Finnish kit vendor Nokia has filed its annual report with the SEC and in it flagged up some legacy issues from Alcatel Lucent that may still be a problem.
In the lengthy ‘risk factors’ section, Nokia indicates that, even years after it completed the acquisition of Alcatel Lucent, it’s still digging up stuff that may present some kind of threat to the company. Here’s the relevant passage in full.
“During the course of the ongoing integration process, we have been made aware of certain practices relating to compliance issues at the former Alcatel Lucent business that have raised concerns. We have initiated an internal investigation and voluntarily reported the matter to the relevant regulatory authorities, with whom we are cooperating with a view to resolving the matter. The resolution of this matter could result in potential criminal or civil penalties, including the possibility of monetary fines, which could have a material adverse effect on our business, brand, reputation or financial position.”
Asked for further comment on the matter Nokia just stressed that “although this investigation is in a relatively early stage, out of an abundance of caution and in the spirit of transparency, Nokia has contacted the relevant regulatory authorities regarding this review.” There’s no reason not to take that statement at face value at this stage, but while the extent of the material effect this could have on Nokia remains uncapped it will surely remain a significant concern.
Iran is also addressed in the risks section, with Nokia noting the dilemma that, while Europe is relaxing its sanctions against the country, the US is moving in the other direction and ramping them up. “As a European company it will be quite challenging to reconcile the opposing foreign policy regimes of the US and the EU,” it laments.
Since the US has shown an unlimited capacity for vindictiveness towards companies that do business with Iran Nokia has sensible decided not to do any more business there for the time being. “Although we evaluate our business activities on an ongoing basis, we currently do not intend to accept any new business in Iran in 2019 and intend to only complete existing contractual obligations in Iran in compliance with applicable economic sanctions and other trade-related laws,” said the filing.
Lastly the risks section also mentions HMD Global, which licenses the Nokia brand to put on its smartphones. It doesn’t make reference to any specific case but notes “Nokia has limitations in its ability to influence HMD Global in its business and other operations, exposing us to potential adverse effects from the use of the Nokia brand by HMD Global or other adverse development encountered by HMD Global that become attributable to Nokia through association and HMD Global being a licensee of the Nokia brand.” How timely.
Norwegian media is reporting that private data of Nokia 7 Plus users may have been sent to a server in China for months. Finland’s data protection ombudsman will investigate and may escalate the case to the EU.
Henrik Austad, a Nokia 7 Plus user in Norway, alerted the Norwegian public media group NRK in February when he noticed every time he powered on his phone it would ping a server in China and batches of data would be sent. The data included the phone’s IMEI numbers, SIM card numbers, the cell ID of the base station the phone is connected to, and its network address (the MAC address), and they have been sent unencrypted. Investigation by NRK discovered that the recipient of the data is a domain (“http://zzhc.vnet.cn”) belonging to China Telecom.
Because HMD Global, the company behind the Nokia-branded phones that was set up by former Nokia executives and has licensed the Nokia brand, is a Finland-registered company, the news was quickly brought to the attention of Reijo Aarnio, Finland’s data protection ombudsman . “We started the investigation after receiving the news from the Norwegian Broadcasting Company (NRK) and I also consulted our IT experts. The findings showed this looks rather bad,” Aarnio said.
When talking to the Finnish state broadcaster YLE and the country’s biggest broadsheet newspaper Helsingin Sanomat (HS), the ombudsman also raised a couple of serious concerns he said he would seek clarifications from HMD Global early next week:
Are the users aware that their personal data are being transferred to China?
On what legal ground, if any, are personal data transferred outside of the EU?
Have corrective actions been taken to prevent similar cases from happening again?
Earlier when writing to NRK, Aarnio said his first thought was this could be a breach of GDPR, and, if true, the case would be brought in front of the European Union. (Although Norway is not a EU member state, Iceland, Liechtenstein, and Norway, the three EEA countries which are not part of the EU, agreed to accept GDPR two months after it came into effect in the EU.)
Replying to Telecoms.com’s enquiry, HMD Global, through its PR agency, sent this statement:
We can confirm that no personally identifiable information has been shared with any third party. We have analysed the case at hand and have found that our device activation client meant for another country was mistakenly included in the software package of a single batch of Nokia 7 Plus. Due to this mistake, these devices were erroneously trying to send device activation data to a third party server. However, such data was never processed and no person could have been identified based on this data. This error has already been identified and fixed in February 2019 by switching the client to the right country variant. All affected devices have received this fix and nearly all devices have already installed it.
Collecting one-time device activation data when the phone is taken first time into use is an industry practice and allows manufacturers to activate phone warranty. HMD Global takes the security and privacy of its consumers seriously.
Jarkko Saarimäki, Director Finland’s National Cyber Security Centre (Kyberturvallisuuskeskus), which offered to support the ombudsman if needed, raised another point while talking to YLE, “In cases of this kind, the company should report the case to the Office of the Data Protection Ombudsman (tietosuojavaltuutetun toimisto) and inform the customers of the data security risk.” It looks what HMD Global has done is exactly the opposite: it quietly fixed the issue with a software update.
What exactly happened remains unclear, but the investigation from NRK may shed some light. Further research into the data transfer took NRK investigators to GitHub, where they discovered a set of code that would generate data transmission similar to that on the Nokia 7 Plus in question, and to the same destination. This code resides in a subfolder called “China Telecom”. On the same level there are also subfolders for China Mobile, China Unicom as well as other folders for different purposes. Henrik Lied, the NRK journalist who first reported the case, shared with Telecoms.com this subfolder structure that he captured on GitHub:
Closer analyses of the code in question on GitHub by Telecoms.com seem to have given us a bit more insight. This is what we assume has happened: HMD Global or its ODM partner sourced the code from a developer by the GitHub username of “bcyj” to transfer user data when a phone on China Telecom network is started. But, by mistake, HMD Global has loaded this set of code on a number of Nokia 7 Plus meant for Norway (“our device activation client meant for another country was mistakenly included in the software package of a single batch of Nokia 7 Plus”). When it realised the mistake by whatever means HMD Global released a software update to overwrite this code.
Incidentally it looks the code was originally written for a Chinese OEM LeEco (which is largely defunct now) whose product, e.g. the Le Max 2, was running on the Snapdragon 820 platform with the MSM8996 modem. The modem was later incorporated in the mid-tier platform Snapdragon 660 which powers the Nokia 7 Plus.
There are still quite a few questions HMD Global’s statement does not answer.
How many users have been affected? And in what countries? The award-winning Nokia 7 Plus is one of the more popular models from HMD Global, and it is highly unlikely a batch of products were specifically made for the Norwegian market with its limited size. Could the same products have been shipped to other Northern European markets too?
Is China Telecom the only operator in China that requires phones on its network to be equipped with a software that regularly sends personal data? We do not find similar programmes under the China Mobile or China Unicom subfolders on the same GitHub location.
Is HMD Global the only culprit? Or other OEMs’ products on China Telecom network and on the same Qualcomm modem are also running the same script every time the phone is powered on, but they have not made the same mistake by mixing up regional variants as HMD Global did?
On what ground could HMD Global claim that the recipients of the data or any other parties who have access to the data (as they are sent unencrypted), will not be able to identify the individuals (“no person could have been identified based on this data”)? To defend itself, in its statement to NRK, HMD Global referred to the Patrick Breyer vs Bundesrepublik Deutschland case when the Court of Justice of the European Union (CJEU) ruled that whether a certain type of data would qualify as “personal data” should generally need to be assessed based on a “subjective / relative approach”. In the present case HMD Global seems to be arguing that the recipients of the data sent from the phones are not able to establish the identities of the users. It may have its point as China Telecom (or other identities in China that receive the data) does not have the identity information of the users. However, this is a weak defence. The CJEU sided with the German Federal Court of Justice because the point of dispute was dynamic IP only, and the court deemed “that dynamic IP addresses collected by an online media service provider only constitute personal data if the possibility to combine the address with data necessary to identify the user of a website held by a third party (i.e. user’s internet service provider) constitutes a mean “likely reasonably to be used to identify” the individual”, as was summarised by the legal experts Fabian Niemann and Lennart Schüßler. In the HMD Global case, however, a full set of private data were transmitted, not to mention transmitted unencrypted.
On what evidence did HMD Global claim that the data transmitted has not been processed or shared with third parties?
To be fair to HMD Global, this is not the first, and by no means the biggest data leaking incident by communication products. For example the IT and communication system at the African Union headquarters, supplied and installed by Huawei, was sending data every night from Addis Ababa to Shanghai for over four years before it was uncovered by accident. Huawei’s founder later claimed that the data leaking “had nothing to do with Huawei”, though it was not clear whether he was denying that Huawei was aware of it or claiming Huawei was not playing an active role in it.
Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Sanjay Goel, President for Global Services at Nokia, looks at what is required to become a Digital Service Provider.
The communications landscape is set to change more in the next three years than it has over the past twenty combined. Security, efficiency, speed and customer satisfaction are the new normal for Communication Service Providers (CSPs) – and with 5G and the realization of the fourth industrial revolution on the horizon, operations and service delivery are set to become far more complex than ever before. There will be no more one size fits all infrastructure for telecoms as CSPs become Digital Service Providers (DSPs).
This evolution to DSP will see consumer expectations grow as the industrial market matures. In the short term, 5G and gradual digitalization will see operators focus on enriching consumer experiences for operators. New services and experiences such as haptics, AR and VR will change the way we learn, experience sporting events and remotely manage tasks. The experience gained through enriching consumer services and experiences through these new technologies will then enable operators to further venture into more industrial use cases and massive IoT.
Of course, expectations around convenience, speed and agility will continue to mature and every service experience will increasingly need to become service and customer-centric, with data and machine learning leveraged to autonomously adapt the network to rapidly changing consumer demands and service attributes.
This represents a real challenge for today’s CSPs – margins are smaller than ever before and new technologies are expensive to deploy. Processes and capabilities need to be industrialized to better scale and operate in the global landscape if CSPs are to keep costs under control and maintain margins. Efficiency will be core to success.
The fourth industrial revolution will magnify the need for efficiency as increasing connectivity across all industries creates new customers and markets that require new services and solutions. 5G will become a catalyst for many of these markets, but raises its own CAPEX and OPEX challenges for CSPs looking to upgrade and they will need to make strong decisions about the services they want to offer and the market segments they want to prioritize as they grow.
My view is that industry will be the next key market for CSP growth. The next three years will no longer be about bigger pipe, but customized services and use-cases delivered with high degrees of automation and within large partner ecosystems. Challenging performance requirements and increasing complexity in new markets such as smart cities and farming will open up double digit growth opportunities but can only be addressed with the assistance of curated ecosystems that manage complexity.
Still, it’s not just complexity in terms of network size, technologies and the industrial market that CSPs need to plan for. Networks need to be operated differently to respond to unique customer-by-customer SLAs and the DSPs of tomorrow need to be able to dynamically adjust the network as requirements change. This new level of customer-centricity – that we’ve not seen before – will require new ways of thinking.
These changes are coming, fast, but it’s not too late to develop the roadmap that will take an operator from CSP to DSP. Reducing complexity and cost can be boiled down to better planning (get it right first time!) and digitizing processes.
Digital tools allow for the accurate prediction of how a network can behave before it is deployed and can ensure that as much legacy equipment as possible is maintained and that products from different vendors can work together coherently. Modelling can also identify bottlenecks and ensure the best possible coverage for the least investment.
Digitization unlocks the door for zero incremental cost to network operations while optimizing service delivery costs and near instantaneous provisioning of new virtual resources and services, with network operations enabling innovation instead of being a bottleneck. A single seamless operations environment across network and data center and IT operations is required.
The reward for CSPs that evolve smoothly into DSPs will be significant, with greater growth to be found in the industrial market and joining growing ecosystems. There will be outside threats as the market matures and new start-ups enter the supply chain, fulfilling roles we cannot imagine today, but CSPs that have planned their journey to DSPs will thrive.
Sanjay Goel has over 27 years of experience across the telecommunications, information technology and engineering industries. In April 2018 he became President of Global Services at Nokia where he leads the team that helps operators and enterprises navigate through complexities and transform their business and adopt new technologies such as cloud, 5G and IoT. Currently based in Espoo, Finland, Sanjay joined Nokia in 2001 and has held many senior management roles across the organization, including Senior Vice President, Global Services Sales and Vice President of Services for Asia, Middle East & Africa.
Korea’s mobile operator KT is going to launch nationwide 5G service this month and will collaborate with Nokia to provide services and tools for the business and the public sectors.
Hwang Chang-Gyu, KT’s Chairman and CEO, recently announced that KT’s nationwide 5G network will be switched in March to cover 24 major cities, key transport routes such as expressways, subways, high-speed railways, large universities, and neighbourhood shopping areas. This will be an upgrade from the synchronised launch of 5G services with limited scale on 1 December 2018 by all the three national mobile operators.
“In March, KT will be the first in the world to introduce ‘True’ 5G mobile services,” said Hwang. “In the 5G era, neckband cameras, AR glasses and all kinds of devices will be connected to 5G, contributing to a better life for mankind.” That this was a personal historic moment should not to be lost. Exactly four years ago at MWC 2015, Hwang predicted a commercial 5G network by 2019. “Today, I would like to announce that the promise I made four years ago has finally been fulfilled,” Hwang added in his MWC speech.
The current 5G service that KT, SKT, and LG Plus are offering is fixed-wireless access targeted at business users. During the recent MWC, KT demonstrated plenty of 5G gimmicks for the consumer market, from a 5G connected robot butler bringing a bottle of water to the doorstep to a 5G and AI powered robot barista fixing cocktails.
KT is clearly banking big hope on 5G. Its Economic and Management Research Institute predicted that the socioeconomic value created by 5G will contribute to 1.5% of the country’s GDP by 2025. To realise such potential and to achieve serious monetisation of 5G, KT is looking towards the enterprise market and the public sector. The company announced that it plans to focus on five key areas with its 5G offers: smart cities, smart factories, connected cars, 5G media, and the 5G cloud. It says it is collaborating with various businesses as well as the Korean government to develop 5G services for both Business to Business (B2B) industries and Business to Government (B2G) sectors.
This is an echo to what Marcus Weldon, Nokia’s CTO and the President of Bell Labs, called for during his own speech at MWC. Weldon suggested the telecom industry should focus more on serving other verticals instead of on consumer markets, to deliver the true value of 5G. He did concede that it would need three to five years before telcos can see meaningful revenues from enterprise 5G. But when they do, Weldon predicted the business will soon equal that being made in the consumer 5G segment.
It just happened that KT and Nokia are going to collaborate closely in 5G. During MWC the two companies signed a Memorandum of Understanding (MoU) to collaborate on various 5G technologies. “We are excited to partner with Nokia to conduct these path-breaking trials,” said Jeon Hong-Beom, KT’s CTO. “This collaboration will ensure that we are able to leverage Nokia’s proven solutions and best-in-class professional services to provide a superior and differentiated experience to our subscribers.”
“With Korea, one of the lead countries in the early deployment of 5G, we are delighted to be working with KT to help them build a future-ready network,” added Bhaskar Gorti, President of Nokia Software. “Nokia’s end-to-end portfolio will empower KT to improve its customer experience and network efficiency.”
The key areas of the collaboration will include Service Orchestration and Assurance for the 5G era, with the aim of delivering end-to-end automation and new revenue opportunities for KT’s enterprise customers. This will be supported by the enabling technologies like NFC and network slicing. The joint work will start in Seoul later this year.
Huawei might have been under some intense scrutiny over the last twelve months, but that hasn’t stopped it maintaining its number one position in telecom equipment market.
Releasing its Worldwide Telecom Equipment Market 2018 report, Dell’Oro has estimated Huawei accounts for 29% of the market, keeping itself on top of the pile. Ericsson, Nokia, ZTE, Cisco, Ciena and Samsung complete the top seven which accounts for 80% of the total. Encouragingly for all involved, the market grew by 1% year-on-year over 2018.
While the market was always expected to increase with the up-coming 5G euphoria, some investors might be a bit worried about the level of growth. These vendors have been consistently promising shareholders the arrival of 5G will compensate for the baron years, with the market declining year-on-year since 2015. 1% might growth in the market might not be the envisioned bonanza, but it is almost certain to accelerate over 2019.
Looking at the growth, Broadband Access, Optical Transport, Microwave, and Mobile RAN claimed the plaudits, while the remaining segments, Carrier IP Telephony, Wireless Packet Core, SP Router and Carrier Ethernet Switch, all declined across the period. The worldwide Mobile RAN market received particular praise.
This is a segment which proved more successful than some would have predicted. 4G networks have been given more attention across the period as demands for better experience have been growing from both a regulatory and consumer perspective, though the emergence of 5G NR continued to accelerate throughout the year. Interestingly enough, the period of rapid growth coincided with the intense scrutiny placed on Huawei, though this seems to have had little impact.
Through 2018 Huawei’s revenue share of the market continued to grow, taking it up to 29%, though Ericsson and Nokia were seemingly able to stem the flow of customers towards the door, halting year-on-year decreases across 2018. In the RAN market share rankings, Huawei is controlling the top spot, while Ericsson sits second and Nokia in third place. ZTE dropped 2% market share, though this is perhaps a sign of the business shut-down in the second quarter.
With the US government finding fewer and fewer sympathetic ears for its anti-China rhetoric in recent months, Huawei’s success has continued. Recently, Ryan Ding, CEO of Huawei’s carrier unit, claimed the firm had shipped 40,000 5G base stations to customers around the world. With many telcos considering these products as a ‘dumb’ component of the network, business may well continue as normal, unless of course any governments step in to implement national bans.
After years of trudging through stringent CAPEX, the light on the horizon does seem to be getting brighter. 1% growth is not going to compensate for the declines over the last couple of years, but it is a good indicator of the potential profits of tomorrow. Revenue growth in the embryonic days of 5G is certainly something to be pleased about.
A few days after Donald Trump tweeted about 6G, when he was roundly ridiculed, Finland’s scientists proved that he had a point by announcing their plan at MWC 2019 to embark on the journey towards 6G.
The researchers in Finland expect 6G to take shape in about 2030. To gain the leadership by that time, the so-called “6Genesis” has been selected as the country’s flagship high-tech project for an eight-year period 2018-2026. The project is hosted by the University of Oulu, ranked a top 3 university globally in radio access engineering.
Professor Ari Pouttu, who leads the project, introduced the vision and key technology streams at the event. 6G will satisfy the expectations not yet met by 5G as well as new expectations fusing AI inspired applications with ubiquitous wireless connectivity, Professor Pouttu said. Specifically, he foresaw four technology trends that are fundamentally different from earlier generations.
“Wireless Connectivity” in 6G means disruptive radio access deployed on 5G core networks, enabling Tbps speed and deliver unmanned process. “Devices & Circuits” means that the current semiconductors will not be able to operate on super high-frequencies. When communication takes place on frequencies above 500GHz or even at terahertz level, new materials will be needed to replace silicon. “Distributed Computing” refers to moving the computing power to the extreme edge. For example, instead of conducting computing from the “brain” of the robot, in 6G environment computing will need to be moved to every limp tip of the robot to enable time critical and trusted apps. “Service & Applications” refers to the disruptive value networks enabled by multidisciplinary research across industry verticals, in contrast to the siloed approach to research and development now.
The Finnish government has already granted 6Genesis €25 million through the Academy of Finland. Five co-founders have signed up, including Nokia, VTT (Finland’s technology research centre), Aalto University, Oulu University of Applied Sciences, and BusinessOulu (local business promotional agency). The total funding of the project so far, including contribution from these partners, other national and EU grants, plus the Academy of Finland grant, amounted to €251 million. Professor Pouttu quipped, while speaking to Telecoms.com, that this amount is for science fiction, not science. He may be on the conservative side with his estimation for science fiction though. “Avengers: Infinity War”, a recent sci-fi blockbuster, cost nearly $400 million (€350 million) to make.
Improving funding is clearly one of the reasons why the project was calling for more companies and institutions to sign up. The fact that the announcement was made during MWC could only mean that global partners are also being sought after. Professor Pouttu could consider pushing a tweet to President Trump directly.
The world’s first 6G Wireless Summit will be held in March in Levi, a ski resort in Finnish Lapland.
After years of fooling around 5G finally arrived at this year’s big telecoms coming-together, but now a lot of people just feel disappointed and used, and are left asking “is that it?”
The hype cycle for 5G seems to have been especially prolonged and intense, arguably exceeding even the utopian fervour of the build up to 3G, which left the operator industry so over-committed and under-rewarded. 4G was mainly about doing mobile broadband properly, but 5G was supposed to revolutionise the telecoms industry. At this early stage, however, there is little sign of that.
In hindsight the build up to the show offered a strong indicator of the anticlimax to follow. The big kit vendor announcements were all about fine-tuning their 5G propositions and playing it safe. That was certainly the case with Ericsson and Huawei, while Nokia didn’t even have a pre-show event, contenting itself with just a webcast.
Nokia does have a major event in Barcelona on the Sunday of the show and, while it went big on 5G, the most it had to show for it commercially at this early stage was fixed wireless access. 5G offers the opportunity to provide high speed broadband to locations that can’t get a decent fixed-line service, for whatever reason, but even Nokia’s own forecasts aren’t especially bullish about the FWA total available market. So it feels more like an early way for operator CTOs to show some ROI from their 5G capex.
With the exception of a juicy bit of M&A action, Ericsson’s MWC event felt a bit flat. Meanwhile Huawei can’t escape the backdrop of the geopolitical spat it has found itself in the middle of, and almost seems ready to give up on some western markets entirely. At least one operator CEO reckons it would be disastrous for the industry if it did. A major theme of the show has been hacks trying in vain to get juicy quotes from anyone on the Huawei situation.
Aside from a bit of light FWA most of the 5G buzz has been generated by the arrival of 5G phones. The fact that some of them also come in a novel new foldable format just adds to the intrigue but those are far too expensive to be considered anything more than public prototypes and, anyway, where are the 5G networks for them to connect to?
To investigate why the arrival of 5G has elicited such a collective ‘meh’ from the industry we need to look at the three main technological subsets that are generally considered to comprise it. They are: Enhanced Mobile Broadband, Massive Machine-type Communications and Ultra-Reliable/Low-Latency Communications. These are illustrated in the slide below from a recent presentation given by Interdigital, which is already wondering what’s next for 5G, as is Qualcomm if the the photo taken of its stand above is anything to go by.
EMBB is essentially more 4G, in so much as it’s essentially a fatter pipe, enabling faster data transfer rates. The problem is there is currently little need for 1 Gbps+ mobile broadband data rates and 5G cheerleaders are reduced to banging on about streaming 4K video, which is completely pointless on a mobile device anyway since the screens are too small to make use of it.
MMTC is otherwise known as IoT and, while it has massive potential, it’s debatable how accurate it is to describe it as a 5G technology. IoT has been progressing just fine without 5G and the standardisation process is largely independent of it. Furthermore some IoT applications can even be satisfied by 2G, so it’s not plausible to position IoT as the killer app for 5G.
The really novel, disruptive technology promised by 5G is the low-latency/ultra-reliable play. At first, talk of latency and reliability seems very technical and dry, but when you start to see some of the opportunities offered by removing the delay in transmitting a signal from one point to another, no matter how far apart they are, you get a sense of the full potential of this aspect of 5G.
On the Ericsson stand we bumped into our old friend Professor Mischa Dohler, who at MWC 2017 felt moved to defend the potential of 5G-enabled remote surgery, after we had used it as an illustration of how ahead of itself the industry had become over 5G. Dohler confirmed our suspicion that low-latency is where the real action is going to be, and pointed us towards the very cool video below of him duetting with his daughter over 5G while they were 1,000 kilometres apart.
Another cool low-latency use-case was provided by Javier Polo, Luis Fernando Fernandez and Juancho Carillo of Spanish cloud gaming specialist PlayGiga. They had a demo showing how cloud virtual reality is made possible by the low-latency capability of 5G and spoke about its importance for mobile cloud gaming in general.
In fact once you eliminate the delay you can bring the cloud into play in all sorts of new ways. Speaking to Alan Carlton of Interdigital, who delivered the aforementioned presentation, we explored a future in which every screen is effectively a thin client that anyone can log into and use as their own device, with all their stuff accessed instantly from the cloud. That could be truly disruptive, while at the same time massively commoditising the devices market.
So we have to concede that the 5G low-latency angle is exciting, but before you think we’ve completely contradicted ourselves over the course of this piece bear in mind that we’re nowhere near seeing it in a commercial environment. Meanwhile we’re even further away from the kind of 5G base station ubiquity you would need to make this low-latency driven all-encompassing cloud into existence.
The sense of antixclimax this year is a product of the telecoms industry’s usual vice of over-promising. Yes, 5G is finally here in its earliest form, but we’re probably still five years from having the kind of infrastructure that can support any of these utopian scenarios. So this year we have FWA and the first devices, but unless each subsequent MWC is accompanied by at least one major new 5G-enabled use-case they risk feeling as anticlimactic as this one. If we’re not careful, everyone will get bored and move onto 6G instead.
Lastly we should also give a special shout out to Nokia, who provide great facilities for us hacks at the show regardless of how much trouble we cause them, and from whose stand this piece was written, fuelled by excellent connectivity and miniature multi-coloured sandwiches. They give good press room.
Nokia’s big MWC 2019 reveal went big on 5G fixed wireless access with the launch of its FastMile 5G Gateway.
FWA is a popular early use-case for 5G. It’s presumably a lot simpler to set up a 5G connection to a static domestic router than to a mobile handset, but you still get to say you’ve done some 5G. Aside from showcasing 5G in the wild, FWA is all about providing decent broadband to places that otherwise lack it.
Nokia claims the FastMile 5G Gateway serves up 10-25 times more bandwidth then LTE. It uses sub-6 GHz 5G spectrum, so will still have half-decent range. It’s being described as ‘plug-and-play’, which is geek-talk for ‘easy to set up’ and seems like a fairly inoffensive bit of industrial design. We don’t know what its costs though.
FWA is also being positioned as an early bit of ROI for operators upgrading their networks to 5G, although Nokia is only anticipating around 50% growth in its use – from 18 million to 27 million households globally – by 2022. When you’re dropping a ton of cash on a network upgrade it’s never to early to have something to show for it.
One operator that seems at least partially convinced is Optus in Australia, where you can imagine there are a fair few remote households in need of a bandwidth boost. It has been the first to trial the FastMile in a live network and seems to think it’s gone well, so much so that it will have 50 live 5G sites using it by the end of March.
“These are historic milestones for Optus as we focus on delivering our customers the very best 5G experience,” said Allen Lew, CEO at Optus. “Nokia has partnered with Optus to accelerate our preparations for 5G and as a result we are first in the world to deliver live 5G NR FWA services using the Nokia’s FastMile 5G Gateway.”
“We are excited to partner with Optus on their 5G vision with solutions that will create a better, more connected future for Australia,” said Sandra Motley, President of Nokia’s Fixed Networks Business Group. “With our 5G FastMile solution Optus will be able to unlock the full potential of its mobile network and deliver new ultra-broadband services to customers.”
The rest of Nokia’s announcements were predictably 5G-ish too. There are some trials and general 5G conviviality with Bharti Airtel, Korea Telecom and Vodafone. On top of that Nokia is helping Sony Pictures bleed its Spiderman asset yet again by combining with Intel to serve up some kind of 5G VR experience at their respective MWC booths.
Mobile operator Three UK has upgraded its network with a fully cloud-based 5G-ready core and has started internal trials of the service. It plans to launch 5G later this year.
Three announced that it is testing the world’s first fully cloud-based core network, delivered by Nokia. The software-based core network is 5G ready and is already carrying the ongoing trial for Three’s own staff. The trial is on the 3.4-3.8GHz spectrum Three bought with over £164 million in the auction concluded in April 2018.
The readiness is also achieved on the edge. Three announced that by December 2018, all its mast sites were already connected to the new cloud-based core networks, meaning when 5G is switched on all Three customers would be able to access 5G services, provided they have the 5G-enabled user devices (fixed wireless access modems, or smartphones and tablets).
Another infrastructure update Three announced is the expansion of its datacentre network. The operator used to have three datacentres in London and the Midlands. After the latest upgrade, it now has “21 data centres spread from as far North as Edinburgh to Portsmouth in the South” which are all live and “have been connected up with fibre”, said the statement. In practical terms, the more distributed datacentre network would reduce latency experienced by the users faraway from southern England, giving customers more or less equal user experience.
Indeed, “enhancing its market-leading customer experience and becoming the best loved brand in the UK by its people and customers” is the explicit target of Three’s latest network upgrading. The company reiterated its target to launch commercial 5G service later this year, after committing to invest over £2bn into 5G. “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,” Dave Dyson, Three UK’s CEO, said late last year.
According to the latest telecoms complaints numbers released by Ofcom in January, Three received 4 complaints per 100,000 customers, narrowly behind its mobile competitors EE and O2 (3 complaints each) but way ahead of Vodafone (8).
Samsung is reported to be investing heavily in infrastructure business to fill the market gap left by Huawei’s ban from 5G business in the developed markets.
Sources inside Samsung and other industry executives have told the Reuters that Samsung is pouring resources into its telecom infrastructure business unit, aiming to seize the opportunity created by the ban on Huawei in a number of important western markets. Samsung’s infrastructure business had been insignificant until recently, trailing Huawei, Nokia, Ericsson, Cisco, and ZTE, according to figures from the research firm Dell’Oro Group. But it saw a chance when first ZTE then Huawei found themselves being shut out of the lucrative 5G markets in one country after another in the developed world.
To join the ranks of Ericsson and Nokia, Samsung is said to be moving strong management resources as well as software engineers from the smartphone unit to the infrastructure business and to have started charming Huawei’s current customers. One of the global heavyweights that has been impressed by what Samsung has got to offer is Orange. After visiting Japan, where Samsung was conducting a 5G trial, Mari-Noëlle Jégo-Laveissière, Orange’s CTO, was happy to include Samsung in its shortlist of alternative suppliers, after the telco decided to ban Huawei, its long-term top supplier, from its 5G business in France. An Orange 5G trial with Samsung will be conducted this year.
One difficulty Samsung needs to overcome is the shortage of talents. To start with it needs good engineers. To this end, Samsung’s heir apparent and de facto head Lee Jae-yong, or Jay Y. Lee as he is known in the western world, has sought the support from the Prime Minister when the latter visited Samsung in January. “We need more software engineers and want to work with the government to find that talent,” Lee was quoted by government officials. Samsung’s infrastructure unit has a workforce of about 5,000 people, both Nokia and Ericsson employ more than 100,000 people, and Huawei is said to have employed 200,000 people.
Another type of people Samsung needs to get onboard is those that can build operator relations. This needs a different skill sets from what Samsung has excelled in dealing with distribution channels for its smartphones, and it needs them to be in all the right places in the mature markets, and, better still, to have already worked with the potential operator customers. Due to the nature of business, trusty relationship with telcos often need to be cultivated for years or even decades.
However, Samsung may have just chosen a perfect timing for expansion. Both Ericsson and Nokia are laying off people, either wholesale shutting down of full business units, or selectively downsizing certain teams. Many of these functions have actually had customer interface experience. Huawei’s founder meanwhile has warned that the company may also need to adopt some cost control measures. Though they could not bolster Samsung’s strengths to the same level of its competitors, these could all be good recruitment targets for Samsung to pounce.