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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Huawei employee arrested in Poland on spying allegations

Huawei’s sales director in Poland, who previously served in the Chinese diplomatic corps, has been arrested by the Polish authorities on spying allegations. Huawei immediately terminated his employment.

More details have been disclosed related to the arrest of Wang Weijing, who also goes by the name Stanislaw Wang. After serving as attaché at the Chinese general consulate in Gdansk, Wang joined Huawei’s Poland office in 2011, first as its PR director then as its sales director responsible for selling to the Polish public sector. Wang was detained on 8 January, on allegations of spying, as was first reported by the Polish public broadcaster TVP.

According to TVP, an Orange employee arrested on the same allegations, identified as Piotr D, had worked at the country’s Internal Security Agency (ISA, or “Agencja Bezpieczeństwa Wewnętrznego (ABW)” in Polish), which carried out the arrests. While at ISA one of his responsibilities was issuing security certificates for equipment used by Poland’s public-sector offices. He left the agency earlier after being accused of corruption but was not formally charged.

The offices of Huawei and Orange were searched respectively following the arrests, though a spokesperson for ISA told Reuters that the allegations against Wang were related to individual actions, not directly linked to Huawei. This is also the line Huawei adopted when it promptly severed the employment relationship with Wang, citing that “in accordance with the terms and conditions of Huawei’s labour contract, we have made this decision because the incident has brought Huawei into disrepute.”

Orange said it did not know if the investigation in Piotr D. was linked to his professional work but would continue to cooperate with the authorities.

Despite the troubles it has run into in markets like the US, New Zealand, Japan, and the UK, Huawei’s business in Eastern Europe has been largely unperturbed. However the latest twist in Poland and the earlier arrest of Meng Wanzhou, Huawei’s CFO, in Canada might put this position under pressure. On Saturday 12 January, Joachim Brudzinski, Poland’s interior minister, called for a EU-NATO joint position with regard to banning Huawei from these markets when speaking on a Polish commercial radio station. “There are concerns about Huawei within NATO as well. It would make most sense to have a joint stance, among EU member states and NATO members,” said Brudzinski.

Then on Sunday 13 January, Karol Okonski, a government official responsible for cyber security, told Reuters that Poland could consider forbidding the public sector from using Huawei products while probing the legal measures to limit Huawei’s access to the private sector. “We do not have the legal means to force private companies or citizens to stop using any IT company’s products. It cannot be ruled out that we will consider legislative changes that would allow such a move,” Okonski said.

Huawei has always denied that it poses security threats, or it spies on behalf of the Chinese government. In a statement it sent out to media after its CFO’s arrest and it sent again after the arrests in Poland, Huawei stressed that it “complies with all applicable laws and regulations in the countries where it operates, and we require every employee to abide by the laws and regulations in the countries where they are based.”

Incidentally, the South China Morning Post reported earlier that, shortly before her arrest in Canada, Meng Wanzhou and Ren Zhengfei, the founder of Huawei and Meng’s father, hosted a town hall meeting for Huawei employees. According to a transcript distributed to Huawei staff and seen by SCMP, both executives discussed extensively on compliance. Cases were divided into “red” and “yellow” lines. By red line, Meng meant the rules where there is “no bargaining and must be strictly complied with”, while by yellow line she referred to cases where strict compliance is not operationally feasible, and the company can build in the costs of flouting the rules as “sunk costs.” She cited labour risks as an example.

“Of course, beyond the yellow and red lines, there may still be another scenario, and that is where the external rules are clear-cut and there’s no contention, but the company is totally unable to comply with in actual operations. In such cases, after a reasonable decision-making process, one may accept the risk of temporary non-compliance,” quoted by SCMP.

Ren also urged his staff to consider both cost and benefit in compliance cases, especially related to laws of the US and EU. SCMP quoted him challenging those present when answering a question: “We must not bind ourselves up just because the US is attacking us. If our hands and feet are bound, then we will not be able to continue producing, then what’s the point of compliance?”

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.

Going under the hood of Qualcomm Snapdragon 855: plenty to like

More details of Qualcomm’s first 5G chipset have been released, bringing all-round improvements, and a 5G chipset for PCs was also announced.

On the first day of its annual Snapdragon Technology Summit, Qualcomm announced its 5G chipset for mobile devices, the Snapdragon 855, but released limited specs. On the following two days more details were disclosed. An SoC for 5G-connected PCs, the Snapdragon 8cx was also unveiled.

In addition to the X50 modem for 5G connectivity (on both mmWave and sub-6GHz frequencies) and X24 modem (to provide LTE connectivity), at the centre of the Snapdragon 855 is ARM’s new flagship Cortex A76 CPU, marketed by Qualcomm as Kryo 485. It contains 8 cores with the single core top performance at 2.84 GHz. Qualcomm claims the 855 is 45% faster than its predecessor 845, though it did not specify what exactly this refers to. More importantly for Qualcomm, the top speed is 9% faster than the Kirin 980 from HiSilicon (a Huawei subsidiary), another 7-nanometre implementation of the ARM Cortex A76.

Also included in the 855 is the new Adreno 640 GPU rendering graphics. Qualcomm has focused 855’s marketing messages on gaming performance, and the GPU is at the core to deliver it. Qualcomm claims the new GPU will enable true HDR gaming, as well as support the HDR10+ and Dolby Vision formats. Together with the display IP, the Adreno 640 GPU will support 120fps gaming as well as smooth 8K 360-degree video playback. Another feature highlighted is the support for Physically Based Rendering in graphics, which will help improve VR and AR experience, including more accurate lighting physics and material interactions, for example more life-like surface texture, or material-on-material audio interaction.

The key new feature on Snapdragon’s Hexagon 690 DSP is that it now includes a dedicated Machine Learning (ML) inferencing engine in the new “tensor accelerator”. The Hexagon 690 also doubles the number of HVX vector pipelines over its predecessors the Hexagon 680 and 685, to include four 1024b vector pipelines. The doubled computing power and the dedicated ML engine combined are expected to improve the Snapdragon 855’s AI capability by a big margin.

The integrated new Spectra 380 image signalling processor (ISP) will both improve the Snapdragon’s capability to deepen acceleration and to save power consumption when processing images. Qualcomm believes the new ISP will only consume a quarter of the power as its predecessor for image object classification, object segmentation, depth sensing (at 60 FPS), augmented reality body tracking, and image stabilisation.

On the OEM collaboration side, in addition to Samsung, on day 2 of the event we also saw Pete Lau, the CEO of Chinese smartphone maker OnePlus come to the stage to endorse the new 5G chipset and vow to be the “first to feature” the Snapdragon 855. Separately, the British mobile operator EE announced that it will range a OnePlus 5G smartphone in the first half of 2019.

On the same day, thousands of miles away, more Chinese smartphone OEMs including Xiaomi, OPPO, Vivo, and ZTE (in addition to OnePlus) also embraced the new Snapdragon chipset at the China Mobile Global Partner Conference in Guangzhou, southern China. China Mobile will also launch a customer premise equipment (CPE), likely a fixed wireless access modem, using the same platform.

Back in Hawaii, on day 3 of the Snapdragon Tech Summit, Qualcomm launched a new chipset for PC: the Snapdragon 8cx (“c” for computer, “x” for eXtreme). This is Qualcomm’s third iteration of chipset for PC, built on ARM v8.1 (a variant of Cortex A76). Similar to the Snapdragon 855, the 8cx also has the X24 integrated cellular modem with for LTE connectivity, and the X50 modem with 5G connectivity can be paired with it. The CPU also has eight cores, with a top speed of 2.75 GHz. The new Adreno 680 GPU is said to process graphics twice as fast as the GPU in the previous generation ARM for Windows chipset (Snapdragon 850) but 60% more efficient in power consumption.

Perhaps the most meaningful change is its memory architecture. The Snapdragon 8cx will have a 128-bit wide interface, enabling it to provide native support for much more software and applications, including Windows 10 Enterprise and Office 365, which clearly is a sales pitch to the corporate IT departments.

Unlike the OEM support garnered by Snapdragon 855, there was no public endorsement by PC makers yet. Lenovo did come to the stage but was only talking about its Yoga 2-in-1 notebooks that have used earlier generations of Snapdragon chipsets for Windows on ARM. On the other hand, Qualcomm does not position Snapdragon 8cx as a replacement for the 850 but rather as a higher end contemporary, with 850 mainly targeted at a niche consumer market.

In general, this year’s Snapdragon Tech Summit has delivered more step change with the new product launches. More concrete industry support was also on show, indicating that, depending on how fast and extensive 5G is to be rolled out, we may start seeing true 5G smartphones in the first half of next year. We may need to wait a bit longer before a reasonable line-up of always-on 5G connected PCs can hit the market.

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.

USA declares war on Huawei, with a bit of help from ZTE

The arrest of Huawei’s CFO was the culmination of years of investigation by the American government and judiciary, with an apparent helping hand from ZTE.

When Ms. Meng Wanzhou, Huawei’s CFO, was arrested in Vancouver, facing extradition to the US, we remembered a file seized and published by the US Department of Commerce when it was investigating then punishing Huawei’s domestic competitor ZTE early in the year, which detailed some of the ways ZTE had gone about the activities that got it into trouble.

The internal document (in Chinese) from ZTE, dated 25 August 2011 includes detailed proposals on how to circumvent American embargos against Iran, Sudan, North Korea, Syria, Cuba, as well as partial sanctions against Ethiopia and Myanmar. It was approved by ZTE’s C-level executives by the beginning of September. The document was used as an incriminating evidence against ZTE, which, in addition to the fines, also resulted in the wholesale change of management in ZTE.

Part II, Section 5 of the document refers to a company codenamed F7 which was also active in similar business dealings with risky countries. F7 used an IT company with good credibility as the front party to sign contracts with their customers in countries facing US sanctions. ZTE also gathered competitive intelligence on the compliance officers and lawyers hired by F7 in head offices as well as in branches offices to handle export embargo circumvention, including the salary offers. The document then proposed ZTE should use this as a blueprint.

The identity of F7 is not hard to establish. IHuawei was the only other large-scale telecom equipment exporter from China, F7 had been barred by Congress from winning meaningful deals in the US, it had hired a Chinese-American lawyer from TI, and it had a joint-venture with Symantec. If this evidence is still too circumstantial, the document also listed specifically that F7 had run into difficulty in its attempted acquisition of 3Leaf, an American server technology company, in 2010. It was widely covered at the time by media outlets including the Reuters that Huawei decided to pull out of the proposed acquisition of and to divest its assets in 3Leaf.

This ZTE document must have been just one piece on the jigsaw of evidence against Huawei put together by the American law-enforcement, but it no doubt would be an important piece. It suggests that Huawei has been flouting US rules for quite some time, and Ms. Meng, as the CFO (as well as the daughter of the founder of Huawei) may have been presumaed to have had some role to play in the whole ploy.

According to sources inside ZTE, “F7” is ZTE’s internal tongue-in-cheek reference to Huawei. Phonetically F7 reads a slight corruption of the word for “husband and wife” in Chinese. It derives from the urban legend that many Huawei employees, having little time to date outside, would end up marrying their colleagues, so the company was full of couples.

Three completes 5G outdoor trials in Hong Kong

3HK, the third largest mobile operator in Hong Kong have completed 5G trials on both the 3.5 GHz and 26 GHz bands.

The trials have been going on since the operator obtained temporary permits from the government of China’s “special administrative region”, for indoor and outdoor tests on the two frequencies in May and June respectively. The trial on the 26 GHz band used 400 MHz frequency resources and achieved a downlink peak speed of 3.2 Gbps, while the 3.5 GHz trial used 100 MHz resources, hitting speeds of 2 Gbps. The latter trial was on Massive MIMO technology, which enabled 3HK to claim to be the first to conduct live outdoor broadcast via a 5G network in the 3.5GHz band, although the operator hastened to add a footnote that the “first” claim was made “based on publicly-available information”.

“Three Hong Kong took the initiative to carry out end-to-end trials in various 5G bands in preparation for a new era of mobile communications,” said Kenny Koo, CEO of Hutchison Telecommunications Hong Kong, of which 3HK is a subsidiary. “We welcome the government’s decision to allow various of its premises to accommodate 5G base stations, and we hope the application and approval processes can be simplified and accelerated to help Hong Kong’s 5G development.”

3HK explained the rationale behind trialling out on both 3.5 GHz and 26 GHz. It believed that long-term development of 5G technology requires different spectrum bands to complement one another. The mmWave band (for example the 26GHz and 28GHz bands) delivers high-speed service but the cells’ coverage is limited. To achieve greater coverage the mmWave band needs to be complemented by the 3.5 GHz band. Such an arrangement enables operators to extend coverage and provide a seamless 5G experience and to meet all the various demands on 5G applications.

While China may not be the first country to go live with 5G – its mobile operators are more likely to by-pass the non-standalone mode and go full blown to standalone mode – Hong Kong is often among the leading markets to adopt the latest technologies, as was the case in 3G and 4G. Hong Kong is one of the most densely populated cities in the world, and the site of 3HK’s massive MIMO trial, Causeway Bay, is right in the centre of the commercial and business district.

Telecoms.com Annual Industry Survey 2018

Welcome to the 2018 edition of the Telecoms.com Intelligence Annual Industry Survey report. The findings from our signature survey continue to provide insights and foresight into the dynamic telecoms industry.

Once again well over 1,000 industry professionals from a broad array of backgrounds responded to the survey with their first-hand experience as well as their perspective views on the current status and future trends of the industry. As our customary practice, the report started with an overall industry landscape before we delved into six key areas pertinent to today’s telecoms industry: NFV, 5G, IoT, Digital Transformation, Security, and Test & Monitoring.

A few key findings from the survey:

  • 75% felt positive about the telecoms industry’s business outlook for 2019
  • 79% believed NFV is critical to their companies overall strategy
  • 61% believed emerging technologies and services are critical to telecom’s long-term success
  • 75% saw digital transformation as very important

Fill in the short form below to download your free copy now.

By downloading a copy of this report the information which you provide will be shared with the sponsor(s) for informative purposes and your mutual interest in the subject matter or similar subject matter (including initial follow-up regarding the content of this report).

40% of the world’s population on 5G by 2025, says GSMA

GSMA’s Director General spoke at Huawei’s MBBF 2018 event, talking up the prospect and promises of 5G and artificial intelligence

Mats Granryd, the Director General of the telecom trade organisation GSMA made a keynote speech themed on “intelligent connectivity” at Huawei’s MBB 2018 event at London’s ExCel today. Granryd put spotlight on 5G and AI as the key enablers to what the telecom industry has to offer in the years to come.

In addition to predicting that 70% of the world’s population, or roughly 6 billion people will be on mobile internet, GSMA forecast 40% of the world population will be on 5G networks. When it comes to AI, on top of improving individual experience (e.g. Personal Assistants) and serving new industry needs (e.g. network slicing), Granryd highlighted what the combined AI capabilities can do for society. The GSMA’s “Big Data for Social Good” initiative has launched in seven countries around the world. Mobile operators in those markets have worked with local partners to enable air pollution warning, malaria spreading prediction, and natural disaster preparedness, using big data and machine learning and prediction capabilities.

Guiqing Liu, EVP of China Telecom, the world’s largest integrated operators in the world by subscriber number, then took the stage to share what China Telecom saw as the biggest opportunity for telecom operators to undertake the digital transformation, especially with the ascendency of industry markets. Liu included four key capabilities the industry in particular the operators need to master to succeed in the transformation. They are: end-to-end slicing to cater to different user and industry needs; FMC edge computing to deliver seamless experience; 5G+Cloud based network and services to provide flexible and special customisation; and 5G+AI to both optimise service delivery and network management.

Liu also outlined the key challenges the industry is facing before 5G can become a real commercial success. He conceded that use cases now are still very much focused on eMBB, and the industry has not thought through how to change business models in the new era, including how to bill customers for the new use cases. On network challenges, in addition to the CAPEX and OPEX and skill gap, Liu also pointed the indoor coverage weakness intrinsic of the high frequency bands most 5G networks will be built on.