly desperate when that growth started to decline. Big question marks still hang over the business, such as the civil action and potential NASDAQ delisting, but at the same time it needs to ensure there’s still a viable business left if those go its way. Good luck with that Glenn.

Apple files countersuit against Qualcomm… again

It’s been a quiet couple of weeks for Qualcomm and Apple, so we really should have expected another chapter in the courtroom tale. This time Apple is suing Qualcomm for patent infringement.

In the latest installment of the saga, Apple has filed a countersuit against Qualcomm claiming the Snapdragon mobile phone chips infringe on Apple’s patents, according to Reuters. More specifically, Apple believes it owns several battery life patents which Qualcomm has incorporated into the Snapdragon design, which is then being used to power the devices of Apple’s competitor’s devices.

This is of course a countersuit, dating back to a lawsuit Qualcomm filed against Apple on exactly the same grounds. Apple denied it infringed any of Qualcomm’s patent, with the countersuit claiming the patents were invalid in the first place. It’s all very complicated, but this is common practice in the courts; deny a claim and then put forward a paper trail which proves there was no basis for the claim in the first place.

The patents actually involve more efficient use of a phones battery. The processor only draws the minimum amount of power from the battery that an application or function of the phone needs, and is then powered down when it is not needed. It is a pretty common feature across devices nowadays, but the question is who gets paid for patenting the idea?

This is of course just the latest skirmish in a larger legal battle between the two, which doesn’t look like it is going to end any time soon. We’re going to try and give as much detail about the wider battle as possible now, but because there are so many fights going on at once, you’ll have to forgive us if we miss one.

January: Apple sues Qualcomm for withholding almost $1 billion in payments it says it is owed. Qualcomm accuses Apple of providing false information to regulators and then files a countersuit. This case is still in the courts.

April: Qualcomm sues Apple accusing the company of inhibiting performance to make Intel look better.

May: Qualcomm sues Apple claiming the iBoss choked its supply chain, forcing its manufacturers to withhold payments from the chipmaker. The manufacturers decided to get in on the act, and filed a countersuit against Qualcomm. This case is also still in the courts.

June: Apple filed a lawsuit which essentially questioned the legality of Qualcomm’s business model. The iLeader argues that license agreements that secure Qualcomm a fee for every iPhone manufactured are invalid. This case also continues.

July: Qualcomm sues Apple for patent infringement and asks the International Trade Commission in the US to ban the import of some Apple devices. The ITC is continuing its investigation currently.

October: Qualcomm files a lawsuit at a Beijing intellectual property court attempting to have the iPhone banned from being imported into China, once again claiming patent infringement. This case is also still in the courts.

Aside from these disputes, Qualcomm has also found itself locking horns with Taiwan’s Fair Trade Commission, Intel on the grounds of competition and the European Commission for monopolistic activities. Samsung and Intel also filed amicus briefs backing the FTC’s complaints against Qualcomm, while it was also forced to refund Blackberry $815 million owing to royalties the Canadian smartphone maker overpaid between 2010 and 2015.

If we have missed anything out feel free to drop us through an email, but there only seems to be one question left. How many lawyers does Qualcomm actually have!?

Telematics could be key for US telcos – just don’t get distracted

ABI Research has pointed to statistics claiming 68.5% of cellular connected M2M devices are telematics or broader transport applications, but telcos need to laser focus to reap the rewards of this window.

The connected car is without a doubt an opportunity for the telcos, but ABI has warned the fortunes might be missed if they get distracted by other technologies. This is a genuine opportunity for the telcos, though ABI has cited new LPWA technologies that are being positioned as a competitor to cellular, increased interest in private network opportunities, and the on-going debate on the merits of licensed and unlicensed spectrum, as distractions which could erode margins.

“Some of the biggest opportunities and drivers for cellular operators are in telematics and asset tracking; coverage and low latency are the essential requirements for these fast-growing segments,” said Kevin McDermott, Principal Analyst at ABI.

At the end of 2016 there were 82.65 million cellular connected M2M devices, 68.5% of which were related to telematics and other transportation applications. The ABI team is also predicting cellular M2M market will grow beyond 300 million connections by 2022 in the US alone. While the proportion of connections for connected vehicles will surely erode, it will still be prominent.

The risk here is that of distraction. Should the executives start seeing the dollar signs everywhere, there is a danger of overreach. Not in the sense of being too ambitious, but spreading operations and research too thin. The greediness of telcos, who have seen profits eroded steadily over the last couple of years, could see them becoming average at everything and exceptional at nothing. Being average at everything is opening the door to disruption, tempting the re-emergence of the downward spiral the telcos have been in for the last decade.

Ericsson looks to Belgium to justify 5G

Ericsson and Corda Campus have announced plans to set up a 5G Life Campus in Hasselt, Belgium, which will be used to test new technologies and applications.

The 5G Life Campus will be located at Corda Campus, a technology park, and connected to connected to Ericsson’s R&D centre in Aachen, Germany, where Ericsson’s 5G pilot projects are executed. The campus will act as a test environment for industry players to develop and trial new applications for the 5G world.

“Corda Campus is a high technology campus, where more than 200 innovative companies work on new products and services every day,” said Raf Degens, Director of Corda Campus. “With Ericsson, this 5G Life Campus will provide industries a way to prepare for the future and grow faster.”

“Ericsson and Corda Campus will engage Belgian enterprises to be key players in the development of 5G, helping to speed up industrial digitalization in the country and Europe,” said Saskia Van Uffelen, Country Manager of Ericsson Belgium and Luxembourg. “This 5G Life Campus, part of the 5G for Europe program launched by Ericsson and industries and institutes across Europe, will help contribute to Belgium’s future economic growth and job market.”

The launch of the park is set for the first quarter of 2018, as pressure comes down on vendors to demonstrate the value of 5G. There is no question it will be better than 4G, though operators are seemingly starting to get cold feet as the commercial launch date approaches. Over the next 12 months you should expect more of these test sites to emerge as vendors attempt to pry open operators wallets to spend on network upgrades.