Japanese telco NTT Docomo has decided providing services based on NB-IoT narrowband technology isn’t worth the hassle, so it’s going to stop.
The brief announcement was published only in Japanese, so we’re indebted to Google Translate once more. It apparently said NTT has been offering NB-IoT services since 25 April 2019, but in the light of the current business environment it’s going to stop, in order to concentrate management resources.
Read into that translation what you will, but it seems clear that the technology just isn’t adding up. Even more damning is the fact that NTT is going to keep providing IoT services based on Cat 1 and LTE-M technology, which implies it’s specifically the standard, rather than IoT in general, which is failing to deliver.
To find out why that might be we spoke to wireless technology expert William Webb. “NB-IoT looked at one time as if it would become the only wide-area IoT network, sweeping all others away,” said Webb. “Its advantages seemed to be overwhelming – it can be deployed by a software update to existing 4G base stations, quickly and cost-effectively delivering nationwide IoT coverage. Chipsets are available from Huawei and others and many module designs are in the marketplace although these have not yet hit the price points and power consumption levels that were originally promised.
“But things have not gone quite to plan. NB-IoT has not been widely deployed. In some countries only one MNO has deployed, resulting in no competition. In other countries operators are deploying ‘on demand’, waiting until they have an order and then delivering the coverage required (eg across a campus). Only in a very few places is there vibrant competition.
“Why is this? Broadly it is due to the business case. Revenues are very weak with 10-year IoT SIM cards available for around $10, so only $1/year, miniscule by cellular standards. Volumes have been low, as they have for all IoT systems, questioning whether this is a large market. Sales have been difficult, requiring complex systems offerings, at high cost. As a result, many MNOs are struggling to make NB-IoT viable. And there is an opportunity cost as NB-IoT takes some spectrum away from the cellular network.”
Webb concluded by noting that this move is likely to send shockwaves around the telecoms world, as it will cause everyone else to question the viability of investing in NB-IoT services. That, in turn, could well initiate a self-reinforcing downward spiral. NTT made no mention of COVID-19 in its announcement, but it seems safe to assume the business environment will be very risk-averse for the rest of this year, which is further bad news for the LPWAN standard that once looked destined to dominate the IoT world.
Huawei held a virtual press conference to launch its latest annual report amid the coronavirus pandemic.
The past year was always going to be a difficult one for Huawei due to the US applying sanctions and increasing pressure globally to ban the vendor’s equipment. A pandemic that’s led to broader market disruption has only amplified those struggles.
"2019 was an extraordinary year for Huawei," said Eric Xu, Huawei's Rotating Chairman. "Despite enormous outside pressure, our team forged ahead with a singular focus on creating value for our customers. We worked hard to earn their respect and trust, as well as that of our partners around the globe. Business remains solid."
The company’s overall revenue in 2019 increased by 19.1 percent to ¥858.8 billion ($120.9 billion). Of that revenue, net profit increased by 5.6 percent to ¥62.7 billion ($8.8 billion).
While countries like Australia have decided to ban Huawei from national 5G infrastructure, the vendor’s global marketshare continues to grow. According to Statista, Huawei holds the largest marketshare (~35.3%) of any vendor. The second-largest, Nokia, holds less than half Huawei’s marketshare at around 16.1 percent.
However, it's likely too early to see the impacts of some pivotal moments over the past year in this report.
Many were awaiting the decision of the UK government, as a key US ally and major intelligence player, to observe their approach to Huawei’s equipment. Following an intense multi-year security review, the UK decided to allow Huawei’s equipment with significant caveats.
Huawei’s equipment will be allowed in no more than 35 percent of British access networks which connect devices and equipment to mobile phone masts. Furthermore, Huawei will not be permitted in any critical infrastructure or sensitive sites like nuclear sites and military bases. All equipment will also continue to be checked at the dedicated Huawei Cyber Security Centre in Banbury for any potential risks.
Following the decision, Huawei VP Victor Zhang said: “We were reassured by the UK government’s decision in January that we could continue working with our customers to keep the 5G roll-out on track. It was an evidence-based decision that will result in a more advanced, more secure, and more cost-effective telecoms infrastructure.”
Many operators are reluctant to give up their relationship with Huawei due to the costs and delays involved with removing existing gear and purchasing and installing equipment from another vendor.
Even under the UK's current plan to limit the use of Huawei's equipment, BT alone estimates the decision will cost it around £500 million over the next five years. Delays in the 5G rollout will also impact the economy and global competitiveness.
The consumer side of Huawei’s business is also under significant pressures. US sanctions forced Huawei to end its relationship with Google, meaning new smartphones – like the P40 flagship announced this week – will launch without Google’s services like the Play Store.
Further sanctions under consideration by the Trump administration may result in changes to the Foreign Direct Product Rule which intends to restrict Huawei’s access to chips made using American technologies and equipment.
Despite the pressures, Huawei’s consumer business flourished last year and grew 34 percent. For comparison, Huawei’s enterprise business grew 8.6 percent and its carrier business grew 3.8 percent.
"The external environment will only get more complicated going forward," Xu cautioned. "We need to keep enhancing the competitiveness of our products and services, promoting open innovation, and creating greater value for our customers and society at large.”
“This is the only way we can seize the historic opportunities presented by the digital and intelligent transformation of industries, and maintain robust growth in the long run."
You can find a full copy of Huawei’s 2019 annual report here (PDF)
Mobile app tracker App Annie reports that downloads of business apps, especially video conferencing one, have exploded in recent weeks.
It’s already becoming redundant to explain why exceptional events are occurring these days, but to avoid all doubt it’s coz of coronavirus. In the week of 14-21 March there were 62 million business apps downloaded worldwide, according to an App Annie blog, which was 45% up on the previous week and a 90% increase on the equivalent week a year ago. That was the week in which many countries introduced compulsory lockdowns for the first time.
Of those four video conferencing apps seems to have led the way: Google Hangouts Meet, Microsoft Teams, Zoom Cloud Meetings and Houseparty. As you can see from the chart below, all four experienced massive spikes in demand, compared to a year ago.
“As people face uncertain timelines for the length of social isolation, video conferencing apps have the potential to vastly influence our daily habits — breaking down geological barriers and fostering the ability to work and socialize relatively seamlessly,” concluded the blog
“It is an unprecedented time for the world and an incredibly dynamic time for mobile — we are seeing shifts in consumer behavior surface daily across virtually every sector. We will continue to report on the vast impact coronavirus is having on the mobile economy as it charts a new path forward for our mobile habits.”
Belgian telco Proximus unveiled its four-pillar transformation strategy at its Capital Markets Day, which will partly be funded by a 20% cut to dividend payments.
The four-point plan will focus on accelerating connectivity products and services, digital transformation initiatives to improve Net Promoter Score (NPS), achieving profitable growth by 2022 and embedding sustainability and digital inclusion throughout the organisation. The plan is ambitious, and to meet the financials promises to investors, the 5G and enterprise revenue streams will have to deliver.
“The experience of the Covid-19 pandemic we are going through, reinforces our belief that Proximus is a key component of a prosperous digital Belgium,” said CEO Guillaume Boutin.
“Especially in these unseen times, we are aware of our responsibility towards our employees, customers and the Belgian society at large to offer access to high-quality networks and delightful services and experiences, every day, without failing.
“In the next couple of years, we will massively invest to roll out the next generation of networks at an industrial pace, structurally transform our operating model and accelerate the pace of customer innovation. This strategy will lead to increased customer satisfaction, engaged employees and partners, as well as a sound financial trajectory towards growth.”
Although investors will be encouraged by the ambition of the team, some might not be completed satisfied with the way it will be paid for. Alongside an increase in debt and divestment in up-to €700 million worth of assets, shareholders will also have to swallow a 20% cut in dividend payments.
Over 2020, 2021 and 2022, Proximus will offer an annual gross dividend of €1.20 per share, down from €1.50 which has been consistent since 2014. Prior to that it was up to €2.49, though these were the days prior to the OTT invasion and competition forcing a race to the bottom on pricing.
The first pillar for the strategy will focus on the networks. Proximus aims to connect 2.4 million homes to fibre by 2025 and will also be launching a commercial 5G service tomorrow (April 1, 2020) priced at €49.99 for unlimited data. A new Network Business Unit will also be created which will focus on the wholesale ecosystem.
The second pillar is focused on digital transformation, with the team hoping to yield an average yearly net indirect OPEX reduction of between 1% to 2% from 2020 to 2022. The hope is this will enable Proximus to operate like a ‘digital native’ company, removing all legacy IT systems by 2025, which should have an impact on customer retention and experience.
The third pillar is all about developing ecosystems and partnerships. The team is hoping to improve the commercial prospects by leaning on the expertise of the internet giants. A partnership with Microsoft, to embed Azure Edge computing functionalities directly into the core network, is an example of these tie-ups.
Finally, the fourth pillar will address how Proximus can embed sustainability and digital inclusion into the DNA of the organisation.
Every telco is scrapping and scraping to ensure operations are up-to-scratch to meet the demands of the digital economy, but it remains to be seen how satisfied shareholders will be with the plan considering it will be shaving down annual dividend payments.
Swedish kit vendor Ericsson is doing its AGM remotely today coz of coronavirus and CEO Börje Ekholm offered a general update ahead of it.
While he would clear far rather be talking about how great Ericsson is at 5G, there was no attempt to dodge the only story in town – the pandemic that has turned everything upside down. ”Our top priority at the moment is the health and safety of our employees, customers, and other stakeholders,” said Ekholm. “So far, we have not seen any material impact on our business, but we are closely following the developments in society.”
While that was a heavily nuanced statement, with the definition of ‘material impact’ being unclear for starters, it was encouraging to hear that things are still going OK. Having said that the really major global disruption has only been happening for a month so its effect on the Ericsson bottom line may well have been delayed.
Moving quickly on, Ekholm wasted little time in chucking some 5G numbers around, as has become the norm among the big kit vendors. “Right now we have 86 commercial 5G agreements and 27 live networks in 4 continents. Ericsson is leading the 5G development. I see no one in front of us.” Nokia’s latest total for 5G deal wins is 69 and, the last time we got an update from Huawei, its total was 91. That’s presumably a bit higher now, but we didn’t get a new number today.
Ekholm couldn’t resist a bit of patent talk, despite profound scepticism about the utility of such claims. “Ericsson’s leadership position is clearly reflected in our patent portfolio, consisting of more than 54,000 granted patents. However, patents are about both quality and quantity; an independent law firm found Ericsson to have the leading share of relevant 5G patents, which bodes very well for the future.”
The rest of his comments were designed to reassure shareholders that Ericsson is in a strong position to weather this storm. It has a few krona in the bank and feels good about 5G momentum, so fair enough. The juggling act all individuals, companies and governments have to perform at this time involves making the necessary immediate adjustments to get through the pandemic, while at the same time ensuring they’re best positioned to bounce back when things return to something approaching normal.
You can watch Ekholm’s full address, as well as the rest of the AGM material here. It’s worth doing for a reminder of what a cool language Swedish is alone, but there’s also the entertainment of checking out the interior of Ekholm’s house. Is that an Ikea chest of drawers? Probably not.
Security is one of the most significant barriers to IoT deployment, together with funding, interoperability and the business model . Fraud is growing in this area, and industry leaders across the ecosystem agree that securing the IoT application is the only way to fully develop its business potential. The good news is that the vast majority of attacks can be prevented, and the resilience of any IoT deployment significantly improved, with measures that are simple and cost-effective to implement.
This white paper from BICS explains how mobile connectivity is a central enabler of IoT security. It outlines best practice advice for protection built in at each layer of an IoT solution, and at every stage of its development.
Record revenues, record profits and record smartphone shipments, but the US Entry List heavily impacted Huawei in the second half and 2020 is going to be tougher again.
US aggression, the coronavirus outbreak and OpenRAN are just three of the areas which were addressed as Huawei CEO Eric Xu unveiled the 2019 Annual Report, but the executive has also predicted ripples which turn into waves for everyone around the world should the on-going conflict between the US and China continue.
“We might see an endless flow of disastrous aftermath,” said Xu. “If that happens, not a single player in the global value chain can stay immune.”
As Xu pointed out, the Chinese Government is not simply going to sit back and do nothing while its telecoms champion is ‘slaughtered’ on the ‘chopping block’. Continued aggression against Huawei will see eventually see reciprocal actions against US firms which will impact everyone and anyone.
Although the financials do not necessarily paint a picture of panic, Xu might be considered the proverbial duck in water; calm and collected on the surface, but frantically paddling underneath fighting off the various challenges to Huawei’s success.
2019 saw revenues increase 19.1% year-on-year to $123 billion, profits climb 5.6% to roughly $9 billion and cash flow jumped 22.4% to $13.1 billion. Smartphone shipments exceeded 240 million across the year, while 15.3% of its 2019 revenue, some $18.9 billion, was invested into R&D.
Looking specifically at the Carrier Business Group, revenues grew 3.8% year-on-year to roughly $41.8 billion. Huawei has signed 90 commercial 5G contracts around the world to date and shipped more than 600,000 5G base stations. These numbers say one story but digging deeper tells another tale.
Some longstanding customers, who Huawei worked with for 2G, 3G and 4G, have chosen to go elsewhere for 5G. TDC in Denmark and Vodafone in Australia are two examples, though it remains to be seen how much of an impact the US will have on Huawei’s fortunes.
Huawei was added to the US Entity List, banning US companies from working with it, during May. For the first six months of the year, Huawei was flying according to Xu, though US aggression severely dented the financials. The business recovered during the fourth quarter, though Xu suggested as much as $10 billion in revenue was lost due to the on-going friction with the US.
The most immediate impact from the US Entity List was to the smartphone business, as while shipments grew attractively in 2019, the bulk of these fortunes were domestic. Xu highlighted that Huawei has no intention of scaling back international operations for its Consumer Business Group, which accounts for 54% of total revenues, but continued success depends on the adoption of Huawei Mobile Services (HMS).
Launched towards the end of 2019, HMS is the ecosystem to replace Google. It will act as the supporting mechanism for developers as well as the marketplace to interact with users. The smartphone is only as good as the applications which can be installed on it, therefore the Huawei smartphone fortunes are almost 100% dependent on the success of this initiative.
This is a direct consequence for Huawei, but the negative impacts can flow the other direction also. A report from Boston Consulting Group (BCG), sponsored by the Semiconductor Industry Association (SIA), suggested restrictions to Chinese trade could result in the US losing its leadership position in the semiconductor industry.
As Xu points out, if Huawei and other Chinese companies are not able to work with US firms, Chinese alternatives might well emerge. It could reduce the influence of US semiconductor companies on the global industry and offer accelerated development of the Chinese challengers. And thanks to ‘Made in China 2025’ strategy from the Chinese Government, there would be plenty of support for growth in this segment.
But these challenges might only be the tip of the iceberg.
In 2019, Huawei only had to deal with the US Entity List, and the subsequent bans, for seven months, but it will have to become accustomed to these discomforts for the full 12 months in 2020. Add in the complications caused by the COVID-19 outbreak, the prospect of Chinese retaliation and potential competition emerging in the Open RAN ecosystem, and the next year could be somewhat turbulent.
Aside from the political conflict escalating, the coronavirus is another very obvious challenge for the business to negotiate.
From a supply chain angle, the most obvious complication is dealing with international suppliers. In China, Huawei suggests the manufacturing capabilities are now close to 100% though the risk which is being faced is to do with the rest of the world. The coronavirus is spreading rapidly outside of China, especially in Europe and North America, which could impact the operations of suppliers. Huawei’s manufacturing operations might be close to 100%, but it is as reliant on external factors for components and materials as anyone else.
Another challenge worth considering are the most immediate concerns of customers. In the Carrier Business Group, the attention of telcos are drawn more towards improving network resilience as opposed to aggressive deployment of 5G. Huawei SVP Victor Zhang highlighted deployments have not stopped, but more work is being done to improve the reliability of broadband and 4G networks as coronavirus causes societal changes, which might detract from the pace of deployment in the 5G world.
Looking at OpenRAN, again this is another challenge, but one which the Huawei team is not overly concerned about in the short-term. These products should not be considered market-ready for the moment, so will not have a material impact of the commercial prospects of Huawei in the foreseeable future.
Perhaps another twist to consider is the parallel deployment of Single RAN and OpenRAN products. Xu likened this dynamic to the idea of General Purpose (GP) and Specialised Purpose computing (SP), where GP was supposed to threaten the existence of SP. In this segment, usecases have emerged to satisfy the demands of both, which Xu believes will be the same result in the RAN world.
Merged altogether, the telecoms infrastructure leader has an interesting 12 months on its hands. Huawei is a company which has been and will continue to be successful, but the hurdles to overcome are starting to become larger and more frequent. 2019 might have been a tough year for the team to negotiate, but 2020 promises to be much more challenging.
Here’s the whole annual report press conference for anyone with an hour and a half of self-isolation to kill.
Every day new initiatives are being announced to ensure people have the correct information on the COVID-19 pandemic, but who watches the watchers?
The BBC reported today that the UK government is cracking down on misinformation about the coronavirus pandemic. This is taking the form of ‘a rapid response unit within the Cabinet Office [that] is working with social media firms to remove fake news and harmful content.’ As ever ‘harmful’ is undefined, but the government seems worried that people could die as a result of being misinformed.
Meanwhile an initiative started by the BBC, among others, called the Trusted News Initiative, has announced plans to ‘tackle potentially harmful coronavirus disinformation’. Most things are potentially harmful, surely, and there’s something distinctly sinister about an organising designating itself ‘trusted’. Surely that’s for other people to determine.
Noel Curran, Director-General, EBU added: “During emergencies of this magnitude, the need for trusted, factual, evidence-based reporting is more crucial than ever,” said Noel Curran, Director-General of the European Broadcasting Union, which calls itself ‘the world’s leading alliance of public service media’ and is a member of the TNI.
“Yet there is a tide of misinformation and bad information, driven mainly through online social platforms, which is threatening to undermine public trust and cause further anxiety for people. This initiative underlines the role of public service media in tackling misinformation head-on and delivering accurate content that audiences can safely rely on.”
Facebook, Twitter and YouTube are all members of the TNI too and on top of this, they seem to be constantly rolling out initiatives of their own. Last week Nick Clegg, Facebook’s VP of Global Affairs and Communications wrote about what the company is doing to ensure purity of information across all its platforms.
The most untainted source of COVID-19 information, according to Clegg, is the World Health Organization. So Facebook, Instagram and WhatsApp are now all spamming their users with top tips from the WHO, in many cases whether they like it or not. Until recently not many people would have contested claim that the WHO is the ultimate global authority on such matters – the clue is in the name, right? – but the tendency of its senior leadership to overtly kowtow to China, as in the clip below, is undermining trust in it.
If @WHO bows to Beijing & won’t call out cover up & disinformation costing k’s of lives, it’s failing to help others prepare. If the stats it’s sharing are lies, what’s the point? Do we need a new global public health body willing to speak the truth? pic.twitter.com/7X8rwIsQyx
Talking of Twitter, it seems to be taking a strong position on the matter of hydroxychloroquine, an antimalarial drug that also seems to work on COVID-19. Twitter apparently doesn’t like people bigging the drug up too much on its platform, even going so far as to take down posts from President Trump’s Lawyer, Rudy Giuliani and the President of Brazil, Jair Bolsonaro, for extolling its virtues.
However, as Axios points out, Twitter is inconsistent in its implementation of this new rule, having recently permitted a tweet of clear misinformation from tech entrepreneur Elon Musk to stay up. This highlights the problem with this latest attempt at censorship, one shared with all others. The censorship decisions ultimately have to be made by humans and will therefore always be flawed.
Until recently very few people expected Twitter to be expert on the therapeutic qualities of hydroxychloroquine, yet we do now. Meanwhile Facebook has unilaterally anointed the WHO the Oracle of coronavirus, despite its refusal to acknowledge Taiwan and many questions about its ineffectiveness in preventing the catastrophe the world is now having to endure.
As for ‘trusted’ sources, how much of the mainstream media can really be trusted? Very few publications don’t have some kind of bias, with the US especially egregious in that respect. If President Trump suggested a new course of action, how sure can we be that CNN or the New York Times wouldn’t dismiss it out of hand or that Fox News would subject it to proper scrutiny?
The thing is, Journalists are human two and no less prone to biases and prejudices than anyone else. At Telecoms.com we never expect our audience to unquestioningly accept everything we say and encourage it to stress-test our stories by seeing what else has been written on the matter. In fact, the more ‘trusted’ a source of information claims to be, the more we would urge you to seek a second opinion.
As we have said previously, censorship is at best a game of whack-a-mole because you can’t perfect speech. You can’t have good speech without bad speech and attempts to eradicate the latter lead to no speech at all. At least none that you can hear in public. In practice censorship just drives banned speech underground, where it gains prominence and is subject to no challenge at all.
There is currently an abundance of official information on the coronavirus pandemic, meaning supposed misinformation can easily be fact-checked by anyone with an internet connection. Nothing can be done about those who choose not to and attempting to protect such people from themselves through blanket censorship and culling of information sources is both futile and repressive.
Having recovered from the impact of Huawei’s entry onto the Entity List, the semiconductor industry has been dealt another blow with COVID-19 impacting supply chains and product launches.
In May 2019, Huawei was added to the US Entity List. This was a nightmare scenario for numerous semiconductor firms, as the worlds’ second most popular smartphone manufacturer faced a significant threat to its existence. Suppliers to Huawei groaned, as their fortunes looked to turn to dust, though this saga was seemingly in the past.
With the US Government continuing to delay the ban on working with Huawei, while also being more generous than previously imagined with exception licences, it might have looked like business as usual. Share prices were slashed in the summer, but seemingly recovered over the latter stages of 2019 only for the coronavirus to threaten the success of the smartphone segment.
Share price is not a perfect measure of success, but it is a pretty accurate one. The table below demonstrates the sorrows of the semiconductor sector quite effectively:
September 30, 2019
January 3, 2020
March 30, 2020
NB: Share prices accurate at time of writing (4pm, March 30, 2020)
As you can see from the selection of semiconductor firms above, the only two who have escaped the last three months without too much damage are AMD and Nvidia. These are two companies who serve the gaming segment, which is proving incredibly popular in these times of self-isolation.
This success is of course driven by the continued shipments and sales of products, though as China is reopening, the immediate threat to the supply chain is contained. On the mobile side, the smartphone industry is suffering.
According to Counterpoint Research, smartphone sales across the world fell 14% year-on-year in February, which is not as bad as some may have feared, but no-one can give a definitive answer as to when this outbreak will subside.
In China, offline sales declined by 50% though these numbers were slightly offset by online sales. Overall, sales in China declined by 38% in February year-on-year, perhaps indicating what the rest of the world has to look forward to two to three months deep into the impact of COVID-19.
Looking around the industry, impact to Samsung has been minimal as much of its supply chain remains outside China, but the same cannot be said for its rivals. The Chinese manufacturers would have struggled, though companies like Apple have also suffered. Apple has been relatively quiet so far, though the fact that Foxconn, one of Apple’s most important suppliers, reported a 23.7% fall in profit this week suggests there is less demand from the iGiant.
The next couple of weeks could certainly make a significant dent in the profits of the smartphone industry, and as a result, the semiconductor segment. With the high street closed, supply chains under threat, device launches delayed and consumers spending less under the threat of a recession, the prospects do not look the most attractive.
Internet providers in the UK have agreed to a package of measures designed to help people isolate.
The British government struck a deal with BT/EE, Openreach, Virgin Media, Sky, TalkTalk, O2, Vodafone, Three, Hyperoptic, Gigaclear, and KCOM.
Digital Secretary Oliver Dowden said: “It’s fantastic to see mobile and broadband providers pulling together to do their bit for the national effort by helping customers, particularly the most vulnerable, who may be struggling with bills at this difficult time.”
As part of the deal, all the aforementioned providers have agreed to:
Work with customers who find it difficult to pay their bill as a result of Covid-19 to ensure that they are treated fairly and appropriately supported.
Remove all data allowance caps on all current fixed broadband services.
Agree to offer some new, generous mobile and landline packages to ensure people are connected and the most vulnerable continue to be supported. For example, some of these packages include data boosts at low prices and free calls from their landline or mobile.
Ensure that vulnerable customers or those self-isolating receive alternative methods of communication wherever possible if priority repairs to fixed broadband and landlines cannot be carried out.
The new measures should help to provide confidence to people doing the right thing by staying at home and helping to “flatten the curve” of the coronavirus pandemic.
Some of the providers had already put in their own ways to support customers but the new agreement helps to ensure all of the major providers make the same commitments.
Melanie Dawes, CEO of Ofcom, said: “We recognise providers are dealing with unprecedented challenges at the moment. So we welcome them stepping up to protect vulnerable customers, at a time when keeping in touch with our friends and families has never been more important.”
“We’ll continue to work with government and industry to help make sure people stay connected.”