New law compels installation of Russian software on all smartphones sold there

The Russian parliament has passed a law compelling all smartphones and other connected devices to have Russian software installed.

The news comes courtesy of the Beeb, which notes that the unspecified software doesn’t have to replace operating systems like Android, but does have to be available as an alternative in the highly unlikely circumstance that a user should want to switch. From the middle of next year it will be illegal to sell smart connected devices without Russian software preinstalled.

“When we buy complex electronic devices, they already have individual applications, mostly Western ones, pre-installed on them,” said Oleg Nikolayev, one of the people behind the new law. “Naturally, when a person sees them, they might think that there are no domestic alternatives available. And if, alongside pre-installed applications, we will also offer the Russian ones to users, then they will have a right to choose.”

Yeah, Oleg, but they already had the right to choose, didn’t they? Now device makers no longer have the right to choose what software to preinstall on their products. The stated aim behind the law is to give a boost to domestic software makers, but that’s not going to convince many people. There are many ways for the state to assist local champions, but force is a very undesirable option.

Unless they also compel gadget owners to actually use the software, which would escalate the initiative towards outright oppression, nobody’s going to use it unless it’s better than the alternatives. And if it is then there shouldn’t be the need for any kind of coercion because people will want to install it anyway. It’s called the free market.

Any time the state opts to interfere with what are normally private matters people will naturally speculate about ulterior motives. In this case it’s easy to believe that the Russian software the state is so keen on installing on connected devices may have more sinister uses, such as spying. At the very least we would expect platform and device makers to examine any state compelled software very closely and, hopefully, refuse to install it if they smell a rat.

Veon raises outlook as it unveils diversification strategy

Telecoms group Veon has increased its EBITDA guidance for FY 2019 and is looking beyond connectivity for future growth.

Veon serves over 200 million subscribers, mainly in central Asia, and things seems ticking along nicely. “Veon is performing well in the current financial year against our 2019 targets and today we are increasing our EBITDA guidance for FY 2019 from low to mid-single digit growth to at least mid-single-digit growth,” said Ursula Burns, Group Chairman and CEO. “Previous guidance of Revenue growth and Equity Free Cash Flow remain unchanged.”

Despite that, Burns reckons Veon needs to diversify beyond mere connectivity in the pursuit of future growth. A new strategy framework is built around three pillars: connectivity, new digital services and future assets that open up adjacent growth opportunities. This essentially seems to be a version of the kind of 5G strategy most telecoms groups are advocating.

“Our new strategy framework underscores the growth opportunities we see beyond our connectivity business and aligns Veon’s ambitions with our industry’s future development,” said Burns. “I am confident that the greater flexibility in how we allocate capital will allow us to execute on these opportunities, reinforcing our market-leading positions and maximizing shareholder returns over the longer term.”

“Over the next 18 months, there are opportunities that we believe will best serve investor interests over the medium-term,” said Alex Kazbegi, Group Chief Strategy Officer. “We are excited about the opportunity in our core Russian market, which we believe can be best accessed through a short-term increase in network capex to allow us to drive medium-term service revenue growth.

“In Pakistan, there may be the opportunity to increase our stake in the business through the existing put option with Warid. We also believe stepping up our investment in Digital Financial Services in Pakistan is an exciting first step in Future Assets.”

Juniper pays $11.7m to make SEC bribery investigation go away

Networking vendor Juniper has never admitted or denied it participated in any activities related to bribery, though apparently its bank accounts were simply too full to continue.

The details of this investigation are complicated and nuanced, though the over-arching accusation is simple. The Securities and Exchange Commission accused Juniper of improperly reporting accounts and allowing a subsidiary to continue a practice which smells incredibly similar to bribery.

To conclude the investigation, Juniper has paid the SEC $11.7 million. This is not an admission of guilt from the firm apparently, it has apparently decided to reallocate $11.7 million because it is innocent and would not consider any form of bribery.

The fact that the government agency will stop a bribery investigation after receiving the funds is perhaps a pleasant after-effect.

While this would appear to be the end of the saga, there are some relatively suspect elements to consider. This extract from the ‘Cease and Desist’ document is an interesting one to ponder.

“From 2009 to 2013, local employees of Juniper China paid for the domestic travel and entertainment of customers, including foreign officials, that was excessive and inconsistent with Juniper policy. Certain local Juniper China marketing employees falsified agendas for trips provided to end-user customer employees. These falsified trip agendas understated the true amount of entertainment involved on the trips.”

Another interesting claim is the approval process. Juniper requires approval from its legal department to justify and validate such entertainment expenses, though marketing and sales employees sought approval after the events took place, painting the legal team into a corner.

The period in question took place between 2009 and 2013. It had been going on for an undisclosed period of time prior to 2009, though this was the time in which senior managers at Juniper were alerted to the practice.

At JNN Development Corp., a Russian subsidiary of the Juniper Group, secret discounts were discussed with third-party channel partners. These discounts were not passed onto customers, instead, funnelled into nefarious accounts. These funds were used to fuel corporate entertainment, much of which undermined the Juniper anti-bribery policies.

Managers were alerted to the presence of these funds, as well as the opaque practices and bread crumb trails which were left behind, in 2009. Some effort was made to discourage the practice, though the SEC deemed this was not sufficient, and the nefarious activities continued for another four years through to 2013.

“Juniper failed to accurately record the incremental discounts and travel and marketing expenses in its books and records and failed to devise and maintain a system of internal accounting controls sufficient to prevent and detect off-book accounts, unauthorized customer trips, falsified travel agendas and after-the-fact travel approvals,” the SEC has stated.

As with every slippery corporate firm around the world, Juniper will not admit fault, though apparently it had exactly $11.745018 million to ‘donate’ to the SEC to make the investigation go away.

Russia jumps on the mmWave train

While most of Europe is resisting the temptation of mmWave frequencies, Russia has joined the US in charging forward with the high-speed, low-coverage airwaves.

Joining forces with the Department of Information Technology of Moscow, the four Russian MNOs will test out the airwaves at a pilot site in the city centre. From the Kremlin to the Garden Ring, the aim seems to be to prove the commercial viability of the 28 GHz spectrum band.

“5G development agreements were signed with the four largest mobile network operators in Russia,” said Head of the Department of Information Technologies Eduard Lysenko. “They suggest implementation of the pilot projects aimed at the development of the new digital technologies and communication services in Moscow, that aim to open-up fundamentally new opportunities.

“A higher data transfer rate along with broader bandwidth will encourage the development of the Internet of things, autonomous transport, remote medicine and many other cutting-edge technologies that will make the lives of citizens even more comfortable.”

While mmWave has become a hot-topic over in the US, for a number of differentiating reasons, Europe is yet to genuinely be drawn into the field. Italy might have conducted an auction for certain licences in the mmWave bands, while Three in the UK has amassed a small collection of assets, generally it is an unproven stomping ground.

The conundrum which many telcos will have to consider is the necessary sacrifice when making use of mmWave assets.

What is undeniable is these airwaves will ensure faster download speeds and lower-latency connectivity. However, coverage is a significant sacrifice when discussing mmWave. The higher the frequency, the shorter the range.

This is perhaps one of the reasons why some telcos have chosen to prioritise mid-range frequencies. It is a nice blend of increased speeds and acceptable range, but also allows the MNOs to make use of existing network infrastructure. This is the very challenge which some analysts have pointed to in the US with the current 5G connectivity; you have to be stood in very precise spots to ensure you can make use of the 5G euphoria.

For 5G connectivity to be a consistent, reliable and realistic experience with mmWave, telcos will have to undertake extensive network densification strategies. This will not only present a significant cost, but in certain countries, gaining planning permission or acquiring new sites for mobile infrastructure becomes a bigger issue.

In some markets, the US for example, regulations have been drawn-up to remove barriers when deploying new network infrastructure. Some other markets, are still waiting for regulatory reform to enable these densification plans are accessible and affordable.

That said, it does not appear the Department of Information Technology of Moscow or the telcos are worried about local governments or planning permission restricting the progress of mmWave in Russia.

MegaFon CEO calls it a day, again

The boss of Russia’s second-largest MNO has decided to hand over the reins once more, having previously done so six years ago.

Sergey Soldatenkov started his current tenure as CEO of MegaFon in 2016 after Ivan Tavrin resigned in order to pursue other interests. This marked the reversal of the move four year earlier in which Tavarin stepped in as CEO, with Soldatenkov moving up to the Chairman position. The fact that he had to move back into the CEO office suggests Tavarin’s departure may have been somewhat sudden.

Soldatenkov’s second tenure as CEO was expected to last three years but that too has been cut short with MegaFon Executive Director Gevork Vermishian stepping up to the plate. There is no mention of Soldatenkov returning to the Chairman role so it looks like he’s just decided to call it a day at MegaFon.

“I have decided that the time has come to hand the reins to Gevork,” said Soldatenkov. “I have been involved with the company since its creation, almost 20 years ago. Throughout this time we have been at the forefront of innovation.

“However, we have been conscious for a long time of the need for a management succession plan. With this in mind, we asked Gevork to take on the role of Executive Director last October, with a view to having me focus on strategy and government relations and having Gevork take on operational issues. In this way it was possible to gradually transition responsibilities to Gevork, and I believe that he is now ready to take over my responsibilities as well and assume full control of the management of the Company.

“I want to thank Sergey Vladimirovich for his huge contribution to the company over the years,” said Ivan Streshinsky, CEO of holding company USM Management. “He is a unique person – he has spent his entire career in telecoms, and as a result he understands the sector better than anyone else. Our decision in 2016 to ask him to return to the position of CEO clearly paid off handsomely.”

MegaFon has 29% of Russian mobile subscribers according to Ovum’s WCIS, just behind MTS with 30% or so.

Huawei makes a Beeline for Russian 5G

Holographic calls have become the hot 5G use-case so Huawei teamed up with Beeline to do one in Russia.

VimpelCom-owned Beeline rented out the Moscow Museum for this demo designed to show how great 5G is. It came soon after Vodafone tried a similar move in the UK, as the telecoms industry searches desperately for ways to capture the public imagination about a technology that, initially at least, will mainly just provide agility and efficiency to operators.

The quality of this demo seemed like a distinct drop-off from the Vodafone one as it involved ‘mixed reality’ headsets rather than a free-standing holographic projection. As a consequence people were treated to the far less impressive spectacle of a bloke in a suit fumbling blindly around a room while talking to himself.

“This May 2018, Beeline and Huawei signed an agreement to pursue the joint development of 5G in Russia,” said Aiden Wu, CEO of Huawei in Russia. “Our cooperation has been extremely productive, which today’s demonstration has quite clearly shown. We will continue working together to bring the implementation of a new communication standard closer to becoming a worldwide phenomenon and speed up the process of creating new technologies and services based on this standard.”

“The rapid development of modern technologies sets a precedence for operators to provide subscribers with high-quality mobile communications at high speeds,” said Vasyl Latsanych, CEO of PJSC VimpelCom. “That’s why Beeline is already preparing its network infrastructure and is conducting research on how to make a rational transition to 5G technologies.”

Huawei was keen to stress that this demo was done using its gNodeB commercially available 5G base station over the 27 GHz band. It also listed a bunch of other kit, but you get the idea. No bandwidth claims were made but it used MIMO 64×64 tech. There was talk about how great this sort of thing will be for virtual experiences that save you having to leave the house.

Russian telcos push for OTT tax on new data storage laws

Russian telcos are lobbying the government to grant new powers which would allow them to tax non-domestic internet companies to ease the burden of new data storage laws.

According to Reuters, the telcos are proposing new legislation to ease the financial burden of the new laws designed to give the state more oversight on communications within the country. As part of the new rules, telcos would be forced to store customer data in the country (calls, texts, internet search history etc.) for six months. The data storage rules come into force in October.

Ahead of the October launch date, the telcos have warned the imposition would result in larger costs. To protect the pockets of shareholders and executives alike, the telcos have suggested these incurred costs for data storage would be passed onto the consumer with tariffs potentially rising as much as 10%. Should the government look favourably on the proposed bill, telcos could seek compensation for the costs from non-domestic internet companies such as Facebook and Google.

Of course it seems perfectly reasonable for telcos to want to spread the burden of the digital economy throughout the ecosystem, it has largely bore the brunt of the financial expense while others profits at the top of the value chain for years, but this is a different matter. Facilitating government ambitions to more surgically monitor citizens and potentially eradicate the concept of privacy might not sit easily with the internet giants.

That said, bowing to government ambitions despite a conflict with apparent principles of the organization is a story which has been hitting the headlines recently. In an effort to penetrate the Great Firewall of China, Google has been creating a censorship-friendly version of its news app which could filter out stories which do not please the government. Google is not alone here as LinkedIn accepted these censorship rules years ago.

Other technology companies might not be as flexible as Google or LinkedIn. Those who maintain principles and refuse to fund the governments ambitions to rid Russia of independent thought will potentially face regulator Roskomnadzor reducing the speed of access to their websites for Russian users.

This is nothing but a proposal for the moment, though should it progress, the internet companies will face another principles versus profits dilemma.

EE elects Ericsson Expert Analytics for excellent experiences

Ericsson has scored a significant deal win to help out UK operator EE with its customer experience management efforts.

The real significance of this for Ericsson will be as an endorsement of its Expert Analytics as it’s not exactly synonymous CEM. And that’s not for want of trying as Ericsson has been involved in BSS/OSS for some time and has been desperate to diversify away from just flogging radios, etc, to operators. But as we see time and time again, diversification it not easy.

“This is another significant milestone in our relationship with EE and an important deal for us in the field of IT,” said Arun Bansal, Head of Market Area Europe and Latin America for Ericsson. “The introduction of Ericsson Expert Analytics will enable more effective customer care and service operations, allowing EE to proactively resolve issues before they have an impact on subscriber satisfaction.”

“With Ericsson Expert Analytics supporting our new customer experience management capability, we will be better able to understand our customers’ experience in real-time, and the detailed insights provided will help us keep improving network quality,” acquiesced Dave Salam, EE Director of Mobility and Analytics.

Elsewhere Ericsson got together with Qualcomm and MTS in Russia to deploy Licensed Assisted Access (LAA) in that county for the first time. In case you forgot, LAA is a technology that augments licensed radio frequencies with unlicensed ones. The announcement claims this deployment achieved Gigabit LTE speeds in Ufa City.

“This is the first LAA network in Russia and Eastern Europe and an important milestone on the way to 5G,” said Andrey Ushatsky, VP of Technology and IT at MTS. “LAA will allow us to build gigabit LTE networks quickly and cost-effectively in places with active traffic consumption, where operators do not always have enough available frequencies in the licensed spectrum.”

“LAA gives service providers access to new spectrum, increasing network capacity and supporting both higher peak rates and higher-than-average speed rates,” said Sebastian Tolstoy, Head of Ericsson Russia. “This commercial LAA rollout marks another important milestone in our strategic cooperation with MTS. Earlier we achieved peak throughput data rates of 25 Gbps at our joint 5G trial. The next step is to prepare for a new demonstration of enhanced 5G capabilities during the football tournament in Russia this year.”

Qualcomm delivered its standard brand of undiluted self-promotion. The deployment, which took place in a large trade center on May 17, featured 256-QAM and 4CC carrier aggregation of 10 streams with 4×4 MIMO on a 20MHz licensed carrier coupled with 3x20MHz LAA.

US and UK intelligence agencies warn of Russian cyber-attacks

The Department of Homeland Security, FBI and National Cyber Security Centre (NCSC) have released a joint Technical Alert warning Russia has sponsored a series of cyber intrusions that threatened home and business routers.

The extent of the alleged Russian footprint is unknown for the moment, though the primary targets are primarily government and private-sector organisations, critical infrastructure providers, and the ISPs supporting these sectors. Although this is the first time specific guidance has been released, the US and UK have been warning for months Russia could be targeting electricity grids and other infrastructure such as banks, hospitals and air traffic control systems.

“Russian government activities continue to threaten our respective safety, security, and the very integrity of our cyber ecosystem,” said Jeanette Manfra of Homeland Security. “We call on all responsible nations to use their resources – including diplomatic, law enforcement, technical, and other means – to address the Russian cyber threat.”

“Russia is our most capable hostile adversary in cyberspace so tackling them is a major priority for the National Cyber Security Centre and our US allies,” said Ciaran Martin, CEO of the National Cyber Security Centre. “For over twenty years, GCHQ has been tracking the key Russian cyber-attack groups and today’s joint UK-U.S. alert shows that the threat has not gone away.”

The Technical Alert (TA) warns the nefarious activity has been on-going since 2015, with the aim to aid Russian espionage actions while also contributing to intellectual property which fuels certain areas of the Russian economy. The state-sponsored hackers target enterprise-class and residential routers and switches, without any national prejudice; this seems to be a mine-sweep for information, not aggression against any one nation.

Network devices are noted as the perfect target here, as the TA notes once a hacker owns the routers, he/she also owns all the traffic which passes through the device. Maintaining a presence on the router not only allows the hacker to monitor information which passes through the device, but also control it. Information could be modified or even denied passageway through the gateway. The attacks, known as ‘Man-in-the-middle’, can support espionage, extract intellectual property, maintain persistent access to victim networks, and potentially lay a foundation for future offensive operations.

Above all else, these devices are easy to manipulate on a mass-scale. Once installed, rarely are these devices maintained at the same security level as other general-purpose desktops and servers, or replaced by the ISP when a relationship with a vendor ends. It is also the last place users generally look when there has been a breach or hack. Most of time routers are hidden away and never touched unless services are down. It is an easy target for hackers whose objectives will be based on quantity as well as quality.

The TA now recommends ISPs do not field equipment in the network core or to customer premises with legacy, unencrypted, or unauthenticated protocols and services, while also disabling any equipment or services which might be deemed as legacy or unencrypted. This could potentially cause a massive disruption to some ISPs who have not travelled as far along the modernization journey as others, but will also cause some significant headaches from an inventory perspective. Perhaps we are about to find out which ISPs have a handle on what equipment is in the field and what condition it is in.

One interesting question will be how seriously the telcos take this threat. There will be legacy and unencrypted equipment in the field, as well as equipment no longer supported by the vendor with software updates and security patches, or products from vendors which no-longer feature in the supply chain. On the advice from the TA, all this equipment should be upgraded or replaced, which would not be a cheap exercise, but how many telcos will actually follow the expensive advice.

While the threat of cyber espionage is of course worrying, this is another scenario which can be added onto the list for those who are fighting against globalization trends. In the US, we have already seen various tariffs and penalties imposed on Chinese companies, for right and wrong reasons, a threat from Russia and its intelligence agencies will create further fear and encourage some nations to close borders (both physical and digital) further.

For more specific guidance on how to tackle the threat, you can follow this link.