Nokia scores a new PON deal with Openreach

Finnish kit vendor Nokia received a boost to its fixed line business by securing a bunch of fibre work from UK network wholesaler Openreach.

Openreach is the semi-autonomous bit of BT that manages its wholesale fixed line network. As a consequence it is the company most responsible for rolling out fibre to the home across the UK, which means it needs lots of optical kit. Much of the announcement focuses on what a great idea fibre is, what with it being much faster than copper and all that, and how good for the country having more of it is.

They do eventually get to the point, however, noting that Nokia’s contribution to the Openreach fibre rollout, which is aiming to reach 4.5 million premises by the end of March 2021, will focus on deploying GPON and XGS-PON access technologies. This will futureproof the network by giving it the ability to deliver up to 10Gb/s symmetrical broadband speeds in the future, as well as giving it the latest virtualization bells and whistles.

“We’re accelerating our full fibre build to deliver an ultrafast, ultra-reliable and futureproof broadband network throughout the UK,” said Clive Selley, CEO of Openreach. “This new digital platform will help our economy to bounce back more quickly from the COVID-19 pandemic – enabling people to continue work from home, and millions of businesses to operate seamlessly online for decades to come.

“Right now, we’re making the new network available to around 32,000 homes and businesses every week, and Nokia’s innovative solutions are helping us to build it better, broader and faster. Our partnership with Nokia will be critical in helping us to upgrade the nation and hit our target of reaching four and a half million premises by the end of March 2021.”

“Ensuring everybody has access to broadband services is critical, especially during unprecedented times like these where it has become the lifeline to millions working, handling healthcare and learning from home,” said Sandra Motley, President of Fixed Networks at Nokia. “Our fiber solutions will help Openreach bring enhanced ultra-broadband services to millions of new customers across the UK today while our 10G PON technology will help to futureproof their network against whatever may come next.”

All this general talk about the virtues of fibre creates the impression that the deal itself isn’t amazingly significant. On the other hand it at least confirms Nokia’s role in the UK’s fibre network and permits the two companies involved to do a spot of connectivity virtue signalling, so fair enough.

Nokia claims latest 5G speed record

The latest company to claim the 5G speed record is Nokia, which chucked out 4.7 Gbps of supercharged data in a test environment.

800 MHz of millimetre wave spectrum were used, to generate the requisite fat pipe. The test was conducted on Nokia’s OTA network in Dallas, US. Apparently this is the gear US operators will be using when they get their 5G act together, but American punters would be well advised to manage their expectations about seeing anything like these speeds.

“This is an important and significant milestone in the development of 5G services in the U.S, particularly at a time when connectivity and capacity is so crucial,” said Tommi Uitto, President of Mobile Networks at Nokia. “It demonstrates the confidence operators have in our global end-to-end portfolio and the progress we have made to deliver the best possible 5G experiences to customers. We already supply our mmWave radios to all of the major US carriers and we look forward to continuing to work closely with them moving forward.”

Not everyone is convinced, however. The coronavirus pandemic has revealed how false headlines about 5G can easily suck up all the debate, taking the focus away from the benefits of this exciting technology,” said Guillermo Pedraja, Head of Networks, 5G & IoT Consulting at NTT DATA, in an unsolicited email that linked to the Nokia announcement. “Scientific evidence, not baseless rumours, are the way forward to a better and more connected world.”

It should be noted that Samsung recently claimed to have hit 8.5 Gbps, but that was only by adding two streams together. So it seems Pedraja has a point about people taking liberties with the numbers, but having said that we’re not aware of any reason to question Nokia’s claims. At the end of the day, 5G speed records make for easy PR wins, but don’t count for much in the real world.

Nokia rolls with the COVID-19 punches in Q1 2020

Finnish kit vendor Nokia managed a solid set of numbers in the first quarter of this year, despite supply hassle created by that most disruptive of viruses.

Revenues were down a little bit, year-on-year, but they would have been slightly in the black if not for €200 million worth of supply disruption causes by that goddamn coronavirus. On the other hand the operating loss was significantly reduced from €524 million a year ago to €76 in the most recent quarter, indicating the cost reduction programme is going more or less according to plan.

“Nokia’s solid first quarter results showed broad year-on-year profitability improvements as our transformation and product cost reduction efforts started to take hold,” said CEO Rajeev Suri in his prepared commentary. “On a year-on-year basis, group-level non-IFRS operating margin was up by 3.6 percentage points; Networks gross margin increased by 3.5 percentage points; Nokia Software had an excellent quarter with sharp margin improvements and strong momentum with customers in North America; and, Nokia Enterprise delivered double-digit sales growth.

“These improvements are, of course, coming at a time of unprecedented change, given the impact of COVID-19. Our top focus areas are protecting our employees, maintaining critical network infrastructure for customers, and ensuring we have a strong cash position. In Q1, we saw a top line impact from COVID-19 issues of approximately €200 million, largely the result of supply issues associated with disruptions in China.

“We are adjusting the mid-points within our previously disclosed Outlook ranges for full-year 2020 to reflect the increased risks and uncertainty presented by the ongoing COVID-19 situation. We expect the majority of this COVID-19 impact to be in Q2 and believe that our industry is fairly resilient to the crisis, although not immune.

“We did not see a decline in demand in the first quarter. As the COVID-19 situation develops, however, an increase in supply and delivery challenges in a number of countries is possible and some customers may reassess their spending plans. Pleasingly, despite the majority of our R&D employees working from home, we have not seen any impact on our roadmaps, and, in fact, some key software releases are proceeding ahead of schedule. Additionally, we saw a massive increase in network capacity demands.”

You can see selected slides from the Nokia presentation below. Note the 29% decline in Greater China sales, which seems to be offset by improved fortunes in the Middle East and Africa. Nokia seems to have been totally excluded from the Chinese market when it comes to the 5G RAN build-out, but its core and fixed line fortunes in the region remain unclear. Investors seemed happy enough with the numbers on the whole, with Nokia’s shares up 4% at time of writing.

Nokia lands $1 billion RAN deal with Bharti Airtel

Finnish kit vendor has signed a multi-year deal with Indian operator Bharti Airtel to deploy a bunch of its SRAN gear all over the country.

Nokia Single RAN consists of multipurpose hardware and common software for 2G, 3G, for TD- and FD 4G and 5G technologies, according to the Nokia site. It’s all about reducing complexity, increasing cost efficiency and future-proofing your RAN, apparently. While this isn’t specifically a 5G deal, Nokia apparently reckons it could turn into one fairly easily.

It wasn’t specified in the press release, but we are advised that the value of the deal is close to a billion bucks, which is a nice win for the cash-strapped vendor. Around 300,000 radio units will be deployed across nine of the 22 telecoms circles in India over the next three years, assuming anyone is allowed to leave the house in that time. So it looks like an SRAN unit sets you back around three grand.

“This is an important agreement for the future of connectivity in one of the world’s largest telecoms markets and solidifies our position in India,” said Nokia CEO Rajeev Suri. “We have worked closely with Bharti Airtel for many years and are delighted to extend this long-standing partnership further. This project will enhance their current networks and deliver best-in-class connectivity to Airtel customers but also lay the foundations for 5G services in the future.”

“We are committed to continuously invest in emerging network technologies to provide a best-in-class experience to our customers,” said Gopal Vittal, CEO (India and South Asia) at Bharti Airtel. “This initiative with Nokia is a major step in this direction. We have been working with Nokia for more than a decade now and are delighted to use Nokia’s SRAN products in further improving the capacity and coverage of our network as we prepare for the 5G era.”

This is especially welcome news for Nokia in the light of it completely missing out on any of the 5G RAN action in China. While it’s still a distant third behind Huawei and Ericsson in the 5G deal race, massive wins like this may not only give it some 5G action by stealth, they could also increase the confidence of other operators to give Nokia a go.

Nokia share price surges on takeover rumours

Nokia share price has jumped more than 10% following rumours the equipment vendor could be the target of a hostile takeover.

The rumours themselves can be traced back to TMT Finance, though such reports should always be taken with a pinch of salt. Nokia has allegedly recruited investment banking firm Citi to counter a transaction, but it refusing to comment on market rumours.

Although the report does not specify a source, making it more suspicious, the market has reacted in such a manner to indicate investors at least partially believe the rumours. Considering the losses racked up in the financial markets over the last few months, it would not be surprising if there were a few opportunists hiding in the darker corners devising such plans.

Company Share price Share price since February 18, 2020 Market capitalisation
Nokia €3.24 -18.2% 18.34 billion
Twitter $25.66 -30.24% 20.79 billion
Telecom Italia €0.36 -30.38% 7.51 billion
BT £1.23 -20.53% 12.24 billion
Uber $27.03 -32.73% 46.69 billion

Share price accurate at time of writing; 12.30pm, April 17, 2020

Thanks to the coronavirus outbreak, the global financial markets are not in the healthiest of positions. The Dow Jones is still down 19.5% from mid-February, with the NASDAQ down 13%, while the FTSE 100 has slipped 21.7% and the Euronext 100 has dropped 24.1%. For the majority, this is bad news, but those who are currently cash rich it presents a significant opportunity.

Certain companies will have drawn the attention of certain corners of the finance industry, and it is likely some of these are sniffing around. Vulture fund Elliott Management, for example, ramped up its ownership of Twitter in the months leading up to the coronavirus outbreak, pointing towards an under-performing share price. Such moves were made before the significant drops tied to COVID-19.

Looking at the table above, there are several prominent companies which might be targeted for hostile takeover, or at least attract the attention of activist investors.

Nokia is a company which may well be in the sights of numerous companies due to recent performance. This is a critically important company for the health of the telecommunications industry, so it is highly likely to have a sustained role, but it has not been able to keep pace with the likes of Ericsson and Huawei. Trends have depressed share price, making it a potentially attractive target.

If there is any truth to the rumours concerning Nokia, this would be a transaction being closely monitored by the relevant authorities.

Depending on who would be the purchaser of the network infrastructure vendor, there could well be a few regulatory authorities ready to veto. The US, for instance, should be very interested considering the role Nokia plays in the deployment of communications infrastructure in the country.

Having secured 5G commercial contracts with all four of the major telcos in the US, Nokia is set to play a very prominent role in the deployment of next-generation infrastructure, even more so when you take into account the firm is also one of the more successful vendors in the optical segment also. Having already ruled out any Chinese vendors, the options for US telcos are very limited, with Nokia being one.

Should the rumours be traced back to any companies or territories associated with China, it would be halted before any momentum is allowed to gather.

Nokia: traffic surges are flattening but DDoS is on the up

Nokia has released its latest update on internet traffic during the coronavirus outbreak, and while networks seem to be standing up to the strain, Distributed Denial of Service (DDoS) traffic is on the up.

As with every aspect of our lives, for all the good that some do there will always be others who try to take advantage of the situation. At a time where telcos are being presented with new challenges, the dark corners of the web are still home to those looking to capitalise on the tiniest of opportunities for nefarious means.

“We noticed a steady increase in the overall volume of DDoS traffic – with amounts exceeding the pre-pandemic levels by 40%,” said Craig Labovitz, CTO of Nokia Deepfield. “This increase may be related to the significant rise in gaming-related DDoS attacks; we continue to investigate this issue – so more to come on this topic.”

Distributed Denial of Service (DDoS) traffic is a malicious traffic aimed at rendering websites or online services inoperable. In short, it is the blunt tool of cybercriminals, one of the oldest tricks in the book but still very popular because of its effectiveness. By flooding one or more web servers with a disproportionately high-level of internet traffic, the aim is to reduce performance or take the service down.

One example has recently been discovered by Bitdefender researchers and has been named Dark_Nexus.

This new IOT botnet disguises traffic as innocuous browser-generated traffic to actively target IOT devices. There have been as many as 40 updates to the code between December 2019 and March 2020. It was potentially designed by greek.Helios, a known botnet author who sells DDoS services and botnet code.

On a slightly brighter note, Nokia has also confirmed traffic growth across Europe is flattening, likely due to a combination of peak video consumption, reaching practical maximum levels and the streaming services placing limitations on downloads. Many fears have already been calmed, but it is always worth reiterating; COVID-19 is highly unlikely to break the internet. Not unless it learns to twerk.

Internet traffic has been as much as 45% higher during the week following the introduction of self-isolation measures across Europe, and up to 20% higher on the weekend. Upstream traffic is still on the increase, but it does appear there is ample headroom for the telco networks to deal with the increased traffic.

Nokia China boss apologies for missing out on mega contracts

Nokia China CEO Markus Borchert has written an open letter to apologise for missing out on a significant chunk of 5G business, as well as a mysterious letter which appeared in the press.

Last month it was announced China Mobile, the worlds’ largest telco, would award the vast majority of its 5G contracts to Chinese firms, with Ericsson collecting a small slither. Nokia was left out of the equation, a bitter pill to swallow considering the cash which would be spent by China Mobile over the coming months and years.

In the letter which was published in People’s Post & Telecommunications News, Borchert stated it would remain a committed partner to China Mobile, and perhaps there was a bit of damage limitation also.

“We hereby solemnly declare that the letter ‘Nokia Bell from Shanghai to China Unicom on March 31’ circulating online recently does not represent our position and attitude,” Borchert also stated.

The letter Borchert is referring to painted a relatively gloomy picture for competition in China. With a Nokia Shanghai Bell letter head, it was supposedly written by an employee who described ‘drastic price cuts’ as a reason Nokia missed out on the China Mobile contracts. The letter also questioned the ‘historical performance’ of various vendors.

While Borchert has said the letter does not represent the opinions and position of Nokia China, it comes at a time where the wider business is under severe pressure in the 5G world. Nokia missing out on a major contract might not raise than many eyebrows, but the coming weeks will give more insight into how much of a future the Finnish company has in China.

Over the course of 2019, Nokia China brought in €1.84 billion in revenue, an 18% year-on-year decline, though this sales drop was 25% for the final quarter. This was the only region in negative growth for 2019, and considering China Unicom is about to go through its own 5G tender, the next few weeks will be a very nerve-racking time for the team. Failure with China Unicom could see the end of Nokia as any sort of force in the worlds’ largest telecoms market.

Nokia reveals impact of COVID-19 on network traffic

The Deepfield analytics team of networking vendor Nokia has been having a look at how network traffic evolved over March.

It comes as no surprise to see that video conferencing traffic went through the roof, with some US networks experiencing 700% growth in use of the app Zoom alone. Zoom has come under massively increased scrutiny as a result and is consequently having to raise its game. It’s also interesting to see how much more popular it is, especially at the weekends, than Skype, which had been presumed to be the default off-the-shelf video conferencing choice.

The other main source of network traffic is subscription video on demand. Apparently Disney+ already accounts for 8% of all SVoD traffic in some European networks and is maintaining a higher bitrate than the incumbents thanks to the use of six different content delivery networks. As you can see there is increasingly a spike in SVoD demand in the middle of the day that rivals the traditional evening one.

“Traffic increases continue across all regions, and networks seem to be handling these increases well,” conclude the blog. “However, as mentioned before, we are seeing additional demand placed on specific domains (peering, edge routing). Also, there is a need for the cloud-based infrastructure to scale up to support this increased demand.”

5G patent chest-beating is an unhelpful distraction

The constant propaganda sent out by the big kit vendors has recently moved onto 5G patents and the latest claims are more unhelpful than ever.

A couple of weeks ago Huawei flagged up a report from the European Patent Office entitled ‘Digital technologies take top spot in European patent applications’. The reason it did so was to bring attention to the table at the end of it that had Huawei as the clear leader among all companies when it came to patent applications to the EPO last year.

Then this morning Nokia sent out a press release headed ‘Nokia announces over 3,000 5G patent declarations’. Specifically the declaration was of 3,000 patent families to ETSI (European Telecommunications Standards Institute) that are essential for 5G and this milestone was positioned as a major step forward from the previous one six months ago concerning 2,000 patent declarations.

There followed a bunch of self-promotion and generic quotes from Nokia bigwigs about how into R&D the company its and, by extension, what a great company it is. The clear intention was to create the impressing that Nokia’s 5G R&D efforts have improved by 50% in the last six months, but it’s very difficult to verify that claim since there are so many unknowns in the claim.

Were the 2,000 patent declarations also ETSI 5G essential families or something else? What even is a patent declaration – is it an application or a full patent? If we are comparing apples with apples and the two milestones concern exactly the same type of claim, how has Nokia suddenly managed such a dramatic uptick in its 5G R&D efforts?

At least Nokia’s claims concern the 5G standard. Huawei’s big achievement was merely to file more applications for all kinds of technology with the EPO than any other company. Anyone can file a claim but that says nothing about the utility or viability of the patent in question and, if a company was determined to win a given patent application race, it could just order loads of its employees to file applications for any old rubbish.

Ericsson has yet to join in this patent pissing competition via press release and when we asked it for comment we were directed to this blog post from October last year, entitled Why you shouldn’t believe everything you read about 5G patents. In it Christina Petersson, CIPO and Head of IPR & Licensing at Ericsson, argues that when you apply certain essentiality filters, Ericsson comes out on top when it comes to 5G patents.

We might be a bit thick here at Telecoms.com, but we find all these claims and counterclaims totally confusing and impossible to derive any useful conclusions from. So we asked around the industry and came to the conclusion that we’re not alone, even among people whose job it is to understand this stuff.

Our instincts about the Nokia announcement were supported, that they may well be comparing apples with oranges, disguising that fact with slippery PR language. For those claims to have substance they needed to be a lot more specific. On top of the vagueness surrounding the 2,000 milestone, we don’t know if those 3,000 patent families are unique to 5G or just recycled legacy patents.

This apparently happens a lot, you see. 5G wasn’t created in a vacuum, it stands on the shoulders of 4G and many of the patents that concern the underlying physics of lobbing voice and data from a transmitter to a phone go back to even earlier generations. So many of the technologies required to make 5G work were actually invented decades ago, but still apply today. That’s fine but if participants in the patent Olympics are counting old patents among their big 5G achievements that’s cheating, surely.

Then you have the matter of where the patent applications are filed. It’s easy to file a patent but a lot harder to have it granted. That involves getting a lot of things right and jumping through a lot of bureaucratic hoops. In principle you literally write a claim on the back of a fag packet and hand it in, and that would count as an application. ETSI seems to be the gold standard when it comes patent rigour.

Around half of Huawei’s 5G patent applications seem to have been made in China, however, and they account for half of all such applications made in China. While there’s nothing intrinsically wrong with that, it’s worth noting that Samsung and LG, which are in the top three 5G patent applicants alongside Qualcomm, have hardly filed any applications in Korea. It’s almost as if the barrier to entry for patent filing in China is somehow lower.

Apparently it didn’t used to be like this. There were no press releases talking up how many patents a company had filed and such things weren’t used as a proxy for general R&D competence. The impression we get is that it was kicked off by Huawei, which is showing an increasing fondness for chucking thinly supported claims around, and the likes of Nokia feel compelled to return fire.

So why would Huawei, which still seems to be on top despite the best efforts of the US government, feel the need to resort to such questionable tactics to inflate its public image? The answer probably lies in its increasing belligerence in the face of President Trump’s provocations, as illustrated by its recent decision to file a lawsuit against Verizon. Again, this is unprecedented, as companies tend not to sue potential customers.

There has been a steady drip of propaganda positioning Huawei as the clear 5G technological leader. The message seems to be that if countries allied to the US decide to ban Huawei from their 5G networks, that will put them at a significant disadvantage against those who don’t. Additionally it tells the US that Huawei doesn’t need it anyway and strikes a general tone of defiance.

The fact that this patent war is being waged in Europe probably isn’t a coincidence either, as that is the primary battleground in the geopolitical battle of wills between the US and China. Every time a European country refuses to ban Huawei that represents a win for China and its belt-and-road strategy of economic imperialism.

The fact remains, however, that nearly all of the patent announcements being chucked out there are largely meaningless given the lack of qualification and context attached to them. Most patent applications made now won’t be processed for around four year, and it’s only then that we’ll know who the 5G technology leader is. Until then the industry would be well advised to take any claims with a big pinch of salt. We certainly will.