Facebook can’t stop dabbling in financial services

Not content with trying to create a new global currency, Facebook now lets you pay for stuff through all its apps.

The new financial service is simply called Facebook Pay and it lets you use Facebook, Messenger, Instagram and WhatsApp to pay for stuff. This isn’t an extension of Libra, it should be stressed, and is more of a competitor to the payment platforms provided by Google and Apple on smartphones. Indeed Facebook’s biggest challenge is to explain to its users why they need yet another mobile payment platform when there are already so many to choose from.

This bit of the announcement tells us where Facebook thinks USPs can be found: “Facebook Pay will begin rolling out on Facebook and Messenger this week in the US for fundraisers, in-game purchases, event tickets, person-to-person payments on Messenger and purchases from select Pages and businesses on Facebook Marketplace. And over time, we plan to bring Facebook Pay to more people and places, including for use across Instagram and WhatsApp.”

In common with the Google and Apple equivalents, Facebook pay merely acts as a conduit for actual financial service providers like credit cards. The company seems to have identified latent demand for a more seamless payments experience when using its apps. Alternatively it could have taken a look at how huge WeChat is in China and decided it wants some of that action.

Facebook tends to copy rather than innovate and, when it comes to minor features, this approach seems to have served it well. Trying to recreate WeChat in the US, however, is a much larger undertaking and will require some degree of market education, which won’t be easy. Having said that the CCMI people seem to have similar ideas, so US consumers look set for a bit of a mobile revolution in the coming months.

Huawei gives extra bonuses to staff that helped counter US sanctions

Embattled Chinese kit telecoms giant Huawei has decided to chuck a bunch of cash at its employees to thank them for hanging in there.

A bunch of different media have all claimed some kind of scoop over an internal email sent by Huawei HR to the entire company. The long and short of it seems to be that Huawei has decided to dish out two billion yuan in one-off bonuses to those staff considered to have done the most to counter the evil machinations of the US and its entity list. On top of that nearly every Huawei employee got double pay in October. Any employees that didn’t get either must be pretty unimpressed.

We haven’t been able to get anything official from Huawei, but have been assured that the reporting is legit. It looks like the R&D and supply chain teams directly involved in trying to find alternatives to the goods and services the US ban is preventing Huawei from accessing are getting most of the bonus pool, which will probably amount to around 100,000 yuan (£11,000) per employee.

Much of the reporting features anonymous insiders stressing how incredibly generous this is of Huawei, so the company is clearly milking its generosity for PR points. That doesn’t mean it’s not a smart move on its own merits, however. Not only will it help steady the nerves of its employees, it also sends out a message that money isn’t a problem in spite of the US doing its worst. Shame there are no bonuses being offered for excellence in telecoms reporting.

Synchronoss unveiled as tech partner for latest US RCS effort

The Cross Carrier Messaging Initiative will use Synchronoss tech in its attempt to make RCS into a useful mainstream alternative to SMS and OTT messaging services.

RCS (Rich Communications Services) has been around for a while, but most people have had a tough time caring, content as they were with SMS for simple messaging and OTT services like WhatsApp for sending photos and that sort of thing. But the four big US operators reckon there’s life in the old dog yet and launched the CCMI a few weeks ago to make a proper go of it.

Synchronoss is a US company that specializes in providing operators with extra services to sweeten their offerings, one of which is messaging, so it’s not surprising to see it unveiled as a key partner in this initiative. With little apparent demand for a new flavor of messaging, the end product of this collaboration needs to offer something special if expects people to give it the benefit of the doubt.

“The cross-carrier messaging initiative has the potential to transition the wireless ecosystem to a new, innovative messaging service that will power new experiences – allowing U.S. wireless customers to manage their digital life and enabling efficient and convenient interactions with their favorite brands from a single application,” said Glenn Lurie, CEO of Synchronoss, before pausing for breath.

“The launch of this initiative signals the beginning of the era of advanced messaging in the U.S. that will begin to unite communication, services and entertainment in entirely new ways. Synchronoss, along with our partner WIT Software, has seen first-hand how powerful advanced messaging can be around the globe, and we believe there is tremendous potential for this in the U.S. on multiple fronts. This collaboration exemplifies how working together can enhance the entire mobile ecosystem.”

“By collaborating with Synchronoss, we’ll be able to successfully advance the messaging experience through RCS and take the next step to further the conversational commerce ecosystem,” said Doug Garland, GM of the CCMI joint venture. “With new RCS capabilities all four wireless carriers together will be able to create better overall mobile messaging customer experience.”

Synchronoss and WIT Software have some form in this area, having been involved in a similar RCS enterprise in Japan last year. If RCS is to belatedly take off it will probably be because it enables some new kind of communication between businesses and end users that all concerned consider valuable. It’s not immediately obvious what form that will take, so it will be interesting to see what they come up with.

T-Mobile US promises nationwide 5G before Christmas

T-Mobile US has made the very bold statement that it will switch on a nationwide 5G network on December 6.

With the 5G race heating up, the industry should be prepared to tolerate some interesting statements and might well have to swallow some considerable exaggerations. This certainly has the potential to be an example.

“We’re building a 5G network that will allow us to deliver future New T-Mobile moves that are going to be so massive we couldn’t wait to share the first few,” said CEO John Legere.

“We have definitively put a stake in the ground around the kind of company the supercharged Un-carrier will be and the ways we can put this radically better 5G network to work doing goof for this country — good for consumers, good for competition and good for innovation.

“Only the New T-Mobile’s transformative 5G network will finally have the capacity and reach to make the bold moves we announced today that are squarely aimed at solving inequities that have huge impacts on our society. When it comes to wireless service, many have been taken advantage of, left behind or completely forgotten. It’s time for another wave of change and the New T-Mobile will be at the forefront of that.”

Legere certainly has precedent in making wild claims, though in fairness, he does usually deliver. After all, this is the man which led the T-Mobile US business out of the shadows of irrelevance to a position where it is challenge the dominance of AT&T and Verizon.

However, you have to take such claims with a pinch of salt. The network will make use of the 600 MHz spectrum hording at T-Mobile US, allowing it to reach 200 million people with extended range, however there will be a compromise on speed. This spectrum will not deliver the eye-watering download speeds which have been promised in the 5G era.

This might be 5G, but not the 5G which many have been talking about. The spectrum in question was purchased in 2017, when T-Mobile US paid $7.9 billion for 1,525 regional 600 MHz licences. The assets are already powering the ‘Extended Range’ LTE service for the telco across 2,700 locations.

In conjunction with the launch of the 600 MHz powered 5G network, T-Mobile US is also making use of the mmWave airwaves in strategic locations. This spectrum will deliver the vastly superior download speeds, though with the 600 MHz spectrum aided to the mix, at least customers will be able to see the 5G logo on their screen more often.

T-Mobile US merger with Sprint one step closer after FCC sign-off

Having secured a bunch of 5G network commitments, the US telecoms regulator has given its seal of approval to the merger of TMUS and Sprint.

The FCC had to make the usual judgment call when it comes to telecoms mergers of weighing up the reduction in competition with the increased investment power of the combined entity. As with apparently everything else in the US, the FCC is politicised and tribal. The three Republican Commissioners voted in favour, while the two republicans voted against.

To the winners go the spoils and the resulting announcement was heavy on the national benefits promised by ability of the combined entity to do a better job of rolling out a 5G network than the sum of its parts. The FCC (or at least the majority of it) is saying ‘the transaction will close the digital divide and promote the wide deployment of 5G services’. Let’s see.

“Specifically, T-Mobile and Sprint have committed within three years to deploy 5G service to cover 97% of the American people, and within six years to reach 99% of all Americans,” said the FCC announcement. “This commitment includes deploying 5G service to cover 85% of rural Americans within three years and 90% of rural Americans within six years.

“The parties also pledged that within six years, 90% of Americans would have access to mobile service with speeds of at least 100 Mbps and 99% of Americans would have access to speeds of at least 50 Mbps. This includes two-thirds of rural Americans having access to mobile service with speeds of at least 100 Mbps, and 90% of rural Americans having access to speeds of at least 50 Mbps.

“Compliance with these commitments will be verified by rigorous drive-testing, overseen by an independent third party and subject to Commission oversight, to ensure that the service Americans receive will be what the parties have promised. And in order to ensure that these commitments are met, the parties will be required to make payments that could reach over two billion dollars if they do not meet their commitments within six years. Moreover, the parties will be required to make additional payments until they have fulfilled their commitments.”

In their lengthy dissenting letter the two Democrat Commissioners stressed how little reassurance they take from these commitments. “The vague promise of 5G does not change what was true when this deal was first proposed and what remains true today—the benefits of this merger, if any, simply do not outweigh the harms,” wrote Commissioner Starks.

This still isn’t a done deal, however. It is the last of the federal obstacles but some individual states are pushing back and, by amazing coincidence, everyone involved seems to be of the Democrat persuasion. This is just how things work over there and the two companies will presumably need to dip further into the pork barrel to win those states over.

Having secured a bunch of 5G network commitments, the US telecoms regulator has given its seal of approval to the merger of TMUS and Sprint.

The FCC had to make the usual judgment call when it comes to telecoms mergers of weighing up the reduction in competition with the increased investment power of the combined entity. As with apparently everything else in the US, the FCC is politicised and tribal. The three Republican Commissioners voted in favour, while the two republicans voted against.

To the winners go the spoils and the resulting announcement was heavy on the national benefits promised by ability of the combined entity to do a better job of rolling out a 5G network than the sum of its parts. The FCC (or at least the majority of it) is saying ‘the transaction will close the digital divide and promote the wide deployment of 5G services’. Let’s see.

“Specifically, T-Mobile and Sprint have committed within three years to deploy 5G service to cover 97% of the American people, and within six years to reach 99% of all Americans,” said the FCC announcement. “This commitment includes deploying 5G service to cover 85% of rural Americans within three years and 90% of rural Americans within six years.

“The parties also pledged that within six years, 90% of Americans would have access to mobile service with speeds of at least 100 Mbps and 99% of Americans would have access to speeds of at least 50 Mbps. This includes two-thirds of rural Americans having access to mobile service with speeds of at least 100 Mbps, and 90% of rural Americans having access to speeds of at least 50 Mbps.

“Compliance with these commitments will be verified by rigorous drive-testing, overseen by an independent third party and subject to Commission oversight, to ensure that the service Americans receive will be what the parties have promised. And in order to ensure that these commitments are met, the parties will be required to make payments that could reach over two billion dollars if they do not meet their commitments within six years. Moreover, the parties will be required to make additional payments until they have fulfilled their commitments.”

In their lengthy dissenting letter the two Democrat Commissioners stressed how little reassurance they take from these commitments. “The vague promise of 5G does not change what was true when this deal was first proposed and what remains true today—the benefits of this merger, if any, simply do not outweigh the harms,” wrote Commissioner Starks.

This still isn’t a done deal, however. It is the last of the federal obstacles but some individual states are pushing back and, by amazing coincidence, everyone involved seems to be of the Democrat persuasion. This is just how things work over there and the two companies will presumably need to dip further into the pork barrel to win those states over. It’s a marathon, not a sprint.

US on the verge of signing some kind of trade deal with China

US Commerce Secretary Wilbur Ross has said his country is close to signing a deal with China that could lead to an easing of some trade restrictions.

Ross (pictured) said as much to Bloomberg, with the usual caveats about nothing being set in stone. Many media have been reporting their own conjecture about what this could mean for Huawei as fact, but Ross was keen to stress this deal doesn’t affect the ‘entity list’, which prevents US companies doing business with Huawei.

There was some couched optimism about licenses being granted, that would enable specific companies to conduct specific trade with Huawei, but then again the US has been sitting on a bunch of license applications for a while without apparently granting any. Arguable the biggest of these would be one that allows Google and Huawei to work together, thus enabling the latter to install the full version of Android on its phones.

It’s all very well for Ross to insist the entity list and the trade war are unrelated, but US foot-dragging over granting those licenses implies the contrary. Trade wars are a game of chicken in which each side raises the stakes to give them more weight in negotiations. Putting national champion Huawei in existential danger via the entity list is just too convenient a negotiating chip for its to be plausible that the two issues are unrelated.

 

FCC wants to use state muscle to ban Huawei and ZTE even more

What little presence Chinese vendors still have in US networks will be further eroded by a new initiative from the US regulator.

Federal Communications Commission Chairman Ajit Pai (pictured) announced at the World Radiocommunication Conference that the FCC will soon vote on a move to deny federal funds to any company that does business with any company that poses a national security threat.

Right now US operators get some state wonga from something called the Universal Service Fund, which is positioned as a pot of cash to ensure everyone in the US is connected. Any time a company is dependent on the state for funds, however, that leaves it vulnerable to state intervention in its business and that seems to be what Pai has in mind. Suddenly universal service is secondary to geopolitics.

With the usual preamble about how Chinese companies are compelled to assist their government in its spying operations, Pai said he thinks even more needs to be done to counter that threat to US national security.

Recognizing this risk, today, I’m circulating an order that would prohibit the use of Universal Service Fund dollars to purchase equipment or services from any company—like Huawei—that poses a national security threat,” said Pai. “Going forward, we simply can’t take a risk when it comes our networks and hope for the best.”

In the process of examining this issue, I also determined that the FCC needs to take a look back, so to speak. That’s because some rural wireless carriers that receive USF funds have already installed Chinese equipment.  So, I’m proposing that the Commission initiate a process to remove and replace such equipment from USF-funded communications networks.

“My plan calls first for an assessment to find out exactly how much equipment from Huawei and another Chinese company, ZTE, is in these networks, followed by financial assistance to these carriers to help them transition to more trusted vendors. We’ll seek public input on how big this “rip and replace” program needs to be and how best to finance it.  I hope that my colleagues will join me in voting for these important steps to protect our national security at our November 19 meeting.”

Public funds are a two-way street, you see. They can be taken away if you’re bad, but increased it you’re good. We don’t know how substantial the USF is, but operators could always just forgo that cash if they really felt like using Chinese gear, we suppose. However they would then find themselves on a governmental naughty list and presumably face all sorts of other state sanctions, so will probably decide discretion is the better part of valour when it comes to doing what they’re told in this case.

Verizon unveils mixed bag as media continues downward spiral

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

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

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

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

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

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

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

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

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

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

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

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

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

US Senators suspect TikTok could be a national security threat

Republican Senator Tom Cotton and Senate Minority Leader Chuck Schumer have written to the Intelligence Community to request a national security investigation into social media video app TikTok.

Although TikTok has been paid particular attention in the request, the duo is asking other China-based applications with a significant US presence are also given some consideration. The move could represent an expansion of the aggression towards China and strain trade-talks between the two parties further.

“We write to express our concerns about TikTok, a short-form video application, and the national security risks posed by its growing use in the United States,” the pair said in the letter to Acting Director of National Intelligence Joseph Maguire.

“TikTok’s terms of service and privacy policies describe how it collects data from its users and their devices, including user content and communications, IP address, location-related data, device identifiers, cookies, metadata, and other sensitive personal information. While the company has stated that TikTok does not operate in China and stores US user data in the US, ByteDance is still required to adhere to the laws of China.”

The comments above pay homage to a Chinese law which requires Chinese companies to comply with requests from the Government and its intelligence agencies. While the law also states Chinese companies can refuse the request if it contradicts with the domestic laws in which the company operates, it is clear the US and others do not believe this clause holds much credibility or weight.

After being launched in 2017 by ByteDance, TikTok has proven to be a very successful additional to the social media scene. The app boasts more than 110 million downloads in the US alone and became the world’s most downloaded app on Apple’s App Store in the first half of 2018.

While this is the first-time politicians have waded into the waters, there has been criticism of TikTok from other avenues. US think tank Peterson Institute for International Economics described TikTok as a ‘Huawei-sized problem’, posing a national security threat to ‘the West’. The thinking here seems to be that the app collects location and biometric data and is unable to deny requests from the Chinese Government.

TikTok has proven to be an immense success in its short life, though the attention from security agencies in the US is an ominous sign. Alongside the shadow of doubt which will be cast on the app in the eyes of US citizens, it is not unfeasible for some sort of restrictions to be placed on the business.

US operators collaborate in one more effort to make people care about RCS

AT&T, Sprint, T-Mobile and Verizon have created the Cross Carrier Messaging Initiative to push the Rich Communications Service standard on Android.

RCS is championed by the GSMA, which has been banging on about it for over a decade. It’s positioned as the heir apparent to SMS, offering all sorts of ‘rich communications’ such as images, group chat. That all would have been pretty handy when it was first proposed, but since then there have been countless OTT messaging apps launched, such as WhatsApp, which seem to provide at least everything RCS does. So it’s hard to see what the point of RCS is in this day and age.

The US operators clearly disagree, however, hence this announcement. It’s easy to see why operators, and therefore their lobby group, would want to promote a messaging standard that they have greater control over. But what is less obvious is the incentives smartphone users would have to switch to it. Presumably most would reflect on their current messaging app portfolio and conclude that if it ain’t broke, don’t fix it.

“People love text messaging for a reason,” said David Christopher, GM of AT&T Mobility. “Texting is trusted, reliable and readily available – which is why we’re using it to build the foundation of a simple, immersive messaging experience. This service will power new and innovative ways for customers to engage with each other and their favourite brands.”

“The CCMI will bring a consistent, engaging experience that makes it easy for consumers and businesses to interact in an environment they can trust,” said Michel Combes, CEO of Sprint. “As we have seen in Asia, messaging is poised to become the next significant digital platform. CCMI will make it easy for consumers to navigate their lives from a smartphone.”

“At the Un-carrier, customers drive everything we do, and that’s no different here,” said John Legere, CEO of T-Mobile. “Efforts like CCMI help move the entire industry forward so we can give customers more of what they want and roll out new messaging capabilities that work the same across providers and even across countries.”

“At Verizon, our customers depend on reliable text messaging to easily connect them to the people they care about most,” said Ronan Dunne, CEO of Verizon Consumer Group. “Yet, we can deliver even more working together as an industry. CCMI will create the foundation for an innovative digital platform that not only connects consumers with friends and family, but also offers a seamless experience for consumers to connect with businesses in a compelling and trusted environment.”

Here are the things the CCMI says RCS brings to the table:

  • Drive a robust business-to-consumer messaging ecosystem and accelerate the adoption of Rich Communications Services (RCS)
  • Enable an enhanced experience to privately send individual or group chats across carriers with high quality pictures and videos
  • Provide consumers with the ability to chat with their favourite brands, order a rideshare, pay bills or schedule appointments, and more
  • Create a single seamless, interoperable RCS experience across carriers, both in the U.S. and globally

Of these the B2B angle seems the most compelling. There is still a surprisingly vibrant business around automated application-to-person (A2P) messaging, which typically operators use to communicate with their customers. The switch to RCS would bring a lot more options to that business. And then there’s the fact that you don’t need to know whether someone has an OTT app installed in order to send that message, although it should be noted that Apple shows no sign of supporting it.

But there’s no getting around the fact that RCS is essentially a direct competitor to OTT messaging which, thanks to the inability of operators to act with any kind of urgency, now has a massive head start in the marketplace. Perhaps if more of them belatedly get their acts together as the US operators have they can start to build some momentum, but we’re not holding our breath.