Why doesn’t Huawei publish the details of its 5G deal wins?

Huawei says it has signed more 5G contracts than any of its competitors, but for some reason chooses not to publish any details.

This stands in stark contrast with Ericsson and Nokia, who both have publicly available web pages that not only offer a live total of their 5G deals wins (Ericsson says ‘commercial 5G agreements or contracts’ which seems a bit slippery), they also name as many of them as they have been authorised to and even detail how many live networks their kit is present in. Ericsson is especially transparent in that last regard.

Huawei has no publicly available information that we’re aware of, apart from ad hoc updates such as the one we reported on yesterday. We don’t know any of the operators it has signed 5G contracts with, nor how many live networks it is part of. Only in response to our specific questioning yesterday did we learn that the 91 number refers only to unique operator 5G RAN wins.

We asked Huawei why this is and were told that it’s up to their customers when the agreements are announced. The inference, then, is that none of its customers have given Huawei permission to go public, which seems odd. Or maybe not. It’s no secret that doing business with Huawei now has major geopolitical implications, so maybe all of its 5G partners want to keep that fact quiet, for fear of drawing the petulant attention of the US.

It’s hard to believe that not a single operator, for example the three Chinese MNOs, would want to go public. In fact Huawei execs were perfectly happy to name them when we asked about this yesterday, so why not publish? Vodafone’s European operations were also mentioned, so that’s a bunch of named wins already. And what about the other 24 wins in Asia, surely they’re not all scared of Trump.

The problem this creates for Huawei is that it helps bolster the US-driven narrative that a lack of transparency is reason enough to call all Huawei’s activities into question. We have written many times that Huawei deserves the same legal due process granted to everyone else, but it doesn’t help its cause when it chooses to be more opaque than its competitors over even minor matters such as this.

GSMA holds firm but this weekend could be carnage for MWC

Companies from all corners of the telecoms ecosystem will be having emergency meetings over the next few days to decide whether or not to pull out of the big show of the year.

We don’t have any more confirmed cancellations but the telecoms grapevine tells us that a lot of companies are in the process of doing risk assessments regarding the threat posed by the coronavirus outbreak. While some may choose to provide updates over the weekend, we wouldn’t be surprised to see a flood of announcements on Monday.

The decision by Ericsson to cancel its entire presence at the event will have spurred the rest of the industry into action, which may otherwise have left the decision to the last minute. Even if companies disagree with Ericsson’s assessment of the situation, they will be under pressure to explain why. They will also presumably be having earnest conversations with their insurers and legal departments.

Meanwhile the GSMA has responded to Ericsson’s decision by stressing its commitment to the event. “Ericsson’s cancellation will have some impact on our presence at this time and will potentially have further impact,” said the GSMA press release. “The GSMA continues to monitor and assess the potential impact of the coronavirus on MWC Barcelona 2020 as the health and safety of our exhibitors, attendees and staff are of paramount importance. MWC Barcelona 24-27 February 2020, will proceed as planned.”

Let’s see if they’re still saying that on Monday.

Major blow to MWC as Ericsson pulls out due to corona virus

One of the biggest exhibitors at Mobile World Congress 2020 has decided the risk posed by the corona virus outbreak is too great.

Ericsson’s stand occupies half an entire hall at the biggest telecoms trade show of the year, so its decision to pull out just two weeks before it’s due to start is a major blow. As you would expect, the networking vendor has been keeping an eye on the spread of the novel form of the virus, for which there is currently no vaccine. It has decided that having so many people crammed together for a week is just too great a risk.

“The health and safety of our employees, customers and other stakeholders are our highest priority,” said Ericsson CEO Börje Ekholm (pictured above at last year’s MWC). “This is not a decision we have taken lightly. We were looking forward to showcasing our latest innovations at MWC in Barcelona. It is very unfortunate, but we strongly believe the most responsible business decision is to withdraw our participation from this year’s event.”

Of even greater significance will be the precedent this sets, following the announcements from LG and ZTE earlier this week. It’s now highly likely that other exhibitors will follow suit and that the show itself could be cancelled. The GSMA, which runs MWC, is in a very difficult position and if the epidemic continues to spread rapidly it come under increasing pressure to call the whole thing off.

Vodafone claims dynamic spectrum sharing first

The point of DSS is to allow smooth transitioning between 4G and 5G by allowing them to share the same spectrum, dynamically.

Vodafone reckons it’s the first to demonstrate this handy tech over a couple of low frequency bands (700 and 800 MHz). It announced it on a blog late last week, but kept so quiet about it that we only just found out. As if to demonstrate the folly of a complete Huawei ban, the Chinese vendor was involved, but so was Ericsson and, inevitably, Qualcomm.

The specific first was the simultaneous use of two bands on one 5G NSA device. Only the 700 MHz band did any dynamic sharing, however, with the other one used as an ‘anchor’ whatever that means. Light Reading attempted to shed some light on it here. It looks like DSS has never been a thing before, so this is quite a big deal.

Outside of technological milestone gathering, this matters because it should minimise the disruption caused by the switch to 5G. For operators it means that, in terms of spectrum, they don’t have to hold on with one hand before letting go of the other and will effectively make refarming a thing of the past, at least in theory.

Ericsson shares drop on disappointing North America numbers

Sales at kit vendor Ericsson barely grew in Q4 2019, with most of the blame being pinned on the protracted merger of T-Mobile US and Sprint.

When adjusted for adjustments total sales increased just 1% year-on-year, thanks to a 9% decline in North America. As you can see from the tables below, Ericsson had plenty of growth earlier in the year in North America, so this is a fairly significant reversal of fortunes. Ericsson would like us to believe it was an aberration brought about by the uncertainty surrounding the TMUS/Sprint merger, but that’s been going for a while so it’s not obvious why it would suddenly have such a profound effect.

“Due to the uncertainty related to an announced operator merger, we saw a slowdown in our North American business in Q4, resulting in North America having the lowest share of total sales for some time,” said Ericsson CEO Börje Ekholm. “However, the underlying business fundamentals in North America remain strong.

“Operating income was impacted by increased operating expenses. The increase is related to the Kathrein business acquisition, increased investments in digitalization and added resources to strengthen security as well as our Ethics and Compliance program. For 2020 we expect somewhat higher operating expenses, which will not jeopardize our financial targets.”

It looks like investors didn’t totally buy the North America narrative either, with Ericsson’s shares down around 8% at time of writing. Ekholm spoke at length about how important it is to continue to build for the long term and not sacrifice that for short-term gains. That’s fine, but many more quarters like this and even that strategy will be called into question.

SK Telecom claims multi-vendor 5G transmission first with Ericsson and Samsung

Korean operator SK Telecom says it has managed the world’s first standalone 5G data session on a multi-vendor commercial 5G network.

Single vendor set-ups are increasingly out of fashion in the telecoms world, with the traditional wariness about vendor lock-in compounded by geopolitical uncertainty that threatens to compel the exclusions of certain vendors that shall remain nameless. So this is an important step for 5G as well as another opportunity for South Korea to virtue-signal about how cutting-edge it is when it comes to 5G.

“With the successful standalone 5G data call on our multi-vendor commercial 5G network, we are now standing on the threshold of launching standalone 5G service, a key enabler of revolutionary changes and innovations in all industries,” said Park Jong-kwan, Head of 5GX Labs at SK Telecom. “SK Telecom will offer the best 5G networks and services to realize a whole new level of customer experience in the 5G era.”

The two vendors in question were Ericsson and Samsung. SKT wasn’t inclined to go into great depth on how this pivotal feat was achieved. We do know it involved applying SA NR radio to existing NSA base stations and, hey presto, it all worked a treat. While it was at it SKT decided to dabble in a spot of network slicing and edge computing, which frankly seems like showing-off, but then again if you’ve got it, flaunt it, innit.

TIM claims 5G speed record with help from Ericsson and Qualcomm

A trio of telecoms trailblazers managed to break the 2 Gbps barrier with 5G over 26 GHz, which is apparently a European record.

TIM, Ericsson and Qualcomm have a rich history of collaborating in the name of self-promotion over 5G and there’s nothing like a speed record for a bit of corporate chest-beating. TIM has a whopping 400MHz of spectrum in this millimetre wave band, which is the main reason it’s able to set records such as this. Meanwhile, as ever, Ericsson provided the radio and Qualcomm the modem.

“This milestone paves the way to the development of new 5G solutions to grant fixed ultrabroadband to families, companies and public authorities not yet covered,” said Michele Gamberini, TIM’s CTIO. “This also includes coverage dedicated to the development of robotics and automation digital services in the smart manufacturing area. All of our customers will therefore be able to take advantage of a wide range of integrated solutions that will allow them to fully enter the digital society”.

“We are extremely pleased that TIM has chosen Ericsson’s 5G technology to achieve this important milestone, placing our country at the forefront of the commercial implementation of the fifth generation of mobile networks,” said Emanuele Iannetti, Country Manager at Ericsson Italy. “Ericsson thus confirms its technological leadership and its readiness to anticipate any market demands.”

“Qualcomm Technologies congratulates TIM on this significant milestone which again demonstrates the potential of 5G mmWave technology and shows how operators are able to use a wide range of spectrum bands to deploy 5G,” said Enrico Salvatori, president, Qualcomm EMEA. “2020 will see a significant expansion in 5G coverage and the use of mmWave bands will play a clear role in the build-out.”

The rest of the TIM press release was mostly spent going on about how this proves the company was right to blow loads of cash at the last Italian spectrum auction. It still remains to be seen how useful high frequency spectrum will be in real life, or indeed how much use there will be for such high data rates, but it’s always nice to be able to claim you’re at the cutting edge regardless.

Telenor Norway goes all-in on Ericsson for 5G RAN

Norwegian vendor Telenor has announced Ericsson will be the sole vendor for its 5G radio access network, replacing incumbent Huawei.

“We are happy to announce that we have chosen Ericsson to start building the future 5G radio network in Norway, and I am confident we now are perfectly positioned to be in the forefront of the country’s network modernisation,” said Petter-Børre Furberg, CEO of Telenor Norway.

“As the first mobile operator on 5G in Scandinavia, Telenor will ramp up the roll out of 5G to our customers in Norway in 2020. The full modernisation of the mobile network in Norway is an ambitious undertaking, and something we are excited to get started on.”

A wholesale change of vendors such as this is a tricky process if you want to avoid any disruption to the service. The modernisation of the RAN, which currently uses entirely Huawei kit, is expected to take 4-5 years. So Huawei will be in play during that time, including some of the 5G upgrade work. That implies this is a business decision rather than a security one, which is consistent with the Norwegian governments apparent decision not to ban Huawei from 5G.

“We expect 5G to be the one technology that will transform our society the most in the next decade,” said Sigve Brekke, CEO of Telenor Group. “We have been through a thorough process to evaluate all the main vendors’ ability to deliver on Telenor’s requirements for the future mobile network.

“When selecting the vendor for the radio access network, we have considered important factors like technical quality, ability to innovate and modernise the network, commercial terms and conditions, as well as carried out an extensive security evaluation. Based on the comprehensive and holistic evaluation, we have decided to introduce a new partner for this important technology shift in Norway.”

This news comes hot on the heels of Telia Norway making exactly the same decision, so Ericsson has Norway pretty much sewn up when it comes to RAN work for the foreseeable future. In the core Ericsson has to coexist with Nokia and that is set to continue with 5G. For Huawei, being frozen out of a market in which it is being allowed to compete freely must be a significant blow.

Ericsson gets a $150 million bargain on its corruption fine from the US

Swedish kit vendor Ericsson got a $150 early Christmas present from US authorities after its fine for violating corruption laws was finally revealed.

The consequence of being found guilty of using back-handers to grease the wheels of commerce in Djibouti, China, Vietnam, Indonesia and Kuwait as recently as Q1 2017 is a fine of SEK1.06 billion. But since Ericsson had already accounted from a fine of SEK 11.5 billion that means it now has 150 million bucks more than it expected to. It can now spend that bonus wedge on Christmas presents which, of course, it will account for in a transparent and correct manner.

To be fair to Ericsson this is probably common business practice in some or all of those countries, but the trick is not to get caught isn’t it? Both the US Department of Justice and the Securities and Exchange Commission have had a piece of this action and seems to have split the winnings equally, so Christmas should be fun there too.

The DoJ is trousering 520,650,432 in return for promising to drop all charges if Ericsson keeps its hands clean for the next three years. Presumably, if Ericsson does comply and the charges are dropped, the DoJ won’t pay back the half a bil in spite of Ericsson no longer being legally guilty of doing anything wrong. That makes the whole thing smell like state extortion, but what do we know?

Meanwhile the SEC prefers to round its takings to the nearest 10k and is pocketing $539,920,000, which hilariously includes $81,540k in interest. This fine seems to be for the same activities so it’s not clear why Ericsson has to pay it twice. Maybe the fine was always going to be around a bil and the DoJ and SEC couldn’t agree on jurisdiction, so decided to split it down the middle.

“The DoJ proceeding is a criminal enforcement action and the SEC proceeding is a civil enforcement action,” explains the Ericsson announcement. “The agencies resolve their investigation independently of one another using their own discretion and applying different standards of proof.  As a result, the DoJ and SEC have come to different conclusions based on the same facts.”

“I am upset by these past failings,” said Ericsson CEO Börje Ekholm. “Reaching a resolution with the US authorities allows us to close this legacy chapter. We can now move forward and build a stronger company. The settlement with the SEC and DOJ shows that we have not always met our standards in doing business the right way. This episode shows the importance of fact-based decision making and a culture that supports speaking up and confronting issues. We have worked tirelessly to implement a robust compliance program. This work will never stop.”

“Through slush funds, bribes, gifts, and graft, Ericsson conducted telecom business with the guiding principle that ‘money talks.’” said U.S. Attorney Geoffrey Berman. “Today’s guilty plea and surrender of over a billion dollars in combined penalties should communicate clearly to all corporate actors that doing business this way will not be tolerated.”

“Implementing strong compliance systems and internal controls are basic principles that international companies must follow to steer clear of illegal activity,” said Don Fort, Chief of IRS Criminal Investigation.  “Ericsson’s shortcomings in these areas made it easier for its executives and employees to pay bribes and falsify its books and records.  We will continue to pursue cases such as these in order to preserve a global commerce system free of corruption.”

So the IRS got a piece of the action too – nice. Here are the specific pieces of naughtiness Ericsson admitted to committing to the DoJ, the charges for which, don’t forget, will probably be dismissed in three years’ time.

Between 2010 and 2014, Ericsson, via a subsidiary, made approximately $2.1 million in bribe payments to high-ranking government officials in Djibouti in order to obtain a contract with the state-owned telecommunications company valued at approximately €20.3 million to modernize the mobile networks system in Djibouti.  In order to effectuate the scheme, an Ericsson subsidiary entered into a sham contract with a consulting company and approved fake invoices to conceal the bribe payments.  Ericsson employees also completed a draft due diligence report that failed to disclose the spousal relationship between the owner of the consulting company and one of the high-ranking government officials.

In China, between 2000 and 2016, Ericsson subsidiaries caused tens of millions of dollars to be paid to various agents, consultants and service providers, a portion of which was used to fund a travel expense account in China that covered gifts, travel and entertainment for foreign officials, including customers from state-owned telecommunications companies.  Ericsson used the travel expense account to win business with Chinese state-owned customers.  In addition, between 2013 and 2016, Ericsson subsidiaries made payments of approximately $31.5 million to third party service providers pursuant to sham contracts for services that were never performed.  The purpose of these payments was to allow Ericsson’s subsidiaries in China to continue to use and pay third party agents in China in contravention of Ericsson’s policies and procedures.  Ericsson knowingly mischaracterized these payments and improperly recorded them in its books and records.

In Vietnam, between 2012 and 2015, Ericsson subsidiaries made approximately $4.8 million in payments to a consulting company in order to create off-the-books slush funds, associated with Ericsson’s customers in Vietnam, that were used to make payments to third parties who would not be able to pass Ericsson’s due diligence processes.  Ericsson knowingly mischaracterized these payments and improperly recorded them in Ericsson’s books and records.  Similarly, in Indonesia, between 2012 and 2015, an Ericsson subsidiary made approximately $45 million in payments to a consulting company in order to create off-the-books slush funds, and concealed the payments on Ericsson’s books and records.

In Kuwait, between 2011 and 2013, an Ericsson subsidiary promised a payment of approximately $450,000 to a consulting company at the request of a sales agent, and then entered into a sham contract with the consulting company and approved a fake invoice for services that were never performed in order to conceal the payment.  The sales agent provided an Ericsson employee with inside information about a tender for the modernization of a state-owned telecommunications company’s radio access network in Kuwait.  An Ericsson subsidiary was awarded the contract valued at approximately $182 million; Ericsson subsequently made the $450,000 payment to the consulting company and improperly recorded it in its books.

There was clearly a fair amount of dodgy stuff going on in the above cases, but none of it is especially shocking. Under-the-table payments are an endemic issue everywhere in the business world and the trick is to launder them such that they look legit. Ericsson clearly failed to do this and that’s really what it’s being punished for.

But nobody seems to be questioning the US’s jurisdiction in prosecuting this matter. None of the back-handers were paid in the US or even seemed to involve US companies, so why is the US policing this matter? Maybe the answer lies in the fines, none of which will apparently find their way to the countries supposedly corrupted by all this. Even with a $150 million discount, the US authorities are now the ultimate beneficiaries of Ericsson’s naughtiness.