Will remote working trends endure beyond lockdown?

It is most likely anyone reading this article is doing so from the comfort of their own home, but the question is whether this has become the new norm is a digitally defined economy?

With many economies and sectors dependent on a fully functioning telecoms network and a healthy digital ecosystem, perhaps we should be wondering why the idea of remote working is not more common. Many companies would say they are forward-looking and innovative, but the vast majority were forced through a digital transformation programme by the COVID-19 pandemic, not their own choosing.

The issue with coerced evolution is that there is a temptation to return to the ways of old, heading back to stodgy offices as the unambitious, unimaginative and uninspiring crave the familiarity of the known. Managers might say ‘teams work better when we’re together’ or ‘we’re an industry where it doesn’t work’, but this is probably a cover. The fact that many businesses still function during lockdown shows this is not true.

The office will never become extinct and face-to-face meetings will always be a requirement, but not every day; such resistance is simply an admission of inability to adapt to a changing economy or evolving society. Said managers would probably have fit in very well at Blockbusters when Reed Hastings pitched Netflix.

There are of course some jobs where working from home is an impossibility, but the fact that the economy

Today’s working practice is an extreme. But one would hope organisations at least take some of today’s mobility and incorporate into tomorrow’s operations. Some will revert to the analogue era, convinced that ‘hot desking’ is progress, but hopefully the majority will evolve and learn from this period of rapid transformation.

Of course, what is worth noting is that some serious changes will have to be made to ensure operations are in a healthy and sustainable position. Some companies might be managing the strain of remote working well today, but who knows which straw might be the fatal one.

A recent survey from Cato Networks suggested 55% of respondents experienced an increase of 75%-100% in remote access usage, while 28% saw usage shoot up more than 200%. VPN’s might be the most common form of remote access technologies, but products are bought for a purpose; most will not be designed for the surge above normal requirements.

67% of the respondents to the survey said complaints had been lodged from remote users, where connection instability and slow application response are the leading problems. Cato suggests the VPN might be a choke point in operations as it uses public internet to backhaul traffic to a datacentre or up to the cloud. In short, there will have to be a rethink on how money is spent and on what.

“…on the front-end you’d be looking at redundant VPN servers, ideally in each region where remote users operate,” said Dave Greenfield, Technology Evangelist at Cato Networks.

“For security, you’ll need antimalware and URL filtering. For the backend, you’ll need to connect and secure your cloud applications and resources. This says nothing about any of the management or troubleshooting tools that might be needed to support remote users.”

This is a disruption to business operations, and whenever there is a disruption, there are those who prefer the quieter life of the status quo. Every organisation has individuals who would rather this stay the same and this is the risk today; how many organisations will return to the pre-COVID-19 way of working, rendering these enforced digital transformation projects temporary.

Wind River, a software provider for connected systems and another company hoping to benefit from the pandemic transformation, is suggesting COVID-19 has caused 90% of enterprises to undergo some change in business processes, with 90% of respondents suggesting there has been an impact on being able to meet customer demands. Again, this might force companies back to old ways as some people simply don’t like challenges.

Interestingly enough, the Wind River research also suggests that IT spend on cloud-based application development has and will increase by 35% because of the coronavirus-enforced periods of lockdown. This increases to 62% in China. This shift to cloud-based technologies and processes should theoretically enable mobility in the work and flexibility in working practises.

Ultimately, the issue with some of these survey’s is that decision makers are the respondents, many of whom will say the right things because they believe they are the right things to say. This does not mean they are empowered to make changes or even have the staying power to see through any form of evolution. Sometimes it is best to ask the foot soldiers, those who fight in the trenches each day, those who are slightly more immune to the politics of business and may well give a more straight forward answer.

When asking Telecoms.com readers whether they thought the flexible and remote working conditions would stay, the results are quite interesting.

  • 50% said they would have to check into the office once or twice a week but could work from home
  • 33% believed they would be given complete freedom to work as they please
  • 6% stated they would have to go into the office to do their job properly
  • 6% thought the management team is not convinced by the idea of working from home and the company would revert to old business practices
  • And the final 5% said they would have to go into the office, but others in the company would be allowed to work from home

Of course, the adaptability of employees and employers is one on element of the equation, there will have to be the communications infrastructure in place.

What will be encouraging for all involved is the resilience of networks as internet traffic surges. These networks have not been designed with the current working dynamic in mind, but performance has been maintained.

According to data from Netscout, internet traffic jumped between 25-35% on home broadband networks from mid-March, when most lockdown protocols were being enforced. What is worth noting is this is a global average, some markets have experienced much higher peaks, for example Italy and the UK. But most importantly, networks have not failed because of the increased strain.

Interestingly enough, speaking at a Time Higher Education conference this week, Muhammad Imran, a Professor of Communication Systems at the University of Glasgow, suggested the work from home trends could be aided by the embracement of smart cities initiatives.

The ‘Accessible City’ is an idea which can help people work remotely. Imran has questioned why people should have to move to work in some jobs, a factor which could lead to an offer falling through or being turned down. Not everyone can move for a job, and for some low-income families it could be a barrier to entry.

Remote and flexible working is not only an opportunity to increase employee welfare, but it could also democratize some careers, breaking down social barriers and opening up opportunities for those who would have previously been overlooked.

Another element to consider is whether people are actually better at their jobs when they work from home.

Research from Harvard Business School suggested a 4.4% increase in output from those who have been empowered to work from home, while software company Prodoscore has said productivity could go up by as much as 44%. Numerous research papers have pointed to remote working being a plus to employers, as well as a benefit to employees.

Despite this research, which has been around for years, most executives have resisted the temptation to evolve working practices, leaving the idea of remote and flexible working to be cultivated by others, most of the time digitally native organisations. Some companies, and people, are stuck in their ways and they will not be as attractive to potential employees as others.

Some will embrace the coerced digital transformation, and some might revert back the ways of old. It will be interesting to see which business leaders are stuck in a previous generation.


Telecoms.com Daily Poll:

Can the sharing economy (ride-sharing, short-stay accommodation etc.) survive COVID-19?

Loading ... Loading ...

ITU says lower prices don’t lead to higher internet penetration

The UN telecoms agency observes that, while global connectivity prices are going down, the relationship with penetration is not as inversely proportion as you might think.

An International Telecommunication Union analysis of mobile and fixed connectivity has found that prices are decreasing, on average, across the world. Disappointingly for the agency, since lowering prices is one of its big things, this trend is not translating into rapidly increasing internet penetration rates. So it looks like there are other factors involved, such as quality of service, level of education and lack of localised content.

In spite of that, the ITU seems to be sticking with its price narrative. “Keeping telecommunication and digital services as affordable as possible has always been important to ensure broader Internet uptake, especially for lower-income households and consumers,” said Houlin Zhao, ITU Secretary-General. “In the face of COVID-19, this is more vital than ever. People who do not have access to the Internet may not be able to access information about how to protect themselves from coronavirus, telework, learn remotely and connect with families and friends during quarantine.”

“The COVID-19 crisis has clearly shown us that nobody is safe until we are all safe,” said Doreen Bogdan-Martin, Director, ITU Telecommunication Development Bureau (has it?). “By the same token, we will not be able to use the full potential of digital technologies until we are all connected. To connect all, we need to address all factors that may prevent meaningful connectivity.”

It’s not clear what the ITU top brass is getting at, other than to vaguely imply that it’s really important to have agencies like the ITU. If you fancy a bit of light reading to see you through the lockdown, you can download the 178-page report here. Universal connectivity is desirable but not essential and some parts of the world may feel there are matters in more pressing need of their scarce funds.

As YouTube defaults to SD worldwide, Ofcom offers connectivity top tips

With everyone stuck at home for the foreseeable future coz of coronavirus, telecoms capacity has become front page news.

Google-owned YouTube, the dominant social video platform for most of the world, has announced that it has set the default resolution for all video playback worldwide to standard definition. “Last week, we temporarily defaulted all videos on YouTube to standard definition in the European Union, United Kingdom, and Switzerland,” said the support update. “Given the global nature of this crisis, we are expanding that change globally starting today. This update is slowly rolling out, and users can manually adjust the video quality.”

The European move was matched by Netflix but they weren’t joking about the slow rollout. SD presumably means 480p and below, but our videos are still defaulting to 1080p in many cases. Since the UK has supposedly been restricted for a week, you have to wonder how long this fairly small concession will take to implement.

In the mean time Ofcom has published some top tips for ‘helping broadband and mobile users stay connected’. You can read them in full here, but in case you lack the bandwidth to do so here’s a summary:

  1. Use your landline or wifi calls if you can
  2. Move your router clear of other devices
  3. Lower the demands on your connection
  4. Try wired rather than wireless
  5. Plug your router directly into your main phone socket
  6. Test the speed on your broadband line
  7. Get advice from your broadband provider

“Right now we need people to stay at home to protect the NHS and save lives,” said Digital Secretary Oliver Dowden. “Reliable internet speeds will be crucial so we can work from home where possible, stay connected with our families and keep up to date with the latest health information. I urge everyone to read Ofcom’s helpful tips and advice to ensure they get the most out of their broadband and mobile internet connections during these unprecedented times.”

“Families across the country are going online together this week, often juggling work and keeping children busy at the same time,” said Melanie Dawes, Ofcom Chief Executive. “So we’re encouraging people to read our advice on getting the most from their broadband, home phones and mobiles – and to share it with friends, families and colleagues, to help them stay connected too.”

Loon claims second customer win in Amazon rainforest

Google-owned balloon connectivity firm Loon has officially signed its second customer, Internet para Todos Perú, to deliver the internet to remote regions in the Peruvian Amazon.

The agreement between Loon and Internet para Todos Perú will kick-off in 2020, providing connectivity to 200,000 people in the Peruvian Amazon. This is the second commercial agreement signed by Loon, and the first sustained, non-emergency use of the technology in South America.

Owned by Telefónica, Facebook, IDB Invest and CAF, Internet para Todos Perú is an open access wholesale rural mobile infrastructure operator, aiming to deliver the internet to regions which are considered commercially unattractive. Although Internet para Todos Perú is telco neutral, this agreement with Loon will be to deliver connectivity to Telefonica’s customers in the first instance.

“Internet para Todos was born with the purpose of connecting millions of Latin Americans, including 6 million Peruvians without adequate access to mobile internet,” said Teresa Gomes, CEO of Internet para Todos Perú.

“This challenge involves reaching difficult access areas with innovative and sustainable technologies that allow us to overcome geographical, technological and economic complexities.”

For those not familiar with Loon, the business is a graduate of Google’s Moonshot Labs. A seemingly ridiculous idea to use hot air balloons to float radio technology above the worlds’ most difficult to reach regions. These are the areas where laying traditional connectivity infrastructure is not a viable option, ROI would be far too low, so the absurd ideas are considered.

The balloons, floating 20km above sea level, will house 4G radio equipment. Signals from ground infrastructure will be distributed between the network of floating cell sites before relaying to 4G devices on the ground.

Discussions with Telefonica have been on-going for months, though Loon seemingly proved its worth by answering calls from the Peruvian Government and Telefonica following a magnitude 8.0 earthquake in May. The team had already been in the process of laying infrastructure in the region, and it took less than 48 hours for the balloons to arrive and start delivering 4G to users below.

While permanent contracts with telcos will of course be more lucrative to the Loon business, assistance in disaster situations is another element. In various regions throughout the world, the Loon team will be laying infrastructure for the worst-case scenario, though it does give the team a head-start when negotiating with the local telcos.

This is not the first time Loon has reacted to natural disasters in the region. In 2017, Loon worked with Telefonica to support efforts in flooded regions in Peru, and a few months later, AT&T and T-Mobile US after Hurricane Maria impacted Puerto Rico. In the aftermath of such natural disasters, Loon’s assistance was critical to replace damaged communications infrastructure, but the business does have to be more than an emergency services tool.

This agreement is a positive step forward, but it is only the second. At some point, the Loon team will have to start making news headlines more often. There is a huge amount of potential for Loon, though at the moment it doesn’t appear to be more than a quirky idea.

Telekom Kenya and Telefonica clearly see the benefits of the technology, but there are hundreds of telcos across the world who fit the customer profile. The vast majority will be in the larger developing markets, where low ARPU inhibits the deployment of traditional connectivity infrastructure, but there are also niches in the developed markets. Australia or the US for example, where vast landscapes and remote communities present the same ROI challenges.

Telefonica is an excellent customer win, this is one of the largest telcos worldwide after all, and there will be plenty of opportunity to cross-sell to other national business units. However, at some point Loon will have to prove it is more than an interesting idea and announce more contracts.

Elliott starts calling for AT&T CEOs head – report

Elliott Management, the activist investor which steamrolled into the AT&T business, has called for the replacement of CEO Randall Stephenson.

Stephenson, who has been running the telco since 2007, will hopefully have seen this move coming. The vulture fund has somewhat of an action-plan template when attempting to cause chaos, and a complete restructure of the management team is a tried and testing phase of the battleplan.

According to Fox News, Elliott Management is not only calling for the resignation of Stephenson, it is requesting it be made responsible for sourcing his replacement and demanding representatives on the Board of Directors.

After announcing it had snapped up a $3.2 billion stake in the telco, Elliott Management set to work. As with other companies the vulture fund has invested in, the objective is disruption, slimming back the focus of the business to realise value for the shareholder. This value will take the form of increased dividends and a bump in share price.

The first phase of the Elliott Management plan has already been set into play. Uncertainty has been placed in the mind of investors with the suggestion of a new strategy for AT&T. Elliott did the same at Telecom Italia when it bought its way into the debate. At AT&T, this is a divestment in the media business and a refocus on more traditional telco business activities.

The second and third phases of the disruptive battleplan are plain for everyone to see here. Elliott Management wants to appoint friendlies on the Board of Directors, and it wants to reform the executive team. Both of these phases of the plan will put the right people in the right place to act as internal champions of the Elliott Management approach to telecommunications.

The strategy being proposed is a very simple one, though it will fundamentally alter the direction of the AT&T business. Through the acquisition of both DirecTV and Time Warner, AT&T was looking like a digital services giant with connectivity at the route of the various different products. Elliott Management wants to get rid of these added value components.

Let’s not underestimate or underappreciate how much of a drastic change to the AT&T business this is.

How this saga will evolve remains to be seen. Perhaps the content businesses will be spun-off. One insider is suggesting a JV with a private equity partner and Dish. Some might assume this would be a complete divestment. Maybe a spin-off and an IPO is on the cards to recover funds and reduce AT&T debt?

There are a lot of options, but AT&T will fundamentally be a different business. It will be one which is focused on the commoditised business of connectivity. However, if Elliott Management want to succeed in their ambition, they will need some internal friendlies at the telco. For Stephenson and other executives, this might well mean a new job.

Openreach cuts costs by 75% to attract builders to fibre diet

Openreach will be slashing the cost of installing fibre wires in new residential developments of less than 30 plots, as it looks to tempt housing developers onto a fibre diet.

Although it might seem remarkable, house builders are not currently mandated by law to install fibre broadband infrastructure on new premises. Considering the aggressive rhetoric being spouted by the UK Government when it comes to laying future-proofed foundations for the digital economy, it does beggar belief the opportunity to cut corners and ignore fibre is still available to these developers.

The ‘Housing Crisis’ in the UK is one which does attract headlines. The severity of this ‘crisis’ does of course depend on who you are talking to, though in certain regions it is undeniable there is a shortage of properties. All you have to look at the price of a two-bedroom flat in London to understand the pickle some youngsters might be in.

This does present an opportunity for the housing developers to make a profit. During the last quarter, the Office for National Statistics estimated 42,870 new homes were completed, though not all took fibre as default. Around 88% of plots on new builds contracting with Openreach elect fibre, though this number increases to almost 100% for plots of over 30 premises.

However, there are still numerous developers which are not taking fibre as a default position. Openreach suggests 124,000 of the new homes constructed in the UK in 2018 still lack access to ‘superfast’ broadband speeds of 30 Mbps or more. The situation is gradually improving, though there still much work to do.

With this in mind, Openreach is looking to increase the attractiveness of installing fibre connectivity through cutting costs by up-to 75% for multi-dwelling housing developments up to 29 properties.

“Our existing offer already provides huge benefits to both buyers and builders alike, but we wanted to go further and make sure everybody moving into a new build property can enjoy the advantages of Fibre-to-the-Premises broadband,” said Kim Mears, MD of Strategic Infrastructure Development.

“Our new offer provides a low-cost option to housebuilders and we hope it will help encourage the adoption of this future-proof technology across smaller developments so that no-one’s left behind.”

Although internet speeds might seem like an after-thought to some, research from LSE and Imperial College Business School suggests home-owners in London are willing to pay up to 8% above the market value properties in areas offering very fast internet speeds. The benefits of fibre connectivity for housing developers is key, though there are still some who are demonstrating a preference for copper, presenting a problem to the likes of Openreach and Virgin Media; it would be far simpler to connect properties while they are in the construction stages.

The Future Telecoms Infrastructure Review (FTIR) concluded connectivity in new builds was not anywhere near the standard it should be, while the FTTH Council Europe estimates also paint a dreary picture. Fibre penetration is as low as 1.5% across the UK, woefully short of other nations such as Latvia (46.9% penetration), Sweden (43.6%) or Spain (43.6%). Even the lethargic Germany manages to beat the UK with 2.3%.

Moving forward, the Department of Digital, Culture, Media and Sport is set to publish its opinion from a recent consultation into the matter, with the intention of making it mandatory for developers to install gigabit-capable connections to all new build developments in the future. This is a step in the right direction, though it does surprise us it has taken until 2019 for such rules to be considered.

The consultation should result in a change to the rules, though whether this goes as far as some would want remains to be seen. It would also be a fair assumption that these new rules would not be implemented immediately.

Openreach might have to use the financial carrot for a bit longer while the slow-moving cogs of government click into place.

UK government tries to encourage 5G innovation rural areas

The UK government has set aside £30 million to fund a few winners of a competition to come up with bright ideas about exploiting 5G tech in the countryside.

This marks the latest minor trip to the well that is the National Productivity Investment Fund, a pot of £37 billion in public wedge that is being drip-fed to industry every time the government reckons a certain area of infrastructure could do with a prod in the right direction. 5G and fibre are core national infrastructure topics, as is the development of rural communities, so the government gets two PR wins for the price of one with this announcement – a bargain at £30 million.

“The British countryside has always been a hotbed of pioneering industries and we’re making sure our rural communities aren’t left behind in the digital age,” said Digital Secretary Nicky Morgan. “We’re investing millions so the whole country can grasp the opportunities and economic benefits of next generation 5G technology.

“In modern Britain people expect to be connected wherever they are. And so we’re committed to securing widespread mobile coverage and must make sure we have the right planning laws to give the UK the best infrastructure to stay ahead.”

That latter statement is a nod to ongoing work to give operators better access to places where they can stick their radio gear, which presumably resulted from persistent moaning on the matter from said operators. This could well be especially challenging in rural areas, where land owners are in a strong position to dictate the terms of business.

Among the changes under consideration in this area are:

  • changing the permitted height of new masts to deliver better mobile coverage, promote mast sharing and minimise the need to build more infrastructure;
  • allowing existing ground-based masts to be strengthened without prior approval to enable sites to be upgraded for 5G and for mast sharing;
  • deploying radio equipment cabinets on protected and unprotected land without prior approval, excluding sites of special scientific interest; and
  • allowing building-based masts nearer to roads to support 5G and increase mobile coverage.

“We’re committed to delivering the homes people across the country need, and that includes delivering the right infrastructure such as broadband connectivity and good mobile coverage,” said Minister of State for Housing and Planning, Esther McVey.

“There is nothing more frustrating than moving into your new home to find signal is poor. That’s why we are proposing to simplify planning rules for installing the latest mobile technology – helping to extend coverage and banish more of those signal blackspots, particularly for those living in rural areas.”

Slightly hyperbolic there, Esther, and it’s presumably part of any home-buyer’s due diligence to check the mobile signal when they inspect their prospective purchase, but we get your point. Whether land-owners, farmers, etc agree on the paramount importance of rural mobile connectivity is another matter, but one of the organizations claiming to represent them seems keen.

“The vast potential of the rural economy will only be fulfilled when everyone in the countryside has full mobile connectivity, and we welcome DCMS’s intent to deliver the Prime Minister’s promise of internet access for all,” said Mark Bridgeman, Deputy President of the Country Land and Business Association.

“The current situation, where only 67% of the country can access a decent signal, is unacceptable and government is right to focus on planning reform as a means to removing current barriers but there must also be a balance between the interests of landowners and mobile operators.”

Prospective rural 5G pioneers have a couple of months to apply for a piece of the 30 mil. This sort of thing seems fairly positive on the surface, but it’s debatable how much impact chucking a few mil at a small number of pet projects will have in the great scheme of things. On the flip side any state intervention in private business needs to be treated with caution as the ultimate arbiter of the viability of any business initiative should be the market.

Telco lobby tells BoJo to show his commitment to fibre goals

UK Prime Minister Boris Johnson made some waves with his 2025 100% full-fibre broadband objectives in recent weeks, and now the telcos are asking him to prove it’s more than hot air.

In an open letter to the Prime Minister (BoJo), associations representing the telco industry in the UK have asked for more concrete commitments to broadband deployment. The fear from many is that this claim will turn out to be nothing more than campaign promises and political point scoring, BoJo does have a track-record in that area after all.

“We welcome your campaign’s focus on improving digital connectivity,” the letter states. “The nationwide rollout of full fibre broadband is an ambitious challenge, and requires a mix of leadership, pioneering spirit and Government support to be possible.

“The industry stands ready to rise to this challenge, but we need a Prime Minister who can provide the direction, idealism and commitment to fulfil this ambition. We call on you to give a full commitment that your Government will give us the tools we need to deliver future-proof connections across the UK.”

Signed by the Internet Service Providers’ Association, the Federation of Communications Services and the Independent Networks Co-operative Association, this could be seen as a communique which represents every quarter of the communications segments in the UK.

Looking at the specifics, its not necessarily anything new from these associations however…

Starting with the obvious, cash, the letter applauds the financial commitment made by the UK Government in assisting the industry in deploying future-proofed infrastructure, but more needs to be done. £3-5 billion in public funds is a good start, but the regulatory landscape should be addressed to ensure the environment is assistive when driving towards the ambitious goals.

This was the main concern from industry insiders when reacting to BoJo’s accelerated objectives for full-fibre broadband across the UK. The initial target, 2033, was already ambitious according to our conversations, though if anyone is to get anywhere near full-fibre coverage by 2025 the skills shortage and regulatory landscape were urgent challenges in need of address.

This is the crux of the letter to BoJo; sort out the red-tape maze. The fibre tax is an on-going issue, as is access to wayleaves. The latter is a very difficult issue to fix, as while the new Electronic Communications Code grants telcos more power, many landowners are hitting back with lawsuits due to unreasonable conditions imposed on them by the telcos (rent and/or access rights). The bottleneck of legal complications could risk a slow-down in both mobile and broadband deployment; this is an issue which needs addressing quickly.

Another gripe from the associations is focused on new-builds. Again, this is not a new complaint from the industry, but many feel house-builders should be forced to include fibre-connectivity as default through regulation. This might sound like an obvious trick to drive fibre deployment and adoption, but it is an area which is often overlooked, or overshadowed by other conversations.

Finally, the skills shortage has been raised. This is a point which was brought up by industry insiders following the initial pledge by BoJo; how much faster can the telcos go? Broadband deployment is labour intensive work and there are only so many bodies. Virgin Media and Openreach are already hiring extensively, and it is a bit more complicated than throwing a hard-hat on Joe or Jane Bloggs.

As it stands, roughly 7% of the homes across the UK currently have the opportunity to subscribe to full-fibre broadband, though uptake is roughly half of that number to date. To extend full-fibre to all 32 million homes by 2025, industry has suggested it would cost £30 billion, while the workforce would have to be drastically increased. BT has said it would have to hire another 30,000 field engineers to meet the demands of connecting an average of 20,000 a week to stick to the accelerated timeline.

BT CEO Philip Jansen has already come out in support of BoJo’s objectives, but like the associations here, he has suggested there will need to be changes.

“We are ready to play our part to accelerate the pace of roll-out, in a manner that will benefit both the country and our shareholders, and we are engaging with the government and (regulator) Ofcom,” Jansen said.

In order to aide this objective, BT would have to do some rejigging of its own. This might involve a rethink in how CAPEX is allocated, and even a cut to the dividend. But this would only happen if it made economic sense, and do to this, BT presumably needs more than political rhetoric from the PM.

It should come as little surprise telco lobbyists are whispering in the ear of the new Prime Minister, however there are some valid points. 2025 is an incredibly ambitious (some might say ludicrous) objective, though the red-tape maze will need to be trimmed into shape if there is any hope of getting any where near it.

Huawei gets out of the subsea game

A filing with the Shanghai Stock Exchange has revealed Huawei will be selling its marine cabling business, the first divestment since relationships turned sour with the White House.

Hengtong Optic-Electric is the kind recipient of the marine business, according to Reuters, claiming a 51% stake. Although the business is profitable, $16.66 million in 2018 according to Huawei’s annual report, removing a distraction of a capital-intensive unit might be what the wider business needs in this tenuous period of international dispute.

Huawei’s marine business has been up-and-running since announcing a joint venture with Global Marine in 2008. Over the last decade, Huawei has slowly been eating up more market share, with the firm participating in 90 projects worldwide, building more than 50k kilometres of the undersea cables. It was one of the participants which built the first cable connecting Africa and South America, completed in September.

While it is a firm under pressure on the international political scene, it does have a tendency to be very competitive in all the segments which it casts an eye to. The same could be said regarding the subsea world, and there may be a few parties happy to see the bad of it.

Aside from Huawei, NEC and Alcatel-Lucent are big players in the market, though there are certainly some US names in the mix. SubCom is a big name, while Infinera and Ciena are also players.

Despite many suggesting US Government actions against Huawei, and Chinese companies more generically, have been to reassert the US’ position in the technology industry. That said, while this is one of the scenarios which seem to benefit US firms, there has been plenty of collateral damage, not least to mention the number of US companies in the Huawei supply chain who are watching their business crumble away day-by-day.

It’ll vary from person to person if you believe the link between the trade war and this sale, but you can’t argue about the material impact President Trump is having on the telecoms industry.

Wearables are on the up – IDC

Global shipments of wearable devices are increasingly healthily increasing, according to IDC estimates, up 55% to 49.6 million over the first three months of 2019.

Wearables are a tricky segment for the technology and telco world. So much is promised, a new revolution in digital society, but for years it has failed to deliver on the potential. That said, the last couple of quarters have looked a lot more promising.

“The elimination of headphone jacks and the increased usage of smart assistants both inside and outside the home have been driving factors in the growth of ear-worn wearables,” said Jitesh Ubrani Research Manager for IDC Mobile Device Trackers.

“Looking ahead, this will become an increasingly important category as major platform and device makers use ear-worn devices as an on-ramp to entice consumers into an ecosystem of wearable devices that complement the smartphone but also offer the ability to leave the phone behind when necessary.”

This was perhaps the watershed moment for wearables; standalone connectivity. Smart watches, the flagbearer for the segment on the whole, struggled to gain traction due to a lack of standalone connectivity. These certainly weren’t fashion accessories in the early days and tethering the devices to a smartphone largely undermined the selling points.

With standalone connectivity there is now attention on the devices, and the increasing adoption of voice user interface, the devices more appealing for a wider range of applications. That said, the fitness niche is still proving to be a profitable one.

“Shipments of wristwear – including watches and wristbands – grew 31.6% year over year, and continue to dominate the wearables landscape,” said Ramon Llamas, Research Director for Wearables at IDC.

“While the functionalities and capabilities have grown and changed, the one common thread is the relentless focus on health and fitness. This has resonated strongly with users and health insurance companies alike, and new health and fitness insights attract a larger audience.”

Brand Shipments (million) Market share Year-on-year growth
Apple 12.8 25.8% 49.5%
Xiaomi 6.6 13.3% 68.2%
Huawei 5 10% 282.2%
Samsung 4.3 8.7% 151.6%
Fitbit 2.9 5.9% 35.7%
Others 18 36.3% 26%

Interestingly enough, over the last few quarters the top five manufacturers have been consolidating their position in the market, with the ‘others’ category claiming less and less. Like the smartphone space, this is increasingly looking like a market which will be tough for new-comers to crack, with market preferences shifting towards those who have an established brand in the space.