Verizon plugs healthcare in the never ending search for 5G ROI

Delivering 5G is the easy bit, figuring out how the telcos are going to make any real financial gains from it is the piece of the puzzle which is missing.

In its pursuit of the much lauded 5G profits, Verizon has announced a partnership with Emory Healthcare, creating what it now claims is the first 5G healthcare innovation lab in the US.

“The potential of Verizon 5G Ultra Wideband combined with mobile edge computing to transform healthcare is limitless,” said Tami Erwin, CEO of Verizon Business Group.

“Which is why Verizon is partnering with Emory to explore the 5G future of patient care. With 5G, doctors should be able to do things like create holographic 3D anatomical renderings that can be studied from every angle and even projected onto the body in the OR to help guide surgery.”

In what now appears to be the greatest PR campaign of the 21st century, the world was told 5G was the only way forward and it would recapture the lost fortunes of yesteryear for the telcos. The reality is somewhat different however as many telcos are still questioning how they are going to generate any ROI from the next generation of mobile technology.

The silver bullet is as real as a sociopathic unicorn, and it does now appear the industry has a new reality to ponder; profit by a thousand usecases.

In its efforts to create value in the healthcare industry, the Emory Healthcare Innovation Hub (EHIH) will aim to transform this vertical through the marriage of super-fast speeds and ultra-low latency networks, with real-time data analytics to add some credibility to the blue-sky thinking ideas of robotic surgery, the connected ambulance and remote patient monitoring.

Realistically, there is a lot to gain in the healthcare industry. This is a vertical which is under financial and operational pressure, and in desperate need of new ideas. Should the clunky bureaucracy of healthcare administrators be able to offer technology a clear path forward, there is an opportunity to create a preventative healthcare mission and significantly realise efficiencies throughout the hospital.

While it might seem like an obvious statement to make, the challenge which the likes of Verizon and Emory Healthcare will face here is going to be cultural. Perfecting the technology is the easy part of the equation, but convincing traditional industry to disrupt themselves will be a monumental task.

How North America will realise the promise of 5G with network densification

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Francesca Greane, Marketing, Content and Community Lead for The BIG 5G Event 2020, discusses the role of Network Densification in realising the promise of 5G.

Digital usage trends—such as 220 million connected vehicles on the road by 2020 and videos accounting for 82 percent of internet traffic by 2021—all point to the need for faster and more converged networks, but there is still uncertainty around how these networks will actually be achieved.

Indeed, network costs are expected to double with 5G, and North American operators are expected to start running out of capacity in at least 50% of sites starting 2020. Depending on the area (urban or rural), carriers will be able to meet the increased traffic needs by densifying their networks with macro-sites or small-cells. And while urban environments will bring the increased revenues, there is pressure on from a federal level to equally cater for rural connectivity needs.

As the CFO of Sprint, Tarek Robbiati, put it in an interview with Wireless Week: “We are not building a network that is 4G; 4G is almost a thing of the past. We are building a 5G network for the future and 5G networks are fundamentally different to 4G networks. They are all around high capacity and the more spectrum you have the more capacity you have, the more spectrum you deploy the more you can connect customers and the more speed you can give customers across your network and that requires a fair bit of densification.”

Some of the primary ways to achieve network densification include increasing the number of antennas and small cell sites as well as upgrading to sector-splitting and massive multiple input/multiple output (MIMO) technologies yet, even though the technology is largely there, the market is still lacking in commercial examples of building, launching and monetising a densified commercial network.

To help tackle this, experts from Boingo Wireless, Heavy Reading and Verizon will be joining The BIG 5G Event’s upcoming webinar on March 10th in order to explore North American commercial experiences of densifying a network and applications of cutting-edge technologies that will accelerate this process and bring valuable ROI.

Breaking down topics such as the concept of mMINO and applications, how beam forming will improve network performance, what network topology needs to be put in place to make mmWave work, network slicing to support 5G applications and so much more, this is an exclusive opportunity to gain business-critical insights around network densification as you plan your 5G roadmap for 2020, 2021 and beyond!

Simply click here to register for the webinar for free.

To discover the latest trends for 5G in North America, claim your ticket to The BIG 5G Event 2020 (May 18-20, Dallas, Texas). Gain insights from senior representatives from Sprint, T-Mobile, Verizon, AT&T and more as they detail their plans for 5G rollout in 2020 and beyond. Simply click here to get your ticket. 

Ericsson shares drop on disappointing North America numbers

Sales at kit vendor Ericsson barely grew in Q4 2019, with most of the blame being pinned on the protracted merger of T-Mobile US and Sprint.

When adjusted for adjustments total sales increased just 1% year-on-year, thanks to a 9% decline in North America. As you can see from the tables below, Ericsson had plenty of growth earlier in the year in North America, so this is a fairly significant reversal of fortunes. Ericsson would like us to believe it was an aberration brought about by the uncertainty surrounding the TMUS/Sprint merger, but that’s been going for a while so it’s not obvious why it would suddenly have such a profound effect.

“Due to the uncertainty related to an announced operator merger, we saw a slowdown in our North American business in Q4, resulting in North America having the lowest share of total sales for some time,” said Ericsson CEO Börje Ekholm. “However, the underlying business fundamentals in North America remain strong.

“Operating income was impacted by increased operating expenses. The increase is related to the Kathrein business acquisition, increased investments in digitalization and added resources to strengthen security as well as our Ethics and Compliance program. For 2020 we expect somewhat higher operating expenses, which will not jeopardize our financial targets.”

It looks like investors didn’t totally buy the North America narrative either, with Ericsson’s shares down around 8% at time of writing. Ekholm spoke at length about how important it is to continue to build for the long term and not sacrifice that for short-term gains. That’s fine, but many more quarters like this and even that strategy will be called into question.

New York Governor proposes localised net neutrality rules

New York state will join the likes of Washington and California in creating localised net neutrality rules.

Governor Andrew Cuomo announced the new rules to follow-up an executive order from 2018 which prevented Government agencies from entering into contracts with telco and technology companies unless they followed net neutrality principles. While the complications of contradictory state- and federal-level rules have not been fully appreciated, New York joins the crowd in ignoring the FCC.

“A free and open internet is one of the great equalizers — allowing every person the same access to information and helping protect freedom of speech,” said Cuomo.

“While the federal administration works to undermine this asset, in New York we are advancing the strongest net neutrality proposal in the nation so big corporations can’t control what information we access or stymie smaller competitors. These protections will help ensure an open market for ideas and content across platforms and preserve the unimpeded access to online content the public wants and needs.”

As part of the rules, telcos will be prevented from any blocking, throttling or paid prioritization of online content, while ‘zero-rating’ products will also be deemed illegal. Cuomo believes these rules exceed the levels of protection which were offered to the consumer under the net neutrality rules put in place by former FCC Chairman Tom Wheeler.

Although the net neutrality rules were officially undone by a Republican-controlled FCC on December 14, 2017, New York now becomes the fourth state to create its own rules. Washington State was the first, though California and Maine have followed suit. The next Presidential Election will dictate the next chapter of this story, though the current position is not healthy.

What is slowly emerging across the US is a fragmented regulatory landscape. This is not only because of the polar opposite approach in New York, California, Maine and Washington State compared to the FCC’s stance, but also the nuances between the different net neutrality regulations. None will be exactly the same creating a patchwork of legislative complications. Companies like consistency, and this is anything but consistent.

New Orleans declares State of Emergency after cyber-attack

Servers were powered down and devices unplugged as New Orleans suffered a cyber-attack comprehensive enough to force Mayor LaToya Cantrell to declare a State of Emergency.

Officials have said suspicious activity was noted on the network at 5am on Friday morning (December 14, 2019), though the emergency preparedness office, NOLA Ready, has been keen to drive home the message that there has been no evidence of significant data loss due to this cybersecurity incident.

What is worth noting, is this does not mean the City is in the clear, it simply confirms employees have not found the damage. These cyber-criminals likely compromised defences for a reason, and just because City Officials do not understand that reason for the moment does not mean damage has been avoided.

“We are in recovery mode,” said Cantrell during a press conference. “There is no evidence of personal data being lost at this time. Credentials were compromised but again we are now beginning recovery.

“4,000 computers will need to be scrubbed, 400 servers were affected, about 7,000 terabytes of data, 20 systems overall that we believe in terms of being brought online, and that touches heavily public safety.”

While few bureaucrats grasp the concepts of the digital economy, this incident drives home not only the dangers but also the lack of preparedness in combating the darker characters of the World Wide Web. In this incident, officials might be able to state that systems were shut down before any damage could be inflicted (or at least that is believed currently) though they were not able to stop the criminals from breaching defences in the first place.

This should not be swept aside, though it likely will. This is the latest in a string of cyber incidents across the US, highlighting the inadequacies of cyber security at public sector organisations, and it will only be a matter of time before genuine damage is inflicted in one manner or another.

Aside from this example, in July, school computers across Louisiana has to be taken offline in response to a ransomware attack. It is not known whether these two incidents are connected. A few weeks later, 23 government agencies were shut down as the State of Texas suffered a comprehensive ransomware attack.

These incidents should be considered warning shots, and it is very worrying at how often government agencies are taken offline. Another worrying factor to consider is that these are the incidents which are known; how many cyber defences have been compromised without setting off the alarm bells? Many governments are aggressively pursuing the digital economy, though perhaps these incidents suggest risk is not being managed appropriately.

Net neutrality argument reappears with another court appeal

A coalition of consumer interest groups are attempting to reinvigorate the dying embers of the net neutrality debate with a petition filed with US courts.

Filed in US Court of Appeals for the District of Columbia Circuit, the very same court which turned down the original appeal in October, the petition has asked the judges to reconsider their decision. The petition suggests the ruling from the October appeal conflicts with the decisions and precedent set by these judges and the Supreme Court in previous competition cases.

“The court unfortunately got it wrong when it upheld the FCC’s decision to arbitrarily side-line itself from protecting consumers’ internet access,” said Ed Black, President of the Computer & Communication Industry Association (CCIA).

“Open access is important for all internet users, and for businesses it supports more competition and innovation by putting the next start-up on equal ground with bigger businesses. With so many politicians calling for more competition and better enforcement, it would be a shame to miss an opportunity to uphold open internet rules which have supported competition.”

Alongside the CCIA, the petition has been filed by the Public Knowledge, Free Press, the Center for Democracy and Technology, New America’s Open Technology Institute and the Benton Institute for Broadband and Society.

Despite numerous challenges from consumer interest groups and Attorney Generals, the net neutrality debate did look to have come to a conclusion. After years of friction, the DC Court of Appeals confirmed in October that the FCC was perfectly within its rights to repeal the net neutrality rules, adding credibility to the assertion from the regulator that competition and fair access to the internet can be retained without the stringent oversight.

Interestingly enough, in the petition filed on Friday, the groups are suggesting the rules and definitions of consumer protection and competition are flawed, as opposed to criticizing the FCC’s ability to enforce them. This is a different strategy from the court proceeding which have been initiated in the past, though whether the consumer groups have enough weight behind them remains to be seen.

The previous cases against the FCC’s dismantling of net neutrality generated momentum thanks to significant support from Big Tech companies, but also from the general public. This support might have forced the hand of some politically-minded bureaucrats, but the courts backed the FCC. Renewed efforts without the previous support might struggle.

Verizon unveils mixed bag as media continues downward spiral

Verizon has released its third-quarter financials with the mobile business growing, broadband middling and media dropping.

Total revenues for the three-month period ending September 30 stood at $32.09 billion, a 0.9% increase year-on-year, though it has racked up $97.093 billion across 2019. As with previous quarters, there are positives to take away though the media business is still weighing heavy on the prospects of the group.

“Verizon continued its momentum in the third quarter by driving strong wireless volumes in both our Consumer and Business segments, while delivering solid financial results, highlighted by continued wireless service revenue growth, increased cash flow, and EPS growth,” said CEO Hans Vestberg.

As many would have imagined, little attention was given to the fragile media business. With each financial statement, the $5 billion bet on Yahoo’s media assets looks a little bit more like a waste of funds. Revenues in this business totalled $1.8 billion, down 2% percent year-on-year.

What was supposed to be the pursuit of alternative revenues in the ever-growing digital advertising segment is seemingly turning into nothing more than an Elephant’s Graveyard for assets in the digital economy. Aside from divesting interests in Flickr, Moviefone, MapQuest and Tumblr, Verizon is also reportedly on the search for a buyer for the Huffington Post. Perhaps executives have just had enough and are searching for a way to elegantly backtrack.

The failings of this business unit have been well-documented, so we do not want to invest too much time here, but Verizon was always going to fighting a losing battle. Winning a slice of the digital advertising profits requires out-of-the-box thinking, the ability to make money out of nothing. This is what Google, Amazon, Facebook and other innovative digital players can do.

But Verizon is not that type of business. It is a functional, engineering-focused, traditional beast. From a culture and risk-appetite perspective it was always going to struggle to compete with the lateral thinking Silicon Valley residents, and this is further evidence.

That said, when Verizon focuses on what it does best it can make money. The mobile business unit boasts of 193,000 retail postpaid net additions over the quarter and revenue growth of 2.6% year-on-year. Revenues for the broadband business are down year-on-year, but the number of Fios subscriptions are up 2.3%. It might not be as exciting to talk to investors about the world of connectivity compared to digital advertising, but it is what the company is very good at.

The team should of course attempt to secure new revenues to bolster the bottom line as the business of connectivity becomes increasingly commoditised but taking on the likes of Facebook and Google for digital advertising revenues always looked like too much of an ask.

Although this is a dampener for the Verizon business, there is more than a glimmer of hope around the corner; 5G.

There might be some questions regarding the coverage of its mmWave spectrum, but Verizon is making progress with 5G deployment. Alongside the financial results, the team also hit the go button for 5G in Dallas, Texas and Omaha, Nebraska. All of the launches are very limited from a coverage perspective, but momentum is gathering very quickly.

5G can form the catalyst for growth is the telcos force themselves through their own digital transformation. Let’s be clear, the telcos will not escape the utilitisation trends with 5G alone. The business needs to be transformed to offer new connectivity solutions to enterprise and consumer customers alike. Digital transformation is a more pressing concern for telcos than any other vertical.

But there is hope on the horizon. The lure of 5G contracts are proving to be tempting for consumers, which will help the bottom-line as data tariffs quickly surge towards unlimited as standard, and enterprise customers are enthusiastic about the connectivity euphoria. There are of course companies who want to steal the profits from the telcos, but the opportunity is still there.

AT&T in talks to appease Elliott: sources

Reports have emerged to suggest the AT&T management team is attempting to reduce pressure from activist investor Elliott Management.

According to Reuters, AT&T has engaged the vulture fund to understand how demands can be met without causing too much disruption to the business or undermining the long-term ambitions of the business.

Elliott Management is pressing AT&T to cut costs, make changes in the management offices and scale back the wider ambitions of the business. One element to the call-to-action from Elliott Management has been to divest non-core assets.

Aside from saving their own jobs, the management team will want to appease the aggression of the vulture fund. With the acquisitions of both DirecTV and Time Warner, the ambition is to diversify revenues, capturing the excitement being generated in the content world. That said, should Elliott Management get its way the AT&T business would be much more commoditised focused almost exclusively on connectivity.

The AT&T business is an interesting one which has polarised opinion. It perhaps has been too cavalier with the cheque book, but few will dismiss the ambition to chase after new revenues. Every forward-looking telco recognises the threat of ignoring diversification and the slow trudge towards commoditisation, though this does not concern Elliott Management.

For Elliott Management, the objective is simple; increase dividend payments and raise share price. Once these two objectives have been met, the team will sell off its stake and collect the profits. This is a mid-term strategy, and it is effective for money men, but it does present a danger to the long-term positioning of AT&T as an influential player in the digital society.

Elliott Management can cause waves, though the ability of the management to control this disruption will give some sort of indication of what AT&T will look like in the future.

AT&T takes another step towards the global IOT dream

AT&T has signed a partnership agreement with Canadian telco Rogers, to extend LTE-M coverage for IoT customers of both companies, throughout Canada and the US.

Rogers IoT customers will now have the ability to roam on the AT&T LTE-M network, with the same privilege being offered the other direction. With AT&T relying heavily on IOT to drive new engagement with enterprise customers, this is another example of the US telco spreading its wings across the globe.

“More and more of our enterprise customers are launching IoT applications across international boundaries,” said Chris Penrose, President of Advanced Mobility and Enterprise Solutions at AT&T.

“Having access to the Rogers LTE-M network across Canada will help them simplify deployments and scale their North American IoT plans.”

The emerging IOT world is one which offers a huge amount of promise for the ambitious AT&T team. In a briefing at Mobile World Congress this year, AT&T told us the opportunity was not only from connectivity, but to move up the value-chain and create platforms and customisable software solutions for enterprise.

There are of course multiple elements to ensure this dream can be realised, however a network which reaches beyond the borders of the US is critical. The IOT business can survive in a single country, but if you want to work with the big boys you have to be able to offer a network which meets the demands of an international business.

With the Rogers partnership, the trio in Canada has been completed. AT&T has a network in Mexico and also a significant partnership in Europe. The European collaboration offers AT&T access to KPN’s LTE-M network in the Netherlands, Swisscom’s in Switzerland and Orange’s in France and Romania. The European operators also gain exposure on AT&T’s networks in the US and Mexico.

With these partnerships in place in Europe, AT&T can expect to cover a significant proportion of the continent, though there are still some significant holes. Orange plans to fill in some of the blank spots with LTE-M launches in Belgium, Slovakia, Spain and Poland, though there is still some work to do.

This is the challenge which AT&T faces in the IOT world. It might be one of the largest and most profitable telcos worldwide, but it is largely limited to the US. If you look at other operators, Orange or Vodafone for example, the physical presence around the world is much more notable. This will factor into the thinking of a few multi-national customers.

FCC moves to kill off all exposure to Huawei in rural networks

FCC Commissioner Geoffrey Starks has stuck the knife into Huawei at an industry conference, suggesting rural telcos will be given financial assistance to cleanse their networks of the vendor.

Speaking at the Competitive Carriers Association annual conference, Starks targeted the Chinese telecommunications industry on the whole, and Huawei in particular. Not only is the FCC exploring ideas on how to ban the purchase of Huawei equipment entirely, but also the introduction of an initiative which would offer federal dollars to search for, and remove, legacy Huawei equipment which might be in the network.

“Huawei is one of the biggest telecom equipment manufacturers in the world, and although its share of the U.S. telecom market is relatively small, some wireless carriers have purchased Huawei equipment for their networks,” Starks said.

“These carriers bought this equipment, often a decade or more ago, because it was far less expensive than other options, and because Huawei was willing to work with them to create customized networks.

“The Commission is currently examining whether to ban the use of federal support dollars for the purchase of such equipment, but we can’t ignore the problem of the equipment that’s already here.”

Starks is the FCC frontman for a new programme which has been known as ‘Find it, Fix it, Fund it’. The initiative will provide funding to telcos to self-assess networks and identify what would be deemed as ‘suspect equipment’. Currently it is voluntarily, though it does appear there are regulatory changes on the horizon to make the initiative a compliance issue.

In the short-term, the equipment might be allowed to stay in the network, though it would be quarantined. Long-term, Starks is suggesting every piece of equipment would have to be ripped and replaced.

The financial support from the FCC is an interesting element, and it does seem to have been working with the private sector to advance its ambitions.

“Nokia and Ericsson have said that they are willing to create products and financing options geared toward smaller carriers that need to replace Chinese equipment,” Starks said. “They also claim that they have had handled similar replacement efforts with minimal customer disruption.”

The challenge which many of these rural telcos are facing. Financially these companies are under strain. Connectivity is an expensive business and the rural players cannot experience the same economy of scale benefits the national players can. Ripping and replacing prior investments would be a kick in the teeth for already financially tense environments.

This is the reason Huawei has been successful in engaging rural and regional connectivity providers in the US. Not only does it offer a broader range of products, some of which are much more financially attractive, but it has been much more open to customisable deployments than rivals. The US is an incredibly varied geography, there is not a one-size-fits-all opportunity here.

A lack of competition and the removal of the cheapest network infrastructure provider is a massive concern for the rural and regional telcos. However, with the help of federal funding and new business offerings from Ericsson and Nokia, the financial burden of rip and replace regulations might be lessened. This does not mean networks will be better or cheaper in the long-term, but it is a nod from the FCC to the immediate concerns.

Aside from this conference speech from Starks, further evidence of Chinese aggression has emerged from the US.

Senators Chuck Schumer and Tom Cotton have called for a ban for China Telecom and China Unicom to use US networks. China Mobile has already been facing difficulties in obtaining a licence to operate in the US, though this further expands the scrutiny which is being placed on Chinese companies.

In a letter to the FCC, Schumer and Cotton have suggested the two telcos, both of which have direct links to the Chinese Government, could use networks to target US communications. They have also suggested the pair could use the licenses and exposure to US networks to reroute traffic through China.

Perhaps this is an incident which many should have expected, but it does demonstrate the US Government is taking a more comprehensive approach to tackling China, bringing more companies into the fray.

Last month, it was suggested the Department of Justice is attempting to put the brakes on a subsea cable which is being funded by Facebook and Google, as well as a Chinese partner. Dr Peng Telecommunication and Media Group does have ownership ties to the Chinese Government, though two US firms could get hit by collateral damage through this DoJ investigation.

All of these incidents indicate the aggression from the US Government is widening and becoming increasingly complex. The likes of ZTE, Alibaba, OnePlus and Xiaomi should perhaps be wondering when they will be dragging into the conflict.