Huawei uses Davos to defend itself

Huawei Chairman Liang Hua has turned up at the World Economic Forum jamboree in Davos to defend his company over security concerns.

Addressing widespread allegations that Huawei is under pressure to collude with the Chinese government, Liang said “We operate our business globally, and in every country we fully comply with local laws and regulations,” according to Reuters. “We don’t see any evidence … to say that Huawei is not safe. Cybersecurity is a common challenge. It is not an issue about any single company.”

To show how open and transparent Huawei is Liang apparently invited foreign officials to visit Huawei’s labs. It’s not clear what that will achieve, however, as they’re hardly going to leave any potentially incriminating stuff lying about the place. On the flip side it’s hard to see what else Huawei can do to convince the rest of the world that its gear doesn’t constitute a security threat.

Liang also addressed the matter of Huawei’s CFO, who is currently stuck in Canada on bail, waiting to see if the US is going to get around to applying for her extradition on charges of violating US sanctions. Understandably he wants them to get a move on.

Meanwhile the BBC is reporting that Liang had also used the event to imply Huawei might just not bother with countries that are giving it a hard time and only go where it’s welcome. If Huawei faced further obstacles to doing business “…we would transfer the technology partnership to countries where we are welcomed and where we can have collaboration with,” he is quoted as saying.

That seems like a slightly redundant statement as it’s already being banned from participating in some of the infrastructure of those countries, so maybe he’s saying Huawei would pull out entirely. If so that threat would appear to be a bit of an own-goal as it would serve to illustrate how disruptive Huawei could be to the markets in question if it feels like it.

Vodafone and O2 UK buddy up over 5G infrastructure sharing

Vodafone UK and Telefonica UK (O2) will be entering into a new infrastructure-sharing relationship ahead of the much-anticipated 5G rollout.

The duo already has an existing relationship for shared infrastructure activities, managed through the Cornerstone Telecommunications Infrastructure Limited (CTIL) joint venture, with this extension to include 5G at joint radio network sites. In theory, such a tie-up will allow the pair to accelerate 5G rollout plans over the coming months.

“We believe that these plans will generate significant benefits for our business and our customers as we move into the digital era of connected devices, appliances and systems on a mass scale,” said Nick Jeffery, CEO of Vodafone UK. “Customers will benefit from the best 5G experience available and we will deliver even faster speeds by using our spectrum holding more effectively.”

“I’m excited by the potential of these plans to meet the future needs of our customers while delivering value for our business,” said O2 CEO Mark Evans. “In addition, these plans would allow us to utilise the spectrum we acquired in the last auction very effectively.”

Looking at the 5G ambitions, both companies are being relatively coy with the specifics. Vodafone has confirmed it will launch commercial 5G services during 2019, exactly when is unknown though, while O2 has already stated it will not enter the fray until 2020. For Vodafone, some industry analysts have commented it is pitting itself in a race with EE, suggesting the launch would be at some point during early summer.

Perhaps this is an indicator of the importance of 5G scale. Being the first to market may not mean anything in the long-run, it’s a gimmick to include in advertising more than anything else, but nationwide deployment will be critical. O2 has a marketing leading position to protect, while Vodafone wants to recapture the fortunes of yesteryear. Clearly offering the 5G network with the widest coverage will be critical to winning subscribers once 5G vaults towards mass market adoption, and this partnership seems to have an eye on that.

As part of the agreement, more responsibilities will be devolved to the CTIL, allowing the JV to improve the efficiency of its operations and pursue opportunities to add further third-party tenants to the assets. The companies also intend to upgrade their transmission networks with higher capacity optical fibre cables, readying the infrastructure for low-latency use cases such as VR, while there is also an eye on future transmission operating model which could drive synergies for investment and operations.

Although trying to get telcos to play nicely with each other is a tricky task, the idea of shared infrastructure has been on Ofcom’s agenda for some time. It might create a bit of a red-tape maze in the first instances, though there are clear benefits to the concept.

“UK 5G roll-out is on the way and operators need to be more accepting of sharing infrastructure to ensure that coverage demands from consumers and businesses can be met as quickly as possible,” said Ingo Flomer, VP Technology at Cobham Wireless.

“Deploying new 5G networks typically require operators to install and maintain new antennas, hardware and cables, which requires significant planning, management and expense. By using one common architecture, operators can minimise cost and disruption.”

Fears the highly dense urban areas will be favoured over rural regions will certainly not be dismissed following this announcement as the cities are still much more attractive commercially, but with such partnerships the delay might not be as painful. A digital divide was created by the slow rollout of 4G, but shared-infrastructure relationships should ease this chasm, at least theoretically.

Most European CSPs expect more enterprise revenue opportunities from 5G

A new survey conducted by IDC, commissioned by Amdocs, has found that almost 80% of European CSPs anticipate increased enterprise revenue opportunities from 5G.

This was the headline datapoint from a survey in which IDC spoke to a bunch of senior management at CSPs from around the world. Another notable finding was that a third of all operators plan to offer enterprise 5G services in 2019 and that will increase to 84% of them in 2020.

“Operators of 5G networks can support mission-critical enterprise communications, with performance backed by service-level agreements,” said John Delaney, Associate VP of Mobility Research at IDC. “Our research shows that mobile operators are optimistic about the potential for 5G to support an expansion of their role in the enterprise market.”

“The survey clearly demonstrates that operators see 5G as a means to restore value around core connectivity services for business customers.” said Matthieu Loreille, VP Head of Consumer, Enterprise and Technology Marketing at Amdocs. “5G technologies such as network slicing will allow them to tailor the performance, security level and characteristics appropriate to each business, opening up differentiating monetization opportunities.

“Furthermore, by leveraging additional technologies such as artificial intelligence, edge computing and hybrid cloud, operators will be strongly positioned to support enterprises in their digital transformation journey. Effectively, this enables them to shift connectivity to the heart of their solutions with meaningful value-added services on top such as cybersecurity, cloud migration, hybrid cloud operations and many more.”

Other datapoints include 72% of European operators reckon they’ll be first to market with 5G enterprise services and 65% of them said their enterprise customers have already expressed an interest. Obviously Amdocs thinks these findings should compel operators to invest loads more in software and services, which it happens to provide.

Ericsson’s loss is a US operator’s gain once more as T-Mobile hires Ewaldsson

T-Mobile US wasted little time in snapping up former Ericsson lifer Ulf Ewaldsson after he came on the market, to head up its 5G efforts.

Ewaldsson’s most recent significant position at Ericsson was to head up its struggling Digital Services division. This time last year he became another casualty of Ericsson CEO Börje Ekholm’s apparent desire to refresh the executive team by getting rid of some dead wood. He does it gently, however, by moving them to the position of advisor to the CEO for a few months before finally casting them adrift.

Following the well trodden path taken by his former boss Hans Vestberg, Ewaldsson presumably needed little persuasion to escape the Swedish winter and move state-side, although he might not find Washington state to be much of an upgrade weather-wise. He will be reporting into TMUS CTO Neville Ray.

“We are thrilled to share the great news that Ulf is joining our team of amazing leaders at T-Mobile who continue to show the other guys what it takes to win in wireless,” said Ray. “Just look at what we’ve done with 4G wireless! We’ve been the fastest for 19 straight quarters – nearly 5 straight years… and we’re just getting started.

“Adding Ulf’s passion and track record for driving innovation to the Un-carrier mix is going to take us to the next level. Ulf has achieved so many firsts and truly supported the evolution of technology for telecommunications across the globe. Bringing him on board is a total win for T-Mobile and we couldn’t wait to share it! He is going to be the perfect addition to our consumer-first Un-carrier team to drive our 5G evolution strategy!”

Have you noticed how similar to Trump’s tweets the canned quotes from TMUS are? Anyway Ewaldsson, does have good tech pedigree, having been Ericsson’s group CTO for five years before being handed the Digital Services poisoned chalice, so he should be a good person to be running the 5G side of things.

Ren’s roadshow continues as Huawei warns of job cuts

Huawei Founder Ren Zhengfei has prepped his employees with a warning of ‘hardship’ and job cuts in the future.

In an email to employees, seen by the Financial Times, Ren has laid out an ominous prediction for the firm. The eras of 3G and 4G came too easily for the business and the extraordinary success which has fuelled Huawei’s domination over the last few years should not be expected as the firm enters the 5G frenzy.

“In the coming years, the overall situation will probably not be as bright as imagined, we have to prepare for times of hardship,” Ren said in the email.

Huawei confirmed to Telecoms.com the email was sent out to employees, though stressed that this is not necessarily new rhetoric from the management team. Over the last couple of months, Ren has been open with employees over the challenges in the future, while this email should be seen as a further step in this communication to re-iterate market conditions will make life for Huawei more difficult that it has become accustomed to.

Having started life in 1988, Huawei’s growth over the last two decades has been astronomical. Passing revenues of $1 billion roughly 20 years ago, the firm exceeded $100 billion in 2018, with the Consumer business group rumoured to have overtaken the Carrier business group as the biggest. Of course, dominance in the 4G era created this position of comfort to allow the Consumer business group to launch its assault on the global smartphone market.

Although this is one of the few examples of Ren being directly quoted in the media, the content of the email should hardly come as a surprise considering trends over the last couple of months.

“5G cannot possibly become as easy as 4G,” said Ren. “Maybe a mine will go off here and there. And even if there won’t be a big explosion all over the place, we will still need to feed 180,000 staff. Wages, salaries and dividends amount to over (US) $30 billion a year.”

Specific numbers have not been detailed, though Ren seems to be readying the troops for what could be a difficult few years fighting against currently unvalidated accusations and suggestions of nefarious behaviour.

Along with the US, Australia, New Zealand, Taiwan, Japan and South Korea, Germany looks to be the next country to block the commercial intentions of Huawei. The Federal Office for Information Security (BSI) has previously stated it would not ban any companies from participating in the 5G frenzy without proof, though there are other factors to consider. Deutsche Telekom certainly wants to stay on the good-side of the US with a certain merger still not greenlit.

This is certainly not going to be the end for Huawei, but this communication from Ren confirms one thing to the world; Huawei truly realises how serious this situation has become and commercial contracts will be much more difficult to win in the future.

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Deloitte predicts 50k 5G smartphone in the UK by 2019-end

While the vast majority will have to wait some time before experiencing the euphoria of an extra ‘G’ Deloitte is predicting there will 50,000 early adopters in the UK.

After several years of slugging, the glorious 5G world is upon us. First in the US and South Korea, though pockets are starting to emerge everywhere else as well. San Marino is live while it won’t be long before countries like China and Japan start hitting the green button.

“The introduction of 5G handsets expected this year will look a lot like 2010, when 4G phones first entered the market,” said Dan Adams, Head of Telecommunications at Deloitte.

“There will be a lot of noise in the first year from vendors vying to be first to market, and relatively little action from consumers. We’re not talking about an overnight switch to faster connectivity with lower latency, we will see 5G used by consumers in hotspot locations in the next two to three years, with mass adoption by 2025.”

The first devices are likely to be with us in Q2, though this year’s Mobile World Congress will almost certainly be a shouting contest between the main smartphone manufacturers. It’s already rumoured Samsung will be launching a foldable-phone (albeit not 5G) prior to the event, while LG and Motorola are also in the running to produce a 5G compatible phone.

In total, Deloitte predicts roughly 20 handset brands will launch 5G-ready handsets across 2019, with shipments totalling one million. This is still a tiny fraction of the 1.5 billion smartphones which will be sold through the year, though 50,000 of them could be heading to the UK.

Looking at the networks, there might not be much to choose from across the UK. EE has confirmed it will launch 5G across 16 cities in 2019, though these will only be in the busiest locations. Vodafone will also launch this year, though it is being coy as to when. Three is telling the same story, while O2 has confirmed its customers will have to wait until 2020. One thing is clear, these will be incredibly limited deployments and it will be years until coverage reaches what the demanding user would consider adequate.

Whether this justifies the hype, or the extortionate amount handset manufacturers will inevitably charge the glory-seekers for the new devices, we’ll leave you to decide, but it will take years for the devices to be considered mainstream. Deloitte expects worldwide 5G smartphone sales to represent 1% of the total smartphone sales by the end of 2020, with 2-3 million Brits getting their hands on the devices. As Adams points out above, 2025 is when the team expect 5G devices to hit mass adoption.

Another interesting growth area the Deloitte team is keeping an eye on is the smart speakers segment.

“Smart speaker adoption has seen phenomenal growth in recent years,” said Paul Lee, Global Head of Research for TMT at Deloitte

“With improvements continuing to be made, demand for smart speakers could be in the many billions of units, possibly even higher than for smartphones. In the future, smart speakers have the potential to be installed in every room in a house, hotel, office, school and even beside every hospital bed.”

Smart speakers are the flashy product which will attract a lot of the consumer market, but the power of the virtual assistants is what could take the segment to the next level. We’ve long anticipated the breakthrough of artificial intelligence in the workplace, but perhaps the slightly sluggish resistance has been down to the delivery model of the applications.

Should smart speakers be adopted in hotel rooms, hospitals and offices in the way which Deloitte anticipates, the world is opened up for industry specific applications of virtual assistants. One area which might help this adoption is the price point.

While smart speakers were initially an expensive appliance for the home, the normalisation of the product in the eyes of the consumer has peaked the interest of traditional consumer electronics manufacturers. With more manufacturers, including those with the ability to produce goods at greater scale, entering the fray competition will increase, bringing prices down, while advertising will also grow, fuelling interest in the bellies of the consumer.

Deloitte anticipates the marker for internet-connected speakers with integrated digital assistants will be increase to £5.6 billion in 2019, selling 164 million units at an average selling price of £34. This would represent a 63% growth rate, making smart speakers the fastest-growing connected device category worldwide, leading to an installation base of more than 250 million units by the end of the year.

This is a price point which would make enterprise adoption of the devices more interesting, and as time moves on, it will get cheaper. The increased introduction of industry-specific virtual assistant and AI applications will certainly help this segment also.

After years of promises and false-dawns, 2019 might prove to be a blockbuster year after all. There’s still a lot which could go wrong, but here’s to hoping.

Huawei founder opened up to the press, or did he?

Ren Zhengfei, the founder of Huawei, once again dismissed the allegations that Huawei has been spying for the Chinese government in a rare meeting with the media.

Huawei’s normally reclusive founder told the Financial Times on Tuesday that he missed his daughter, who was arrested in Canada and faces extradition to the US. Ren also reiterated that Huawei has not spied for the Chinese government and has not been asked to do so. “No law in China requires any company to install mandatory backdoors,” Ren was quoted by the FT.

Ren also handed out an olive branch to President Trump, calling the latter “great” and recognising the positive results the American administration’ tax cuts had delivered to the American economy. But he also warned the isolationist route the current American government is pursuing. “The message to the US I want to communicate is: collaboration and shared success. In our world of high tech, it’s increasingly impossible for any single company or country to sustain or to support the world’s needs,” Ren said. Earlier President Trump said he ‘would intervene on Huawei CFO’s case to help China trade deal’.

When it comes to Huawei’s tactics to navigate the difficulties it faces in the western markets, Ren conceded “it’s always been the case, you can’t work with everyone . . . we’ll shift our focus to better serve countries that welcome Huawei,” he told the reporter.

By the founder’s own standard, this interview was a rare opportunity for the outside world to get more transparency of the company he set up 32 years ago. But we were not made much wiser on a few key questions.

Huawei’s CFO, and Ren’s daughter, was charged with misleading the American banks with false information on Huawei’s relationship with its subsidiary related to the company’s business in Iran, which resulted in the banks being handed multi-billion dollar fines. Ren’s interview did not shed new light on the case, despite expressing his parental feeling.

In the spirit of “presumed innocent until proved guilty”, we should believe that the Huawei founder was telling the truth when he claimed Huawei has not spied on behalf of the Chinese government. His words were also carefully chosen when he claimed, “no law in China requires any company to install mandatory backdoors”, which is true. Law enforcement agencies may require companies or private persons to assist their work. In some jurisdictions the companies or individuals have the legal right to refuse, as Apple did in 2015 when being asked by the FBI to unlock an iPhone used by the San Bernardino attackers.

In other jurisdictions companies and individuals are obliged to comply with such demands.

China’s Intelligence Law was passed by the National People’s Congress, China’s legislature, in June 2017 and entered into force the following day. Two articles of the law are of interest here:

Article 7: An organization or citizen shall support, assist in and cooperate in national intelligence work in accordance with the law and keep confidential the national intelligence work that it or he knows. (Translation by the Law School, Peking University)

Article 14: National intelligence work institutions, when carrying out intelligence work according to laws, may ask relevant institutions, organizations and citizens to provide necessary support, assistance and cooperation. (Translation by QUARTZ)

In plain language this means the intelligence agencies have the mandate to require any institutions or individuals to cooperate (Article 14) and the institutions or individuals must comply (Article 7).

Therefore Ren, who declared “I still love my country, I support the Communist party” to the FT journalist, is law-bound to say Huawei has “never received any request from any government to provide improper information”, no matter whether it has received requests of this kind or not. Hypothetically, if Huawei had received requests from the Chinese intelligence agencies to assist their tasks, it could not refuse, otherwise it would be violating the first half of Article 7. On the other hand, if Huawei, hypothetically, had carried out intelligence tasks as required, it could not tell anyone, otherwise it would be violating the second half of Article 7.

But, seriously, no one would have expected an alternative answer.

58% of UK business can’t detect IoT security breach – study

Digital security vendor Gemalto claims the IoT euphoria might be hitting the UK before its ready, as research shows 58% of businesses are not able to detect a breach.

First and foremost, we need to put a disclaimer on this report. Gemalto is a security company and is thus incentivised do its best scaremongering to drive revenues. The more scared companies are about potential data breaches, and the punishments which follow the incidents, the more likely they are to buy security software. Making the world a big, bad, horrible place is an effective marketing strategy for security vendors.

That said, considering the lax approach most of the industry takes towards security and data protection, we suspect many of the statistics being discussed are pretty accurate.

“The push for digital transformation by organisations has a lot to answer for when it comes to security and bad practices,” said Jason Hart, CTO of Data Protection at Gemalto. “At times it feels organisations are trying to run before they can walk, implementing technology without really understanding what impact it could have on their security.”

The most shocking figure from the report is the 42% of UK companies who are capable of detecting an IoT breach, with only France worse off at 36%. Considering the role IoT has been touted to play over the next few years as 5G hits the streets, this is an incredibly worrying statistic.

While spending on IoT security has increased from 11% of the overall IoT budget to 13%, you have to wonder what direction this money is heading. Perhaps even more concerning for those companies involved, is that 90% of them accept this will be a major buying motivator for customers. At least they are aware that security can have a direct impact on the revenues of the business now, a concept which has taken years to hammer home.

“Given the increase in the number of IoT-enabled devices, it’s extremely worrying to see that businesses still can’t detect if they have been breached,” said Hart. “With no consistent regulation guiding the industry, it’s no surprise the threats – and, in turn, vulnerability of businesses – are increasing. This will only continue unless governments step in now to help industry avoid losing control.”

IoT is set to be one of the biggest winner of the 5G bonanza, while the segment is also predicted to be the major catalyst of 6G. If predictions are anywhere near accurate, 5G networks will soon not be able to cope with the strain of IoT, driving the case for 6G due to the sheer number of ‘things’ connected to the network.

Looking at the predictions, IDC believes the IoT market will grow to be worth more than $1.2 trillion by 2022, with consumer devices expected to account for the largest share at 19%. Ericsson has forecasted the number of cellular IoT connections to reach 3.5 billion in 2023, increasing at a CAGR of 30%.

Security remains a major challenge for the industry, though the buzz around blockchain could provide a suitable means to meet the expectations of the consumer. In the absence of regulation, Gemalto notes the adoption of blockchain technologies has doubled from 9% to 19% in the last 12 months, with 23% of the respondents to this survey believe the technology would be an ideal solution to use for securing IoT devices. 91% who are not using blockchain are considering it for the future.

“Businesses are clearly feeling the pressure of protecting the growing amount of data they collect and store,” said Hart.

“But while it’s positive they are attempting to address that by investing in more security, such as blockchain, they need direct guidance to ensure they’re not leaving themselves exposed. In order to get this, businesses need to be putting more pressure on the government to act, as it is them that will be hit if they suffer a breach.”

While research like this does indicate security is becoming a more serious topic in the world of telecoms and technology, it also confirms there is a very wide gap to close. Security has long been the ugly duckling of the industry, many seemingly choosing to ignore the challenges because they are too difficult to solve, though new regulations such as GDPR has perhaps forced the issue up the agenda.

Interestingly enough, should the telcos get serious about security there would certainly be a revenue generating opportunity to capitalise on. With cyber security incidents and data breaches becoming more prominent in the news, consumers are gradually becoming more aware of the risks of the internet and the emerging digital society. While the industry has played down the risk in recent years, the incidents speak for themselves.

An excellent example of turning this scenario into a business opportunity lies with Orange, the master of the convergence strategy. Here, the team have invested heavily in cyber security capabilities and are now offering security services to customers as a bolt on to other connectivity packages. The move has proven to be a success as while it is generally becoming accepted that 100% secure is impossible nowadays, more people are willing to do something about it.

Security is a topic which has always been in and around the news, but few want to do anything proactive about it. Unfortunately, with the perimeter expanding so rapidly as IoT penetration grows, these statistics are incredibly worrying. Perhaps regulators will get the chance to swing the GDPR stick before too long after all.

Helios Towers expands footprint into South Africa

Helios Towers has entered into a partnership with Vulatel to form a joint venture to build out wireless and fixed line open-access infrastructure in South Africa.

Helios will take a 66% slice of the venture as the firm readies itself for the 5G revolution. While it might seem strange to talk about 5G on a continent which has constantly struggled to bridge the enormous digital divide, South Africa is certainly a different landscape than what would be expected as the norm.

“I am thrilled to announce our entry into South Africa, which delivers against our stated strategy of providing MNOs with open-access infrastructure to meet the growing demands of their customers in Africa for fast, stable and available networks,” said Kash Pandya, CEO of Helios Towers. “We are delighted to be partnering with Vulatel, a business with impeccable telco sector expertise and deep local credentials in South Africa.”

For Helios, expansion into the South African market makes perfect sense and partnering with a local business will provide suitable foundation. Helios’ footprint currently covers four markets across the African continent, while Vulatel came to existence in 2017 on the back of acquiring Dimension Data’s fibre and wireless division. Helios brings the international experience and capital, while Vulatel holds its own with contacts and relationships in the South African market.

“There is a significant infrastructure gap in South Africa today, which means the demand in data services is not being met,” said Tlhabeli Ralebitso, CEO of Vulatel.

“We are convinced this provides an unrivalled opportunity to build a leading open-access infrastructure platform to address that gap. Our vision has always been to establish a nationwide service network before entering into the open-access telecoms infrastructure market on the back of our trusted relationships with the telecoms operators in South Africa.”

Looking at the South African market, this is a country which is expected to lead the 5G euphoria on the African continent proving this is a good time for Helios to make its move. With 6,500 towers in four markets (Tanzania, Democratic Republic of Congo and Congo Brazzaville), contracted revenues of $3.1 billion and average contract life of 8.4 years remaining across the group, it is certainly in a stable position to make such a bet.