China Telecom and China Unicom jointly build and share 5G RAN

China Telecom and China Unicom, two of China’s three leading telecom operators, and two of its four 5G licensees, will jointly cover parts of the country with one shared 5G radio access network.

The two companies, both listed on the Hong Kong Stock Exchange, signed the “Framework Agreement on Co-building and Co-sharing 5G Networks” on Monday. According to the Agreement, the two operators, by sharing the radio spectrums to their names, will “build together” and “share together” one 5G radio access network in 15 major cities, including Beijing, Shanghai, Shenzhen, Guangzhou, etc. The 5G core networks will be built separately.

The Agreement also laid out the plan on how to divide the work between the two in the cities they will share the network. Territories each will cover is divided roughly based on the number of 4G base stations. For example, in Beijing, China Telecom will build 40% of the 5G base stations, while in Shanghai it will build 60%. Each company will be responsible for investing in, maintaining, and operating the base stations it builds. The Agreement also commits “non-aggression” between the partners, for example, collaboration with third parties by one partner should not harm the interest of the other partner. Details of revenue settlement in the shared networks will be worked out later.

On top of that, the two companies will build their own separate 5G networks in other parts of the country. China Telecom’s own network will extend to 19 provinces, while China Unicom’s will cover 10.

The two operators, together with China Mobile, the world’s largest mobile operator by subscriber numbers, and China Broadcasting Network Corporation Ltd, were all awarded 5G licences in June, well ahead of what the industry had expected.

Pai gobbles up Sprint and T-Mobile US merger

After months of headaches and sleepless nights, the tides of favour seem to be turning for Sprint and T-Mobile US as the FCC chief gives his blessing for the union.

254 days into the 180 days the FCC gives itself to approve mergers, FCC Chairman Ajit Pai has officially confirmed his position. It is still not quite 100% guaranteed for the two telcos, however with Pai’s recommendation, the future is looking very rosier.

“After one of the most exhaustive merger reviews in Commission history, the evidence conclusively demonstrates that this transaction will bring fast 5G wireless service to many more Americans and help close the digital divide in rural areas,” Pai said in a statement.

“Moreover, with the conditions included in this draft Order, the merger will promote robust competition in mobile broadband, put critical mid-band spectrum to use, and bring new competition to the fixed broadband market.”

Suggesting this was a protracted and painful process might be one of the biggest understatements of the year. However, it might have been necessary considering the significant impact a merger of this scale could potential have on competition, diversification and network deployment across the US.

Above all else, the US is a monstrous market with an incredibly small number of nationwide telcos. This does of course offer economy of scale to improve investment capabilities, though there is a risk of regional monopolies due to the sheer size and geographical variance across the country. Proposed mergers which would take the number of national telcos from four to three has been extinguished in the past, though this one has passed almost every test.

The greenlight from the FCC Chairman is an important step, adding momentum to positive news from the Department of Justice in the last few weeks. At the end of July, the DoJ’s antitrust division gave the thumbs up, assuming Sprint’s prepaid brand Boost is divested, and Pai has made the same demands.

This is one concession which many expected, but we have major issue with. Dish will acquire the Boost brand, allowing it to make use of its horde of valuable spectrum, satisfying the demands, though will this be enough to maintain the current levels of competition, the objective of both the FCC and DoJ? We do not believe so.

Firstly, instead of having four established telcos in the US, consumers will now have to choose from three telcos and a newbie with zero experience of effectively running a mobile business and network. Dish does not have the competence, experience, infrastructure, processes, billing systems or supply chain to run a mobile business, and it will take years to build these elements to the degree expected.

Secondly, Dish is now an MVNO. It will be able to make use of the T-Mobile network, but the FCC and DoJ has replaced a functional MNO with an MVNO and expects no-one to notice the difference. Both of these agencies expect Dish to have its own network up-and-running in a few years, but this is another ridiculous ambition.

As mentioned in the first point, this is a company which is not practiced in the dark arts of mobile. The three remaining traditional players took decades to rollout their own networks, and they are still not genuine nationwide telcos (there are still network gaps across the country). How is Dish expected to create a nationwide, 4G and 5G, network across a country of 9.8 million km2, with an incredibly variety of different urban densities, geographical landscapes and economic societies.

If anyone thinks Dish is going to be a replacement which can maintain the current status quo, they are quite frankly fooling themselves.

What is worth noting is that this is not the end of the road for Sprint and T-Mobile. It might have secured the relevant regulatory approval, but now it will have to combat the various legal challenges.

Led by New York Attorney General Letitia James, a coalition of State Attorney Generals have filed a lawsuit to block the proposed merger. The lawyers are arguing the merger would harm competition, and it should be blocked to maintain the status quo. As it stands, with four separate MNOs challenging each other, prices and mobile experience is improving for the consumer; the lawyers are arguing that the situation is not broken, it is in fact improving, so why should the FCC and DoJ try to fix an imaginary problem?

Although the approval process from the DoJ and FCC might have been considered a significant problem, the telcos will not have to face legal heavyweights from more than a dozen States. Lawyers have a way of being very difficult when they want to be, so there might well be a few more twists and turns in this saga.

Verizon sues City of Rochester over 5G fees

US telco Verizon has filed a lawsuit against the City of Rochester, suggesting a newly created telecommunications code violates federal law and the maximum fees telcos can be charged.

Filed in the District Court for Western New York, Verizon’s lawyers will be attempting to argue that the implementation of the new telecommunications code by the city will prohibit the rollout of 5G technologies in the area. This is of course early days, though it could go some way in creating legal precedent throughout the US.

Using FCC rules which were passed last September, Verizon will argue the newly adopted telecommunications code in the City of Rochester violates the maximum fee of $270 a year which can be charged by the local governments. Although we were unable to figure out how much each site could cost Verizon annually, it does appear to run into the thousands.

“To better serve its customers and the City and to begin to serve new customers and provide new services, Verizon Wireless seeks to extend, densify, and upgrade its wireless network infrastructure, including to install additional Small Wireless Facilities to support the provision of current and next-generation telecommunications services such as 5G and to deploy fiber to connect these facilities,” the filing states.

“To successfully do this, Verizon Wireless requires new approvals from Defendant to access City property.

“As a result of Defendant’s actions, Verizon Wireless has been, and will continue to be, damaged and irreparably harmed absent the relief requested herein. The harm caused by Defendant’s unlawful actions includes, but is not limited to, an effective prohibition on Verizon Wireless’s ability to provide telecommunications services in the affected area of the City.”

Similar to regulatory changes in the UK with the new Electronic Communications Code, the FCC is attempting to protect the interests of the telcos. As real-estate owners know the telcos have no choice but to increase the number of cell sites to provide the promised 5G experience to consumers, they are in a position of power. The new rules from the FCC, and the creation of the $270 annual limit, is supposed to create a responsible transaction which benefits both parties.

However, it does not appear the City of Rochester agrees with the position of the FCC. In creating its own telecommunications code, it does appear higher fees can be charged for cell sites, while some officials state they are attempting to reduce potential clutter and eyesores created by the additional mobile infrastructure.

Looking at the timeline, Verizon wrote to city officials to ask for revisions to the code on January 10 and February 7, before the code was enacted on February 20 without any amendments, taking effect on April 1. Another letter was sent on April 15 questioning whether the code was compliant with federal law, with city officials finally responding on April 30 suggesting they were happy with the set-up. On July 30, the city officials demanded payment from the telco.

In short, Verizon is claiming the fees are acting as a prohibitor to the delivery of connectivity in the city, therefore federal law is being violated.

What is worth noting, that due to the focus on mmWave for the delivery of 5G services in the US, more cell sites will have to be deployed. This is unavoidable, as to deliver the higher speed promised by 5G, higher-frequency airwaves will have to be utilised. This does not appear to be a problem, however coverage distance will have to be sacrificed leading to the densification plans set-forward by the telcos.

Although this is the first lawsuit of this nature which has been brought to our attention, we suspect there are numerous other local governments attempting to sweat public assets to secure more funding. This is one of the first, but this might become quite a common lawsuit to read about over the coming months and years, as densification strategies gather momentum.

China reportedly warns India not to ban Huawei from 5G

China has told India not to exclude Huawei from its upcoming 5G trials, or Indian businesses will face retaliations, Reuters reports.

Quoting its “sources privy to internal discussions in New Delhi”, the news agency Reuters reported that the warning shots of “reverse sanctions”, should India ban Huawei from its 5G business under pressure from the US, were fired when the Indian Ambassador was summoned to the Foreign Ministry.

India will start trialling 5G in the coming months but has not selected the vendors yet. Ravi Shankar Prasad, the telecom minister, told the parliament earlier that Huawei was one of the vendors that have submitted proposals, though he did not name the others.

“On the issue of Chinese enterprises participating in the construction of India’s 5G, we hope the Indian side makes an independent and objective decision, and provides a fair, just and non-discriminatory commercial environment for Chinese enterprises’ investment and operations, to realize mutual benefit,” said the spokesperson of China’s foreign ministry in a statement sent to Reuters. “Huawei has carried out operations in India for a long time and has made contributions to the development of Indian society and the economy that is clear to all.”

Like all obscure diplomatic parlance, the statement said less than what is left unsaid. However, the stress on “independent” is a clear message that India should calculate its own gains and losses when making the decision, independent of US pressure.

When it comes to security, the parliamentary committee tasked to evaluate the vendors has not found evidence to suggest that Huawei has comprised the security in its current business in India, according to Reuters’ sources.

Similar to the difficult choice the post-Brexit UK has to make, siding with the US or siding with China, when it comes to how to deal with Huawei, India is also caught in the cross fire of the trade war, and its situation is arguably trickier. The US is India’s most important trade partner and the country the Modi government (which has just won the general election with an enlarged majority) desperately would love to be on good terms with.

China, on the other hand, closer to home but is a much smaller trading partner, though a few of India’s leading companies (Tata, Infosys, etc.) do have a limited presence. Meanwhile, the world’s two most populous countries share a long border and do not always see eye to eye. In 2017 there was a two-month long army standoff in a disputed area between the two countries.

While our expert suggested that a way out for the UK could be a government mandated multi-vendor policy, a similar idea was devised by the Indian National Security Advisory Board (NSAB). But instead of asking the telcos to deploy equipment from more than one vendor, the NSAB experts suggested that, if the telcos choose to use Huawei hardware, then the software “to drive equipment” should be Indian-made. This may look reasonable on paper, but since 5G is so heavily software reliant, it is hard to predict how the demarcation will be drawn.

Europe not happy about Czech network sharing arrangements

The Czech Republic’s two dominant mobile operators are sharing one network and the European Commission thinks this is taking things too far.

When the EC thinks something might be dodgy, but hasn’t totally decided yet, it likes to kick things off by sending a statement of objections to all concerned. This puts them on notice that it’s looking into the situation and initiates an investigation. Hence the network sharing arrangement between the Czech versions of O2 and T-Mobile is now under the EC microscope.

“Operators sharing networks generally benefits consumers in terms of faster roll out, cost savings and coverage in rural areas,” said Commissioner Margrethe Vestager. “However, when there are signs that co-operative agreements may be harmful to consumers, it is our role to investigate these and ensure that markets indeed remain competitive. In the present case, we have concerns that the network sharing agreement between the two major operators in Czechia reduces competition in the more densely populated areas of the country.”

This is an intriguing conundrum; how can something good suddenly become bad when it’s done too much? To be fair, between them T-Mobile and O2 account for almost three quarters of Czech subscribers. If the only other MNO of note – Vodafone – is frozen out of this arrangement that would appear to put it at a massive disadvantage. The EC is also concerned that their collective dominance means they have a disincentive to provide a decent service.

Unlimited data is inevitable with 5G, but try telling operators that

We’re quickly moving into the 5G era and many assume the concept of unlimited data bundles will be commonplace, but how will the telcos fare in this new world?

As it stands, the telcos are under pressure. This is not to say they are not profitable, but many shareholders will question whether they are profitable enough. Tight margins and a squeeze on core revenue streams are common enough phrases when describing telco balance sheets, but this could get a lot worse when you factor in unlimited data packages.

As Paolo Pescatore of PP Foresight pointed out, when you offer unlimited data you are effectively killing off any prospect of revenue growth per subscriber in the future. In some markets, there are still fortunes to be made, but in some, such as the UK where 4G subscription penetration is north of 100%, where are you going to make the growth revenues from when consumers are demanding more for less?

More consumers are seeking unlimited or higher data allocations but are not willing to pay for the experience. Some MNOs might be able to resist, but the more rivals who offer such tariffs the more the rest will be forced into line. It’s the race to the bottom which is profitable in the short-term, but growth will end quickly. The price per GB is only heading one direction and unlimited data allocations will end the prospect of upgrading customers.

O2 fighting for air

This is the conundrum which the telcos are facing in the UK right now. All four have announced their 5G intentions and all four are promising big gains when it comes to the next era of connectivity.

Starting with O2, the only one of the four MNOs not to have released 5G pricing to date, this is a telco which looks to be in the most uncomfortable position. Over the last few quarters, the management team has boasted of increased subscriber numbers, but this can only go on for so long in the consumer world. Soon enough, a glass ceiling will be met and then the team will have to search for new revenues elsewhere.

This is of course assuming it plans to go down the route of unlimited data, it might want to stick with the status quo. That said, if everyone else does, it will not be able to fight against the tide for fear of entering the realm of irrelevance.

The issue here is one of differentiation. The idea of attracting new customers by offering ‘bigger, meaner, faster’ data packages will soon end and telcos will have to talk about something else. O2 does have its Priority loyalty programme, but with rivals launching their own version this USP will fade into the noise.

Differentiation and convergence are two words which have been thrown around a lot over the last few years, though O2 has thus far resisted. Last year, CEO Mark Evans suggested he was not bought into the convergence trend and would continue as a mobile-only telco, though this opinion does seem to be softening.

If O2 is going to be competitive in the almost inevitable era of unlimited data, it will have to source growth revenues from somewhere. It is making a push into the enterprise connectivity world, which will bring new profits to the spreadsheets, though does it want its consumer mobile business to stand still?

Bundles of fun

This is where the other telcos in the UK have perhaps got more of a running start in the 5G era. EE has its connectivity assets in broadband and wifi to add value, as well as a content business of some description. Three is already known as the data-intensive brand, while its FWA push will take it into some interesting connectivity bundling options. Vodafone also has FWA, a fibre partnership with CityFibre and is arguably the leader in the enterprise connectivity market. The rivals are offering more than mobile connectivity as a stand-alone product.

Looking at Vodafone to begin with, the recent announcement is certainly an interesting one. The innovative approach to pricing, tiering tariffs on speeds not data allocation, will attract some headlines, while it is also super-charging its own loyalty programme, VeryMe. It has secured content partnerships with the likes of Sky, Amazon, Spotify and gaming company Hatch, while its FWA offering also includes a free Amazon Alexa for those who sign-up early enough.

Combining the FWA product or its fibre broadband service, courtesy of CityFibre, also gives them the ‘connectivity everywhere’ tag, a strength of BTs in recent years, to allow them to communicate and sell to customers in a different way. Perhaps it is missing a content play to complete the convergence bundle, but it is in a strong position to tackle the 5G world and seek additional revenues should the unlimited craze catch.

The same story could be said of Three. With the acquisition of UK Broadband, it has forced itself into the convergence game and kicked off the ‘race to the bottom’ with an unlimited 5G data offer. As long as you have a Three 4G contract, you can get 5G for no additional cost, assuming you have a 5G compatible phone of course.

Three’s strength and weakness lies in its reputation. It is known for being the best telco if you have an insatiable data appetite, this works very well for the 5G era, though it is also known for having a poor network. Three regularly features at the bottom of the network performance rankings, especially outside of the big cities where it has not done nearly enough to satisfy demands.

This will of course change over the next couple of months. Three is working to improve its network with additional sites and a new Nokia 5G core, however it will have to do a lot to shake off the reputation is has acquired over the last few years.

EE is perhaps the most interesting of the four. It has lost its position as the market share leader when it comes to 4G subscriptions, but it does have the reputation for being the best in terms of performance throughout the country. It is regularly the fastest for download speeds, but its 5G pricing is by far the most expensive to be released so far.

That said, with the BT assets it has for wifi and broadband, as well as the content options, there is plenty for the consumer to be interested in. Should BT be forced to readdress the pricing conundrum, it might not have the fear regarding a glass ceiling on revenues as there are plenty of other products to engage the consumer. It will be able to find additional revenues elsewhere.

MVNO no you didn’t

Outside of the MNOs, you might also start to see some competition. MVNOs are nothing more than ‘also rans’ today, but Sky has officially entered the 5G race. This is an interesting competitor, one who could cause chaos to the status quo.

Firstly, understand mobile is not the primary business for Sky. This is an add-on, where it is seeking to drive additional revenues and attract more customers through bundled services. It is the leader in the UK when it comes to premium content and has a thriving broadband unit also. Sky can add services on top of connectivity to make itself seem more attractive than the traditional mobile service providers.

Then again, there are only a couple of MVNOs who can pose this challenge. Sky is one, while there are persistent rumours Amazon wants to get involved with the connectivity game and Google has its own Fi service. These are also companies who are at the mercy of the MNOs in terms of the commercial agreement with the MVNOs, so damage is likely to be limited unless one network owner decides to go down the wholesale infrastructure route.

But you cannot ignore these companies. They are cash-rich, constantly searching for new ways to make money and have incredible relationships with the consumer. They are also the owners of platforms and/or services which are very attractive to the mass market; bundling could be taken into a new context with these firms.

Diversity is our strength

This is of course only looking at the services which are common throughout telco diversification plans today, there are other options. Orange has launched a bank, has experimented in energy services and is making a move towards the smart home in partnership with Deutsche Telekom. Over in Asia, gaming is an important element of many telcos relationships with consumers and this trend is becoming much more prominent in the European markets also.

Elsewhere, the smart home could certainly offer more opportunities for telcos to add-value to an emerging ecosystem, while the autonomous vehicles offers another opportunity and so does IOT. The issue which many of these telcos are facing is competition from the OTTs. Arguably, the battle for control of the smart home might already have been won by the OTTs, though the same could be said for autonomous vehicles and IOT.

In many of the emerging segments, telcos will remain a connectivity partner though they certainly need more than that. This will remain a consistent stream of revenue, though it will also sleepwalk telcos to utilitisation. In IOT, as an example, the major cloud players are crafting business units to engage enterprise businesses for edge and IOT services; this is a market which the telcos would love to capitalise on for both enterprise and consumer services.

Security is another which is increasingly becoming a possibility. The concept of cybersecurity is generating more headlines and consumers are becoming more aware to the dangers of the digital world. Arguably, the telcos are in the strongest position to generate revenue from this segment; there is trust in the brand and they have largely avoided all the scandals which are driving the introduction of new regulation.

Unlimited data is certainly not commonplace today, but with the services of tomorrow promising to gobble up data at an unfathomable pace, it would surprise few to see more people migrating to these tariffs. The question is how you make money once you have migrated everyone.

Diversification and the acquisition of new products is not a simple task, but then again, it is becoming increasingly difficult to imagine how single revenue stream telcos will be able to survive in the world of tomorrow.

 

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AT&T joins the retail robot revolution

AT&T Business has unveiled a new partnership to target the retail segment, a vertical which might look completely different in a few years’ time.

Working alongside Badger Technologies, the aim here is to improve capabilities which are already in place as opposed to create a human-less shopping experience. With its new 5G capabilities, improvements for indoor coverage and expansion of MEC, the duo are targeting operational efficiencies throughout the super market.

“In-building cellular solutions, including 5G and edge computing, are critical drivers of digital transformation for retailers,” said Mo Katibeh, CMO of AT&T Business.

“These technologies will eventually equip robots with both the compute power and lower latency needed to increase revenue, improve the in-store experience, and elevate employees to better assist customers. Badger Technologies’ robots can help retailers make sure they have products in stock and in the right place, increasing customer satisfaction. That leads to increased revenue. That’s the power of data.”

Robots in supermarkets are not exactly a new idea. In some of the larger retailers in the US, small robots roll through the aisles hoping to identify out-of-stock, mispriced or misplaced inventory as well as store hazards, informing human colleagues of up-coming tasks which need to be completed. However, running these systems over wifi can be inefficient and even impossible when it comes to transmission and processing of data.

Although this is a very simple application focused on improving efficiency as opposed to revolutionising the retail experience, it is an incremental step towards automation in the industry. In a few years’ time, there might not be any need to have humans working in the supermarket whatsoever; MEC and improved connectivity will be critical components.

Firstly, you have to look at the home delivery segment. Not all consumers will buy into this concept, however with improved connectivity, this could be a completely autonomous process. Amazon fulfilment centres already incorporate robotic processes to reduce the need for humans, whereas progress is being made on autonomous vehicles and small robots to make the delivery over the ‘last mile’. In theory, this does not have to have a single human in the process.

One other area which seems to attract headlines every couple of weeks are the cashier-less stores. The concept is not new, self-check out machines are becoming increasingly common, though this idea could be taken up another level. Amazon is once again making progress here, potentially removing the need for self-scan tills completely, though improvements in indoor connectivity and MEC could help this idea progress even further.

Finally, you only have to look at companies like Boston Dynamics to see the advancements which are being made with humanoid robots. Cashiers are heading towards the door and it might not be too long before shelf-stackers might follow them. Robotics is a field which is advancing ridiculously fast (see video at the bottom of article), and while the economics will not make sense for the moment, that is only a matter of time.

The warehouse could be robotic, payments could be managed through sensors and apps, on-shelf-stock and hazards could be monitored by simplistic robotics and cameras, restocking and hazards cleared by advanced robotics and deliveries could be performed by drones or autonomous vehicles. With MEC decreasing latency, cloud-based AI constantly improving all the processes and indoor connectivity ensuring everything runs smoothly, soon enough there might not be any need to have a human involved in the supermarket.

This might seem like an unrealistic idea right now, but always remember this Bill Gates quote; most people overestimate what they can do in one year and underestimate what they can do in ten.

French parliament passes “Huawei Law” to govern 5G security

Both houses of the French parliament have voted in favour of the new law, dubbed the “Huawei Law”, to give the government the power to security vet 5G rollouts in the country.

The legislation process started when France, being pressured by the US to exclude Huawei from the country’s 5G networks, decided to keep the decision-making power in its own hands, hence the nickname. An earlier draft of the legislation was met with protests from the parliament as being too “open-ended” which would give the government too much power.

The final stage of the legislation process started three weeks ago, when a joint group of 14 parliamentarians (la commission mixte paritaire, or CMP) from the Senate and the National Assembly started putting the final touches to the draft. According to the announcement from the Senate when the final stage started, Senator Catherine Procaccia stressed that the Senate’s amendments have excluded the ongoing 4G rollout from the upcoming law, and demanded the authorisation process be simplified from two-stage to one-stage. Sophie Primas, the chairperson of the economic affairs committee, also believed that the amended version was more balanced than the initial proposal.

The AFP reported that, after an ultimate vote on the Senate floor, the parliament has given its final approval to the comprised text, which it is now ready for President Macron to sign into law. When it becomes effective, the Prime Minister will have the power to approve or reject the telecom operators’ plans to roll out 5G networks, considering the implications on national security. The PM’s decision needs to be made within two months of the application.

Agnès Pannier-Runacher, Secretary of State for Economy and Finance, told the AFP that the new law will establish a stable, simple, and protective legal framework without delaying France’s deployment of 5G, and the government is already in the process of finalising the implementation details. She also stressed that there will not be a city 5G and a rural 5G in France. Each operator should have 12,000 sites equipped with 5G by 2025, a quarter of which should be in the rural areas, she told the news agency.

This piece of legislation is made at a time when the European Union is developing a pan-EU framework to assess 5G risks. Although it is one of the two most powerful driving forces in the EU (the other being Germany), France has a tradition of going its own way without waiting for the EU legislations to catch up. A recent example is the decision to go ahead with the 3% sales tax on the internet heavyweights without waiting for a European-wide single digital market regulation.

Huawei suspected of decade long relations with North Korea – report

The Washington Post has obtained internal documents showing the Chinese vendor and its partners have been working with North Korea’s national mobile operator for over a decade.

A former Huawei employee turned whistle-blower has passed on the documents to the newspaper, which has had them translated into English and shared on GitHub. The two spreadsheets are project logs of Huawei’s business in the China region, which covers North Korea (codenamed A9 inside Huawei). Details include project name, project status, account, country, internal business units, etc.

Huawei and its partners (for example Panda (Beijing) International Tech Limited, Xiamen Baoxin Supply China Co) are shown to have undertaken multiple projects for Koryolink, North Korea’s only mobile operator. The files recorded the latest initiated project with Koryolink took place in 2016, and the latest uninitiated project with the North Korean operator was logged in 2017.

The Washington Post reported that North Korea started building the mobile operator after the late Kim Jong Il (father of current leader Kim Jong Un and son of the country’s founder Kim Il Sung) visited Huawei in 2006. The operator was then set-up as a joint-venture between the Egyptian company Orascom Telecom Holding and North Korea’s Post and Telecommunications Corp. The newspaper claims it has also obtained additional files, not shared externally, that corroborate the case, with Huawei’s internal social network discussion records. Huawei is also allegedly to have developed a special encryption system for “special users” in North Korea.

At the time of writing Huawei has not responded to Telecoms.com’s request for comment, but its spokesperson denied to The Washington Post the company has any business presence in North Korea, though he does not deny the authenticity of the files. The spokesperson also claimed that “Huawei is fully committed to comply with all applicable laws and regulations in the countries and regions where we operate, including all export control and sanction laws and regulations”.

The timing of the report can be tricky for multiple parties. For Huawei, while the litigation in the US related to its business in Iran is still ongoing, the exposure of its long-term business relations with North Korea could become another roadblock to its efforts to be de-listed from the US Entity List. However, if Huawei had used other Chinese companies to ship equipment to North Korea, as was reported, it might have a case to argue that it has not dealt with a country under US sanction directly, which is different from the Iran case, where it is accused to have used its own subsidiary. But there are also cases, in particular system integration and software development projects, where Huawei has direct links. It would potentially need detailed investigation to determine whether American technology has been involved.

For the US it is also a precarious period. President Trump met CEOs from seven US technology companies on Monday, when he promised that the Department of Commerce would respond promptly to the license requests for Huawei sales. Afterwards, when asked about the North Korea report, the President said he will need to explore the issue. A further twist is the President has repeatedly claimed that he and the North Korean leader Kim are good friends.

For the UK and the European Union, the rather concrete case of Huawei’s link to North Korea would undoubtedly lend more weight to the argument that the company should be excluded from the construction of 5G networks, citing security concerns.

Ofcom moves in to protect UK mobile users from loyalty punishments

The UK’s telecom regulator believes out-of-contract mobile users could have saved millions if telcos offered the best deal available, and has released new measures to protect them from being treated unfairly.

After nearly a year’s research the regulator has found that on average the out-of-contract customers, those who have taken out a handset/airtime bundle contract and stay with the operator after the contract runs out, are paying £11 more per month than if they have been offered a better alternative, e.g. a comparable SIM-only deal. This would take the total amount of over-payment made by the 1.4 million out-of-contract customers to £182 million a year.

“Our research reveals a complex mobile market, where not everyone is getting a fair deal. So we’re introducing a range of measures to increase fairness for mobile customers, while ensuring we don’t leave existing customers worse off,” said Lindsey Fussell, Ofcom’s Consumer Group Director.

The new measures introduced today, published in a release titled “Helping consumers to get better deals in communications markets: mobile handsets”, focus on three areas:

  1. Transparency of contract details: mobile operators offering bundle contracts should tell customers the cost of the handset and the cost of airtime separately. This is in line with new EU rules, but Ofcom has decided to introduce it to the UK despite  the decision to leave the EU.
  2. Time limit on “split contract”: this refers to the kind of contacts that a customer would pay for the handsets and usage separately. The new rule would cap such contracts to 24 months, to avoid customers being locked in one contract for to long and to make switching operators easier.
  3. Concretised measure to treat customers fairly, following the more vague “Fairness for Customers” commitment the operators signed up to. Specifically, it requires mobile operators to tell customers that their contract is going to end, and to explain to them the best available deals including SIM-only deals. The easy way of switching operators with a text message that was laid out in June is also coming into effect this month.

Ofcom also declared the first victories in operator endorsements. “All the major mobile companies – except Three – will also be reducing bills for millions of customers who are past their initial contract period,” Fussell said.

O2 and Virgin Mobile will charge their out-of-contract customers the equivalent 30-day SIM-only deal, while both EE and Vodafone are going to reduce the price for their customers out-of-contract for more than three months, though they will only confirm the level of discount by the end of the year. The discount will become effective next February.

“Three is the only major provider that has refused to apply any discount to its out-of-contract customers. As a result, these customers will continue to overpay and will not receive similar protections if they stay on their current deal,” the Ofcom statement said.

The regulator also announced that later this year it will publish its findings on broadband prices, and why some customers find their broadband bills higher than others.