Nordic winter hits hard as Ericsson loses exec and Nokia cuts more jobs

Swedish Ericsson and Finnish Nokia both announced they’re losing people as the endless winter nights take their toll.

Ericsson’s SVP, Chief Marketing and Communications Officer and Head of Marketing and Corporate Relations, Helena Norrman, is calling it a day after 21 years at the company, with ten of those on the executive team. She’ll be hanging around for a quarter or two, to keep the transition smooth and presumably have a hand in finding her replacement.

“Helena has been instrumental in reshaping and modernizing Ericsson’s global marketing and communications strategy and function,” said Ericsson CEO Börje Ekholm. “With a deep understanding of the company’s priorities she has helped Ericsson navigate through periods of both massive change and considerable challenges. Helena has been a valued member of the Executive Team and I wish her all the best in her future ventures.”

On a personal note, I got a chance to hang out with Helena when I was over in Stockholm last summer and found her to be smart and tough, but at the same time friendly and approachable, in other words great at her job. I’m sad to see you go Helena, but wish you all the best with your next thing. Here were are getting the beers in, on a boat in Stockholm, with Helena on the right.

Ericsson tour boat beers

Over in Helsinki Nokia is trimming another 350 Finnish employees in a further dive to cut costs, as previously reported by Light Reading. “Our industry is one where a constant focus on costs is vital and the planned transformation measures are essential to secure Nokia´s long-term competitiveness,” said Tommi Uitto, Nokia’s Country Manager in Finland. “Such decisions are not easy, but we will do our utmost to support our personnel during the change process.”

“Nokia has made good progress in executing on its strategy, with momentum in providing high-performance end-to-end networks, targeting new enterprise segments and creating a standalone software business. Our early progress in 5G is strong and we continue to increase our investment in this critical technology.

“We will redouble our efforts to ensure that Nokia’s disciplined operating model remains a source of competitive advantage for us, and that we maintain our position as the industry leader in cost management, productivity and efficiency. Finland will continue to be an important country for Nokia to achieve these goals. To this end, we are also currently recruiting into key new technologies in all our campuses in Finland.”

On one hand any job loss announcement sends out the message that the company is struggling to make a profit. But as Uitto noted, this sort of thing is not uncommon among kit vendors and Ericsson has been on a massive downsizing of its own, so these 350 redundancies need to be kept in perspective. Meanwhile Norrman’s departure is a loss to Ericsson, but maybe it will take this opportunity to get someone in from the outside with a different perspective on the company.

DT and Ericsson hit 40 Gbps over millimeter wave

Operator group Deutsche Telekom and kit vendor Ericsson got together in Athens to claim a new record for wireless backhaul.

Right now you’re apparently looking at a maximum throughput of 10 Gbps (gigabits per second) from your wireless backhaul. At a DT service centre in Athens the two companies teamed up to quadruple that threshold using millimeter wave over a distance of 1.4 kilometers. The aim of the demo was to prove the commercial viability of future wireless backhaul technology.

“A high-performance transport connection will be key to support high data throughput and enhanced customer experience in next-generation networks,” said Alex Jinsung Choi, SVP Strategy & Technology Innovation at DT. “While fiber is an important part of our portfolio, it is not the only option for backhaul. Together with our partners, we have demonstrated fiber-like performance is also possible with wireless backhauling/X-Haul solutions. This offers an important extension of our portfolio of high-capacity, high-performance transport options for the 5G era.”

“Microwave continues to be a key technology for mobile transport by supporting the capacity and latency requirements of 4G and future 5G networks. Our joint innovation project shows that higher capacity microwave backhaul will be an important enabler of high-quality mobile broadband services when 5G becomes a commercial reality.”

In the light of AT&T’s absurd rebranding of LTE-A as 5Ge it’s good to see some concrete, substantial 5G progress being demonstrated. 5G will require a lot more base stations and small cells to work, which means a lot more backhaul. So we’re likely to see a lot more of this sort of thing in the coming months and years.

Ericsson calls BS on its full-stack BSS

Kit vendor Ericsson has started the year by writing down almost $700 million to account for the fact that its latest BSS efforts have turned out to be a non-starter.

Its Q4 numbers will feature costs of around SEK 6.1 billion related to the ‘reshaping’ of its BSS (Business Support System) business, half of which will be customer compensations and write-downs, and half of which will be restructuring charges. It looks like Ericsson has concluded this is the only way to get its struggling Digital Services division back on track.

“The company’s past BSS strategy included pursuing large transformation projects based on pre-integrated solutions, including development of a next generation BSS platform, the full-stack Revenue Manager,” said the announcement. “The strategy has not been successful and to date the full-stack Revenue Manager has not generated any revenues.

“The anticipated customer demand for a full-stack pre-integrated BSS solution has not materialized. Delays in product and feature development has also made the full-stack Revenue Manager less competitive. R&D resources in BSS have been focused on full-stack Revenue Manager, causing further delays in product releases of the established platform. In addition, certain complex transformation projects experienced delays and cost overruns.”

No revenues at all? Damn! You have to question the due diligence that ‘anticipated customer demand for a full-stack pre-integrated BSS solution,’ when none whatsoever materialised. Furthermore another SEK 1.5 billion will need to be accounted for over the course of this year, taking the total bill to around $860 billion. Ericsson does still see value in its established platform, Ericsson Digital BSS, which apparently has a decent installed base, so it’s not pulling out of BSS entirely.

A big part of Börje Ekholm’s strategy since he took over has been to dial back some of the over-reach that characterised the Vestberg era. “Ericsson is applying a selective approach to large transformation projects focusing on projects based on available products,” said the latest announcement, and it’s clear that Revenue Manager was just such a project. Ekholm deserves some credit for continuing to look facts in the face and take decisive action.

Ericsson seek Ambani arrest over unpaid RCom bill

Ericsson has filed its second contempt petition against Reliance Communications in the Indian Supreme Court asking for Chairman Anil Ambani to be arrested.

The dispute between Ericsson and Reliance Communications is not a new one, though this certainly steps the conflict up a level. With previous lawsuits focusing on unpaid bills, Ericsson has requested be detained in civil prison and be barred from travel overseas unless he can guarantee the payment of 550 crore rupees (roughly $79 million) owed for various products and services.

According to The Economic Times, Ambani has previously given guarantees in court that the debt would be repaid to the Swedish vendor, though since the December 15 deadline is firmly in the past Ericsson executives have gotten twitchy. The last filing asks Ambani be detained until there are concrete guarantees the bill will be paid.

Having missed the original payment in September, Ambani and Reliance Communications were given until December 15 to find the cash, though this has proved more difficult than expected. Ambani is in a bit of a stalemate at the moment, as while he will not want to be arrested, payment somewhat relies on the sale of licenced spectrum assets to Reliance Jio, a transaction which is being held up by the Department of Telecommunications.

This deal is currently in limbo, as while the National Company Appellate Law Tribunal has given the green light for the sale (and told the Department of Telecommunications to clear it), the hold-up is concerning cash. The Department is standing its ground, stating it is not possible to clear the deal unless there was clarity on payment of dues and associated charges. Reliance Jio CEO Mukesh Ambani has stated the company would not be prepared to take any liable for dues owed by Reliance Communications.

With all parties refusing to give in the road ahead does not look like a pleasant one. Not only has his telco business suffered due to the success of his brother’s disruptive influence on the market, but in refusing to accept liability Mukesh is pushing further misery, and a potential jail sentence, onto Anil.

On the other side of the coin, Mukesh’s Reliance Jio is having a much happier time. The latest figures from TRAI suggest the telco grew its subscriber base by more than 10 million, taking total market share up to 22.46%.

That said, family disputes mean nothing to the Swedes. Ericsson will seemingly push ahead to recover the debt, whatever the cost.

Huawei enters 2019 swinging with $108.5 billion revenues

To say 2018 was a rollercoaster ride for Huawei would be somewhat of an understatement, but the New Year’s message from Rotating Chairman Guo Ping is one of defiance.

Ping has proudly stated the business has reached record sales revenues in 2018, $108.5 billion, signed 26 5G commercial contracts with telcos, shipped more than 10,000 5G base stations, tempted 160 cities and 211 Fortune Global 500 companies into digital transformation contracts and shipped more than 200 million smartphones.

The company might have been the antagonist in the Great Security Saga of 2018, but it is still moving in the right direction. That is, for the moment at least. This message from Ping is one of reassurance. Huawei is proactively seeking to engagement the community, promising everything is above board and legitmate. This is a business which is scrapping for its reputation.

“It has been an eventful year, to say the least,” said Ping. “But we have never stopped pushing forward, and as a result our 2018 sales revenue is expected to reach 108.5 billion US dollars, up 21% year-on-year.”

Reading between the lines you have to wonder whether the business is worried about its dependence on the US. Prior to Christmas, Rotating CEO Ken Hu promised the company’s supply chain was in a stronger position than ZTE, and there was no chance a ban from using US components and IP would create the same disaster zone. Ping seems to be reiterating this message.

“In 2019, we will focus on strategic businesses and strategic opportunities and build a more resilient business structure,” said Ping. “We will continue to optimize our product investment portfolio to achieve end-to-end strategic leadership. As part of this, we need to retain products that are competitive and appealing and phase out those that aren’t.”

Huawei are in a worrying position right now, teetering on a knifes edge. On one side, you have an incredibly successful and innovative business, with a proven track record of delivering results and a culture of account management rivalled by few. This is a vendor a lot of telcos will want to work with. However, with the echoes of accusation getting louder, governments excluding it from 5G bonanzas and the possibility of being banned from using any US goods in its supply chain, some will naturally be nervous about entering into any commercial contract.

The security concerns which plagued Huawei for the majority of 2018, accelerating in the final quarter, look like they will continue over the next couple of months but there hasn’t been an immediate impact on the business just yet. With numerous contracts already secured, Huawei is certainly not going to disappear from the connectivity landscape, but in choosing not to mention any financial predictions for 2019, Huawei has effectively stated what we are all thinking; its dominance is coming to an end.

Looking at the major vendors across the 4G era, the story was relatively clear; Huawei freely counted the cash at the expense of others, most notably Ericsson and Nokia. This will not be the story for 5G as more telcos look for greater diversity in the supply chain and governments place more scrutiny on Huawei, as well as Chinese vendors in general. Perhaps there will not be such a clear winner in the 5G era, with the bounties being more evenly spread throughout the ecosystem.

Huawei is promising to be more secure, more transparent and more innovative than competitors, and it needs to be. But we suspect the damage has already been inflicted. Success seems to have been the downfall for Huawei, forcing the company into the limelight and raising its profile so much questions were bound to be asked. Huawei will certainly continue to be a heavyweight in the connectivity industry, but its era of such spectacular dominance seems to be over.

Qualcomm has one last 2018 5G fest with TIM in Rome

Qualcomm’s events team has had a frantic end to the year, culminating in the demo of a 5G NR video call over millimeter wave in Italy.

The venue was TIM’s freshly unveiled 5G Innovation Hub in Rome. In attendance were Qualcomm and TIM, of course, but also a host of kit and device partners as well as the great and good of Roman public life, including its Mayor Virginia Raggi (pictured). Most of the presentations were in Italian, but they sounded pretty cool, and there were also a bunch of demos from the various partners.

The highlight of the day was what was claimed to be Europe’s first 5G NR video call, completed over the TIM network using millimeter wave. It made use of a Qualcomm modem and some Ericsson kit. The demo is being positioned as ‘a new milestone that will soon lead to the commercial use of 5G mmWave technology in Europe.’

“When we started to define the strategy and the development plans for 5G, we immediately realized that such a massive challenge could not be faced without the support of a wide range of partners committed to the same goal,” said Mario Di Mauro, Chief Strategy, Innovation & Customer Experience Officer at TIM.

“We therefore proposed Qualcomm Technologies set up a place where work on the new 5G services and every business idea could find a quick realization thanks to the support of leading international technology players, innovative partners and start-ups from the local and national ecosystem.”

“Qualcomm Technologies is very excited to be part of this initiative and we would like to congratulate TIM on the significant momentum they have achieved in a short time with the Hub,” said Enrico Salvatori, President Qualcomm EMEA. “A great example of innovation is today’s demo showing the first 5G mmWave mobile smartphone form-factor mobile test device powered by the Snapdragon X50 5G modem connecting to Ericsson 5G Radio Access Network.

“We are very pleased to be part of the team helping to bring 5G to commercial reality in Italy in 2019 and also to realizing the vision of the Hub. 5G is so much more than new devices and smartphones and it will provide significant growth opportunities in new sectors. The Hub provides TIM with a strong platform to leverage the benefits of 5G to a whole host of new customers and industries.”

We’ll leave it at that for now, but we shot a bunch of video interviews while we were there so keep an eye out for those in the coming days. We can also recommend the Farina Kitchen pizza restaurant, which features a proper wood fired oven and does a very naughty fried pizza starter. Here’s a shot of the 5G call taking place.

TIM video call

Ericsson facing £100 million damages bill for network outage – report

With smartphones around the world being reduced to doorstops thanks to Ericsson’s software issues, the vendor is potentially facing a damages bill in excess of £100 million.

The full extent of the impact is a bit hazy for the moment, though it is rumoured to be much more than is officially known. What we do know is the O2 network was down for almost all of Thursday, Softbank’s customers were plunged back to the paper days and there are ‘several’ other customers who were impacted by the issue.

Ericsson has confirmed there were others, though it is remaining tight-lipped on who these operators actually are. That said, as you can see from the crowdsourced data below from wireless coverage mapping company Opensignal, it would probably be a fair assumption to add Vietnam’s Mobifone to the list.

Opensignal Graph

Looking at the bill, The Telegraph has reported Ericsson will be facing a global bill of £100 million to compensate customers for the oversight. Ericsson is yet to respond to a request for comment, though having admitted being the root cause of the data dessert there will certainly be conversations concerning compensation.

IWe understand O2 CEO Mark Evans is currently in discussion with the Ericsson management team regarding the whole issue, and the topic of damages will be included on the agenda. Ericsson UK and Ireland CEO Marielle Lindgren is certainly involved in these meetings, though we have not been able to confirm whether these specific discussions have been escalated all the way up to Group CEO Börje Ekholm.

In fairness to O2, it has not palmed off responsibility completely. Last week, it confirmed it would be reimbursing customers as a result of the outage. Pay Monthly, SMB business and mobile broadband customers will be credited with two additional days of monthly airtime subscription charges by the end of January. Pay-As-You-Go customers will be given a 10% credit on a top-up in the New Year, while PAYG Go mobile broadband customers will receive a 10% discount on a Bolt On purchase.

While some might suggest O2 is not completely blameless and should have had processes and systems in place to compensate for such instances, as the root cause of the disruption does lie elsewhere it does have some bargaining power in the talks. The rumoured £100 million bill would not all be credited towards O2, though as it seemed to be impacted the worst, it may well be seeking a large cheque to compensate for lost revenues associated with reimbursing customers.

Ericsson has narrowed the root cause of the issue down to two specific software versions of the SGSN–MME (Serving GPRS Support Node – Mobility Management Entity). These nodes in the core of O2’s network caused the calamity, as the license for the software expired.

For Ericsson, there might well be no choice. Some are suggesting up to 20 operators were impacted by the expired software license and considering the importance of relationships ahead of the up-coming 5G bonanza, the vendor will need to do everything in its power to ensure favourable terms. It seems buying its way out of this mess might be the only sensible route to take.

Nokia has a great week by simply not screwing anything up

Christmas has come early for Finnish kit vendor Nokia, with its competitors bestowing it with presents of breath-taking generosity.

Huawei was the first to smash through the secret Santa threshold, at least indirectly, when BT confirmed that Huawei would not be considered to contribute to its 5G core infrastructure and that it’s also being removed from legacy cores. This marked the first time a UK operator had directly addressed the matter of Huawei and 5G kit and would appear to be part of the move against Huawei by the US and its allies.

But that was just a stocking filler compared to what the US had under the tree. In a gesture of unprecedented aggression and hostility the US persuaded Canada to arrest Huawei’s CFO and daughter of its founder, Meng Wanzhou, and wants to extradite her to the US in order to face as yet unspecified charges.

This move is unrelated to all the stuff around 5G security and concerns suspected violations of US sanctions against certain countries. This is what drove ZTE so close to extinction earlier this year and would appear to be as much a front in the trade and political war between the US and China as it is any specific point of order. It also marks a significant escalation since no ZTE execs were subjected to this kind of legal rough treatment, and to add insult to injury it looks like some ZTE documents are being used in evidence against Huawei.

Huawei’s misfortunes alone must have had Nokia execs reaching for the breakfast bucks fizz, but when it emerged that Ericsson was responsible for major outages at some of its MNO core network partners they presumably ordered a whole new shipment of champers. The fact that Huawei is desperate to divert attention onto the Ericsson thing too must have resulted in port and brandy being added to the celebratory mix. Nokia’s resulting hangover may have been slightly exacerbated by the apparently effective damage limitation done by Ericsson, but on balance it can reflect on a pretty catastrophic week for the competition.

Nokia has sent out a few press releases this week but whatever incremental achievements they claim pale into insignificance compared to the misfortunes of Huawei and Ericsson. In the run up to Christmas Nokia would be well advised to focus all its resources on simply not screwing anything up and letting its competitive environment take care of itself.