Telefónica Germany and Nokia form a 5G cluster

The stampede to acquire 5G allies continues with Telefónica Germany and Nokia agreeing to form nothing less than a 5G Innovation Cluster.

In this context a cluster seems to refer to a collection of labs that have agreed to play nice with each other. To make sure everyone knows where they stand the two companies have taken a leaf out of Huawei’s book and signed a memorandum of understanding, complete with compulsory photo of people in suits shaking hands.

“Our innovation collaboration in Germany follows a global agreement with Nokia to explore technologies on the path to 5G,” said Cayetano Carbajo, CTO of Telefónica Germany. “Having access to Nokia’s latest portfolio will enable pre-testing and understanding new technologies thus helping us to further enhance the user experience in our network.”

“This joint Innovation Cluster is a manifest of our long-standing excellent relationship,” said Marc Rouanne, President of Mobile Networks at Nokia. “We have a strong presence in Telefónica’s radio network in Germany and it is important that we work jointly to innovate on the path to 5G, preparing the network for future demand and business opportunities.”

Testing across Germany will focus on a lot of the RAN needs for 5G, including massive MIMO and that sort of thing. There were frequent references to 4.5G and 4.9G and, if for no other reason, 5G can’t come soon enough to put a stop all that talk. Various other boxes are expected to be ticked such as ultra-low latency and all that jazz.

ZTE flogs $2bn shares in effort to be 5G ready

ZTE board members have approved the issuance of 686,836,019 A Shares in an effort to raise capital for 5G research and development.

While ZTE could sometimes be seen as a poor man’s Huawei, in truth it is just as threatening to the more traditional network infrastructure vendors. Over the last couple of years, Huawei might have been grabbing the headlines and second helpings of global market share, ZTE has also been eating into the profit margins at former world-beaters Ericsson and Nokia.

It might still be sitting in fourth place, but looking at the most recent financial figures it is certainly heading in the right direction. For the nine months ending September,  ZTE boasted of operating revenues of roughly $12.2 billion, a 7% increase for the same period in 2016. When you compare this to Ericsson or Nokia’s quarterly results for the same period,  6% and 7% decline respectively, the story starts to make a bit more sense.

There still is a considerable buffer for ZTE to catch Nokia and Ericsson, but it is consistently heading in the right direction. Huawei has also shown how quickly the status quo can be changed as well.

Puffing out its chest, ZTE is now showing it means business when it comes to 5G. Adding to the billions it has spent or planning to spend on 5G R&D already, the team will also be selling off 686,836,019 shares on the Shenzhen and Hong Kong stock exchanges to raise $2.1 billion. The majority of this will be directed towards ‘research and product development relating to 5G network evolution’, while roughly 30% will be replenish working capital.

“With the global leading position in 5G network sector, the Company expects that 2018 to 2020 will be a crucial period for the formulation and industrialization of the global standard for 5G technology,” the filing states.

“The Company considers that the Proposed Non-public Issuance of A Shares will enable the Company to maintain its high level of investment in research and development, help ensure its technological competitive edge and develop its main products and businesses with core advantages, which may help the Company increase its market shares in the mainstream products and markets as well as enhance customer satisfaction, thereby help increasing the profitability of the Company.”

An extra couple of billion is certainly something to boast about a couple of weeks ahead of Mobile World Congress. This year’s event promises to be a bombardment of euphoric 5G promises as vendors scrap for the attention of wide-eyed operators. ZTE seemingly profited quite handily out of the 4G evolution, and it would seem it is positioning itself well ahead of the 5G slug-feast.

T-Mobile’s latest ‘Uncarrier’ move is to help un-screw the planet

T-Mobile has pledged to use 100 percent renewable energy in support of Green America’s "Hang Up on Fossil Fuels" campaign. Furthermore, the ‘Uncarrier’ has committed $500,000 to a clean energy non-profit.

Green America’s campaign was launched in 2017 and focuses its efforts on reducing the huge amounts of energy consumption by telecommunications providers. According to the campaign page, the industry contributes 2.5 percent of global greenhouse gas emissions.

For perspective, the energy consumption of telecommunications companies is comparable to the entire aviation industry.

According to Green America, T-Mobile’s pledge to switch to 100 percent renewable energy by 2021 has ‘raised the bar’ for the industry. Naturally, outspoken T-Mobile CEO John Legere has used the opportunity to issue a challenge to his rivals.

Legere posted a video calling on people to grab the attention of AT&T and Verizon’s CEOs — Randall Stephenson, and Lowell McAdam. If one of his two rivals commits to 100 percent renewable energy by June 1st, T-Mobile will increase its donation by $100,000.

The real prize, however, would be to get both carriers to commit — in which case, T-Mobile will raise the amount to $1.5 million.

Todd Larsen, Executive Co-Director of Consumer and Corporate Engagement at Green America, says:

"This is a game-changer within the telecom industry, which has lagged behind other sectors in making commitments to clean energy.

T-Mobile is making it clear that it is entirely possible for telecom companies, with their massive energy use, to make a 100 percent clean energy commitment. AT&T, Verizon, and Sprint should all make similar commitments."

In his video, Legere claims Verizon and AT&T consume enough energy to power 2.6 million homes. Despite this staggering amount of consumption, just one percent comes from renewable sources.

Beth Porter, Program Director for Green America, comments:

"Consumers who care about the climate now have an environmentally conscious option when choosing a cell phone provider. They can support a company that is making an unprecedented 100 percent clean energy commitment.

People should not have to choose between using their phones to text and tweet, and protecting the planet. If T-Mobile's announcement helps move the entire industry to 100% renewable energy, we won't have to make that choice."

While the announcement is clearly designed to generate some good publicity as well as being a philanthropic effort, it’s good to see T-Mobile taking a stand against unsustainable energy consumption.

Do you think T-Mobile’s rivals should commit to renewable energy? Let us know in the comments.

Infographic: Does social media influence our spending?

Advertising on social media is nothing new, but some sceptical individuals might question whether there is any value in it. New data from Post Office Media argues the case it is more influential than we think.

The majority of people are stubborn. This might sound like a very broad statement, but look at the person sat next to you and ask whether it is true. Despite the Post Office’s data showing a substantial chunk of us are influenced by friends or celebrity posts, or sidebar adverts and featured content, we still deny it.

As you can see from the infographic below, social media advertising is very real, and big business. Maybe there is something to the digital economy? Please note, the statistics below are for the UK.

As always, if you have any interesting, shocking or quirky statistics, feel free to send them through to

Post Office (2)

Amdocs drops $224 million on Vubiquity for an extra shot of VOD

Communications software vendor Amdocs has made a strategic move into the video-on-demand market with the acquisition of Vubiquity for $224 million.

Vubiquity has specialized in providing video-on-demand infrastructure and operations for some time, and seems to be well positioned as telcos increasingly look to the multiplay model to add value to their subscribers. Amdocs will have noticed that many of its customers want to get better a video and general content services, so this acquisition will give it a significant string to its bow in that respect.

“This acquisition uniquely positions Amdocs at the centre of increased convergence across the content community and video distributors including major OTT providers,” said Eli Gelman, Amdocs CEO. “Our joint offerings address the media and entertainment industry’s challenge in balancing the incredible growth of content and the many ways to consume content with making programming easier, faster to deliver and ultimately watch, while also delivering profits.”

“Vubiquity has successfully been connecting content owners and distributors across many diverse platforms and evolving business models at the core of its support to the media community,” said Vubiquity CEO Darcy Antonellis.

“Our capabilities, coupled with Amdocs’ global scale and rich set of complementary solutions around monetisation, analytics and personalised customer experience will be truly unique, allowing us to deliver to a larger set of customers while solving key industry challenges. This includes helping video distributors deliver additional profitable offerings, as well as enabling content owners to focus on content creation and maximising licensing revenues.”

Antonellis will stay on as head of Amdocs Media Division and has a formidable reputation within that industry so, as long as Amdocs can conclude the tricky business of integrating a successful entrepreneur into a larger corporate structure they should have a good asset. Having said that $224 million is not a lot for money for a leading VOD player, which indicates that sector might not be the cash cow man y operators are hoping it will be.



Apple faces US probe after phone slow downs

Apple has confirmed it has been contacted by US agencies over its admission it has been slowing down the performance of older devices.

According to Bloomberg, Apple has been contacted by the US Department of Justice and the SEC which are in the preliminary stages of investigating wrongdoing to any of the claims. This is very much a hushed investigation for the moment and it is not sure what sort of financial penalties, if any, the iLeader would face if found guilty.

It should also be noted that while Apple has confirmed it has been contacted by US agencies, it has not given any specifics. The US Department of Justice and the SEC have only been named by anonymous sources so far.

The question of whether Apple has been slowing down older devices is seemingly a moot point now, it did admit it after all, but what is less clear is whether these agencies believe such activities are justified. Apple might be able to squeeze out of this difficult corner should it be able to convince the unknown agency that the slowdown was for the benefit of user experience overall.

Over the Christmas period Apple came clean over the slow down. It was slowing down the performance of older device as a means of improving battery life and to avoid devices shutting down at random times. Such actions were only used to improve the experience of the device for the consumer and nothing to do with the fact that a clunky devices makes an expensive upgrade more of a necessity for the poor iCultists, who are constantly being bleed dry by the iBoss. Since Apple’s admission of the slow down, it has seemingly gone on the offensive.

“We did say what it was, but I don’t think a lot of people were paying attention,” Apple CEO Tim Cook said to ABC in January. “And maybe we should have been clearer.”

The slow down wasn’t Apple’s fault, but the fault of the user for not paying attention to announcements made by the iMafioso in some obscure communications back-channel. And we thought it was Apple screwing the user, when it is the world screwing Apple.

Such headlines will not be welcomed by Apple executives who are already facing potential legal action in France and Italy for the planned obsolescence claims. Reports also state sales of the iPhone X were lower than expected, though details will be clearer during the company’s earnings call later this week. Although it is too early to tell, entering the smart speaker market late with a device which is amazingly more expensive than anything else on the market, might compound the misery for Apple.

More gloom for Ericsson – sales down, shares down, media unit sale fudged

It was yet another tough quarter for networking giant Ericsson, with sales down 12% and an unsatisfactory conclusion to the strategic review of its media business.

Sales were down by a rather worrying 12% (7% when adjusted for adjustments), although Ericsson says that was expected. Much of the blame has been placed on reduced sales of LTE gear in mainland China. There was also the big write-down Ericsson warned us about a few weeks ago. Here’s the Q4 2017 summary table and we challenge you to find the highlight.

Ericsson Q4 2017 table

“The fourth quarter was in line with our overall expectation, with gradual improving performance in Networks and continued significant losses in Digital Services,” said Börje Ekholm, Ericsson CEO. “The result is however far below our long-term ambition. For 2018, the Radio Access Network (RAN) equipment market is expected to decline by -2%, compared with estimated -8% in 2017. The Chinese market is expected to continue to decline due to reduced LTE investments, while there is positive momentum in North America.

“Segment Networks showed stable performance with the ramp-up of Ericsson Radio System (ERS), representing 71% of radio unit deliveries in the quarter, and efficiency gains in service delivery as key drivers. Networks adjusted gross margin increased to 36% (32%) YoY and the success of our 5G-ready portfolio continues. In the quarter, we made deliveries related to our market share gain in Mainland China and we signed several break-through contracts, including with Verizon and Deutsche Telekom.

“Segment Digital Services had another challenging quarter with significant losses, mainly due to higher costs in ongoing large transformation projects. As previously communicated, our turn-around plan builds on stability, profitability and growth – in that order. The initial focus has been on stabilizing both product roadmaps and challenging customer contracts. We have identified 45 critical or non-strategic customer contracts and the plan is to complete or exit approximately half of these contracts in 2018. The actions to improve profitability in Digital Services are expected to generate positive effects on gross margin in the second half of 2018.

“The refocus of Managed Services to improve profitability is underway, with 23 out of the 42 under-performing contracts completed, resulting in an annualized profit improvement of SEK 0.5 b. As a result of these efforts, the underlying gross margin improved slightly QoQ. One-time effects and seasonality in operating expenses impacted operating income negatively.

“For our Media Solutions portfolio, reported in segment Other, we have executed on a profit improvement program while continuing to invest in the product offering. This has significantly improved operating performance during the year, thereby improving our strategic flexibility as we have completed our strategic review of the business. We have evaluated various options including partnerships, divestments and continued in-house development, with the objective to maximize shareholder value.

“We have decided to partner with One Equity Partners (OEP) to further develop the Media Solutions business through retaining a 49% ownership stake. This allows us to capture the upside of the business while at the same time taking active part in the expected consolidation of the industry. We have decided to keep Red Bee Media (former Broadcast and Media Services) as the bids received did not reflect the value of the business. We will develop the business as an independent entity within Ericsson, building on the improved operations.”

So the conclusion of Ericsson’s big strategic review of its media unit is to sell 51% of the ‘media solutions’ (i.e. broadcast and media hardware) to private equity, thus relinquishing control of it while still retaining substantial risk (and potential upside, it should be said). Red Bee Media is the rebranded broadcast services bit and it looks like Ericsson just couldn’t find any buyers at almost any price, so it’s stuck with it.

Lastly it wouldn’t be an Ericsson announcement without a bit of a reshuffle. This time it involves the creation of a new ‘business area’ called Emerging Business, which seems to be all about exploring new business opportunities in the areas of IoT and distributed cloud solutions. To head the unit up Ericsson poached Åsa Tamsons from McKinsey’s, where she was previously partner at its Stockholm office.

Meanwhile Ekholm’s purge of the old guard continues with Ulf Ewaldsson losing his job as head of Business Area Digital Services, which had another bad quarter, and will now just be Advisor to the CEO. The Ericsson release says Ewaldsson ‘decided to step down’, but Ekholm’s last two advisors – Jan Frykhammar and Magnus Mandersson lasted just eight months before the decided to pursue other opportunities.

Clearly the Ericsson work in progress continues. One result of this constant purging, reviewing and streamlining must surely be that Ekholm at least has a clearer picture of the task in front of him. At MWC 2017 Ekholm was able to duck the matter of the grand plan to turn things around but he won’t have that luxury this year.

He would presumably like to have better numbers to talk about at Ericsson’s traditional first-morning press event but, regardless, he has to try to demonstrate how things are going to improve. Even if the plan is just to continue downsizing until 5G ramps up then he probably needs to admit it if he wants to avoid further share price shocks such as the 8% loss of the value of his company that had happened at time of writing this article.

Samsung profits shrink despite record revenues

Samsung has reported its earnings for the final quarter of 2017, and while profits shrunk year-on-year it does seem to be pretty good news for the Koreans.

Over the course of the quarter, operating profit fell slightly to $14.25 billion, though total revenues did increase 24% compared to the same period to roughly $62 billion. Over the course of the 12 months, revenues increased 19% to just over $224 billion, while operating profit jumped a monstrous 83% to just over $50 billion.

Looking more specifically at the individual business units, the semiconductor was attracting all the praise once again. The largest contribution came from the Memory business that manufactures DRAM and NAND, with Samsung gobbling up market share. This growth is expected to continue over the next couple of months, as new data centre builds will continue the demand for DRAM, while demand for NAND is likely to remain stable.

Interestingly enough, Samsung could now be considered the world leader in the chip market. A title long-held by Intel has now seemingly been handed over, as the $69.1 billion generated by the Samsung semiconductor business exceeds the $62.8 billion brought in by Intel over the last twelve months. Admittedly it is not a direct comparison as the pair operate in different sub-sectors, but looking at a cash basis Samsung is number one.

In the mobile business, earnings declined due to increased marketing costs prior to Christmas and lower shipments. Top-range devices maintained sales, though Samsung stopped selling as wide a range of low-range devices which has been blamed for the slowdown in total shipments. This dip might only be temporary however, as the launch of Galaxy S9 over the next coming months will provide a notable boost for the business.

This focus on the top end will only continue over the next twelve months as well. The business unit might not match total revenue numbers but the theory here seems to be focusing on profitability. In the low- and medium-range devices market the aim will be to simply hold-strong and maintain the current position, while the moves will be made further up the food chain.

Elsewhere on the mobile side of things, the Networks Business anticipates some bites when it comes to 5G commercialization in major markets including Korea, the US, and Japan. We’ve already seen a glimpse of the 5G potential in the US over the last couple of months, Samsung did win a useful contract with Verizon, but this is only the tip of the iceberg. 5G will start paying off before too long, but it can’t come soon enough as Samsung notes ‘the completion of LTE investments’.

Samsung might be known for a flashy phone with a big screen in most places worldwide, but the chip business is proving to be the saviour here. It might not be the most exciting aspect of the technology industry, but considering the anticipated need for components relating to software, connected devices, and services based on AI/IoT platforms, it might just pay-off to be boring.

Cake served up as alternative to Safari and Chrome

Cake Technologies has raised $5 million to expand its business and tackle a very ambitious goal; stealing market share off internet browsers Chrome and Safari.

Any challenge to the status quo should be more than welcomed but this is a tall ask. Cake is aiming to deliver an internet browser which is developed specifically for mobile devices in an attempt to make a name for itself in the highly lucrative search advertising business. The idea is sound but whether the entrenched position of Google’s Chrome and Apple’s Safari can be dislodged is another matter.

“There’s a lot of room for innovation when it comes to the mobile browser, and Cake has found a sweet spot,” said Sid Krommenhoek, Partner at Peak Ventures, the firm which led the funding round.

“Since the smartphone was introduced in 2007, storage capacity alone has increased more than 60x, yet the mobile browser has hardly changed in a decade. We see a huge opportunity for Cake to disrupt industry heavyweights by providing quicker access to search results in a way that is much more user-friendly.”

As with any good new idea, the functionality is simple and addresses an irritating problem which users have just got used to by now. By suppressing the search index and immediately preloading search results, users are able to search through search results as web pages, instead of tapping back and forth between a list of result links.

Web browsers haven’t really changed over the last couple of years, and the frustration of having to load a webpage before reloading the initial results list is a hindrance most users have just become accustomed to. The only reason for this acceptance is there isn’t an alternative option which is why such a challenge, with an new approach, might have a chance of catching on.

It is a very good idea, but we are struggling to see how Cake will be able to lure users away from the norm; Cake does not have a platform where it will be loaded as the default option. This will be the biggest challenge as far as we can see, primarily because people are inherently lazy.

Google and Apple have created a dominance in the world of mobile internet browsers because they have a mobile operating system. The Chrome and Safari apps are preloaded as default on devices, while most apps are pre-linked to the relevant browser (depending whether the app has been designed for Android or iOS). For Cake to succeed, it would have to convince users to actively download and use an alternative to the default.

There is nothing passive about it and it removes the idea of convenience. Like we said before, most people are lazy, happily taking the path of least resistance especially when that path is a successful and proven option.

That said, this is a very interesting idea put forward by Cake. We can’t really see the firm offering any real challenge to the dominance of Chrome or iOS, but we can foresee changes in the future. Should the experience actually prove to be positive for users, it won’t be long before Google or Apple are developing their own version in-house or will be looking to acquire Cake. Change might be on the horizon, just not in the way Cake probably hopes or wants.

The challenges of 5G – and how to overcome them in 2018

The UK has achieved a lot with its rollout of 4G connectivity over the past year, reaching more than 52 million active subscriptions and 89 per cent geographic coverage in towns and cities nationwide. However, as we move into the 5G era, demands for mobile data continue to rise rapidly and ever-quicker connectivity speeds open doors to new data-heavy applications – such as Fixed Wireless Access (FWA), high quality video (4K, 8K) and virtual reality (VR) – leaving the telecoms industry facing brand new connectivity challenges.

This mounting pressure to keep people connected – especially in densely populated cities like London, Manchester and Birmingham, where millions of consumers and businesses battle to get online using the same limited spectrum – coupled with the improvements needed in infrastructure and technology, threatens how quickly we can realise the full potential of 5G. So, what steps must the industry take in 2018 and beyond to make future rollout a success?

Smart spectrum use

The first and perhaps most obvious consideration is spectrum. Ofcom has worked with its continental counterparts to determine the three bands that they believe will be initially important to enable 5G in Europe: 700 MHz, 3.4-3.8 GHz, and 24.25-27.5 GHz.

However, spectrum is limited and therefore expensive, so the industry will also need to make better use of the spectrum that mobile network operators (MNOs) already have in order to deal with colossal demand across busy cities and suburban areas. This would mean that rather than relying only on roadside towers, the sector must look towards the installation of hundreds of thousands of street-level outdoor small cells as a solution, providing additional capacity and coverage in areas where it is needed most.

Where 2017 has seen initial small cell rollout and confirmation of the deployment and operational model, 2018 will be all about scale.

This will require greater collaboration and investment throughout the sector, involving infrastructure providers (like Arqiva), asset owners and MNOs; but is crucial if the UK is to be part of the 5G race.

Support for MIMO and dark fibre

The transition to 5G will require more than just an increase in asset numbers – the industry needs to look closely at how its infrastructure operates and how it will support the new technology (i.e. MIMO – multiple input/multiple output) in order to provide the reliable, superfast connectivity customers expect.

‘Standard MIMO’ (and its various derivatives) uses multiple antennas located at both the source and destination of a wireless signal to maximise efficiency and minimise error in the network – a system already being deployed to enhance 4G connectivity. This trend is set to accelerate as we head through the 4G evolution and into 5G, introducing ‘Massive MIMO’. As the term suggests, this is MIMO scaled up to hundreds or thousands of antennas and terminals, designed to achieve greater efficiency and throughput using the same amount of spectrum – requiring investment and upgrade of existing physical infrastructure (i.e. towers).

With Ofcom working to improve the access of Openreach’s infrastructure, t­he industry also needs to consider how these assets will work around dark fibre connections, which will be a vital component of 5G network deployment. Denser networks with greater coordination will be needed to support the huge growth in mobile data, increased M2M activity and ongoing launch of new services. For 5G to thrive, dark fibre will need to be available to the mobile industry from a range of players at competitive prices.

Fixed wireless access

5G will clearly bring seismic changes to the industry and providers will need to reassess how they manage, sell and deliver their services. Network slicing will provide the opportunity to offer services with very different features via a common set of infrastructure.

Take 5G Fixed Wireless Access (FWA), for example. FWA can provide a greatly enhanced service compared to today’s fixed home broadband technologies and complement future fibre-to-premise deployments. Such a service could result in new market entrants, as well as providing an alternative approach for established players by changing the time to market for ultrafast broadband and allowing greater commercial model innovation. 

Last year Arqiva conducted the first field trial of FWA technology in the UK, working with Samsung to deploy an end-to-end 5G FWA network operating in the 28GHz band – and demonstrating its enormous potential for delivering ultra-fast, high bandwidth connectivity to homes and businesses. We expect UK broadband providers to undertake similar trials and network planning in 2018 as the industry begins to seriously consider how commercial models will need to either change or evolve as a result of 5G connectivity over the next 12 months.

The road ahead

Many cite 2020 as the estimated arrival date of 5G, but regardless of exact date, the industry needs to remember that this will be the very start of the new connectivity era, rather than the pinnacle.

The technologies being trialled and implemented right now will help get things off to a flying start, however the future success of 5G will be heavily dependent on the work that is done over the coming years to prepare for and overcome the inevitable challenges of delivering superfast connectivity and high network demands.

If infrastructure providers, network operators, local authorities and the Government work in close quarters to develop the required infrastructure, the UK will be in a much better position to call itself a true leader of the 5G era.