Nokia UK CEO: Where are the bodies to build the networks coming from?

Cormac Whelan, Nokia’s UK CEO raised an interesting point in a recent conversation with Telecoms.com. Where are the employees to implement ambitious rollout plans?

As it currently stands, the UK is rapidly upgrading its nationwide broadband network. Virgin Media is expanding its fibre footprint by more than 100,000 premises a quarter, while Openreach is doing the same number each month. CityFibre has got approval to expand its fibre footprint to 70 cities across the UK, and various different alt-nets are scaling as well. Toob is growing in Southampton, Gigaclear is growing in the South-West and HyperOptic is scaling in London.

Arguably, the UK has one of the fastest growing fibre initiatives across Europe. Yes, it missed the memo which was sent to everyone else years ago, but it is finally arriving to the fibre feast. There are calls to increase the pace further, see BoJo’s ridiculous comments, but you have to wonder how much quicker the industry can actually go.

“Where are the bodies going to come from?” Whelan asked during a conversation at the Connected Britain conference in London. It’s a simple question, but one few have actually asked.

Last year, Openreach recruited 3,000 staff to help with its fibre plans, and it plans to add another 3,000 across 2019. Virgin Media’s Project Lightning is continuing to progress, and it is recruiting. If the alt-nets want to continue to scale, they will also need more bodies. But, finding these individuals is not simply a case of slapping a hard-hat on Joe Bloggs. These are specialised careers with a lot of training, soon enough the candidates are going to start drying up.

One of the big issues facing the industry, as Whelan points out, is the attractiveness of working elsewhere. The UK is a cosmopolitan society, but that is changing. With Brexit on the horizon, the UK is becoming less appealing to EU workers. There are more EU citizens arriving on UK shores than leaving, but immigration is at its lowest levels since 2013.

The big question which will need to be asked is whether it is more prosperous for workers who have the skills attractive to telcos to work in the UK or in the country of their birth? This is not suggesting that all field engineers are of EU dissent, but due to education trends over the last couple of decades there are less UK citizens suited to these professions than in previous generations.

The millennials were a generation ushered towards university. The percentage of UK citizens who are now in their 20s, 30s and early 40s have a higher proportion of degrees than previous generations. It is becoming less attractive to go to university nowadays, such is the horrendous price of tuition fees, but that does not fix the problem. Attracting workers from the EU was one way to fill the gaps in these fields of expertise.

As Whelan pointed out, Poland has an on-going broadband initiative running nationwide, while so do Hungary and Germany. Soon enough, the Czech Republic will be kicking off their own projects and so will numerous other EU nations. The UK is not the only place in Europe running large scale broadband schemes, but with Brexit on the horizon it is becoming increasingly unattractive as a place of work for EU citizens. Just as the UK telco industry needs to hire more field engineers, the availability of candidates might just start drying up.

Addressing BoJo’s preposterous claims 100% FTTH could be delivered by 2025, Robert Kenny, co-founder of Communications Chambers, suggested Brexit would be his downfall. Fortunately, the point Kenny is making also supports the argument being made here.

“Brexit has resulted in a large number of continental European engineers and construction workers returning home from the UK, meaning that telcos are having a nightmare recruiting the staff necessary even for the current pace of deployment,” Kenny wrote on LinkedIn. “Quite how they would radically accelerate is not clear.”

Some might suggest technology can take over and plug the gaps. Yes, the likes of Openreach and Virgin Media are getting better and faster at rolling out fibre networks. However, Whelan believes the technological gains will only help these companies maintain the current rate, to increase the pace of deployment there is only one solution; hire more people.

The UK is making progress. After years of ignoring the benefits of a fibre diet, the penny seems to have dropped. However, as with everything in life, some people will never be happy. It doesn’t matter is the UK is adding 3-4 million fibre premises to the network a year, more is always better. But more might not be possible before too long.

How is 5G getting on?

With the FCC announcing the results of its latest spectrum auction, we’re having a look at how the networks and supporting ecosystems are developing around the world.

Of course, it is critically important to deploy 5G networks, this is the most expensive and time-consuming aspect of the connectivity euphoria, but all the other cogs have to click into place as well. Without the devices and applications on the market to make use of the speed, you have to actually wonder what the point is.

But to start with, how many countries have actually hit the on-switch?

DISCLAIMER: We appreciate we haven’t covered every possible country, telco, product, offer and service, but that would be a monstrous task. If you consider this more of a summary of progress, you might not be disappointed.

US and South Korea take the lead, but not by much

It will have surprised very few that the US and South Korea were first to market, this was a prediction made years ago, though there were quite a few countries are following quickly.

Who made it first is a bit of a contentious discussion. The three major MNOs in Korea hit the on-switch first, though Verizon claims as the connectivity euphoria was only available for celebrity influencers, it should be considered the first. Starting on April 11, Verizon launched 5G in Chicago and Minneapolis. Since then more cities have been added to the mix.

What is worth noting is that this is mobile 5G. Technically both Verizon and AT&T launched home services in 2018, though as there were no mobile devices available it was nothing more than a misleading marketing plug. AT&T is now present in various cities throughout the US, while Sprint has launched in a handful of regions, making use of its 2.5 GHz spectrum, at the end of May. Completing the big four in the US, T-Mobile US will start to launch towards the end of 2019.

Sticking with North and Central America, the Canadian telcos have plans to launch 5G services in 2020, as does America Movil in Mexico. The rest of Central America will stagger in over the next couple of years, dealing with 4G connectivity challenges first.

In Asia, we have already discussed South Korea, but it is worth noting it is hoovering up subscriptions. Contrary to Verizon’s claim, the telcos insist it was a full-service switch-on, while the Ministry of Science and ICT said 260,000 5G subscriptions were added in the first month.

South Korea is also steaming along with network densification plans, claiming to have deployed 54,202 5G base stations by the beginning of May. This is where other nations might face more of a challenge, considering how concentrated the South Korean population is in Seoul and the size of the country.

China is a country which fits into this challenging mould. Despite being one of the technology leaders in the 5G world, it is not one of the fastest to market. China Unicom launched some test projects this year, with plans to launch in 2020, while China Mobile is planning to have 10,000 5G base stations by the same date. The big question is how quickly China can roll out hardware across such a vast geographical area.

Elsewhere in Asia, Japan’s telcos are also targeting a 2020 launch date, as is Viettel in Vietnam and StarHub in Singapore. The Indian Department of Telecommunications has 2020 plans across the industry, while Reliance Jio is being predictably aggressive, also suggesting it will launch its own device.

In Europe, it has been suggested the telcos will be slower off the mark than others around the world, though there are some bright spots defying the trends.

EE has already switched on its network in the UK, while Vodafone will follow next month. O2 plans to launch towards the end of 2019, as will Three. One of the issues facing the UK in the immediate future is the price of tariffs, which are notably higher than 4G. Once all four MNOs are up and running this might calm down, but for the moment, 5G is just for the wealthy.

Switzerland is a country which is seemingly leading the European charge however. Having launched 5G in April, Swisscom plans to have 90% of the population covered by the end of the year. Sunrise has also launched, while a third MNO Salt will be in hot pursuit before too long.

In Finland, Elisa Oyj first turned on its 5G network in 2018, and has been scaling the deployment to various different cities across the first couple of months as devices have become available. Telia has also launched in a handful of cities, while DNA plans to launch not only a mobile service, but also a FWA offering in Vantaa.

Orange in France and Telecom Italia in Italy are two other telcos which plan to launch across 2019, though the majority seem to be targeting 2020 for any 5G buzz.

The Middle-East is another region which is at the front of the 5G pack, and perhaps it should come as little surprise considering the wealth of the citizens and also the smaller size of the nations involved.

Ooredoo in Qatar is another telco which is claiming to be the first worldwide to deliver commercial 5G services, while it has also launched in Kuwait alongside Zain. UAE 5G became available via Etisalat UAE on May 30, while du is planning on launching in the immediate future. Bahrain will also see launches in 2019, according to the government, while it looks like it will be 2020 for Saudi Arabia, though many of the messages from here are confusing.

As you would expect, many of the 5G rollout plans in South America are somewhat being the curve, though there are some exceptions. Entel in Chile is targeting 2020, as is Telefonica in Columbia, while Brazil is also confident.

Africa is similar to South America, with some of the wealthier nations pushing ahead while the majority are still tackling the massive digital divide.

In South Africa, Vodacom and Rain are planning to launch 5G this year, while MTN hasn’t announced any timelines. Telecom Egypt and Nokia have reportedly come to an agreement to launch in 2019, although specifics are light on the ground, and Safaricom also have 5G plans this year. The Nigerian government has set 2020 as a target.

How long will we have networks without the devices?

Of course, the networks are largely redundant without the devices to make use of the connectivity euphoria.

Starting with the biggest device manufacturers, Samsung has already released its first 5G-compatible device onto the market. The Samsung S10 5G is available through most MNOs who are heading towards the finish line, while some other device manufacturers have signed exclusive agreements.

The second biggest smartphone manufacturer is somewhat of a different story however. With Huawei facing problems with its operating system, Google has paused the partnership thanks to the ban put on working with Chinese companies by the White House, many telcos are wary of selling the devices. In the UK, for example, both EE and Vodafone have removed the Huawei Mate X from their websites, refusing to accept pre-orders until the issues have been clarified.

Apple is one brand which is sitting out the first wave of 5G smartphones, though this is hardly a surprise. This seems to be the strategy from Apple in many different areas; you don’t necessarily have to be the first but be the best. By the time Apple comes to launching its own device, the initial bugs and bumps will have been identified (and hopefully corrected) to deliver the experience which consumers have come to expect.

Looking at the best of the rest, Motorola might have been one of the first to market, but it has fallen out of the headlines since. The issue was the 5G component of the device was a module which could be clipped onto a standard smartphone. Why would anyone consider such a device when there are better alternatives?

The OnePlus 7 Pro has launched exclusively with EE in the UK and Elisa in Finland, while the LG V50 ThinQ looks like a very useful device targeting multi-taskers and gamers. The Oppo Reno 5G and Xiaomi MI MIX 3 are also available.

There are also various connectivity plug-in hubs, smart home appliances and FWA devices which are either currently on the market, or soon to be, available for consumers. The issue which many will face over the remainder of 2019 and early 2020 is a tsunami of devices which will be compatible with 5G. All of these devices will be fighting to attention, so be prepared for 5G to be plastered across every billboard, radio message, TV ad and double decker bus.

What to do on the impossibly fast phone

This is the issue which many will face over the coming months; you have the device, you have the 5G contract, but what’s the point?

In some cases, it does make sense to have a contract without the applications. In central London, for example, when 4G networks are congested, 5G will address a challenge. However, many will be hoping for more.

There are some interesting ideas floating around. Most will focus on faster download speed, though this is largely redundant. If you can get speeds of 100 Mbps, 80% of it will largely be data headroom as there are few applications currently on the market (and applicable to the everyday user) which would require the full-potential of 5G.

In South Korea, telcos are offering customers add-ons to reduce latency. It would be considered a premium, and a very niche service to offer, but for gaming enthusiasts this might be appealing for an extra couple of quid each month. Real-time gaming, VR, immersive content, these are applications which are most relevant today, but it won’t be long before others emerge.

The killer 4G application did not appear straight away either. It took time for the developers to play around with ideas, test out the potentially good ones and scale the few which were realistic. Right now, 5G might look like a solution without a problem, but it won’t be too long before we are all demanding the speeds which seem so unnecessary today.

Are telcos asking for too much cash?

This is the big question; how much do you charge for 5G?

On the one hand, it has cost the telcos a lot of money to roll out the networks. The bean counters will want a return on investment sharpish, encouraging marketing teams to push premium tariffs. However, when you look at the efficiency gains of 5G, it makes the delivery of connectivity much cheaper for the telcos, setting lower tariffs to encourage more people to upgrade might be a better long-term solution for pressures on the spreadsheets.

It does look like the telcos are opting for the more expensive option in the first instance however.

EE and Vodafone have announced their tariffs in the UK, and should you want to get a satisfactory amount of data for the month, you’ll have to send north of £70 a month. This would not be deemed as acceptable to most.

In the US, Verizon is offering customers the chance to upgrade for an extra $10 a month on more premium 4G contracts, while AT&T is charging $70 a month. T-Mobile US, the company most likely to disrupt the pricing strategies of this pair, has not made any announcements to date.

In South Korea, the tariffs are a little bit friendlier, with the option to get data allowances of up to 250 GB being a lot more expensive. Overall, there is little consistency, with different regions taking different approaches to both pricing and data allowances.

With only a handful of operators offering 5G connectivity, there is always a risk of pricing themselves out of the market. As more launch, the price will come down and, in a few markets, there will be disruptors running loss leader packages. To get a better handle on pricing, we will have to wait a while.

BT looks to Juniper to trim the network bloat

BT has opted for Juniper Networks to deliver its Network Cloud infrastructure initiative, paving the way for BT’s Network Cloud roll-out.

The platform itself is designed to offer BT a number of different upgrades to its current position, including improvements to converged fixed and mobile services rollout to consumers and businesses, faster time-to-market for network services and improved voice and video deliverability and scalability.

The initiative will hope to roll BT’s networks including 5G, Wi-Fi and fixed-line into one virtualised service, a common framework which can be shared across all BT offices nationally and globally. Moving into the single framework will also help BT deliver cost efficiency saving, a key component of recent strategies to make the telco into a leaner machine.

Aside from the EE component of the business, BT has been one of the more sluggish players in the telco space, with the spreadsheets bearing the brunt. If BT is to make the most of up-coming connectivity evolutions, IOT and 5G for example, the business needs to be in a fitter position. This initiative is one of the strands of this plan.

“This move to a single cloud-driven network infrastructure will enable BT to offer a wider range of services, faster and more efficiently to customers in the UK and around the world,” said Neil McRae, Chief Architect at BT. “Being able to integrate seamlessly with other partners and solutions and aligning with our roadmap to an automated and programmable network is also important.”

“By leveraging the ‘beach-front property’ it has in central offices around the globe, BT can optimize the business value that 5G’s bandwidth and connectivity brings,” said Bikash Koley, CTO at Juniper Networks. “The move to an integrated telco cloud platform brings always-on reliability, along with enhanced automation capabilities, to help improve business continuity and increase time-to-market while doing so in a cost-effective manner.”

For Juniper, the bean-counters will be happy with the win, with numerous services being undertaken across different aspects of the network. Contrail Networking will be used for dynamic end-to-end networking policy and control for telco cloud workloads, AppFormix will run the cloud operations management suite, while the QFX Series also features.

BT shows off its shiny new Nokia silicon

UK telco BT is one of the first customers for Nokia’s catchily-named 7750 SR-14s IP routing platform, which features its special FP4 chip.

Nokia first announced all this shiny new core gear a couple of years ago, but it looks like the sales cycle for this sort of thing is fairly protracted. So this is an important deal win for Nokia, but perhaps even more so for BT as it’s a clear statement of intent when it comes to investing in its core network. Apparently traffic through the BT network is growing by 40% annually so it needs to show it can handle it.

“BT’s FTTP footprint is growing on a daily basis, and we are launching 5G this year in the busiest parts of 16 of the UK’s busiest cities,” said Howard Watson, BT Group CTIO. “These technologies create an amazing customer experience, and drive people to watch more, play more and share more. We have to stay ahead of the massive traffic growth that this will bring, and Nokia are a key part of that, giving us the capacity and automation that we need.”

“Nokia’s 7750 SR-s platform, based on our FP4 silicon, will offer BT’s network the enhanced capabilities and automation needed to address continuously mounting capacity demands as it moves toward 5G,” said Sri Reddy, Co-President of IP/Optical Networks at Nokia. “Our exclusive partnership will allow BT’s converged core network to grow, and move to a programmable, insight-driven network architecture, creating a platform for BT’s growth to continue as demand for its services in FTTP and 5G expands.”

As you can see there’s a fair bit of buzzword-dropping in the canned quotes. The significance of FTTP and 5G in this context essentially amounts to the fact that network traffic is likely to keep growing rapidly for quite a while. For Nokia this is a juicy deal win in a core network market that, admittedly, is largely denied to one of its biggest competitors.

Three UK readies assault on broadband market

While its latest financials might not look mind-blowing, Three UK is steading the ship as it casts its eye towards the promised land of convergence and 5G.

Convergence is not really much of a buzzword anymore, such is the accepted nature of the model across the telco industry, though Three is seemingly readying itself for a broader push into broadband segment. The first job is to rebrand Relish, which will happen next month, and the next box to tick will be 5G.

“We are well set up for some transformational shifts in 2019 for our customers and our employees,” said Three UK CEO Dave Dyson. “It will be a year when our customers will start to see the real benefits of the next generation of 5G “mobile” technology, a technology that will not only replace 4G, but will also replace the need for wired broadband services.”

With the new ‘Three Broadband’ branding and a 5G network launching in H2, the Three marketers will have plenty to talk about when attempting to add to the 800,000 broadband customers it already has. In terms of the current state of play, Three said 10% of its current customer base is already ‘converged’ but 5G offers an opportunity to accelerate growth in the broadband business.

The team feels it has an advantage over rivals with its 5G holdings, offering superfast broadband connectivity which is not reliant on fibre. Whether UK consumers are swayed by the Fixed Wireless Access promise remains to be seen.

Looking at the position of the business, it would be fair to describe the last twelve months as healthy without being particularly good. This might not sound the most positive, but the raw materials are certainly in place for Three to make some very strong strides forward.

Total revenues over the last 12 months rose 1% to £2.4 billion, while total network connections reached 11.3 million. 99% of new customers were brought in through Three’s own sales channels, churn is down to 1.1% and net promoter score has reached a new high of +15. Three might not have torn up many trees last year, but the foundations of the business are very healthy.

Looking forward, the team is in the testing stages for its fully-virtualized 5G-ready cloud core network, while there are now 21 data centres live on the network. The business has also signed an agreement with SSE to improve mobile backhaul and 3G spectrum is being continuously re-farmed for 4G. All these initiatives will incrementally improve the customer experience.

“Three is fully embracing a business transformation to take maximum advantage of the opportunities digital businesses enjoy,” said Dyson. “2018 was the year when we set the foundations in place for us to jump up to the next level and become the UK’s best-loved brand by our people and customers, meeting all our customers’ connectivity needs.”

This kind of feels like a ‘calm before the storm’ scenario. Once the broadband rebrand is finished and 5G launched, we feel there will be some very aggressive moves from Three, staying true to its data-orientated roots but heavily integrated convergence messages on-top.

Germany outlines its 5G security requirements

Short and to the point, did we expect anything from the German 5G security requirements other than meet our standards and you can operate in our country?

“We regularly adapt the applicable security requirements to the current security situation and the state of the art,” said Jochen Homann, President of Bundesnetzagentur. “The security requirements apply to all network operators and service providers and they are technology-neutral, covering all networks, not just individual standards such as 5G.”

What is worth noting is that while 5G and international security concerns might be the catalyst to these requirements, they will be applied across all networks and communications infrastructure moving forward, as well as all vendors.

The announcement from Bundesnetzagentur, the German regulator, will come as a blow to the aggressive geo-political ambitions of the US. It seems the anti-Huawei propaganda is running low on fuel, and such is the weight of Germany’s influence across Europe, Chinese executives might be letting out a sigh of relief.

Although the new safety requirements are only a concept for the moment, Bundesnetzagentur plans to release a draft of the rules for feedback over the next couple of weeks.

The requirements are quite broad-ranging, though there are enough clauses to ensure Germany is the master of its own fate. For example, critical components can only be used in communications infrastructure should there be certification recognized by the Federal Office for Information Security (BSI). Employees who install or manage this equipment will also have to be certified by German authorities.

There does also seem to be a move towards the UK’s approach to monitoring and managing risk. As part of the new requirements, network traffic must be regularly and continuously monitored for abnormalities, while safety-relevant network and system components must undergo regular and continuous safety checks. This is a more forensic approach to network management, which allows for companies like Huawei to operate in the country, but the risk is managed.

Another interesting aspect to be included in the new rules addresses ‘monocultures’. Although this is a term which is usually used in agriculture, Bundesnetzagentur is essentially ensuring there is depth in the supply chain. Redundancy must be built into the networks through using multiple vendors for different segments and aspects of operations.

While this might create more work for telcos, vendors and regulators, we feel this is a more proportionate response to the risk of nefarious external parties. Simply banning one company, or companies from a single country, will not work, such are the complexities of the digital ecosystem. Vulnerabilities are everywhere, and the most pragmatic approach should be to understand 100% secure will never exist. Its all about managing the risk most appropriately, and Germany seem to be taking a very sensible approach.

In the UK, the industry is eagerly awaiting the results of the Government’s supply chain review, which will potentially dictate how telcos interact with the vendor ecosystem. Rumours have emerged suggesting no single-vendor can own more than 50% of a certain area, but we hope the result is somewhat similar to the German approach here. This seems to be the attitude of Vodafone also.

Speaking at a briefing in London, Vodafone UK CTO Scott Petty highlighted the team has been working with the National Cyber Security Centre (NCSC) to identify the levels of risk associated with each segment of the network (Radio, Transmission, Core), and building a diverse supply chain to mitigate risk where appropriate.

This approach has led to Chinese companies being excluded from certain areas, though on the radio side where right has been deemed to be very low, Huawei supplies 32% of equipment. This approach allows best-in-breed kit to be considered but considering the sheer volume of cell towers around the UK, even if some equipment is compromised, the impact would be incredibly minor. Resilience has been built in through volume, data encryption and security gateways.

Interestingly enough, Germany is taking another very sensible approach to managing risk; the assumption that everyone is nefarious. All components and equipment will have to be certified, not just those products from countries which are deemed underhanded by paranoid opinion. Every vendor’s supply chain is becoming increasingly complex, suggesting vulnerabilities could appear anywhere. This impartial approach to suspicion will certainly place Germany is a sound position.

A considered approach to security

While certain countries have taken a knee-jerk reaction to security requirements, pinning the blame of an insecure digital ecosystem on one country or a very limited number of countries, Germany is taking a much more considered approach.

Having such a laser-like focus on security, scrutinising single elements of the ecosystem is incredibly dangerous. Cyber-criminals are incredibly intelligent, managing sophisticated networks through the dark web. If the risk of exposure becomes too high through a single route, another will be sought. Taking a blanked approach to security as Germany is doing minimises risk throughout the supply chain.

We suspect the Chinese government is not completely innocent in light of all the accusations, but we also believe they are not alone. Many of the fingers are being pointed in one direction, but Germany is not falling into that trap.

Ciena bags 20.5% growth perhaps thanks to Huawei dilemma

Optical networking company Ciena posted positive results for the first quarter of 2019, with total revenues of $778.5 million beating analyst expectations.

There have been whispers in corners of various conferences that a Huawei ban could benefit some, and it may well be having a positive impact for Ciena. While there are numerous other companies which would compete with Huawei in the optical equipment segment, with Ciena one of the few ‘pure-play’ companies it might have a more notable impact on the financials.

That said, irrelevant of where the favourable fortune has come from investors will be happy. $778.5 million represents a 20.5% year-on-year increase for the first quarter, while nearly all geographical markets have shown healthy growth.

“We began fiscal 2019 with a very strong first quarter performance, including outstanding top and bottom line growth as well as continued market share gains,” said Gary Smith, CEO of Ciena. “We believe that the combination of our leading innovation and positive industry dynamics will enable us to further extend our leadership position.”

Net income for the quarter stood at $33.6 million, though this is incomparable to the same period of 2018 which registered a loss of $473.4 million thanks to President Donald Trump’s US tax reform.

Looking at the regions, in the US, a market which now accounts for 62% of the company’s total revenues, the earnings grew just over 20% to $485.5 million, while 20% growth was also registered in the APAC region. The big success story however was in Europe, where the team grew the business by 32% to $129.2 million. This is still only 16.6% of the total haul for Ciena, but more geographical diversification will certainly be welcomed.

For Ciena, Europe could be a very interesting market over the next couple of months. With Huawei coming under increasing scrutiny globally, telcos will look to further diversify supply chains to add more resilience and protect themselves from potential government bans. While the anti-China rhetoric being spouted out by the White House is losing momentum, the European Union is reportedly looking some sort of ban, even if this puts the Brussels bureaucrats at odds with some member states.

For such vast investments, telcos will be looking for certainty and consistency from government policies. When looking at Huawei as a potential vendor, telcos will naturally be nervous, even if they don’t want to admit it.

With Huawei’s ban set to have little impact on the US market, it is not a major supplier to the market historically, the Europe could be a hidden goldmine for Ciena.

Interestingly enough, this scenario also seems to be paying off dividend in the APAC markets as well. Smith notes the success in the APAC region has come from Australia, Japan and Korea, three markets where Huawei has either been explicitly banned or is receiving a rather frosty welcome.

Competition is a problem, removing Huawei could be disastrous – Vodafone CEO

With all eyes in directed towards Mobile World Congress this week, Vodafone CEO Nick Read took the opportunity to vent his frustrations.

Competition is unhealthy, accusations are factually suspect, protectionism is too aggressive, the trust with customers has been broken, collaboration is almost non-existent. From Read’s perspective, there are plenty of reasons the 5G era will be just of much of a struggle for the telcos as the 4G one.

And of course, it wouldn’t be a telco press conference if there wasn’t a reference to Huawei.

“I would like a new contract for the industry, I want to go out and build trust with consumers and businesses,” said Read. “This will require us to engage government and build the vision of a digital society together.”

Read has reiterated his point from the last quarterly earnings call, there needs to be more of a fact-based conversation around the Huawei saga. There is too much rhetoric, too much emotion, and perhaps, too much political influence.

Huawei is the punching bag right now, but any ban or heavy-handed response to US calls for aggressive action would be a consequence for everyone.

As Read points out, Huawei is a significant player in almost everyone’s supply chain, controlling roughly 28% of mobile infrastructure, while Nokia and Ericsson also have market share in the 20s. Removing one of these players from the market will further compound a problem which plagues the industry today; the supply chain is too concentrated around a small number of vendors.

There simply isn’t enough diversity to consider removing a key cog to European operations.

Of course, you have to consider the status quo. The US is happy to ban Huawei as it has never been a significant contributor to its infrastructure. Should the same ban be enforced in Europe, negotiations would be de-railed, and operations disrupted. Read suggests this would set 5G plans back by two years across the bloc.

The issue here is of confidence to invest. Why would telcos enter into deep negotiations when future conditions have not been set in stone. This is already evident in Vodafone’s decision to pause work on the core with Huawei; delaying these important initiatives could push Europe further behind global 5G leaders. Telcos need confidence, certainty and answers. The longer reviews go on, the more precarious the situation becomes.

This is one of the many challenges the industry is facing. There is an ‘us versus them’ mentality when it comes to telcos. Read is referencing the relationship with regulators and government, suggesting a lack of collaboration which is negatively impacting the ability to operate, but it is also evident in the relationship with the consumer and competitors. Collaboration is a key word here.

One example of collaboration is in the UK where the National Cybersecurity Centre effectively monitors Huawei equipment. This model could be rolled out across Europe, though Read’s stressed the point that there would have to be a harmonised approach. Fragmentation is the enemy here, and it would stifle progress. If there is a European level of monitoring, or even if it is taken down to nation states, it doesn’t actually matter as long as it is consistent.

The Huawei ban is set to become one of the talking points of this years’ MWC, that is not necessarily an idea anyone will be surprised about, but what we are not sure about is the disruption. Will it slow 5G development? Has the uncertainty already slowed 5G development? Will the anti-China rhetoric, dilly-dallying and confusion kill Europe’s ambitions in the global digital economy?

O2 up and running but how much damage has been done to them and Ericsson?

With O2’s UK network back up and running, the 32 million Brits who depend on it have been returned to the digital era, but you have to wonder how big the fallout from this disaster will be.

With 3G data services restored late Thursday evening, and 4G getting the green-light early Friday morning, a stressful period comes to a close. Now the more difficult questions need to be asked to understand why this happened, why O2 is rumoured to have had to cancel its Christmas party last night and what the consequences of the chaos will actually be.

“We can now report that our 4G network has been restored,” said an O2 announcement. “Our technical teams will continue to monitor service performance closely over the next few days to ensure we remain stable. A review will be carried out with Ericsson to understand fully what happened. We’d like to thank our customers for their patience during the loss of service on Thursday 6 December and we’re sorry for any impact the issue may have caused.”

In fairness to O2, the simple thing to do here would have been to shift all of the bad press and finger pointing towards the root cause of the problem, Ericsson, but it has managed the saga as well as could be expected.

And while it might have taken a couple of hours for the Swedes to come clean, they finally did, as you can see below:

“The faulty software that has caused these issues is being decommissioned and we apologize not only to our customers but also to their customers,” said Börje Ekholm, Ericsson CEO. “We work hard to ensure that our customers can limit the impact and restore their services as soon as possible.”

While Ericsson is continuing to do root cause analysis on the fault, the issue has been narrowed 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, though it was not alone.

Softbank experienced the same issues over in Japan, while there are rumours several telcos in Asia also had network outages. Ericsson has confirmed it impacted other customers, but it is not its place to name said customers; O2 and Softbank made their own announcements, so it is up to the operators themselves. Mobifone in Vietnam could well be one of these customers, with its own network shutting down at 11.30am local time.

Before we move on, it’s worth drawing attention to the graph below from web performance and security company Cloudflare, just for context.

Cloudflare graph

As you can see the drop was incredibly pronounced, though the minor traffic which can be seen has been attributed to O2 customers who were roaming outside the UK. These customers do not seem to have been impacted by the data-doomsday.

One of the big questions which is now floating around concerns the fallout. With people and society on the whole relying so heavily on data networks, any fear of sub-par or non-existent performance will have a negative impact. Outages are something people should realistically expect to happen every now and then, but the severity and length of this one is certainly noteworthy.

“The disruption shows how much importance we place on a mobile device,” said telco and media analyst Paolo Pescatore. “Without connectivity, people are stranded, and businesses cannot compete. Furthermore, it underlines the need for continuous investment in the UK digital infrastructure, both fixed line and mobile networks to ensure growth and productivity.”

Just scrolling through Twitter, you can see how many people were impacted by the outage. This impact cannot just be restricted to personal activities, as there have also been several reports of sole-traders and critical services being unable to do their jobs. Whether we’re talking district nurses being unable to do house-calls because they are unable to rely on mapping apps or a plumber who can’t access his emails, the consequence is incredibly real and financial.

Earlier this year we had the chance to speak to various O2 executives, including CEO Mark Evans, over dinner, and the enterprise market was a segment targeted for growth at the firm. This is a lucrative market currently dominated by EE and Vodafone, though with this outage you have to wonder what the cost will be for O2. Joe Bloggs having to speak to someone on the bus is a minor inconvenience but shutting down a business which relies on mobile to work effectively is a completely different matter.

On one side of the coin, you have to feel a bit sorry for O2. This is a business which has been effectively shut down due to a fault from one of its network partners. Customers will not actually care what the problem is, they only deal with O2 therefore O2 should shoulder the blame. The negative impact on brand credibility and the company’s ability to offer basic services will certainly be questioned by some. Conversely, Ericsson’s share price has actually gone up a few percent since this news broke, perhaps reflecting the apparently swift resolution of the crisis.

However, you also have to wonder whether O2 is itself culpable. Should this be considered a due diligence or supply chain issue? As you can see from the tweet below, Heavy Reading’s Gabriel Brown doesn’t feel O2 is innocent through the saga:

And sticking with Twitter to finish, as you can imagine there were certainly a few people who had fun with the toil and torment of others. We’ve copied a couple of our favourite tweets from the last 24 hours below. Enjoy.

Three UK talks up its 5G investment plans

The UK’s fourth MNO, Three, has given a public update on its investment priorities and plans for 5G.

The headline figure is £2 billion, which is what Three says it is committed to spend on 5G stuff. Apparently Three customers are more data-hungry than average, so it’s even more important that it drops enough cash to ensure its infrastructure can keep up. The intended message seems to be that Three is for real in the 5G era and the other UK MNOs had better watch their backs.

“We have always led on mobile data and 5G is another game-changer,” said Three CEO Dave Dyson. “Also described as wireless fibre, 5G delivers a huge increase in capacity together with ultra-low latency.  It opens up new possibilities in home broadband and industrial applications, as well as being able to support the rapid growth in mobile data usage.

“This is a major investment into the UK’s digital infrastructure. UK consumers have an insatiable appetite for data and 5G unlocks significant capability to meet that demand. We have been planning our approach to 5G for many years and we are well positioned to lead on this next generation of technology.  These investments are the latest in a series of important building blocks to deliver the best end to end data experience for our customers.”

Dyson also had some stuff to say on the matter of Huawei potentially getting a hard time from UK public bodies which you can read more about here. So where is all this wedge going to end up? Details are thin on the ground right now and it looks like the headline figure includes some investment already made. Three did offer the following highlights of its 5G investments so far.

  • Acquired the UK’s leading 5G spectrum portfolio
  • Signed an agreement for the rollout of new cell site technology to prepare major urban areas for the rollout of 5G devices, as well as enhance the 4G experience
  • Built a super high-capacity dark fibre network, which connects 20 new, energy efficient and highly secure data centres
  • Deployed a world-first – a 5G-ready, fully integrated cloud native core network in the new data centres, which at launch will have an initial capacity of 1.2TB/s, a three-fold increase from today’s capacity, and can scale further, cost effectively and quickly.
  • Rolled out carrier aggregation technology on 2,500 sites in busiest areas, improving speeds for customers