US suspends Huawei export ban for another 90 days

President Trump’s Huawei export ban is increasingly looking like a hollow bluff as it gets yet another suspension.

When the US Bureau of Industry and Security (BIS) put Huawei on its ‘entity list’, thus prohibiting US companies and any others that want to stay in the US’s good books from doing business with it, there were a number of stated reasons for doing so. Among them was the allegation that Huawei has been doing business with Iran, which is on another US shit-list, as well as unspecified ‘activities that are contrary to U.S. national security or foreign policy interest.’

Soon after, however, the new restrictions were suspended out of apparent concern over the disruption to US companies. At the time it seemed implausible that the various US agencies involved hadn’t anticipated such disruption, but given Trump’s impulsive brand of leadership most people were happy to accept that explanation.

Now, on the day that suspension was due to expire, BIS has decided to extend it for another 90 days, this time “…to afford consumers across America the necessary time to transition away from Huawei equipment…” Once more this begs the question that, if it’s reasonable to expect US consumers to take at least six months to wean themselves off what little Huawei gear they had been able to get hold of, why this wasn’t taken into account when the announcement was first made.

And what about all these national security and foreign policy concerns, let alone the punishment for working with Iran, which elicited such swift and merciless retribution for ZTE? It’s increasingly looking like the US isn’t half as bothered about this stuff as it makes out and is merely using the entity list as a negotiating chip in its broader geo-political spat with China.

“As we continue to urge consumers to transition away from Huawei’s products, we recognize that more time is necessary to prevent any disruption,” said Secretary of Commerce Wilbur Ross. “Simultaneously, we are constantly working at the Department to ensure that any exports to Huawei and its affiliates do not violate the terms of the Entity Listing or Temporary General License.”

This latest concession comes soon after President Trump had dinner with Apple CEO Tim Cook, which just happens to be a massive US consumer electronics company. Cook apparently moaned about the effects of bilateral tariffs and Trump tweeted about it as if it had only just occurred to him that they might harm US companies as well as Chinese ones. All of this is coming over as increasingly disingenuous and with every new concession the threat of the entity list becomes a less effective negotiating tool.

Google ditches subscription model for YouTube Original content

Google tried to make the transition over to a subscription-led business and now it seems it has had enough, announcing all YouTube Original content will be free after September 24.

Although the subscription business model is very attractive to the money-men, it was always going to be a tough sell for Google and YouTube. Not only have users become accustomed to free content through the platform, it is also far removed from the core competency of the Google money-making machine.

It now appears the experiment has not worked, with Google announcing all YouTube original content, movies and live events released on September 24th and beyond will be free to view.

There will of course be a subscription model still available for users. For $12 a month, ads will be removed, content can be downloaded for offline viewing, all episodes of a series will available from the beginning and users can expect bonus material also.

It doesn’t seem to be completely giving up on the idea of subscriptions, but this represents a more back the traditional from Google.

Google is very good at a number of different things, but top of the list is hyper-targeted advertising. Like Facebook, Google specialises in collecting and analysing information on a user before presenting the right type of content. Some might question the appropriateness and relevance of some of the ads, but you only have to look at how good the Google search engine actually is to realise it does know what it’s doing.

This is why the transition to subscription-based revenues on YouTube was a slightly unusual move. Firstly, Google is really good at making money through serving relevant ads at the right time, so why change this. And secondly, YouTube users are accustomed to getting content for free, why would they want to pay?

Perhaps this is why it has been a struggle to collect subscriptions to date. YouTube users are used to a certain experience, and maybe do not feel YouTube Original content warranted a price tag. Google was asking users to pay for content, without really owning a track record of creating price tag worth content.

This is not necessarily the end of the subscription ambitions for Google and YouTube, but it does impose a different mentality on the business. It takes the platform back into the realms of targeted advertising, a practice which has made Google billions upon billions, and also allows the team to broaden the audience.

Without a paywall to hide content behind, the YouTube Originals will be viewed by more people. More opinions can be nurtured and more of a reputation can be created. As it stands, Google or YouTube does not have a positive or negative reputation for making content. Eyeballs are important when going up against the likes of Netflix, HBO, Disney and Sky, and now Google can ensure people can form an opinion on its content.

If Google wants to transition YouTube across to a subscription-based business model, it will have to demonstrate why people should pay to access content. Perhaps it forgot to do that in the first place.

5G pricing: the best is yet to come

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece, Jennifer Kyriakakis, Founder and VP of Marketing at Matrixx, explores best practice in the pricing of telecoms services in the 5G era.

The advent of 5G technology will bring a monumental shift in how traditional telcos operate their business. In the run up to full scale 5G deployments, many forward thinking telcos have launched digital brands. These are essentially 100% digital versions of their businesses packaged as a different brand. Many of them are using their digital brands to experiment with customer experience, service offerings, and business models that will become mainstream with 5G. The theorem: If we don’t have the pricing models and business infrastructure in place to properly extract value from a 5G offering, we’ll end up losing out to the next wave of OTT players. So let’s figure it out now, before the networks are in place.

As operators debate how best to price 5G, some early examples, such as Three in the UK are offering 5G at no additional cost to current 4G plans. The idea seems sound as a starting point, particularly as there is little 5G network availability and devices haven’t yet caught up. But does it make sense in the medium to long term, or do these tactics risk further devaluing the very asset that differentiates them? Are these early pricing models really strategies for 5G, or merely placeholders as telcos continue with transformation efforts that will set them up to compete with OTTs and digital players?

Operators have a powerful opportunity to create a competitive advantage with their 5G offering. Getting the pricing model right is a strong place to start. With the industry already throwing different pricing models at the wall, which one will stick?

The Pay-for-Speed approach

This approach started in some markets with 4G and while it’s simple and straightforward for the consumer, it also sets the precedence that speed is the only value lever telcos have to offer. For example, Vodafone became the first UK network to offer unlimited 5G data plans. Ditching the monthly data allocations, Vodafone offers three speeds; 2Mpbs, 10Mpbs and then the fastest speed possible. People have the choice on how fast they want to download or stream content.

If you are a super user or have a family of six who are always on their phones, it makes sense to pay for those faster speeds. If you are in retirement, don’t necessarily have a job in tech or could care less about YouTube, then having the choice for lower speeds may be a good option.

But is this model sustainable? When in the future, the amount of data – everything from gaming to connected home, health apps, IoT, streaming video and more -could outweigh the speed? Would an operator lose a revenue opportunity on super users who take advantage of accessing large amounts of data at the fastest speeds?

The Rewards approach

Others are taking an ecosystem approach banking on potential new revenue streams by creating value-added services, which often come to life through rewards-based programs. These programs offer incentives such as discounts, coupons and first-access to concerts and movies, to entice users and make the app experience more sticky. By building loyalty around an ecosystem now, as 5G services arrive they have established channel relationships with partners who will be leveraging 5G in the future for AR/VR services and are actively participating in the revenue chain.

Verizon’s Up Program is a great example of this, as they offer discounts and rewards on technology, dining, sports experiences and stage-side concerts. They tout deals monthly and even daily, driving people to check in on the app frequently. Once there, they encourage users to manage their services, often upselling them on new benefits.

By creating these rewards-based programs they are not only appealing to the next generation of users, but they are also creating a more valued relationship between consumers and their brand. This brand strategy is one that few operators have navigated successfully, but it is crying out for change in a new 5G era if operators expect to compete with OTT players.

The Marketplace & Bundled approach

Operators that create marketplaces are offering users opportunities to connect with friends, form inner social groups, gift data to friends, and also manage their plans in real-time. These marketplaces are highly sticky, driving customers to spend lots of time within the marketplace, which breeds more opportunities to sell products and boost revenue.

Another approach are operators who are choosing to bundle the price of data with a specific service. For example, if you want Netflix delivered in high-definition to your smartphone, you’ll pay a flat monthly fee for that service and the data will be included. These bundled-service options work well for a variety of value-adds, including VR gaming, augmented reality services, IoT of the home and more.

This sets the market up nicely for two-sided business models which will emerge with full scale 5G. Getting consumers used to paying carriers for services vs. network access is phase one to future multi-faceted models in which the carriage is monetized through different partners and models.

So have any 5G pricing models arrived yet?

While these offerings are all based on 4G today, they set the foundation for turning customers into high-engagement fans, in turn increasing their revenue streams.

5G introduces hundreds and even thousands of possibilities to utilize the network efficiently and generate additional revenue. Operators that are moving now to innovate and distinguish themselves from their competitors are setting themselves up to reimagine pricing for 5G and drive new revenue vs. defend against price wars and the resulting churn.

 

Pod 15 jul Jennifer croppedMATRIXX Founder and Vice President of Marketing, Jennifer Kyriakakis, brings deep expertise in both telecoms and software with roles ranging from complex systems delivery to technical sales to strategic marketing. Her 20 plus years of experience helping Telcos reinvent themselves has propelled the growth of MATRIXX into markets all over the globe.

Macquarie bags KCOM for £627 million

Macquarie Infrastructure and Real Assets (MIRA) has officially closed the acquisition of KCOM for £627 million.

While KCOM has a limited footprint in comparison to rivals, it has created a remarkable leadership position in the Hull and East Yorkshire region. KCOM has been of interest to a number of different suitors over the last few months, since a major profit warning was made last year, though MIRA wins out after an auction process.

“We are pleased to be partnering with an investor that has deep, global expertise in our industry,” said Graham Sutherland, CEO of KCOM. “We are confident that Macquarie Infrastructure and Real Assets will support our long-term growth ambitions whilst helping us maintain our strong local focus and presence.”

“We are looking forward to working closely with KCOM’s management team and workforce to increase fibre accessibility and reduce digital exclusion in the region,” said Leigh Harrison, Head of MIRA EMEA. “By investing to develop and expand KCOM’s networks, we hope to deliver the infrastructure that will underpin growth and innovation in East Yorkshire.”

Last November, KCOM not only issued a profit warning but also cut dividends and warned debts were 10% higher than during the same period of 2017. The news led to a 36% drop in share price and also peaked the interest of potential acquirers.

Virgin Media was first rumoured to be interested in the purchase, it would offer access to an entirely new market for the telco, though pension fund Universities Superannuation Scheme Ltd (USSL) was the first to table a bid. After MIRA got involved in the financial fracas, The Takeover Panel recommended an auction.

With KCOM entering the MIRA portfolio, the investment fund is bolstering its already healthy telecoms position. Aside from KCOM, MIRA is already an investor in Arqiva, and the owner of Danish telco TDC.

UK’s laissez-faire attitude to privacy and facial recognition tech is worrying

Big Brother Watch has described the implementation of facial recognition tech as an ‘epidemic’ as it emerges the police has been colluding with private industry for trials.

There are of course significant benefits to be realised through the introduction of facial recognition, but the risks are monstrous. It is a sensitive subject, where transparency should be assumed as a given, but the general public has little or no understanding of the implications to personal privacy rights.

Thanks to an investigation from the group, it has been uncovered that shopping centres, casinos and even publicly-owned museums have been using the technology. Even more worryingly, in some cases the data has been shared with police forces. Without public consultation, the introduction of such technologies is an insult to the general public and a violation of the trust which has been put in public institutions and private industry.

“There is an epidemic of facial recognition in the UK,” said Director of Big Brother Watch, Silkie Carlo.

“The collusion between police and private companies in building these surveillance nets around popular spaces is deeply disturbing. Facial recognition is the perfect tool of oppression and the widespread use we’ve found indicates we’re facing a privacy emergency.”

What is worth noting is that groups such as Big Brother Watch have a tendency to over engineer certain developments, adding an element of theatrics to drum up support and dramatize events. However, in this instance, we completely agree.

When introducing new technology to society, there should be some form of public consultation, especially when the risk of abuse can have such a monumental impact on everyday life. Here, the risk is to the human right to privacy, a benefit many in the UK overlook, due to the assumption rights will be honoured by those given the responsibility of management of our society.

The general public should be given the right to choose. Increased safety might be a benefit, but there will be a sacrifice to personal privacy. We should have the opportunity to say no.

While the UK Government is clip-clopping along, sat pleasantly atop of its high-horse, criticising other administrations of human right violations, this incident blurs the line. Using facial recognition in a private environment without telling customers is a suspect position, though sharing this data with police forces is wrong.

Is there any material difference between these programmes and initiatives launched in autocratic and totalitarian governments elsewhere in the world? It smells very similar to the dreary picture painted in George Orwell’s “1984”, with a nanny-state assuming the right to decide what is reasonable and what is not.

And for those who appreciated a bit of irony, one of the examples Big Brother Watch has identified of unwarranted surveillance was at Liverpool’s World Museum, during a “China’s First Emperor and the Terracotta Warriors” exhibition.

“The idea of a British museum secretly scanning the faces of children visiting an exhibition on the first emperor of China is chilling,” said Carlo. “There is a dark irony that this authoritarian surveillance tool is rarely seen outside of China.

“Facial recognition surveillance risks making privacy in Britain extinct.”

Aside from this museum, private development companies including British Land, have been implementing the technology. There is reference to the technology in terms and conditions documents, though it is unlikely many members of the general public have been made aware.

As a result of the suspect implementations, including at Kings Cross in London, the Information Commission Officer Elizabeth Denham has launched an investigation. The investigation will look into an increasingly common theme; whether the implementation of new technology is taking advantage of the slow-moving process of legislation, and the huge number of grey areas currently present in the law.

Moving forward, facial recognition technologies will have a role to play in the digital society. Away from the clearly obvious risk of abuse, there are very material benefits. If a programme can identify fear or stress, for example, emergency services could be potentially alerted to an incident much quicker. Response to such incidents today are reliant on someone calling 999 in most cases, new technology could help here and save lives.

However, the general public must be informed, and blessings must be given. Transparency is key, and right now, it is missing.

BT streamlining continues with reported £100m Dutch infrastructure sale

UK telco group BT is reportedly flogging £100 million of infrastructure assets in The Netherlands as its new CEO strives to make it a leaner operation.

BT doesn’t seem to have said anything official yet, but the Sunday Times got the scoop regardless. Apparently this is part of an attempt to streamline the struggling Global Services business, as BT currently uses its own infrastructure, such as towers and cables, to connect its Dutch business customers.

There’s not much more to the report other than a claim that, while BT is also looking to streamline its Global Services operations in other regions, including Ireland, Spain and Latin America, it doesn’t plan to completely abandon specific countries.

The report also refers to a previous Sunday Times scoop that BT is also flogging a legal software service called Tikit. It’s reasonable to ask what the hell BT was doing in the legal software business in the first place and if this is indicative of the kind of wild tangents the Global Services business has gone off on in the past, we can expect many more such disposals.

This news comes just days after it was revealed that BT was forced to hand over a bunch of cash to Ofcom due to its historical accounting incompetence. In addition BT announced last week that it was delisting from the New York stock exchange and earlier in the month decided to flog BT Fleet Solutions. Sadly for CEO Philip Jansen, none of this tweaking seems to have won over investors, with BT’s share price down by over 30% since he took over at the start of the year.

Tim Cook smooth talks Trump away from tariffs over dinner

Over dinner this weekend, Apple CEO Tim Cook has seemingly added to the softening position President Trump is taking on trade tariffs imposed on goods and services from China.

The last week has seen several new rumours emerge from the mill, suggesting the White House is backing away from its aggressive stance against China. It of course remains to be seen whether Congress will allow Trump to de-escalate the situation, though it does appear Trump wants to switch-up the rhetoric.

“I had a very good meeting with Tim Cook, I have a lot of respect for Tim Cook, and Tim was talking to me about tariffs,” Trump said to US reporters over the weekend.

“And one of the things is that he made a good case, is that Samsung is the number one competitor and Samsung is not paying tariffs because they are based in South Korea, and it’s tough for Apple to pay tariffs if they are competing with a very good company that is not.”

Finding consistency in the Trump rhetoric is similar to discussion the pros and cons of VAR with the Mad Hatter. Aside from these comments, some US companies will supposedly have until Christmas to work with Chinese suppliers, Huawei Technologies will allegedly be given another three months to buy from US suppliers and Trump has promised violence against protesters in Hong Kong will negatively affect trade talks.

Looking at the extension, sources are now suggesting Huawei will be granted another temporary general licence. The additional three-month window will offer another reprieve to US suppliers, though it is highly-likely Congress will start to throw a bit of a temper tantrum. Political opponents of Trump have already shown distaste for the mood swings of the President, and we suspect road-blocks will be introduced.

The only consistency from the trade conflict between the worlds’ two largest economies is inconsistency.

We are yet to read Trump’s “The Art of the Deal” but perhaps there is a chapter on shifting goal posts. The strategy from the White House seems to be escalate and de-escalate tensions regularly, perhaps to confuse political opponents in Beijing so a cohesive counter-strategy cannot be formed.

Here, Cook’s comments are exactly what you would expect from a CEO who has little concern with geo-politics. Cook and the Apple management team will not want to take sides, simply sell iPhones to iLifers, irrelevant to where they live, at a price which generates the most profit. The tariffs threaten this mission.

Apple might be able to recover its second-place in the smartphone market share rankings before too long, such is the damage which is being dealt to the Huawei consumer business, but how will Samsung benefit?

If Huawei’s international customers stop buying Huawei devices, sales will be redirected elsewhere. However, if Apple is not able to keep the price of its devices down, it will struggle to compete. Apple will firstly have to convince Android users to switch to iOS, but also not to be tempted by Samsung, or more price-sensitive brands such as OPPO, LG, OnePlus or Xiaomi.

What is not entirely clear is how broad the tariffs conversation actually was. We suspect Cook simply argued Apple should be exempt from the tariffs, why should he want to help anyone else, though there will be plenty of companies keeping an eye on the developing situation. Trump could find himself in a very difficult situation if preference is shown to a few hand selected companies.

If there is a game plan scribbled on the back of a Burger King menu somewhere in the Oval Office, it will either be the musings of a mad-man or the work of a strategic genius. The number of moving parts and dummy passes is enough to make anyone’s head spin.

Three goes live with 5G broadband service

UK telco Three has become the latest to join the 5G bonanza with the launch of its 5G Fixed Wireless Access (FWA) service in London.

With plans to launch the service in 25 cities throughout the UK, the FWA proposition looks to be a challenger to traditional broadband services. We have been told the new service will promise speeds of 100 Mbps between the hours of 8pm and 10pm, peak times for streaming in the living room, offering an alternative to fibre broadband for speed hungry customers.

“Three’s 5G is going to revolutionise the home broadband experience,” said Three CEO Dave Dyson. “No more paying for landline rental, no more waiting for engineers, and even a same day delivery option. It really is the straightforward plug and play broadband that customers have been waiting for.

“We’ve taken a simple approach with one single truly unlimited data plan to give customers the opportunity to fully explore 5G and all its exciting possibilities. The ease and immediacy of it all means home broadband using 5G is going to be key to the future of the connected home.”

Looking at the deal offered, there are some interesting elements. Three is promising a ‘plug and play’ experience, meaning customers will no-longer have to wait for an engineer to start the service, while contracts can be taken to new homes if the customer moves. This of course depends on whether Three has launched 5G in the new area, though removing the dependence on physical lines into the home can offer some benefits.

Although this does look like a promising opportunity to disrupt the traditional home broadband market, questions still remain over the long-term viability of FWA as an alternative to the delivery of connectivity over physical infrastructure.

There is a business case for FWA in the remote regions, where the commercial attractiveness of connecting ‘the last mile’ with fibre falls dramatically, though these are not the areas which Three will be targeting to start with.

The launch today is in certain areas of London, while Three is promising to connect 25 towns and cities by the end of the year. These will most likely be the more urbanised areas, this makes commercial sense after all, perhaps targeting regions where fibre penetration is lacking.

As Heavy Reading Analyst Gabriel Brown points out, £35 a month is not overly aggressive pricing, and the 100 Mbps download speeds are very achievable. Users might experience higher speeds during the day, though the proposition might well be more attractive financial and performance wise than many cable services today.

This is where Three could find its appeal. As Brown points out, accessibility to fibre services is a challenge today in the UK. If Three is able to target the regions where Openreach, Virgin Media and the fibre ‘alt-nets’ are missing, there could be a tailored audience for the speedy and reasonably priced 5G FWA service.

Played smartly, Three can drive additional revenues through the business. And while Three does already have 800,000 broadband customers with its 4G FWA service, this could be a notable driver of new revenues for the business. 5G network deployment is going to be an expensive business, therefore sweating the assets in every way possible will be an important factor.

This product opens up a new world for the challenger brand. Over the last few years, subscriber growth in mobile has been relatively flat, though should Three push towards the convergence game, there could be new opportunities to engage new customers with a new message.

How smart meters continue to drive IoT applications in North America

The Internet of Things (IoT) has numerous applications within the energy and utility sector. As an example, smart meter penetration in North America is forecast to reach 81 percent by 2024.

According to the latest worldwide market study by Berg Insight, the installed base of smart electricity meters in North America will grow at a compound annual growth rate of 8 percent between 2018 and 2024 to reach 142.8 million units at the end of the forecast period.

Smart meter market development

Over the next five years, smart meter penetration among electricity customers in the U.S. and Canada is projected to increase from around 60 percent in 2018 to more than 80 percent by the end of 2024.

"North America has long been at the forefront of smart grid technology adoption and a large share of the major utilities in the region are now either fully deployed or in the implementation or planning stages of full-scale rollouts," said Levi Östling, IoT analyst at Berg Insight.

The market is however highly heterogeneous in terms of penetration. Some states or provinces remain skeptical towards the business case for advanced metering investments whereas others are soon to begin the second wave of deployments.

Canada has reached a high penetration of smart meters through ambitious initiatives in its most populous provinces. Continued growth in North America the next few years will largely be driven by the large investor-owned utilities in the U.S. market that are yet to roll out smart meters for their customers.

In addition, the large number of smaller cooperative and municipal utilities will also be playing an increasingly central role for penetration growth.

According to the Berg assessment, yearly shipments of smart electricity meters in North America will grow from 8.8 million units in 2018 to 19.9 million units in 2024.

Over the next few years, first-wave deployments of smart meters by utilities -- such as Consolidated Edison, Duke Energy, Ameren, Entergy, PSEG, National Grid and Xcel Energy -- will boost shipments.

Outlook for smart meter deployment growth

Second wave deployments of smart meters will gradually make their way into the shipment numbers at the end of the forecast period.

"While increasingly powerful meters with edge intelligence capabilities coupled with advanced data analytics software will drive second wave deployments, the utilities are now also looking to leverage their existing RF mesh networks for a wider array of applications beyond metering, bringing an increasingly diverse set of devices onto their networking platforms," concluded Östling.

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