An executive for Huawei Canada says allegations it would conduct espionage makes no sense as the distrust caused would be terminal for its business.
Some believe Huawei is compelled by law to conduct espionage if asked by the Chinese government. The company has always denied such a law exists.
China is said to be ahead of Russia as the 'biggest state sponsor of cyber-attacks on the West'. Naturally, Western governments are wary about the use of Chinese equipment in critical infrastructure such as 5G networks.
Some countries, such as the US and Australia, have decided to outright ban companies such as Huawei from their 5G network buildouts. Others, like the UK and Canada, are opting to inspect equipment instead.
Scott Bradley, Canadian VP of Corporate Affairs for Huawei, said:
“I think people need to step back a little bit and think of the simple dollars-and-cents economic impact if in fact any of this activity ever happened.
There are perceptions that need to be challenged.”
Back in September, a Canadian official said allowing Huawei to operate in the country improves security. If a specific vendor’s equipment is compromised, having others in operation means less of the network is affected.
The UK established its dedicated HCSEC (Huawei Cyber Security Evaluation Centre) facility in 2010. Experts from security agency GCHQ examine the company’s equipment for any potential security threats prior to use in national infrastructure.
Until earlier this year, HCSEC had only ever identified minor issues with the use of Huawei’s equipment, but could still assure it did not pose a risk.
However, back in July, HCSEC identified shortcomings in the company’s engineering processes that resulted in the centre only being able to provide ‘limited assurance’ that risks had been sufficiently mitigated.
The company is said to have been slow in addressing the concerns raised in the report, but a meeting between UK security officials and Huawei executives this month led to an agreement it will change its practices.
A recent increase in anti-Huawei sentiment is expected to have been driven by the US which has reportedly been petitioning its allies not to use Chinese 5G gear. Officials are even said to be offering aid if they use US vendors.
“If a government’s behaviour extends beyond its jurisdiction, such activity should not be encouraged,” said a Huawei spokesperson.
Earlier this month, Huawei CFO Meng Wanzhou was arrested in Canada on the behalf of the US for allegedly violating US sanctions against Iran – further adding to a troublesome year for the company.
Wanzhou is the daughter of Huawei founder Ren Zhengfei, making the arrest particularly notable. Part of the scrutiny against Huawei arises from Zhengfei’s past links to the People’s Liberation Army where he served in a rank equivalent to a major.
Interested in hearing industry leaders discuss subjects like this and sharing their experiences? Attend the Cyber Security & Cloud Expo World Series with upcoming events in Silicon Valley, London, and Amsterdam to learn more.
It’s that time of year again and before we set about the food, booze and pressies with shameless abandon we decided to collate some predictions from the cognoscenti of our industry.
2019 will be the year of rhetoric – William Webb, Telecoms Consultant
A lot of talking, not much doing. Everyone will be talking about their 5G deployments but many will be trials, not many handsets will be available, and there will be many teething problems with initial deployments. With 5G taking up so much attention, the industry will not be looking at alternative business models, hetnet concepts, or pushing for mergers. Current trends will continue – more fibre will be laid, more wifi connectivity provided, data requirements will continue to grow. Oh, and academics will start to talk up 6G….
Fixed Wireless Access put the revenue back in 5G – Bengt Nordstrom, CEO of Northstream
Fixed Wireless Access (FWA) has evolved into a separate 5G use case, especially by Verizon in the US. Of all the suggested 5G use cases – including eMBB and mIoT – it is FWA that provides the most tangible revenue growth opportunity over the next five years, for both the US and in specific markets in Europe. Furthermore, operators can use their existing physical network assets and competencies for FWA. In 2019, FWA will emerge as a mainstream 5G revenue opportunity beyond the US, and particularly in Europe.
The 5G hype bubble will inevitably burst, revealing its true value – Jennifer Kyriakakis, VP of Marketing at Matrixx Software
As operators battle each other to out-hype their consumer 5G offerings, the breathless mania will surely run into the hard reality of the consumer marketplace. The roll-out of next-generation capabilities will be lengthier than consumers expected, device manufacturers will be slow to adopt the standards, and a whole host of other challenges to 5G enthusiasm will surely arise. While initially painful, this bursting of the hype bubble will provide the impetus necessary for operators to pivot away from today’s heavy focus on speed, coverage and price, and refocus their businesses on monetization opportunities for new and emerging technologies. By embracing innovation as a way to help pay for their substantial network investments in the near term, it will afford Telcos breathing room for the consumer ecosystem to catch-up and fully leverage the new capabilities that 5G will offer in the long run.
Smartphone market to revive in 2nd half with 5G volume – Wei Shi, Telecoms.com Intelligence Manager
The smartphone market has registered the first 4-quarter recession by the end of Q3 this year, and is likely to continue into the first half of the next. The market needs a stimulus for revival, and that should come from 5G. With the first commercial 5G chipset launch by Qualcomm, the enthusiastic smartphone makers, led by Samsung and the Chinese OEMs and, will ride on the wave of excitement to bring a strong line-up of 5G enabled products to the market in the second half of the year. This will provide another impetus for replacement in addition to the normal Galaxy-iPhone driven cycle. However most users who buy 5G phones will not be able to use 5G services overnight.
Telcos scale back efforts in content and media – Paolo Pescatore, Tech, Media and Telecoms Analyst
Cost of premium content rights continues to escalate. In part driven by new bidders such as the online giants. This will force telcos to rethink their current strategies towards investing in content. Some telcos like AT&T and Telefonica will continue to invest heavily. While others like BT will scale back their own ambitions and take a different approach in this landscape such as partnering more closely with providers like Amazon and Apple.
Amazon will acquire DAZN to create a global sports TV challenger – Ed Barton, Analyst at Ovum
Sport is the missing piece of the content puzzle for the tech giants – but not for much longer if Amazon continues to bid for distributors with existing rights deals, such as Fox’s regional sports networks in the US. By acquiring DAZN, Amazon would gain strong sports rights in key global markets including Germany and Japan. DAZN is committed to the sports market but might find the support and growth acceleration offered by Amazon – and its huge existing subscriber base – too alluring to resist.
We will finally get the message on RCS – Mary Clark, CMO of Synchronoss
2019 is actually going to be the year of carrier sponsored RCS – some 12 years or more since the technology was introduced. Between the launch of the operator led solution in Japan and the many other operators we are talking to about this around the world, I think by the end of 2019 we will see multiple launches of interoperable RCS messaging within countries and across countries, allowing for an improved customer experience as well as commerce.
Bringing people and things closer together with applications – Patrick Joggerst, CMO and EVP of Business Development for Ribbon Communications
2019 will be the breakout year for applications that combine people and things, communicating with each other, whether through voice activated commands (“Alexa, call Mum”), or messaging alerts (“A stranger is on your doorstep.”) The lines will blur and tremendous value will be created when companies design applications, connected on secure networks, that make it as easy to develop a relationship with your smart car, smart home, or smart campus as it is to develop a relationship with human beings. The impact will be substantial and meaningful, with applications that leverage sensors to help us age at home more safely, to get to and from work more conveniently, and to generally reduce the “friction” in life that can lead to exhaustion and despair. Look for major changes to the contact center industry, as virtual and human assistants help millions of people navigate this brave, new hyperconnected world, and look for value creation in securing communications throughout.
Rise of SIM-only contracts could be bad news for operators – Kevin Gillan, Europe MD at SquareTrade
Expect to see the slump in smartphone sales continue, and subscribers increasingly turn to SIM-only contracts in 2019. Operators will need to think carefully about alternative revenue sources to combat the unavoidable slump in contract sales. Additional services such as music, TV or device insurance that will retain customers and improve subscriber engagement, while driving new revenue, will be critical.
Operators fully embrace eSIM for devices and the IoT- Bengt Nordstrom, CEO of Northstream
After years of concern about the impact on their businesses, operators are coming to realise the considerable benefits of eSIM technology. These include simpler provisioning, reduced logistic costs and lower barriers for new use cases. Thanks to the rising number of eSIM use cases plus the launch of major handsets equipped with GSMA-based eSIMs, 2019 will be the year that operators in Europe and North America properly embrace eSIM for both handsets and IoT use cases.
The first sixth/seventh play bundle – Paolo Pescatore, Tech, Media and Telecoms Analyst
Most converged telcos already offer a portfolio of multiplay services including fixed line broadband and pay TV. These telcos include the likes of Deutsche Telekom, Comcast, Orange, and Telefonica. Expect these providers to launch the first sixth/seventh play bundle. This will consist of but not limited to other services such as banking, financial services, utility services and other connected services. Orange is likely to lead the race with its march into financial services.
Microsoft is to finish 2019 as the world’s most valuable company – Wei Shi, Telecoms.com Intelligence Manager
Microsoft has been delivering stellar performances in recent quarters, and has weathered the market gloom better than its main competitors. The strategy shift to becoming a platform and to focusing on cloud and gaming will continue to power its resurgence. Meanwhile, its main competitors on the top of the world’s most valuable company table are seeing their share prices being depressed for different reasons. Apple’s overreliance on iPhone makes it vulnerable when the market sniffs weakness in the shipment of its latest products; Amazon’s AWS is growing slower than Microsoft’s Azure; Alphabet is still a one-trick pony: advertising through Google, which continues to throw the company into troubles. As a matter of fact, Microsoft did briefly become the most valuable company in late November. Next time this crossover happens it may last longer.
Now that they’ve got to actually do it everyone gets bored of 5G and starts banging on about 6G – Scott Bicheno, Telecoms.com Editor
So 5G just ended up being about capacity, efficiency and industrial applications. How boring is that? Once the first couple of 5G conversational gambits at MWC fall flat, people will soon realise it’s much more fun to focus on more distant technology, about which they can make all sorts of utopian predictions without fear of being called out. There will be talk of a wireless neural network connecting everyone and everything to a hive mind overseen by benign artificial super intelligence. What they won’t say is that the ultimate aim of 6G will be to erase all traces of individuality in order to create a global AR/VR Borg that will combine Chinese social credit, American cultural puritanism and European imperiousness to free us all from the burdens of disappointment, inconvenience and choice. Happy New Year!
One of the biggest stories of the year, and one of the major catalysts of the US/China trade war, was ZTE’s brush with extinction, but Huawei thinks it’s robust enough to withstand the US economic dirty-bomb.
During the Summer, ZTE was caught violating US trade sanctions with Iran and subsequently was banned from using any US products or IP within its supply chain. The move from the US almost destroyed ZTE, with the company ceasing operations for a couple of weeks, but Huawei’s Rotating CEO doesn’t think his firm would be under the same risk.
“We all know the ICT industry highly depends on a global supply chain,” said Hu. “And Huawei is no exception. Today we have 13,000 suppliers in our supply chain. Companies coming from Japan, US, Europe, China and many other countries in the regions. Take this year for example, our annual procurement spend would be 70 billion dollars.”
With CFO Meng Wanzhou currently on bail in Canada, Huawei is facing questions it probably doesn’t want to answer. The connection with Skycom looks to be much closer than some US financial institutions were led to believe, suggesting Huawei has been violating US trade sanctions with Iran. Should the US take the same action as it did with ZTE earlier in the year, Huawei could face the same ban on US exports.
The issue with ZTE was its dependence on the US for its supply chain. Huawei will also have the US feature prominently through its own supply chain, but Hu is confident it would stand up to any potential punishment dished out by the US.
“We take a diversified supply strategy,” said Hu. “That means we have a multi-sourcing strategy.
“We look at multiple choices in terms of technology solutions, and we also have multi-location supply networks. At the same time, since we’re working together with hundreds of telecom operators in the world, and also, we are serving a significant number of enterprise customers, so we look at the full lifecycle support that is needed and build up our stock of spare parts and components to ensure support across the product lifecycle.”
The company is also working to produce its own alternatives to some technologies which might not be able to be replicated elsewhere. A prime example of this is the Android mobile operating system.
As it stands, should the US impose a ban on Huawei its smartphones and wearable devices would be relegated to the role of doorstop. With this in mind, Huawei is attempting to create its own mobile operating system. It will probably be no-where as good as what the Android OS can offer, others such as Samsung have tried and failed, but it is certainly better than nothing.
Being banned from using US components and IP would certainly be a negative for Huawei, and it certainly isn’t a scenario which is out of the question, but Huawei seems to be in a better position than the suspect ZTE.
It’s not very good, but here’s another attempts at a Telecoms.com poem. This time around we’ve destroyed the much loved ‘Twelve Days of Christmas’ and wrestled in some of the stories from the last twelve months.
Twelve months of Jio mobile subscriptions growing (story here)
Eleven (.2) billion opportunity for Smart homing (story here)
Ten versions of the iPhone culting (story here)
Nine weeks left of pre-MWC eye-rolling
Eight guests joined Scott and Jamie podding
Seven years of IBM quarterly revenue decline ending (story here)
Six months of Facebook share price declining (story here)
Five generations of mobile
Four operators in the US hangs in the balance (story here)
Three months of ZTE banned from the US (story here)
Two Ericsson enforced network outages (story here)
And One Huawei CFO stuck behind bars (story here)
Merry Christmas (and sorry about that…)
Just a few weeks after lighting up a 5G network in Sweden, Telia has taken the connectivity euphoria across the Baltic Sea to Estonia.
In partnership with TalTech University, Telia has turned on Estonia’s first 5G network as a test bed for the university, as well as local companies and start-ups. The 5G network is a permanent installation using standardized and commercial 5G products.
“We hope to see new and exciting future services and business models built upon 5G,” said Kirke Saar, CTO at Telia Estonia. “Thus, different stakeholders are welcome to test the possibilities of the new technology at the TalTech University. It is the perfect place for this, combining technical knowledge, smart people and cooperation experiences with very different partners. Additionally, 5G technology supports our newly opened NB-IoT network which now has its first commercial user.”
“It´ll open limitless opportunities for communication in virtual world,” said Rector of TalTech Jaak Aaviksoo. “TalTech, Telia and Ericsson take this step together because we believe in the creativity of both scientists and students in using this platform and generating new ideas. 5G means a thousand steps into the future for the whole Estonia.”
This is of course not Telia’s first venture into the 5G world, having opened up the network at KTH the Royal Institute of Technology in Stockholm, earlier this month. This network has been poised as the first building block for 5G in Sweden.
The first task for the TalTech network will be a 4K live stream on the university campus of the network opening party from the Tallinn Old Town Christmas Market, which was recently voted the best in Europe.
The partnership will not limit the ambitions of those wishing to play around with the 5G network, though one of the first initiatives will focus on autonomous driving. TalTech´s self-driving car made its first official journey in September, though progress will surely be accelerated with the 5G input.
The next stage of the autonomous initiative will be establishing a vehicle-to-vehicle communication platform with Telia, while also optimising the vehicle structure with Silberauto, one of the biggest automotive companies in the Baltics.
Huawei, and China on the whole for that matter, has become the telco industry’s punching bag over the last couple of months, but Rotating CEO Ken Hu has hit back at the allegations.
Speaking at Huawei’s new campus in Dongguan, Hu put forward a strong statement of intent, pointing to the commercial success of the business in the 5G world and hitting back at security allegations which have plagued the firm.
“When it comes to security issues, as an industry, we believe that we need to talk more about the technology and how to improve,” said Hu.
“When it comes to security allegations, it’s best to let the facts speak for themselves. And the fact is: Huawei’s record on security is clean. We believe that cyber security is a global issue. It’s an industry wide issue and we need to address it together.”
Opinion will be divided on these statements, but we intend to sit on the fence this time around. China is almost certainly attempting to widen its influence on the world, but so is every other country and intelligence agency. And Huawei seems to be sitting in a difficult position. It isn’t unfeasible to believe the government is exerting influence on the firm, but no evidence has been tabled to date.
That said, it doesn’t seem to be having an overtly negative impact on the business. Hu claims the team has secured 25 commercial 5G contracts, the most in the segment, though the allegations will be weighing down prospects. Having already been written out of several big-spending markets, perhaps the Huawei influence is being diluted.
Huawei will not go out of business because of these allegations, unless there is some pretty serious evidence put into the public domain, but we are unlikely to see a repeat of its fortunes in the 4G world. Nokia and Ericsson will secretly be jumping for joy, with the pair seemingly unable to compete with Huawei in the 4G era, the political climate is making life considerably easier for the next couple of years.
But Hu is not writing off Huawei just yet.
“We realize that the industry we’re in is undergoing faster technological transition periods. Technologies are becoming increasingly complicated,” said Hu. “Networks are becoming more open. As a result of this, we definitely notice the increasing interest and care from network operators and regulators and also the general public about the industry. We think this is just normal.
“In our most recent board meeting, we decided on a company wide transformation program to improve our software engineering capabilities. The company will invest an initial special budget of $2 billion US dollars in the next five years to comprehensively improve our software engineering capabilities, so our products will be better prepared for the future world.”
Part of this $2 billion has been invested in the cyber security lab in Dongguan, though it might not be unusual to see more of these labs appear around the world. The UK is a prime example, having a team monitoring Huawei equipment in GCHQ, and it does seem to have removed some concerns with the government yet to hand out a Huawei ban.
Last month the team opened a similar lab in Bonn, Germany, while there are plans to unveil a security transparency centre in Brussels over the next couple of months. Perhaps this is an initiative Huawei could point to with other governments to suppress some of the growing negative sentiment.
Security concerns about China and it nefarious intentions will never go away, at least not while the country poses a threat to the US’ technology dominance, but Huawei is a powerful business. The next couple of months will see various commercial contracts announced for the 5G rollout; this will give a much more conclusive picture of how telcos feel about Huawei. Will the technological capabilities stand tall above the security concerns?
During yesteryear, CityFibre was known for moaning for the sake of moaning, but in securing a debt package of £1.12 billion, the firm’s ambitions are starting to look very real and very interesting.
Seven banks have financed the transaction, ABN AMRO, Deutsche Bank, Lloyds Bank plc, Natixis, NatWest, Santander and Société Générale, which will serve as the first installment of CityFibre’s £2.5 billion commitment for a nationwide fibre rollout. CityFibre has given itself a target of providing fibre to five million homes, a third of the Government’s target of 15 million, by 2025.
“The appetite from these institutions to support our financing is further evidence that CityFibre’s strategy is the right one for the UK,” said Terry Hart, CityFibre’s CFO.
“As our networks are rolled out, this will benefit everyone, driving innovation and increasing fibre penetration across the UK, providing the future-proof digital connectivity the UK needs. CityFibre’s target to reach five million homes by 2025, as well as thousands of businesses and public-sector sites, will catalyse huge economic growth in regional towns and cities across the country.”
CityFibre made it abundantly clear in its statement that this is an endorsement of the firm’s business model from heavy hitting financial institutions, and perhaps it does indicate a change in attitudes from investors.
Back in October, we attended an investor panel session at Broadband World Forum featuring the likes of the European Investment Bank and also Amber Infrastructure, a specialist venture capitalist firm. The message was clear from this panel session; investors are increasingly happy to fuel fibre rollouts as the business case has been justified and consumer demand has been validated.
This is where CityFibre sits. It doesn’t want to be a telco but become a serious infrastructure player. Owning the relationship with the consumer is of zero interest but creating a nationwide alternative to Openreach and becoming a connectivity wholesaler is the big picture. However, to be considered a viable alternative, there needs to be more of a presence than there is today.
Telcos don’t want to have a patchwork of relationships across a country to meet the connectivity demands. Multiple relationships create more overheads and more opportunity for something to go wrong. CityFibre has made good progress in rolling out fibre spines in numerous areas across the UK, but the gaps will have to be plugged if it wants to be a viable and realistic alternative to Openreach.
That said, CityFibre is looking like a business which has the right ingredients for a market which is primed for disruption. Aggressive ambitions, a head-strong CEO and the confidence of being owned by one of the world’s most powerful businesses. CityFibre is a very strong contender to make a genuine and permanent dent in the connectivity infrastructure game.
And a £1.1 billion investment from seven major financial institutions is a very good place to start.
The T-Mobile US TV launch has been anticipated for some time now, but we’ll have to wait until at least mid-2019 for this dream to become a reality.
After closing the Layer3 acquisition at the beginning of this year, it was assumed T-Mobile US would sharply enter the TV market with another ‘Uncarrier’ move. These disruptive plays have formed the foundation of T-Mobile US’ rise through the ranks in recent years, luring customers away from the still dominant duo of AT&T and Verizon.
But for those who were eagerly anticipating the launch of a TV service, don’t hold your breath. The launch has been kicked back, with no concrete commitments made. Why? Because CEO John Legere has high standards.
According to Bloomberg, people working on the project have suggested the wild-eyed CEO has set the bar so high, the team are struggling to meet expectations. This is not necessarily a bad thing and demonstrates Legere has the patience to produce a good product instead of being rushed to market due to the pressure of other players.
The first moments of life for this product could be the beginning and the end. Such is the competition in the ‘cord-cutter’ space, bringing a poor product to market could result in the venture failing before it has even started. If T-Mobile US wants to make a splash in this pond, he’ll have to meet consumer expectations, most of whom are dissatisfied at the moment.
While cable has had a place in the hearts of consumers for years, this trend is ending with the cord-cutting generation of today. Digital alternatives are wanted by the consumer, though with expensive and sub-standard options on the market as it stands, there is the opportunity for disruption. This is a perfect storm for Legere and the magenta army, but only if the proposition is right.
It’ll have to be cheap enough to attract interest, expensive enough to allow for future content investment, stylish enough to meet the visual and experience demands of the digital natives and have the content depth to attract a broad range of customers. This is a complicated equation to get right, but the rewards are potentially massive. We’re pleasantly surprised the team is taking its time and getting the proposition right.
Another factor to consider is the increased competitive threat from Disney. Disney has already shown its intention to go toe-to-toe with Netflix on the content battlefield, though should this entertainment heavyweight get its own OTT service right upon launch next year, the content gains for everyone else will get considerably smaller.
With a host of services already on the market, and more to come in 2019, T-Mobile US will have to make this Uncarrier move perfect if it wants to cash in on the content bonanza. Consumers are fickle and un-loyal enough to mean late-comers to the market can make a splash, so don’t expect Legere to be rushed with this challenge to the status quo.