Tencent carves out $70bn for Chinese cloud expansion

Hong Kong-based Tencent has said it plans to expand its business into cloud computing services, ranging from traditional data centres to enterprise AI services.

While it might be a titan in certain segments of the telecoms and technology world, enterprise cloud services is not a significant earner for Tencent. That said, the Chinese cloud computing market is only a fraction of what it could be as it is still pushing through its digital transformation programme.

“As one of the leading cloud service providers in China, Tencent invests heavily in talent and technological innovation, actively promoting the development of the Industrial Internet,” a Tencent spokesperson said.

“We recently announced our new initiative to invest RMB500 billion ($70 billion) in new digital infrastructure over the next five years. The investment will focus on a number of fields including cloud computing, artificial intelligence, blockchain technologies, servers, large-scale data centres, supercomputers, Internet of Things, 5G networks, audio and video communications, cyber-security, quantum computing and more.”

The team has said it will construct a series of large data centres, each of which will contain more than a million servers. With more companies having their eyes opened to the benefits of remote working and cloud computing, this might be a sensible time to push forward with such plans.

China cloud computing market Q4 2019
Company Market share
Alibaba 46.4%
Tencent 18%
Baidu 8.8%
Others 26.8%

Source: Canalys

For the final three months of 2019, total spend for cloud computing was $3.3 billion. This is still the second-largest market worldwide but considering the scale and breadth of the Chinese economy, there are huge profits on the horizon.

What is not entirely clear is whether this strategy is a prelude to an assault on the international cloud markets.

A strategy which is becoming common for Chinese telecoms and technology companies is to generate significant revenues in the domestic market before looking internationally. Huawei did it for base stations and consumer devices, Xiaomi is attempting this move for its own smartphones and Alibaba is attempting to implement the expansion for cloud services.

The Chinese cloud computing market can act as a springboard for greater profits in the future, but for the moment, there is incredible opportunity as this monstrously large economy shifts into the cloud.

A look back at the biggest stories this week

Whether it’s important, depressing or just entertaining, the telecoms industry is always one which attracts attention.

Here are the stories we think are worth a second look at this week:


GSMA cosies up to O-RAN Alliance

The GSMA, the telco industry lobby group, has announced a new partnership with the O-RAN Alliance to accelerate the adoption of Open Radio Access Network (RAN) technologies.

Full story here


Europe backtracks on market consolidation opposition

The General Court of the European Court of Justice has annulled a decision made in 2016 to block the merger between O2 and Three in the UK, potentially opening the door for consolidation.

Full story here


Huawei CFO loses first legal battle in extradition case

Huawei CFO Wanzhou Meng, the daughter of Ren Zhengfei, has lost her first legal battle in Canada and will now have to face an extradition case.

Full story here


Data privacy is in the same position as cybersecurity five years ago

It has taken years for the technology and telecoms industry to take security seriously, and now we are at the beginning of the same story arc with privacy.

Full story here


Indian telco association pushes for ‘floor tariffs’ on data pricing

In an open letter to India’s telecoms regulator, the Cellular Operators Association of India (COAI) has pressed for quicker decision making on pricing restriction rules.

Full story here


UK’s National Cyber Security Centre launches another Huawei probe

The National Cyber Security Centre (NCSC) has confirmed it is attempting to understand what impact potential US sanction directed towards Huawei would have on UK networks.

Full story here


 

Making Sense of the Telco Cloud

In recent years the cloudification of communication networks, or “telco cloud” has become a byword for telecom modernisation. This Telecoms.com Intelligence Monthly Briefing aims to analyse what telcos’ transition to cloud means to the stakeholders in the telecom and cloud ecosystems. Before exploring the nooks and crannies of telco cloud, however, it is worthwhile first taking an elevated view of cloud native in general. On one hand, telco cloud is a subset of the overall cloud native landscape, on the other, telco cloud almost sounds an oxymoron. Telecom operator’s monolithic networks and cloud architecture are often seen as two different species, but such impressions are wrong.

(Here we are sharing the opening section of this Telecoms.com Intelligence special briefing to look into how telco cloud has changing both the industry landscape and operator strategies.

The full version of the report is available for free to download here.)

What cloud native is, and why we need it

“Cloud native” have been buzz words for a couple of years though often, like with many other buzz words, different people mean many different things when they use the same term. As the authors of a recently published Microsoft ebook quipped, ask ten colleagues to define cloud native, and there’s good chance you’ll get eight different answers. (Rob Vettor, Steve “ardalis” Smith: Architecting Cloud Native .NET Applications for Azure, preview edition, April 2020)

Here are a couple of “cloud native” definitions that more or less agree with each other, though with different stresses.

The Cloud Native Computing Foundation (CNCF), an industry organisation with over 500 member organisations from different sectors of the industry, defines cloud native as “computing (that) uses an open source software stack to deploy applications as microservices, packaging each part into its own container, and dynamically orchestrating those containers to optimize resource utilization.”

Gabriel Brown, an analyst from Heavy Reading, has a largely similar definition for cloud native, though he puts it more succinctly. For him, cloud native means “containerized micro-services deployed on bare metal and managed by Kubernetes”, the de facto standard of container management.

Although cloud native has a strong inclination towards containers, or containerised services, it is not just about containers. An important element of cloud native computing is in its deployment mode using DevOps. This is duly stressed by Omdia, a research firm, which prescribes cloud native as “the first foundation is to use agile methodologies in development, building on this with DevOps adoption across IT and, ideally, in the organization as well, and using microservices software architecture, with deployment on the cloud (wherever it is, on-premises or public).”

Some would argue the continuous nature of DevOps is as important to cloud native as the infrastructure and containerised services. Red Hat, an IBM subsidiary and one of the leading cloud native vendors and champions for DevOps practices, sees cloud native in a number of common themes including “heavily virtualized, software-defined, highly resilient infrastructure, allowing telcos to add services more quickly and centrally manage their resources.”

These themes are aligned with the understanding of cloud native by Telecoms.com Intelligence, and this report will discuss cloud native and telco cloud along this line. (A full Q&A with Azhar Sayeed, Chief Architect, Service Provider at Red Hat can be found at the end of this report).

The main benefits of cloud native computing are speed, agility, and scalability. As CNCF spells it out, “cloud native technologies empower organizations to build and run scalable applications in modern, dynamic environments such as public, private, and hybrid clouds. Containers, service meshes, microservices, immutable infrastructure, and declarative APIs exemplify this approach. These techniques enable loosely coupled systems that are resilient, manageable, and observable. Combined with robust automation, they allow engineers to make high-impact changes frequently and predictably with minimal toil.”

To adapt such thinking to the telecom industry, the gains from migrating to cloud native are primarily a reflection of, and driven by, the increasing convergence between network and IT domains. The first candidate domain that cloud technology can vastly improve on, and to a certain degree replace the heavy infrastructure, is the support for the telcos’ own IT systems, including the network facing Operational Support Systems and customer facing Business Support System (OSS and BSS).

But IT cloud alone is far from what telcos can benefit from the migration to cloud native. The rest of this report will discuss how telcos can and do embark on the journey to cloud native, as a means to deliver true business benefits through improved speed, agility, and scalability to their own networks and their customers.

The rest of the report include these sections:

  • The many stratifications of telco cloud
  • Clouds gathering on telcos
  • What we can expect to see on the telco cloud skyline
  • Telco cloud openness leads to agility and savings — Q&A with Azhar Sayeed, Chief Architect, Service Provider, Red Hat
  • Additional Resources

The full version of the report is available for free to download here.

Making Sense of the Telco Cloud

“Telco cloud” has become a byword for telecom modernisation, though views on exactly what the cloudification of communication networks entails may vary from people to people. This Telecoms.com Intelligence monthly briefing, sponsored by Red Hat, explores the implications of telecom operators’ migration to cloud on their strategies, as well as the different options they may pursue. Although in the long run telecom operators and internet companies will find increasing convergence, and we are seeing more cross-ownership between the two types of businesses, telco’s evolution to cloud native will be a long process and may take different shapes.

Virgin Media to make COVID-19 retail closures permanent

Virgin Media has made the decision to remove itself from the high street, permanently closing its 53 retail stores which have been shut during the COVID-19 lockdown period.

Trends have been shifting away from in-store purchases for years, and it appears the pendulum has swung far enough for Virgin Media. None of its 53 retail locations will be reopened following the period of lockdown, with the 341 employees all being offered alternative roles in the business.

“We are focused on delivering the service customers want, in the ways they want it and at a time and a place that suits them,” said Rob Orr, Executive Director for Sales at Virgin Media.

“By creating new jobs in our most popular care and sales channels, we will be better able to provide our customers with the top service and support they rightly expect while retaining our talented workforce.”

Virgin Media has said at least 300 new customer service roles would be created to compensate for lost in-store roles, the majority of which will be work-from-home roles. The majority of sales already take place over the phone or via other digital channels.


Is there any need for a high-street presence for the telcos nowadays?

Loading ... Loading ...

Virgin Media is the first company to make such an announcement, but we suspect there will be others. We are not necessarily limiting our assumption to the telecoms and technology industries, but this lockdown has shown that operations can continue with physical shops or offices, therefore digital transformation programmes might be encouraged.

Looking specifically at the telco space, Vodafone is currently working on a phased reopening plan for post-lockdown, and although it cannot guarantee it will be able to reopen every location, that is the plan. BT will also implement a phased reopening strategy, opening as many locations as Government guidance will allow for.

At the time of writing, O2 and Three had not responded to emails from Telecoms.com.

There might of course be accountants and strategists who would want to close down physical sales channels, digital is much more profitable after all, but this is unlikely to be the case for mobile network operators.

As many customers would be interested in seeing and holding a smartphone before signing a £1000 cheque, a retail presence would be desirable. Closing down these shops might encourage customers to look at devices elsewhere, which might mean losing a postpaid customer. It is a delicate balance, but perhaps a necessary cost, at least for the moment.

Virgin Media is in a different position; how many people want to inspect a router prior to buying a broadband package. It might sound like a negative for the business, but realistically it probably is an unnecessary expense. COVID-19 was probably a contributor to the decision to permanently closing the high street present, but we suspect executives have been discussing this for some time.

UK Gov launches IOT cybersecurity fund

The Department of Digital, Culture, Media and Sport (DCMS) has launched a £400,000 fund to fuel ambition for the security of internet-connected products.

The ultimate hope will be to kick-start the development of an assurance market for consumer internet-connected products such as wearable devices or smart doorbells. Such assurance schemes could offer accreditation for products which have undergone relevant tests, providing more confidence for consumers to purchases and to make full use of all functionality without fear of poor security.

“We are committed to making the UK the safest place to be online and are developing laws to make sure robust security standards for consumer internet-connected products are built in from the start,” said Digital Infrastructure Minister Matt Warman.

“This new funding will allow shoppers to be sure the products they are buying have better cyber security and help retailers be confident they are stocking secure smart products.

“People should continue to change default passwords on their smart devices and regularly update software to help protect themselves from cyber criminals.”

The idea is a simple one, but a very good one. Should such assurance programmes be nurtured correctly, and the general public be made suitably aware, it would become a factor in the buying decision making process. Manufacturers would be effectively coerced into compliance as sales could be impacted without the presence of the certification.

Alongside this initiative, new laws in the UK will come into play for both enterprise and consumer internet-connected devices. Any device sold in the UK will soon have to adhere to three rules:

  1. Device passwords much be unique with no option to restore to factory settings
  2. Manufacturers must create and maintain a public point of contact to report device or software vulnerabilities
  3. Manufacturers must state how long the device will receive security updates

These rules should form the basis of a more secure digital economy, though product assurance programmes would add more credibility and confidence in the quickly developing segment.

Recent figures from IDC suggest the wearables market is growing, 29.7% year-on-year for the first three months of 2020, though the numbers could have been higher. The on-going COVID-19 pandemic limited shipments due to supply chain disruptions and sourcing component for the products.

While the consumer IOT segment is still in the early development stages, it is critical the industry set the standards on security. Should the segment be allowed to progress too far with bad habits, attempting to correct mistakes and bad practice will become much more difficult. The UK should be applauded for its attempts to get ahead of trends, and hopefully other Governments are taking note.


Telecoms.com Poll:

When will OpenRAN be ready to be embraced by the industry without reservation?

Loading ... Loading ...

Work from home helps drive up wearable market by 30% – IDC

The Q1 wearable shipment numbers showed strong growth, with the wireless headset segment up by nearly 70%, partly driven by working from home employees’ need to block out unwanted noise.

In its latest wearable tracker, the research firm IDC saw the overall market go up by 29.7% over the same quarter in 2019. The strongest growth was in the so-called ‘hearables’ segment, which is essentially wireless earphones and headsets. This segment increased by 68.3% and accounted for 54.9% of the 72.6 million wearable market.

“The hearables category was seemingly resilient to the market-suppressing forces caused by COVID-19,” said Jitesh Ubrani, Research Manager for IDC Mobile Device Trackers. “Consumers were clamouring for these sophisticated earpieces not only for the abilty to playback audio but also to help them increase productivity, as many of them were forced to work from home and sought ways to reduce surrounding noise while staying connected to their smartphones and smart assistants.”

The other categories in the total wearable market includes wristbands and watches. IDC estimated the wristband segment grew by 16.2%, helped by the launch of Fitbit’s new Charge 4. However, the watch category has seen a 7% decline. IDC attributed the contraction primarily to supply chain disruption in China caused by COVID-19.

“The downward pressure on watches shifts the onus to the latter half of 2020,” said Ramon Llamas, Research Director for IDC’s Wearables Team. “This gives companies the time to refine their products and messaging, and to align those with customer needs. Given the hyper focus on overall health and fitness in today’s climate, vendors would do well to highlight those capabilities, and provide guidance on how to live healthier lives.”

Incidentally, this estimate of the watch market is rather different to the smartwatch market numbers published by Strategy Analytics earlier this month, when it estimated a 20% increase in the segment. SA also believed Apple Watch volume grew by 23% in Q1 to reach 7.6 million.

“Apple’s global smartwatch market share has grown from 54 percent to 55 percent, its highest level for two years,” Neil Mawston, Executive Director at Strategy Analytics said. “Apple Watch continues to fend off strong competition from hungry rivals like Garmin and Samsung. Apple Watch owns half the worldwide smartwatch market and remains the clear industry leader.”

IDC, on the other hand, put Apple Watch’s sales volume in Q1 at 4.5 million units, down by 2% from a year ago. Such is the difficulty posed to research firms when Apple, the market leader does not disclose device volumes.

It is also worth noting that the two research firms are reporting on slightly different market segments. IDC, in addition to smartwatch, also includes what it calls ‘basic watch’ in its market estimate, by which it refers to those watches that have computing and data processing power as well as wireless connectivity but do not run third-party applications. IDC does not split the volume of two types of watches it reports on in its publicly available data.

Here are the market estimates from the two firms:

GSMA cosies up to O-RAN Alliance

The GSMA, the telco industry lobby group, has announced a new partnership with the O-RAN Alliance to accelerate the adoption of Open Radio Access Network (RAN) technologies.

Although the benefits of OpenRAN technologies are still widely disputed by opposing corners of the industry, there is clear momentum gathering. With telcos desperate to make the commercial realities of network deployment more attractive, it should come as little surprise new ideas are being embraced.

“As the demand for data and vastly expanded mobile communications grow in the 5G era, a global, cross-border approach is needed to rethink the RAN,” said Andre Fuetsch, Chairman of the O-RAN Alliance, and CTO of AT&T.

“The GSMA collaboration with the O-RAN ALLIANCE is exactly the sort of global effort that’s needed for everyone, operators and vendors alike, to succeed in this new generation.”

The promise of OpenRAN technologies is simple. Firstly, more competition will be introduced to the market to encourage diversity and resilience. Secondly, once hardware and software have been disaggregated, deployment costs will be decreased, and innovation can be increased as best-in-breed technologies can be selected for each segment. Finally, vendor lock-in will become a thing of the past.

The Telecom Infra Project (TIP) has recently released a report which demonstrates the drive of the mobile network operators (MNOs). 53% are now prioritising total cost of ownership (TCO) reductions as profits erode and capital expenditure expenses increase.

What is worth noting is that the MNOs are taking a realistic view on the development of this segment. 66% believe Open RAN technologies will be critical to the survival of numerous MNOs as ARPU falls, but it will be several years before a comprehensive, resilient and competitive ecosystem emerges. A third of tier-1 and half of tier-2 telcos believe they will have commercially launched OpenRAN by 2023, but this does not mean the death of traditional network infrastructure within a generation.

While all these promises sound very interesting, optimism is not shared by all in the industry.

“Not all openness is good and not all closed-ness is good,” Nokia CTO Marcus Weldon said this week.

The likes of Nokia, Ericsson and Huawei will give messages of support to OpenRAN in public, but there will always be an undertone of doubt, as is in Weldon’s message above. The OpenRAN movement fundamentally destroys their business model so it is not difficult to understand why they have resisted and not been as helpful as they could have been to date. Slowing down this movement provides a bit more time for profits without disruption to operations after all.

The OpenRAN ecosystem is not ready yet, despite what some might insist, though progress is being made. And while this partnership might seem like little more than a ribbon cutting ceremony it is also very important. Like Vodafone or Telefonica embracing OpenRAN trials, a partnership with the GSMA provides credibility for the technologies, encouragement for less adventurous and innovative telcos.


Telecoms.com Poll:

When will OpenRAN be ready to be embraced by the industry without reservation?

Loading ... Loading ...

Trump attempts to tame Silicon Valley with questionable results

President Donald Trump has signed an Executive Order intended to limit the protections afforded to social media platforms, though feedback has been varied.

The right-leaning elements of society has celebrated the EO, believing the White House is finally holding the politically biased Silicon Valley accountable, while those on the left side of the spectrum point to an opportunistic attack on opponents. This is a move which has been in the works since Twitter decided to flag two of the President’s tweets as a risk of fake news.

“Twitter now selectively decides to place a warning label on certain tweets in a manner that clearly reflects political bias,” Trump said in the White House statement.

“As has been reported, Twitter seems never to have placed such a label on another politician’s tweet. As recently as last week, Representative Adam Schiff was continuing to mislead his followers by peddling the long-disproved Russian Collusion Hoax, and Twitter did not flag those tweets. Unsurprisingly, its officer in charge of so-called ‘Site Integrity’ has flaunted his political bias in his own tweets.”

Of course what is worth noting is that Trump is no champion of free speech or a protector of the US Constitution, he is a hawk swooping in on enemies; would the President have signed the same order if presumptive Democratic nominee for President Joe Biden or the politically independent Senator for Vermont Bernie Sanders were under the same scrutiny?

The EO attempts to do several things, including:

  • Depict the social media companies as enemies of the US
  • Remove immunity for the social media companies for content which is published on their platforms
  • Designate the social media platforms as ‘publishers’
  • Delegate responsibility of rulemaking to the FCC
  • Restrict how political campaign funds can be spend on social media advertising

Focusing on a section of the Communications Decency Act known as Section 230, passed in 1996, which states:

“No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”

The intent of this legislation was to protect freedom of speech by ensuring the platform hosting user-created content could not be targeted by those being criticised. Without this protection, the platforms which give the general public a voice could have been the focal point of hundreds of lawsuits and may not have survived their embryonic development stages.

While the original intentions of this law may well have been good, it has been criticised by both sides of the political aisle.

Aside from President Trump’s, as well as numerous other Republicans, complaints over left-wing Californians controlling the technology industry, the Democrat Party has also found issue with Silicon Valley. Chairman of the House Intelligence Committee Adam Schiff questioned the role of Section 230 last year as Deepfake videos emerged online, with the social media giants doing little in response.

Interestingly enough, while the Electronic Frontier Foundation (EFF) is clearly opposed to the EO, it also feels it is largely redundant and ineffectual.

“President Trump’s Executive Order targeting social media companies is an assault on free expression online and a transparent attempt to retaliate against Twitter for its decision to curate (well, really just to fact-check) his posts and deter everyone else from taking similar steps,” the EFF said in a blog post.

“The good news is that, assuming the final order looks like the draft we reviewed on Wednesday, it won’t survive judicial scrutiny.”

According to the EFF, the clauses mentioned in the EO are not directly linked, in that, should one be affected by the EO it would not mean the protections afforded to the platforms would be diluted. The EFF believes the White House has misunderstood how the courts have already interpreted the law, therefore the path which is being taken forward cannot be legislated for.

Another very interest element to consider is the social media platforms do not have First Amendment obligations as they are private spaces.

This week saw the District Court of Washington DC rule against an appeal from right-leaning Freedom Watch and right-wing YouTube celebrity Laura Loomer. The two parties were attempting to sue Twitter, Facebook and Google for violating antitrust laws and the First Amendment.

The case was filed against the trio of internet giants on the grounds of political bias. Freedom Watch claimed the trio were inhibiting the organisations growth potential, while Loomer was fighting against a 30-day ban for suggesting a Democrat politician was ‘anti-Jewish’.

In the ruling, the three-judge panel said that as private organisations, the social media platforms were not necessarily obliged to First Amendment in terms of facilitating free speech. Private organisations are perfectly entitled to their own opinions, or to curate content in a manner of their choosing.

This might be contrary to the promise of the social media companies to the masses, but it does mean they are shielded from at least some of the President’s attacks.

While some might debate whether this is a document which has the power the President intended, it is a clear statement of intent. The social media companies have firmly entrenched themselves on the Trump enemy list.


Telecoms.com Daily Poll:

Is the industry doing enough to combat the 5G conspiracy theories?

Loading ... Loading ...

5G Poster: Cell Site Installation Tips

5G is not just faster than 4G, it is way more complex. And this means installation and turn-up is also much more involved. All the different pieces have to work together instantaneously. Things like beam forming with new antennas with massive MIMO, new frequency ranges, millimetre-wave and of course it also depends on how the transport is going to work. During install, If you test one and don’t test the other at the same time there will be problems requiring another visit to test again.

We’ve put this poster together to help you understand the testing complexity from day one, meaning you can get the job done right first time.

This new poster is designed to help cell site technicians do their work quickly and safely, so they can get in, get out and get paid!