Virgin Media gives some smarts to wifi

Virgin Media has unveiled a new, ‘intelligent’, router which it claims will bring faster speeds to more areas of the home.

With the telco world becoming increasingly utilitised, and advertising authorities rightly cracking down on the ‘creative’ marketing claims, new ideas will certainly be needed to capture the attention of the increasingly demanding consumers. And in fairness to Virgin Media, this is not a bad attempt.

“Delivering ultrafast broadband to help make Britain faster is what we do best at Virgin Media but making sure this translates into reliable in-home connectivity is just as important,” said Richard Sinclair, Executive Director of Connectivity at Virgin Media

“Intelligent WiFi will allow our customers to make the most of their broadband while also helping to easily overcome any connectivity conundrums around the home. With families using more devices than ever before, it’s vital they can all be online whenever needed. Whether it’s streaming UHD movies on Netflix, playing the latest games online or video conferencing, Intelligent WiFi has your back.”

Starting with the intelligence side of the router, should the software work the way it’s supposed to, this could prove to be a very interesting addition. Firstly, Channel Optimisation allows the router to choose the least congested channel to decrease the likelihood of traffic jams. Secondly, a Band Steering feature allows devices to switch between 2.4GHz or 5GHz frequency to optimise performance. Finally, Airtime Fairness suggests bandwidth will be allocated between devices depending on the demands of that device.

The term ‘intelligence’ is thrown around relatively flimsily nowadays, though should the performance of these features be at the desired level, this could prove to be a very useful product.

 

And while the ‘intelligence’ aspects are more likely to enthuse those consumers who are more geekily orientated, a new app to manage the wifi experience is answers a lot of the simple bugbears and first-world problems of connectivity.

One example is sharing wifi passwords. It might not seem like a revolutionary idea but being able to log into the app and simply send the wifi password to a friend or guest will save customers from the inevitable digging around behind the TV. This is not necessarily a feature which will win customers for Virgin Media, but enough of these little quirky features will improve the customer experience and loyalty.

Another area which the app addresses is ubiquitous connectivity. Being connectivity everywhere and all-the-time is a necessity nowadays, though consumers are becoming increasingly cash conscious. Through the app, Virgin Media customers can now connect to any Virgin Media wifi hotspots, of which there are 3.5 million around the UK.

Most importantly for Virgin Media, this take the brand outside of the customers home, and allows the company to support customers through the entire day. This is Virgin Media adding value into the customer’s lives, going beyond the assumed perimeters of a home broadband provider.

“UK consumers have an insatiable appetite for data across a wide range of devices that will continue to grow over time,” said Paolo Pescatore of PP Foresight. “As well faster download speeds, consumers want a better and reliable connection in all parts of their home. This is starting to be a highly sought after service among users.”

BT has been playing in this market for some time, which offers Virgin Media a blueprint for success. Patchy performance and an irritating log-in process perhaps gave the BT wifi play a bad name, though progress has been made across the public wifi space in recent years. Hopefully Virgin Media will have learned these lessons.

With connectivity increasingly heading towards the dreaded limitations of utility, it is becoming increasingly important for telcos to prove they can add value to other aspects of the customers life. This is certainly an interesting play from Virgin Media and should the features work, Virgin Media goes some way in proving it is more than just a utility.

Telcos need to seriously think about how to sell to consumers

Following the news that Sky has been slapped on the wrist for misleading claims during a 2018 advertising campaign, marketers need to have a long and hard think about whether they are doing a good job.

The most recent assault against the marketing strategies of the telcos comes from the Advertising Standards Authority (ASA), with the group ruling Sky’s push to suggest customers would be able to receive stronger wifi signal throughout the house because of its routers, was misleading. The campaign features characters from ‘The Incredibles’ franchise, running across TV and through mainstream press.

The campaign was originally challenged by BT and Virgin Media, with both suggesting the claims were misleading as there was no way to substantiate the assertion. And the ASA agreed. In some cases, Sky’s router might be able to improve wifi signal throughout the home, but due to the breadth of different homes, each with their own structural design, it is an impossible claim to justify. The ad was far too generalist and deemed misleading.

“Unfortunately for Sky, its promise of a strong wifi signal all over your house has been shown to be misleading, and while it is by no means unique in falling foul of the ASA, it will be stung by this ruling the regulator has upheld against it,” said Dani Warner of uSwitch.com.

“Broadband providers are no longer allowed to make such exaggerated claims about potential speeds following the ASA’s major clampdown at the end of 2017, so they have had to become more imaginative in how they stand out from the pack with their advertising.”

This is an area the ASA has been quite hot on in recent years; telcos should not be allowed to make such generalist claims, intentionally misleading customers over performance. Especially in an age where advertising can be personalised on such a dramatic scale, at best it is lazy and incompetent, at worst it is directly and intentionally lying.

What is worth noting is that Sky can potentially boost signal throughout the home, though additional equipment would be required to make this possible. This is not mentioned during the advertising campaign however. The ASA ruled that some of the claims made in the ad could be substantiated, however it is no longer allowed to run in its current form.

Sky incredibles

This is of course not the only area where telcos are being challenged in the world of advertising. ‘Fibre’ claims are another, the ‘up-to’ metric has been removed and the telcos are being forced to detail speeds during peak times. Another factor to consider is the up-coming 5G service. Do any of the telcos have a clue how they are going to sell the service to consumers, as we do not believe the idea of ‘bigger, faster, meaner’ will not work, at least for the first few years.

Starting with the ‘up to’ claim, this is one which plagued the consumer for years. Masses of customers were duped into buying promised services which could only be delivered to a fraction. Thankfully, the ASA changed rules, forcing the telcos to be more accurate in how they communicate with potential customers.

Not only did this ruling mean the ‘up to’ claim had to be avoided, but it also forced the telcos to claim speeds during peak times. This also more readily informs the consumer of services which they are likely to experience, as opposed to the dreamland which most telcos seem to think we live in.

The term ‘fibre’ and ‘full-fibre’ has also been challenged, though telcos can still get away with some nefarious messaging. Irrelevant of whether there is fibre in the connection, and there generally always will be at some point, the ‘last mile’ is where the difference is made to broadband speeds. If it is copper, you will never get the same experience as fibre, however, telcos are still able to mention fibre in advertising.

The ASA has done some work to clear this up, in all fairness, though we still feel there is opportunity to abuse the trust of the consumer. And the telcos have shown that when there is an opportunity to be (1) at best lazy or (2) at worst directly misleading, they will take it.

The final area which we want to discuss takes us into the world of mobile and 5G. The telcos have always leant on the idea of ‘faster, bigger, meaner’ to sell new services to customers, or lure subscriptions away from competitors, but 5G presents a conundrum for the marketers; do consumer need faster speeds right now?

EE

4G delivers a good experience to most, and if it doesn’t, there generally is a good reason for this (i.e. congestion, interference, remote location, indoor etc.). 4G will continue to improve both in terms of speed and coverage over the next few years, and as it stands, there are few (if any) services which supersede what 4G is or will be capable of.

Another factor to consider is the price. Many consumers will want the fastest available, even if they don’t need it, but the premium placed on 5G contracts might be a stumbling block. EE has already hinted 5G will be more expensive than 4G, though details have not been released yet. In the handsets segment, consumers have shown they are more cash conscious, especially when there is little to gain through upgrades, and this is heading across to the tariffs space as purchasing savviness increases.

“I don’t think there are many great telco brands out there most consumers see them more as a utility,” said Ed Barton, Chief Analyst at Ovum. “T-Mobile USA is an exception with their customer champion, ‘un-carrier’ positioning but there no branding even approaching the effectiveness of, say, Apple’s.

“If 5G is sold only as a faster G, sales will be slow and it’s up to the entire ecosystem to create the apps, services and use cases which can only exist because of 5G network capabilities. These will probably rely on some combination of edge computing, high volume data transfer, low latency and maybe network slicing. An early use case is domestic broadband however as 5G networks evolve the use cases should proliferate relatively quickly.”

If consumers are becoming more cash conscious and have perfectly agreeable speeds on their 4G subscriptions, the old telco marketing playbook might have to be torn-up. The big question is whether the ideas are there to make the 5G dream work. Differentiation is key, but few telcos have shown any genuinely interesting ideas to differentiate.

Priority

One excellent example is over at O2 with its Priority initiative. Through partnerships with different brands, restaurants, gig venues and companies, customers are given freebies every week (a Nero coffee on a Tuesday) or special discounts periodically (£199 trip to Budapest). It leverages O2’s assets, the subscription base, allowing O2 to add value to both sides of the equation without monstrous expense. This has been a less prominent aspect of O2 advertising in recent years; perhaps the team is missing a trick.

Another, less successful, example of differentiation is getting involved with the content game. BT has been pursuing this avenue for years, though this expensive bet has seemingly been nothing more than a failure, with former CEO Gavin Patterson heading towards the door as a result.

This is not to say content cannot be a differentiator however. The content aggregator business model is one which leverages the exclusive relationship telcos have with their subscribers, streaming-lining the fragmented content landscape into a single window. Again, it uses assets which the telco already has, adding value to both sides of the equation. It also allows the telcos to get involved in the burgeoning content world without having to adopt a risky business model (content ownership) to challenge the existing and dominant members of the ecosystem.

In France, Orange is a making a place for ownership of the customers ‘smart ecosystem’, offering new services such as storage and security, while the same play is being made by Telefonica in South America through Aura. These offerings will offer differentiation, as well as an opportunity to make more revenues through third-party services. It’s a tough segment, as it will put them head-to-head with the likes of Google and Amazon’s digital assistants, but it is a differentiator.

By having these initiatives in place, marketers have something unique to go to market with, enticing consumers with promises which are genuinely different.

Three is a company which is taking a slightly different approach, hitting the consumers appetite for more data as opposed to speeds. Here, the team is leaning on ‘binge-watching’ trends, offering huge data bundles, but you have to wonder whether this is sustainable in the long-run when it comes to profitability and customer upgrades. There is only so long a company can persist in the ‘race to the bottom’.

Go Binge

“There are too many claims in an attempt to stand out in a crowded market,” said Paolo Pescatore, Tech, Media & Telco Analyst at PP Foresight.

“This is not the first time and wont be the last. It will only proliferate with the rollout of fibre broadband and 5G services. Consumers are happy to pay for the service they’ve signed up for, not to be misled. In essence, telcos are struggling to differentiate beyond connectivity. There’s a role for a provider to be novel and provide users with value through additional services and features.”

With the ASA chipping away at what marketers can and cannot say, as well as the traditional playbook becoming dated and irrelevant, telcos need to take a new approach to selling services to the consumer. The winners of tomorrow will not necessarily be the ones with the best network, O2 currently sits at the bottom of the rankings but has the largest market share in the UK, but the telco who can more effectively communicate with consumers.

5G offers an opportunity for telcos to think differently, as does the emergence of the smart ecosystem. Other product innovations, such as AI-driven routers, which can intelligently manage bandwidth allocation in the home, could be used as a differentiator, but it won’t be long before these become commonplace.

At the moment, all the bold claims being made by telcos, each competing the game of one-up-manship, are merging into white noise. The telcos have lost the trust of the consumer, many of which has cottoned onto the claims being nothing more than chest-beating. The telcos need to get smarter, and it will be interesting to see whether there are any unique approaches to capture the imagination of today’s cash conscious, technologically aware and savvy consumer.

Failure to do so, and the telcos might as well start calling themselves utilities.

Telefónica and Microsoft team-up to own connected ecosystem

Every telco is attempting to figure out how to survive in the newly-defined digital world and Telefónica’s approach looks to be one of the most interesting attempts yet.

Speaking at Mobile World Congress in Barcelona, Telefónica CEO Jose Maria Alvarez-Pallete was joined on stage by Microsoft CEO Satya Nadella to preach the promise of its ‘fourth platform’ and the power of digital assistant ‘Aura’ as a play to capture the fortunes of tomorrow’s digital ecosystem. Many are attempting to realise the glories of the connected economy, but this approach, leaning on the ‘gated community’ lessons of the OTTs looks to be one of the most encouraging yet.

“We decided cognitive intelligence was an amazing new opportunity,” said Alvarez-Pallete. “It is a new wave of interaction with our customers.”

The idea, which has been in the making for the last two years, is a relatively simple one on the surface. Build an effective digital assistant (tick), an intuitive interface (tick), a network designed for intelligence (tick) and open all this up to third parties (the next tick). It is remarkably similar to the ‘gated community’ model which has been championed by the likes of Facebook.

Although there are services and products which will be designed by Telefónica, there are more intelligent ways to monetize the consumer. The digital assistant and ‘Movistar Living App’ help Telefónica own the relationship with the consumer, but by opening the gates of this cultivated community Telefónica can monetize the relationships and (in-directly) the services which are build on top of its own intelligent network.

rhdr

However, for this idea to work the services have to be captivating and innovative. Telefonica must give customers a reason to use ‘Aura’ and the ‘Movistar Living App’ as the focal point of their own connected world. Effectively, Telefonica will have to go head-to-head with the likes of AWS and Google who are also trying to own this relationship with their own digital assistants. This is where Microsoft will be able to help.

Under Nadella, Microsoft has been reborn as a new company. After a brief fall from grace, the now cloud-defined business is fast becoming one of the most innovative players in the market, and part of this is built on its own AI platform and cognitive intelligence offerings. If Telefonica is going to go toe-to-toe with some very innovative players and own the connected ecosystem, the power of Azure (machine learning research, speech recognition etc.) will be critical to this success.

Another crucially important factor to success here will be earning, and maintaining, customer trust. Facebook succeeded so forcefully in the first few years because no-one questioned the data-sharing business model. Perhaps this was because no-one could understand these concepts, but the world has changed. Privacy is a priority for consumers, and Telefonica will have to prove it is serious about keeping personal information safe and managing the relationships with third-parties responsibly. Without this trust, Telefonica’s drive towards evolution with fail and the business will be nothing more than a dumb pipe.

rhdr

What is worth noting is that the strategy is off to the best possible start. Aura has been launched in six different countries, across 30 channels and has developed more than 1000 different usecases. By the end of 2019, these numbers will have improved to 9, 50 and 1500 respectively. The ambition and the growth potential is certainly there.

Owning the ecosystem which is fast developing behind the connected economy, including the smart home, is an opportunity which looked to be lost for the telcos. With the likes of AWS and Google seemingly wrestling control away with their own smart speakers and integrated personal assistants, it might have been a case of another missed opportunity due to inaction. Telefonica is looking to right this wrong however.

Xiaomi brought an old phone to Barcelona but added 5G to it

Xiaomi used Mobile World Congress 2019 to launch a 5G version of its Mi Mix 3 smartphone. The product will be available in the markets by May 2019.

Under the banner of “We Make It Happen” and billed as its first Mobile World Congress product launch (despite that it took place one day before MWC started), Xiaomi introduced the Mi Mix 3 5G version. The original 4G version of the phablet / super-sized phone was launched in October 2018. The new 5G reincarnation is powered by Qualcomm’s Snapdragon 855 equipped with the new X50 5G modem.

“Xiaomi has spent tremendous efforts developing a 5G smartphone solution and Mi MIX 3 5G represents Xiaomi’s quest to create innovative products for everyone,” said Wang Xiang, Senior Vice President of Xiaomi. “We are also delighted and honoured to be working with our partners to make 5G a reality for even more users all over the world.”

By partners on this particular occasion he definitely included Qualcomm and Orange, both of which endorsed the product launched. Cristiano Amon, President of Qualcomm Incorporated, shared the stage at the event. “We are thrilled to continue our long-standing collaboration with Xiaomi to help bring deliver unprecedented 5G speeds and transformative user experiences to consumers through their latest flagship smartphone, Mi MIX 3 5G,” he said.

Then a live 5G video call on the Mi Mix 3 5G was made on stage with an off-site Orange Spain executive, using Orange network. This may look commonplace nowadays, but it made history for Xiaomi: it was Xiaomi’s first 5G video call outside of China, the company claimed. It did not let go the opportunity without a subtle poke on AT&T either. When pointing at the on-screen 5G symbol, the Xiaomi product development director stressed this is real 5G, “not fake 5G”.

With the exception of 5G, all the other features and specs of Mi Mix 3 5G are the same as its 4G predecessor. The 5G version will be available in May and is priced at 599€.

Xiaomi Mi Mix 3 launch Feb 2019

Also introduced at the event is Mi 9, its new flagship smartphone launched in China a few days ago. Xiaomi spent a fair amount of time promoting the triple-camera, especially the AI performance to support different picture taking scenarios. Also being highlighted was Mi 9’s full-curved back cover, which it claimed to be inspired by the works of Antoni Gaudí, much to the delight of the local audience.

The Mi 9 is priced at 449€ for the 64GB version, and 499€ for the 128GB version. It is open to pre-order from today in Spain, France, and Italy.

The new product launches are packaged as steps taken to carry out the company’s “dual-core strategy” of Smartphone+AIoT that Xiaomi’s founder launched recently. Xiaomi’s executive threw in quite a few impressive numbers as proofs. For example, the number of monthly active users of MIUI (Xiaomi’s skin on top of Android) has reached 224 million; more than 2,000 products have been brought to the market by over 200 companies in the Xiaomi ecosystem; there are 132 million activated Xiaomi consumer IoT products, which has made it the world’s largest consumer IoT company.

It is also collaborating with IKEA and Philips to popularise smart homes and smart lighting. To make the point, Xiaomi’s executive went into a demo home environment on stage, attempting to switch off the smart air purifier with Google Assistant voice command. He did not quite pull it off. The air purifier refused to switch off, twice. Then he gave up.

Vodafone turns to wifi innovation to bolster broadband business

Vodafone has announced the launch of a new smart home network which it hopes will address a frustration of many consumers around the world; suspect wifi.

The new routers will not only allow for extenders to be placed around the house, potentially eliminating not-spots hidden in various rooms, but cloud-based algorithms will allow for more dynamic and intelligent allocation of connectivity resources.

“We know that the vast majority of people’s broadband issues are actually down to poor Wi-Fi signals in their homes – around a quarter of calls into customer care are about Wi-Fi issues,” said Ahmed Essam, Vodafone Group’s Chief Commercial and Strategy Officer. “Super WiFi is a simple way to address these problems and give our customers the best possible connection in every room of their house, every day of the week.”

As it stands, most broadband routers are pretty dumb devices. Bandwidth is split evenly to the devices which are connected to the router, irrelevant as to what the devices are doing. In this ‘dumb’ world, your TV which might be streaming a HD movie, will be allocated the same amount of bandwidth as a laptop which is only checking emails. Its not a very efficient way to do connectivity.

Cloud-based self-learning algorithms mean the network is constantly improving over time, adjusting automatically to deliver the best possible connection to each type of device, whether it is a mobile, laptop or connected TV. This makes a lot of sense when you consider the difference in checking WhatsApp and watching Stranger Things, while the equation might become a little bit more complicated with the connected revolution gathering momentum.

The introduction of smart speakers and energy meters might just be the beginning. While the idea of a connected fridge has been around for years, with a supporting ecosystem quickly emerging behind the products, there might be a bigger appetite for such futuristic living. With more devices fighting for connectivity attention from the router, this might be a solution. The ‘dumb’ status quo, putting the TV and the fridge on par, is clearly not a good option.

This is certainly a good move forward for Vodafone, and we look forward to the routers coming to the UK in the next couple of months, with the Spaniards getting the attention first and foremost.

Google investors slightly spooked by free-spending execs

Revenues might well be booming again at Google, but it seems shareholders are slightly concerned by increased costs, which is one of the fastest growing columns in the spreadsheet.

Looking at the final quarter, revenues stood at $39.3 billion, up 22% year-on-year, though traffic acquisition costs (TAC), what Google pays to make sure it is the dominant search engine across all platforms, operating systems and devices, were up by over $1 billion. Cost-per-click on Google properties were also down. A glimmering ray of sunshine was higher-than-expected seasonal growth for premium YouTube products and services.

Total revenues for 12 months ending December 31 stood at $136.8 billion, up 23% over 2017, while net income was back up to the levels which one would expect at Google, raking in $30.7 billion. The company is not growing as quickly as it used to, while expenses are starting to stack up. Investors clearly aren’t the happiest of bunnies as share price declined 3.1% in overnight trading.

“Operating expenses were $13.2 billion, up 27% year-over-year,” said Alphabet CFO Ruth Porat. “The biggest increase was in R&D expenses, with the larger driver being headcount growth, followed by the accrual of compensation expenses to reflect increases in the valuation of equity in certain Other Bets.

“Growth in Sales and marketing expenses reflect increases in sales and marketing headcount primarily for Cloud and Ads followed by advertising investments mainly in Search and the Assistant.”

Headcount by the end of the last period was up by more than 18,000 employees to 98,771. While CEO Sundar Pichai was keen to point out the business is continuing to invest in improving its core search product, diversification efforts into areas such as the smart speaker market, cloud and artificial intelligence are hitting home. Perhaps investors have forgotten what it’s like to search for the next big idea.

For years, Google plundering the bank accounts with little profit to offer. These days are a long-distant memory, but it is the same for every business which is targeting astronomical growth. You have to perfect the product and then scale. A dip in share price perhaps indicates shareholders have forgotten this concept, but Google is doing the right thing for everyone involved.

Some businesses search for differentiation and diversification when they have to, some do it because they have ambition to remain on top. Those who are searching because they have to are most likely reporting static or declining numbers each month and did not have the vision to see the good days would not last forever. Google is pumping cash into the next idea so when growth in its core business starts to flatten, something else can pick up the slack and pull the business towards more astronomical growth.

This is what is so remarkable about the ‘other bets’ column on the spreadsheets. It might have costs growth every single year, as does the wider R&D column, but having graduated the cloud computing business and most recently Loon, there are businesses which will start to contribute more than they are detracting. This is a company which never sits still, and this is why it is one of the most admired organizations from an entrepreneurial perspective. Shareholders might do well remembering this every now and then.

Looking at joy around the world for the final quarter, US revenues were $18.7 billion, up 21% year-over-year, while EMEA brought in $12.4 billion, up 20% and APAC accounted for $6.1 billion, up 29%. Revenues in LATAM were $2.2 billion, up 16% year-over-year. APAC and LATAM were subject to negative FX fluctuations, particularly in Australia, Brazil and Argentina.

In the specific business units, Google Sites revenues were $27 billion in the quarter, up 22%, with mobile collecting the lion’s share, though YouTube and Desktop contributing growth also. Cloud, Hardware and Play drove the growth in the ‘other’ revenues for Google, collecting $6.5 billion, up 31% year-over-year for the final quarter.

Although these diversification efforts are growing positively, there are also some risks to bear in mind. Firstly, the cloud computing business is losing pace with Microsoft and AWS. Google is making investments to attempt to buy its way through the chasm, but it will be tough going as both these businesses make positive steps forward also.

Secondly, some properties and developers are choosing to circumnavigate the Google Play Store, instead taking their titles direct to the consumer. This is only a minor segment of the pie for the moment and there will be a very small proportion of the total who actually have the footprint to do this (Fortnite for example), though it is a trend the team will want to keep an eye on. Perhaps the 30% commission Google charges developers will be reconsidered to stem dissenting ideas.

Finally, the data sharing economy which will sit behind the smart speaker and smart home ecosystem is facing a possible threat. Google will not make the desired billions from hardware sales, but it will from the operating systems and virtual assistant powering the devices. Collecting referral fees and connecting buyers with sellers is what Google does very well, though this business model might be under threat from new data protection and privacy regulations.

The final one is not just a challenge to the potential billions hidden between the cushions in the smart home’s virtual sofa, but the entire internet economy. GDPR complaints are currently being considered and potential consequences to how personal data is collected, processed and stored are already being considered. The Google lawyers will have to be on tip-top form to minimise the disruption to the business, and wider data sharing economy.

Costs might be up and while there are dark clouds on the horizon, Pichai and his executives are moving in the right direction. The lawyers can lesson the potential impact of regulation, but the exploration encouraged by the management team in the ‘other bets’ segment is what will fuel Google in the future. Costs should be controlled, but spending should also be encouraged.

Orange steps further into the convergence game

Orange has announced a new partnership with Groupama, adding another branch to the convergence strategy with a home telesurveillance service.

Everyone in the industry is talking about convergence as a means to improve revenues, but few have created quite a splash in the deep-end as the cannon-balling French telco. This latest partnership with Groupama will see the creation of Protectline, a joint platform for the operation and management of home telesurveillance services.

“The upcoming launch of our home telesurveillance service is an important part of Orange’s multi-service operator strategy,” said Stéphane Richard, CEO of Orange. “To deliver the best product possible, we have again chosen to work with Groupama to pool our skills and resources, following on from our Orange Bank partnership.”

With Orange owning 51% of the new venture, it’s a very clever way for the telco to diversify revenue streams. Groupama is already a well-established player in this segment, but Orange has something which every business wants; a humongous subscriber base to potentially sell added-value services into. This is where this partnership is a stroke of genius and an excellent foundation for future convergence growth.

Orange has built a successful business and large customer base through doing what it does very well. Until recently it has focused exclusively on markets which it has a pedigree in; connectivity. Recently it has explored banking, cyber-security, entertainment and smart home services, though each has relevant-industry partners under-pinning the venture, as well as a direct tie back to the core business.

Protectline is another example of how the Orange business is embracing convergence in a low-risk, high-reward manner. Groupama has the expertise while Orange has the sales and marketing capabilities. Each is supplemented the other, leaning on the skills which are brought to the table. Its sounds incredibly simple, because it is, but it is effective. Of course, you have to wonder why there aren’t more in the industry doing this and the answer is relatively simple.

When splitting the risk, you have to split the spoils. If Protectline becomes a roaring success, Orange can only collect 51% of the riches. This might not sound attractive to other telcos, some of which have chosen to go solo on diversification to varying success; just have a look at BT’s attempt to rock Sky’s dominance in the premium TV segment.

Sky is another which has proven to be successful in the convergence and diversification game, branching out from the core TV services to offer broadband and mobile connectivity offerings. However, similar to the Orange example, the risk has been somewhat removed as the broadband offering runs over Openreach infrastructure and the Sky Mobile is a MVNO. The high-risk elements of these diversification ambitions, the CAPEX heavy infrastructure, has been removed from the equation. Sky focuses on what it does best, maintaining a relationship with its customers.

The buzz around convergence has been dying down a bit recently, as while it is an effective strategy few has realised the bonanza which was initially promised. Orange is one of those few who are reaping the considerable benefit, but only because it is not going alone.

The question which remains is whether Orange can nail the customer experience element. This would have been the big hurdle for the banking product, though it seems to have passed with flying colours. Groupama can take the operational risk away from the telco, but customer experience is slightly different in every vertical; Orange will have to prove its worth by being engaging and intuitive if this is to be a success.

Orange has realised where its strengths are and by offering this massive subscriber base as leverage is any future partnerships, it is proving the low-risk convergence game can be a very profitable one.

58% of UK business can’t detect IoT security breach – study

Digital security vendor Gemalto claims the IoT euphoria might be hitting the UK before its ready, as research shows 58% of businesses are not able to detect a breach.

First and foremost, we need to put a disclaimer on this report. Gemalto is a security company and is thus incentivised do its best scaremongering to drive revenues. The more scared companies are about potential data breaches, and the punishments which follow the incidents, the more likely they are to buy security software. Making the world a big, bad, horrible place is an effective marketing strategy for security vendors.

That said, considering the lax approach most of the industry takes towards security and data protection, we suspect many of the statistics being discussed are pretty accurate.

“The push for digital transformation by organisations has a lot to answer for when it comes to security and bad practices,” said Jason Hart, CTO of Data Protection at Gemalto. “At times it feels organisations are trying to run before they can walk, implementing technology without really understanding what impact it could have on their security.”

The most shocking figure from the report is the 42% of UK companies who are capable of detecting an IoT breach, with only France worse off at 36%. Considering the role IoT has been touted to play over the next few years as 5G hits the streets, this is an incredibly worrying statistic.

While spending on IoT security has increased from 11% of the overall IoT budget to 13%, you have to wonder what direction this money is heading. Perhaps even more concerning for those companies involved, is that 90% of them accept this will be a major buying motivator for customers. At least they are aware that security can have a direct impact on the revenues of the business now, a concept which has taken years to hammer home.

“Given the increase in the number of IoT-enabled devices, it’s extremely worrying to see that businesses still can’t detect if they have been breached,” said Hart. “With no consistent regulation guiding the industry, it’s no surprise the threats – and, in turn, vulnerability of businesses – are increasing. This will only continue unless governments step in now to help industry avoid losing control.”

IoT is set to be one of the biggest winner of the 5G bonanza, while the segment is also predicted to be the major catalyst of 6G. If predictions are anywhere near accurate, 5G networks will soon not be able to cope with the strain of IoT, driving the case for 6G due to the sheer number of ‘things’ connected to the network.

Looking at the predictions, IDC believes the IoT market will grow to be worth more than $1.2 trillion by 2022, with consumer devices expected to account for the largest share at 19%. Ericsson has forecasted the number of cellular IoT connections to reach 3.5 billion in 2023, increasing at a CAGR of 30%.

Security remains a major challenge for the industry, though the buzz around blockchain could provide a suitable means to meet the expectations of the consumer. In the absence of regulation, Gemalto notes the adoption of blockchain technologies has doubled from 9% to 19% in the last 12 months, with 23% of the respondents to this survey believe the technology would be an ideal solution to use for securing IoT devices. 91% who are not using blockchain are considering it for the future.

“Businesses are clearly feeling the pressure of protecting the growing amount of data they collect and store,” said Hart.

“But while it’s positive they are attempting to address that by investing in more security, such as blockchain, they need direct guidance to ensure they’re not leaving themselves exposed. In order to get this, businesses need to be putting more pressure on the government to act, as it is them that will be hit if they suffer a breach.”

While research like this does indicate security is becoming a more serious topic in the world of telecoms and technology, it also confirms there is a very wide gap to close. Security has long been the ugly duckling of the industry, many seemingly choosing to ignore the challenges because they are too difficult to solve, though new regulations such as GDPR has perhaps forced the issue up the agenda.

Interestingly enough, should the telcos get serious about security there would certainly be a revenue generating opportunity to capitalise on. With cyber security incidents and data breaches becoming more prominent in the news, consumers are gradually becoming more aware of the risks of the internet and the emerging digital society. While the industry has played down the risk in recent years, the incidents speak for themselves.

An excellent example of turning this scenario into a business opportunity lies with Orange, the master of the convergence strategy. Here, the team have invested heavily in cyber security capabilities and are now offering security services to customers as a bolt on to other connectivity packages. The move has proven to be a success as while it is generally becoming accepted that 100% secure is impossible nowadays, more people are willing to do something about it.

Security is a topic which has always been in and around the news, but few want to do anything proactive about it. Unfortunately, with the perimeter expanding so rapidly as IoT penetration grows, these statistics are incredibly worrying. Perhaps regulators will get the chance to swing the GDPR stick before too long after all.

Google unveils Assistant delights at CES

It wasn’t going to be long before Google stole the show with a horde of updates to the virtual assistant. And in fairness, some of them look pretty useful.

Who is leading the smart assistant battle varies depending on who you are talking to, but the importance of this segment is consistent throughout. With more users becoming comfortable with the voice UI, buying power will gradually shift away from the smartphone screen and onto connected devices. Whoever has the best and most prominent virtual assistant will control the relationship with the consumer.

Google might dominant search revenues for the moment, but the smart home and the connected economy are changing the status quo; the Google Assistant is one of the ways the firm will stay relevant. So, what is new?

To kick things off, the team has launched Google Assistant Connect, a platform for device manufacturers to bring the Google Assistant into their products in an affordable and easy-to-implement way. This is an important step for the Google team to take, as it allows for scale. Google’s speakers and smart products will not dominate the smart home forever. Sooner or later, traditional brands will take the lion’s share of spend as the mass market will be more comfortable buying from the trusted, specialised brands. But the ambition for Google in the smart home should be in the software not the products.

Google needs to make it as easy as possible for appliance and device manufacturers to incorporate the virtual assistant. Just as it is with the search engine, scale is everything. The more users Google is interacting with, the more accurate its algorithms become and more money its advertising models can generate.

As it stands, the Google Assistant currently works with over 1,600 home automation brands and more than 10,000 devices. This number will only accelerate as the mass market acceptance of smart home devices and applications becomes more apparent.

Another area which has been targeted by the firm in recent months has been automotive. Back in September, Google was named as the technology partner of the Renault-Nissan-Mitsubishi alliance, allowing it to embed the Android operating system directly in vehicles. Last year, the alliance sold a combined 10.6 million vehicles in 200 markets across the world. At CES, Google announced a number of new features which would increase the usability of its applications in the car.

One of the updates is to bring the Assistant to Google Maps. Not only will the Assistant help with navigation, but users will be able to use voice commands to send messages to friends, such as estimated time of arrival. The Assistant can also be commanded to search for points of interest or stop-off points along the designated route. It’s a useful little update.

The final update which we like to draw attention to is focused on travel. Before too long, users will be able to instruct the Google Assistant to check them into flights (starting with US domestic flights), and also book hotel rooms at the destination. How effectively this will work remains to be seen, and it will be interesting to see how many hotels the Assistant has to choose from (as well as the price ranges), but again, it is a useful update.

Virtual assistants are not new, but they are becoming increasingly normalised in the eyes of the consumer. The voice UI is starting to make a genuine impact on the technology landscape the sci-fi image of tomorrow might not be as ridiculous as once though. Perhaps if someone nails AR glasses the smartphone screen might become redundant sooner rather than later.

DCMS launches new initiative to bring elderly into digital

The Department of Digital, Culture, Media and Sport (DCMS) has announced the launch of a new initiative to help older and disabled people get digital skills and reap the benefits of the digital era.

The scheme will see digitally savvy older people open their homes up to be kitted out in the latest technologies, before allowing others to visit and learn first-hand from their peers how to make the most of smart technology to control household appliances, book GP appointments online, contact friends and family by video, and shop online. In short, you can get some free kit, but you have to let Edna and Harold from down the road parade around your home.

“We are committed to improving the digital skills of people of all ages and abilities, so everyone can enjoy the benefits of modern technology,” said Minister for Digital, Margot James. “These innovative projects will not only help some of the hardest to reach people live healthier and happier lives but also boost our mission to make the UK the best place in the world to start and grow a digital business.”

Funded by the Digital Inclusion Innovation Fund, this scheme will initially receive £400,000 and will be championed in rural West Essex by a partnership led by Uttlesford Council for Voluntary Service.

“Organisations across Essex are backing the Digital Boomers which will see older people redesign their relationship using technology to become even more tech confident and retain their independence for longer,” said Clive Emmett, chief executive of Uttlesford Council for Voluntary Service.

“Thanks to the Digital Inclusion Fund, our exciting Living Smart Homes and Digital Buddies pilots will help us rethink how older people use digital to support their health, wellbeing and independence.”

While some might turn their nose up at this idea, it is very easy to forget the older generations need to be taken forward into the digital economy as well. These are people who in all likelihood weren’t forced into the digital mindset through work or society and therefore need all the assistance possible to make sure they feel the benefits.

The UK government has not necessarily shown itself to be the most forward-thinking in the world, but this is an initiative which we quite like the look of.