Future proofing networks with open source technology

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Tom Canning, VP of IoT at Canonical makes the case for open source software as the future of telecoms networks.

We live in a time of immediacy and excess. No more so than with our relationships with the phones in our pockets. Unlimited data packages, media streaming, and calls over the air waves wherever you happen to be. As a result, mobile operators face unprecedented levels of pressure to deliver more data, faster connectivity, better coverage, and more functionality every month.

To put even greater weight on the shoulders of telecoms providers, a new phenomenon is taking centre stage – that of business intelligence. End users are now less likely to be the ones consuming information, but the individual products or machines that make up the Internet of Things (IoT).

IDC predicts that by 2025, 60 per cent of the world’s data will be generated by enterprises and not consumers – double that of 2017. In other words, the infrastructure behind smart devices. Autonomous cars, smart cities, sensor networks, and connected industrial equipment all require extensive bandwidth to function. Operators need to rethink how the connected network is architected. They must support the faster transfer of data, greater density, and dramatically reduced latency. And they must add this functionality and flexibility whilst simultaneously driving down the costs of deploying, sustaining, and managing network infrastructure.

A new way of thinking

For decades, the telecoms industry was dominated by proprietary businesses and operating models. As market pressures evolved, however, providers were forced to find new, innovative solutions. It has resulted in telcos embracing open-source principles in recent years – an approach that transformed the computer industry from transactions to supercomputing, smartwatches and wearables, and then to a wireless network infrastructure supporting each one. The lesson has come just in time, with the dawn of  5G promising faster speeds and more reliable connections for internet-enabled devices across a diverse set of locations.

The success of 5G rests on software-defined networking (SDN), whose main concept is to decouple the infrastructure of wireless networks from expensive, closed hardware and shift it to an intelligent software layer running on top of commodity hardware. 5G and open source, therefore, have become an attractive combination for telecoms, with major operators worldwide pioneering new technologies and use cases.

Open source software in particular is key to 5G and the IoT developments, because the software can power the automation of mission-critical functions required to support the high speeds and low latency of 5G, as well as the huge number of endpoints in IoT. In short, it is the democratisation of wireless network infrastructure that will allow telcos to stay relevant in the world of 5G and connected devices.

Spotlighting the innovators

Several initiatives are already in motion, which seek to break the propriety stranglehold of telcos players and deliver SDN to the wireless network. They include both major operators and wireless infrastructure vendors, while disruptive challengers and startups are making an impact, too.

The operator community, as well as businesses, are actively engaged in collaborative alliances to help drive the uptake of open source. These include, but are not limited to, the O-RAN Alliance, which includes members such as AT&T, Deutsche Telekom, Intel, Verizon, and SK Telecom, and the Open vRAN initiative, which is backed by Cisco. The MyriadRF open source initiative, meanwhile, was founded by Lime Microsystems in 2012, with the purpose of democratising wireless innovation. It has grown to include a vast array of contributors, from hobbyists and wireless enthusiasts to professional engineers and large equipment manufacturers.

Vodafone is one such partner. The company had a goal of extending coverage and adding additional services to its 4G corporate network. Working with Lime Microsystems’ CrowdCell – a network-in-a-box solution that runs on top of commodity hardware – Vodafone was able to deliver to IT managers a new SDR-based, high capacity network ideally suited to IoT applications. IoT is the area in which you need regular intelligence within the network, to gather data and predict outcomes in real-time. An SDR network is perfectly optimised for this.

Looking to the future

As 5G begins to roll out across the enterprise, the need for more affordable, capable and agile networks is imperative. SDN holds the key, with its increased intelligence directly on top of commodity hardware. The future of mobile connectivity, therefore, is software-defined. As an approach, it also promotes third-party app development and greater community involvement, which allows operators to add value and differentiate from the competition beyond the traditional measures of coverage and subscription costs.

Open source is the answer to future proofing network infrastructure, with its collaborative and diverse heritage the perfect partner for innovations across 5G and IoT. An open, software-defined model will help operators meet the growing need for faster, more flexible, and more secure systems. It’s a case of adapt and survive.

 

Tom Canning is VP of IoT at Canonical Group, the developer of the open source OS Ubuntu. Prior to joining Canonical in 2017, Canning held a number of senior positions in the UK and the US., including at HP, Cisco and, most recently, Spigit. He is based in London and holds an electrical engineering degree from the University of Ottawa.

Google pushes further into hardware world with Fitbit purchase

Google has announced it has entered into a definitive agreement to acquire wearables brand Fitbit as it further explores its options in the hardware segments.

While wearable fitness devices are certainly a long-slog away from Google’s core competencies, it has already shown it is able to gain traction in the hardware segments with the success of its smart speaker. With the Pixel smartphones, smart speakers, Chromebook, the Nest Thermostats and now Fitbit, Google is certainly spreading its wings.

“Three and a half years ago, I joined Google to create compelling consumer devices and services for people around the world,” said Rick Osterloh, SVP of Devices & Services.

“Our hardware business is still relatively young, but we’ve built a strong foundation of capabilities and products, including Pixel smartphones and Pixelbooks, Nest family of devices for the home, and more.

“Google also remains committed to Wear OS and our ecosystem partners, and we plan to work closely with Fitbit to combine the best of our respective smartwatch and fitness tracker platforms. Looking ahead, we’re inspired by the opportunity to team with Fitbit to help more people with wearables.”

Although this has been a rumour which has been circulating for a while, it certainly looks like a sensible move for the internet giant. This is another example of Google doing what Google does; throws money at an idea which it likes.

The core Google business model is a relatively simple one. Its services are some of the best available, however to continue growth it needs to ensure these services are being pushed into new ecosystems. For example, it started as a desktop application, before buying Android and dominating the mobile space, then when the voice user interface started to gather steam, it brought out a range of smart speakers. Each of these moves takes the core Google services into a new domain, and Fitbit is no different.

The wearables segment has constantly promised the world but delivered only a fraction, though there does seem to be gathering momentum. Smart watches and other wearable devices are becoming more popular, and it does offer Google another opportunity to interact with the consumer in a different environment.

Google currently has a voice assistant which allows for the voice user interface, Fitbit devices will soon enough be powered by Google’s Wear OS, while it has been doing some promising work in gesture control also. These elements would all link back to Google’s other services, such as the Mapping product or search engine. Fitbit looks like an attractive investment because it offers Google another opportunity to make money in another domain.

Despite being an incredibly sound brand, Fitbit has been suffering in recent years. It found fame and success in delivering a niche wearable device for fitness enthusiasts, though as the wearables segment slowly evolved, it did not. Other more complex devices evolved to offer fitness elements, stealing some of the shine from the Fitbit. Its own attempts to create smart watches have been hit and miss.

Fitbit does need to evolve its product beyond the niche fitness devices which it produces today, but to develop something which is competitive in a market with the likes of Apple, it will take cash. Fortunately, this is something Google can contribute with abundance. However, Google will have to make sure it lets Fitbit be Fitbit.

Google will have to make sure it leaves the Fitbit team on its own to hire the right people and design the right products. Google’s heritage is in software after all and wearables need to marry substance and style. We suspect a horde of software engineers might not be the best suited to get too involved.

Should Google leave the Fitbit team to create an excellent product, just like it left Nest on its own, and marry the devices to its wider service ecosystem, this could be a very crafty acquisition.

Amdocs launches ‘future ready’ RevenueONE billing system

Telecoms software vendor Amdocs has unveiled its bid to bring billing into the 5G and cloud era, in the form of RevenueONE.

The Amdocs marketing team saw fit to describe it as ‘game-changing’ in the headline of the press release. What game that is, whether it needs changing and whether or not this launch does so, we’ll leave to others to establish. The top line is that this is a billing system designed to help operators exploit all the new revenue opportunities we’re constantly being told have been generated by 5G and the move to the cloud.

To flesh out the press release we spoke to Ron Porter, Product Marketing Manager at Amdocs. He explained that 5G, IoT, connected environments, etc create all sorts of new billing opportunities for operators, but legacy billing systems aren’t geared to exploit them. A lot of this comes down to the kind of speed and flexibility that comes with having virtualized functions in the cloud, especially the edge. He concluded that the ultimate aim was to offer a billing system that is ‘future ready’.

“Amdocs RevenueONE brings together proven scalability and cloud-native architecture to accelerate the launch of new 5G services, while supporting existing products and offers, said Anthony Goonetilleke, Amdocs President of Media, Network and Technology. “At its core, the RevenueONE blueprint was built to scale, and was proven to support 200 million subscribers on a single platform.  This robust architecture allows CSPs to handle the velocity of new service launches, and the variety of new business models, that will come with 5G, while cutting time to market from days to minutes.

“Our goal was to continue to significantly reduce our hardware footprint while scaling to support the influx of new connected devices and services. Utilizing edge-based architecture to reduce network traffic, we believe RevenueONE will grow with our customers as consumers embrace new business models and services.”

The BSS/billion/digital transformation space is pretty competitive at the moment, with various vendors queueing up to giver operators the tools to capitalize on their 5G investments. If products like RevenueONE enable even half of what they promise the onus, as ever, is on operators to adapt the way they do business. 5G is still at an early stage, but the winners of it will surely be those operators that use it as a platform for genuine innovation.

Google updates Android for entry-level smartphones to be faster and safer

Google has announced a new version of Android Go, claiming the updated operating system for entry-level smartphones will run apps faster and support new data encryption technology.

The update will take the stripped-down OS to Android 10 (Go Edition). The company claimed the new version will load apps 10% faster then the current iteration, Android 9 (Go Edition).

Android Go was first introduced on top of Android Oreo (Android 8) at the end of 2017. At that time the target was for entry-level Android phones with 1 GB RAM or less. Despite the threshold has risen to 1.5 GB RAM for the latest version, the memory demand is still much lower than those on mid-range or high-end phones. As a comparison, Pixel 3, Google’s own signature smartphone, has 4 GB RAM, while Samsung’s Galaxy S10 and Huawei P30 both have 8 GB RAM.

The new version of OS can also run a native encryption software, called Adiantum, which was launched by Google at the beginning of the year. Google said running Adiantum on Android 10 (Go Edition) will not affect the devices’ performance. Unlike earlier data encryption tools, Adiantum does not need specialist hardware, therefore all entry-level Android phones can command a similar experience.

A number of Google services are also optimised for Android 10 Go. The “Read-out-loud” feature, which was first introduced in 2018, is updated. So is Lens for Google Go that can read out texts on signs and pictures, supported by on-board AI.

There is also the new Gallery Go, which essentially is the light-weight version of Google Photos. The software is only 10MB in size and can use on-board AI to help users sort and arrange pictures

Thanks to its business model, Google has little control over the user experience on the plethora of devices launched by the hundreds of Android OEMs, most of which would modify the OS one way or another. It has tried reining in the fragmentation, especially on the low-end. Sundar Pichai, the current Google CEO, was leading the Android One program, a version of Android that cannot be customised by OEMs. It was initially designed for entry-level Android phones in the Indian market, but has since been expanded to mid- to high-end products. Only a handful of OEMs, primarily Xiaomi, Nokia (HMD), and Motorola, have taken it seriously though.

Google believes the Android Go momentum is stronger and the appeal is broader. It said over 1,600 device models from more than 500 OEMs have been launched with Android Go over the last 18 months. These have made up over 80% of the total entry-level Android phone market, with wholesale prices ranging from $27 to $77.

Go_infographic.max-1000x1000

Huawei all smiles with $1.5bn developer plug amid the chaos

At its Connect Conference in Shanghai, Huawei executives attempted to put themselves on the front-foot with a $1.5 billion commitment to lure developers into its computing platforms.

This is one of the more notable challenges the business will face if it has to shift over to new operating systems. The technology might be fantastic, but if there isn’t the developer community and application ecosystem to back it up, there is little value. This is a massive consequence of Huawei’s entry onto the US Entity List, banning it from working with US suppliers, and should not be under-estimated.

The smartphone is the most obvious area to discuss, but there are others such as PCs and the developing IOT ecosystem. If Huawei is banned from using popular operating systems in these areas, its own version, Harmony OS, will have to suffice. If Harmony OS is to succeed, it needs developers to create products and applications which are compatible with it. With the additional funds, Huawei is aiming to increase the pool of developers it works with from 1.3 million to 5 million.

Looking at the rumours with the latest flagship smartphone, the Mate 30, it has been suggested the device will be delivered without any Google applications pre-loaded on the device. We’ll all find out in a matter of hours, though Huawei seems to be getting around the ban by including an open-source version of the Play Store on the device. This is not a long-term solution for Huawei, but it might suffice while it works on making the Harmony OS software and ecosystem battle-ready.

This is of course only one element of the Huawei business strategy moving forward. It is anticipating aggressive growth in the ‘Intelligence’ segment, and it does appear its enterprise business is going to get a supercharge moving forward.

This would appear to be a very sensible move for Huawei, as while it has dominated the network infrastructure market and made significant progress for consumer devices, it is little more than an ‘also-ran’ for enterprise. With numerous businesses becoming increasingly driven by digital models and technology, as well as the telcos aggressively promoting the promise of connectivity for future fortunes, there is a significant opportunity for growth.

“In terms of Huawei’s investment, they’re equally important,” Rotating Chairman Ken Hu said. “In the past, we mostly talked about connections. Today I’d like to focus on computing.”

If you are talking about autonomous driving, astronomy, and weather forecasting, the demand for compute power is only going to increase. Intelligence is going to be embedded on an increasingly large number of products moving forward, not simply limited to the cloud. And soon enough, the computing ecosystem is going to have to be a lot more collaborative.

All of these areas offer a lot of promise for those who can create solutions, cost effectively, to enable businesses to make money in the digitally-defined economy. For Huawei, this means new products in the semiconductor market, shifting to a more virtualised business model, opening up hardware products for customisable solutions and creating an opensource ecosystem to back-up the business.

Anyone reading these comments from Hu might think the business has just given up on telecoms infrastructure due to pressure from the US. This will never be the case, but often enough pressure forces innovative companies to find new ways to make money. We suspect this is the case at Huawei.

Huawei reportedly reckons it has an Android ban workaround

At a recent trade show a Huawei exec indicated that there may be a way to enable its future smartphones to access Android apps despite Google being banned from working with it.

The goss comes from Android Authority, which attended the launch of the Huawei P30 Pro at IFA in Germany. At the launch the head of Huawei’s consumer business group Richard Yu apparently told reporters he has a cunning plan to get around the catastrophic consequences of not longer having google support for Android.

While Android itself is open source and anyone is free to install their own take on it, the Play Store and Google apps such as Gmail. Maps, etc are all licensed from Google and can’t be installed on a phone without that license. If and when the US stops suspending the sanctions that come with Huawei being put on its entity list, Google will be barred from entering into further licensing agreements with Huawei.

An Android phones without Google apps and the Play Store is not worth having. There are already signs of Huawei having to adapt to that eventuality, with the P30 Pro featuring the EMUI 10 user interface that is ‘based’ on Android 10. The extent to which it deviates from Android 10 to the detriment is unclear.

In reference to the imminent launch of the flagship Mate 30 smartphone, Yu said Huawei is working on a way of letting users install Google apps on the non-official version of Android. He even went so far as to say that the process would be quite easy for users, without going into details. Even if that’s true, however, with there being so little to choose between flagship Android smartphones when it comes to hardware specs, there would still be little incentive for punters to accept any user experience compromise, so even this hope may be forlorn.

Nokia found to be best brand for prompt Android updates

There is significant variation in the performance of the leading Android smartphone makers when it comes to updating Android, according to new research.

Counterpoint has crunched the numbers and concluded that among all Android handset brands Nokia (manufactured by HMD Global) is the quickest and best at rolling out new versions of Android to its users after Google has issued them. Samsung Xiaomi and Huawei also do a decent job of serving their customers on this matter, but after them there’s a significant drop off.

Counterpoint android update chart

“Operating system and security updates are an aspect of Android smartphones that get relatively little attention,” said Peter Richardson of Counterpoint. “In our experience researching the industry, we have seen a few brands focusing on this. And perhaps because manufacturers are not talking about it, consumer awareness is also low. It doesn’t appear among the ten features consumers say they care about most, in our research.

“Unsurprisingly, therefore, little effort is expended by the top manufacturers in focusing on regular updates to the operating system and device security, despite it being a critical element in the continued safe performance of the smartphone. Many of the key features including battery life, processor, camera and memory are linked to the performance of the underlying operating system. We believe it is important to the overall consumer experience and is likely to become more widely recognized as such.”

This is a good point – what incentive is there for Android smartphone makers, who already operate on very thin margins and see Google and other OTTs hoover up most of the subsequence service revenue, to invest in something that has little apparent effect on sales? The main commercial answer would have to be brand reputation and things like NPS. Presumably prompt updates to yield some ongoing brand benefits and at least increase customer loyalty to some extent.

“High-priced devices are often updated first, but having the latest software is as important to mid- and low-priced products as it is to flagship devices,” said Abhilash Kumar of Counterpoint. “We, therefore, looked at manufacturers’ performance at updating software across all price tiers. By this analysis, Nokia stands out, again, as the brand most likely to update its full portfolio quickly.

Xiaomi and Lenovo also rank high in this metric. Brands like Alcatel and Tecno are the laggards. This is because these brands have broad portfolios, mostly in the sub-US$200 segment, and the lifecycle of their models tends to be short. Their products often transition from launch to end-of-life in as little as six months, which means they have less incentive to provide long-term updates.”

It seems likely that most brands are fairly prompt in updating their flagship devices but many drag their feet when it comes to the cheaper ones. As well as the reasons detailed above there’s the fact that the cheaper a device the more commo0ditised it is, making anything other than the core hardware feature set even less of a factor in purchasing decisions. That makes Samsung’s performance especially impressive since it has such a large device portfolio across all price tiers.

Google exposes massive iPhone hacking operation

Google’s Project Zero security team has revealed a vulnerability in iOS that exposed large numbers of users to a hack that allowed the installation of a monitoring implant.

This kind of hack is called ‘zero-day’, the definitions of which vary, but which refers to a vulnerability in a piece of software that leaves it open to exploitation by outside actors. The stated aim of Project Zero is to make zero-day hard and it goes about doing so by trying to find such vulnerabilities. Apparently it always publishes these findings after giving the owner of the software time to address the vulnerability and Apple was told about this one back at the start of February this year.

“Now, after several months of careful analysis of almost every byte of every one of the exploit chains, I’m ready to share these insights into the real-world workings of a campaign exploiting iPhones en masse,” wrote Ian Beer of Project Zero in the blog post detailing the findings. “Let’s also keep in mind that this was a failure case for the attacker: for this one campaign that we’ve seen, there are almost certainly others that are yet to be seen.”

This is at best very embarrassing for Apple, which prides itself on the relative lack of malware on its close software platforms. The malware was able to install itself on iOS devices if they merely visited an infected website, with no manual download required. Upon successful installation the malware apparently granted the bad guys access to everything on the phone, including passwords, chat histories, etc.

Google is, of course, Apple’s sole rival in the mobile operating system space, so it does seem pretty convenient that it should be discovering iOS vulnerabilities and publicising them. Project Zero’s policy, it seems, is to publish all such findings after an appropriate delay to allow for patching, which it should be stressed Apple did immediately, but you have to wonder whether it’s quite as keen to bring Android’s failings into the public domain.

Apple given golden opportunity to crack India with relaxed rules

Apple has struggled to gain any sort of traction in the Indian markets to date, but new Government rules could perhaps open the door a crack.

India is a market which represents a significant opportunity for the major players in the digital economy. It has the second-largest population globally and a smartphone penetration rate of roughly 24%, but one of the few markets worldwide where smartphone shipments are increasing quickly. Thanks to certain market disruptions, India is currently under-going its own digital revolution, with the increasingly wealthy middle-class easing into the digital euphoria Western consumers have been accustomed to as the norm.

Year Smartphone penetration1 Average income (US $)2
2018 23.9% 2,020
2017 21.9% 1,830
2016 20.4% 1,690
2015 18.6% 1,600

1Statista 2World Bank Group

The evolution of India and the surge of the digital economy in the country is moving at a dramatic pace. The opportunity for profit is monstrous, but this is a tricky market to crack.

This is the conundrum which Apple is currently facing. It currently has less than 2% of market share across the country (which isn’t increasing), and premium prices are stifling any genuine ambition to increase this.

Indian consumers are gradually spending more on devices, though by the time Apple’s prices would be deemed palatable, other brands might have already developed a strong sense of loyalty; do not underestimate the power of the Android/iOS divide.

Brand Market share
Xiaomi 31%
Samsung 26%
Vivo 6%
Oppo 6%
Realme >1%
Apple >1%

Figures curtesy of Counterpoint Research – Q2 2019 shipments

However, there is a glimmer of hope. The Indian Government has this week announced it will relax rules which dictate how foreign companies can operate in the country. Fortunately for Apple, the easement will allow it to sell directly to customers through its eCommerce channels.

In by-gone years, a foreign company had to source 30% of its production locally to create a retail presence in India. This presence includes online channels. With such reliance on China for the manufacturing elements of the supply chain, Apple has always struggled to meet these requirements. As a result, Apple’s devices have been sold through local partners, who add a premium to an already premium product; it has struggled to gain a foothold in the market.

Another element tied to this is the brand story. The Apple Store is a presence in 25 countries around the world, not only presenting a direct-selling opportunity, but a chance to offer an experience to current and potential customers. This is a fundamental building block in the Apple strategy, which is all about creating a brand and an identity to cultivate customers into the loyal iLifers you see around the world today.

Thanks to new elements being considered by the Indian Government, Apple now meets the requirements and will allegedly begin selling products through its own eCommerce channels in the coming months. These new considerations take into account more iPhones will be manufactured in India, not only for Indian consumers, but for export to Europe as well. This is massive win for Apple.

In short, there are two massive benefits for Apple. Firstly, it can own the purchasing relationship with the customer, dictating the messaging and reducing the price while maintaining profit margins. Secondly, it can begin to create the Apple experience for customers to nurture the sense of loyalty which is so critical to the Apple success over the years.

Apple is an incredibly successful smartphone manufacturer because it creates excellent devices, but the work which has been done to build loyalty with its customer base should never be underestimated.

Think back to the 90s and 00s when you saw Apple adverts on TV. None of these adverts ever really discussed products in the way you would expect but talked about the Apple experience. A huge proportion of advertising today is designed around story-telling and brand experience, but Apple was arguably one of the first to do it and remains one of the best at building this experience.

The result of these campaign was an ‘us’ and ‘them’ mentality which persists today. Whether it pins iOS versus Android, or Mac versus PC, the split is very apparent, and crossover is very rare. Not only does this segmented approach maintain loyalty for the individual products, it presents significant cross-selling opportunities. How many iPhone users have an iWatch, an iPad or a Mac also? We suspect a high percentage.

Shifting people into, and keeping them in, the Apple universe can partly be attributed back to the brand marketing campaigns, the closed ecosystem and ownership of sales channels and brand experience. And now, it presents another massive opportunity moving forward; software and services revenues.

Period Net sales Software and services revenue Percentage of total
Q3 2019 53,809 11,455 21.2
Q2 2019 58,015 11,450 19.7
Q1 2019 84,310 10,875 7.7
Q4 2018 62,900 9,981 15.8
Q3 2018 53,265 10,170 19
Q2 2018 61,137 9,850 16.1
Q1 2018 88,293 9,129 10.3

Figures taken from Apple financial reports – USD ($) in millions

Apple CEO Tim Cook has made a big deal about software and services, and he is very right. It attracts recurring revenues without the R&D and manufacturing price tag. There will of course still be R&D, but smartphones are very expensive products to produce at the level Apple customers demand.

Generating revenues through AppleCare, iTunes, Apple Music, iCloud, Apple Pay, Apple Books, Siri, maps, search or TV subscription services becomes substantially more profitable once people are bought into the ecosystem. And as you can see from the table above, it is becoming an increasingly important facet of the financial spreadsheets.

With many users persisting with the OS they have become accustomed to, if Apple wants to make India a profitable market, it will have to start embedding itself in the minds and lives of Indian consumers today.

The Indian market is one which offers great prospects and profits for those who play their hands wisely. Up to now, Apple would have been written off by many industry commentators, but will changes to the rules, the door is slightly ajar. But that is all it is right now.

Apple will have to convince smartphone users it is a better alternative than the Android ecosystem, while also justifying the premium it traditionally charges for products. This will be a very difficult battle, but Apple is in a better position today than it was yesterday.

Cisco hits expectations once again, but disappoints on forecast

Cisco has released financials for the final three-month period of 2018, beating market expectations for the 21st consecutive quarter.

He might not be the most flamboyant of CEOs, but like Satya Nadella over at Microsoft, Chuck Robbins is letting the business do the talking. Since his appointment in 2015, the vendor has gone from strength-to-strength, with these results adding another feather to the cap.

Looking at the financials, total revenue for the three months reached $13.4 billion a 5% year-on-year increase, while net income was down 42% to $2.2 billion. Although the latter figure might shock some, CFO Kelly Kramer has suggested this is only a blip on the radar, with the hole attributable to US Treasury Regulations issued during the quarter relating to the Tax Cuts and Jobs Act.

In terms of the numbers across the year, total revenues stood at $51.7 billion, up 7%, while net income was $13.8 billion, an increase of 9% compared to the previous year.

However, it is not all glimmering news.

“Let me reiterate our guidance for the first quarter of fiscal ’20,” Kramer said during the earnings call. “We expect revenue growth in the range of 0% to 2% year over year.”

Considering the ambitious plans set-forward by the business over the last few years, this would not seem to be the most generous of forecasts. The dampened forecast might well disappoint a few investors. What is worth noting, it that despite having strong and stable foundations, Cisco is not immune to global trends.

Looking at the telco customers, Asia is demonstrating weakening demand for Cisco. The China telco business is weakening, while demand in India has dropped off as aggressive network roll-outs in 2018 are not being replicated today.

In terms of working with enterprise customers, the team had two major software deals in 2018 which are “tough to compare against”, according to Robbins, while the Chinese and UK markets are demonstrating weakened positions thanks to events which are outside of the control of the team. No prizes for guessing what those events might be.

What is worth noting is that while it is easy to point the finger of blame towards China in the current political climate, take    this explanation from Robbins and Kramer with a pinch of salt. Cisco’s revenues in China might have declined by 25% this year, though the market only accounts for less than 3% of total revenues.

Cisco is no different from any other vendor in the telco space right now. It might be performing healthily, though it is reliant on telcos getting their act together and pushing network investments forward. The 5G bonanza to boost profitability in the telco ecosystem is yet to appear, though there are hints it might be just around the corner (as always…).

“I would say don’t anticipate that being a huge profit driver off of the 5G transition that’s going to come when they build more robust broader 5G infrastructure where they’ll deliver enterprise services and that’s going to come after they do the consumer side,” Robbins said.

“So, it’s a bit unclear when that will take place. I’d say we’re not modelling and don’t anticipate any significant improvement in this business in the very near term.”

This is where the 5G hype can be slightly misleading. There are of course telcos who are surging ahead, but these are only a fraction of the networks around the world. It is promising, but the market leaders or fast followers are not going to flood vendors bank accounts with profits.

There are numerous markets who are still in the testing phases of 5G, with the telcos aiming to figure out the commercial business model to make the vast investments in future-proofed markets work. When we start getting to the steep rises of the bell curve, this is where the profits will start rolling in.

That seems to be the message from the Cisco management team today; we’re in a healthy position, but don’t expect this quarter to blow anyone’s mind away. The 5G euphoria is on the horizon, but investors will have to wait just a little bit longer.