Microsoft and Sony join up on AI and cloud gaming

Microsoft and Sony have signed a memorandum of understanding to jointly develop cloud systems for game and content streaming, and to integrate Microsoft’s AI with Sony’s image sensors.

This is another step on Sony’s journey to transform from a console and title seller to a game streaming service platform. Microsoft’s leadership in both cloud computing, its Azure cloud platform, and the global footsteps of its datacentres makes it an ideal partner to Sony.

The collaboration will also cover semiconductors and AI. Sony has been a leader in image sensors (among its clients is the iPhone including the latest XS Max model), and the integration of Microsoft Azure AI will help improve both the imaging processing in the cloud and on device, what the companies called “a hybrid manner”. Microsoft’s AI will also be incorporated in Sony’s other consumer products to “provide highly intuitive and user-friendly AI experiences”, the companies said.

“Sony has always been a leader in both entertainment and technology, and the collaboration we announced today builds on this history of innovation,” said Satya Nadella, CEO of Microsoft, in a statement. “Our partnership brings the power of Azure and Azure AI to Sony to deliver new gaming and entertainment experiences for customers.”

Kenichiro Yoshida, president and CEO of Sony agreed. “I hope that in the areas of semiconductors and AI, leveraging each company’s cutting-edge technology in a mutually complementary way will lead to the creation of new value for society,” he said.

Looking to the future of the PlayStation platform, Yoshida said, “Our mission is to seamlessly evolve this platform as one that continues to deliver the best and most immersive entertainment experiences, together with a cloud environment that ensures the best possible experience, anytime, anywhere.”

Gaming is following the trend of video and music from one-off ownership selling to access streaming. But gamers are more sensitive to the visual quality and, above everything else, lagging. So to provide good experience to convert gamers to long-term streaming subscribers, the platform needs to guarantee superb connection. This is where Microsoft’s datacentre footsteps and the upcoming 5G networks will fit well with the “game” plan.

Another key success factor, similar to video streaming market, is the content. Gamers’ taste can be fast changing and frivolous. That is why the companies also stressed the importance to “collaborate closely with a multitude of content creators that capture the imagination of people around the world, and through our cutting-edge technology, we provide the tools to bring their dreams and vision to reality.”

No information on the size of investment or the number of staff involved in the collaboration is disclosed, but the companies promised to “share additional information when available”.

Nokia laments a weak first quarter

Finnish telecom vendor Nokia reported a disappointing Q1 of flat revenue and expanding loss. The company blamed competition and slow ramp-up of 5G.

Nokia reported a modest 2% net sales growth to reach €5.032 billion over €4.924 billion of Q1 2018, which would be down by 2% on constant currency basis. The gross margin was at 31.3%, down from 36.7% a year ago. The operating loss increased from €336 million (or -6.8% of net sales) to €524 million (-10.4%). Net cash was depleted by more than half from €4.179 billion to €1.991 billion. Earnings per share went from positive €0.02 to negative €0.02.

Nokia Q1 2019

Rajeev Suri, the President and CEO of Nokia, conceded that “Q1 was a weak quarter for Nokia.” Meanwhile, the company believes that its fortunes will improve in the rest of the year, especially in the second half.  “As the year progresses, we expect meaningful topline and margin improvements. 5G revenues are expected to grow sharply, particularly in the second half of the year, driven by our 36 commercial wins to date.”

In addition to the slow start of the year, Suri also saw risks in intensified competition and customers reassessing their investment. He said in the statement that “competitive intensity has slightly increased in certain accounts as some competitors seek to be more commercially aggressive in the early stages of 5G and as some customers reassess their vendors in light of security concerns, creating near-term pressure but longer-term opportunity.”

When looking at the results by business lines, Networks, by far the biggest segment of Nokia’s business, grew by 4%, both Software and Nokia Technologies kept flat, while sales from the Group Common and Other unit (including Alcatel Submarine, Bell Labs, Radio Frequency Systems, etc.) went down by 13%. Geographically, North America, which overtook Europe to become Nokia’s biggest market in the last quarter, fell back to below Europe in Q1 despite registering an impressive 9% year-on-year growth. Europe was largely flat with the sales keeping at €1.5 billion level. Asia Pacific grew by a decent 6% to get closer to the €1 billion mark, but the biggest loss was in Greater China, where the sales plunged by 10%, now only marginally bigger than Middle East & Africa.

To say things have not been going smoothly for Nokia recently would be an understatement. In late March, the company first announced that it had discovered certain “compliance issues” in the Alcatel-Lucent business it acquired years ago which might have “material adverse effect” on its business, causing a rush sell in the financial market, only to retract a couple of hours later to declare those issues would not have materials impact. More recently it was reported that the company has been struggling to fulfil its business contracts in Korea.

This must be a painful moment for the Nokia management and shareholders (it’s shares were down around 9% at time of writing), who have to watch its two major competitors reporting strong results while sitting on its own disappointments. Ericsson has just delivered an encouraging quarter, and Huawei, despite all the headwind, has reported a particularly impressive Q1. As Light Reading, our sister publication, said earlier, Huawei’s woes may not necessarily mean good fortunes for its two main competitors. So far they have not translated into good fortunes for at least one of them.

Comparing the numbers with Ericsson we could see that despite Ericsson’s total sales in Q1 was about 10% smaller than Nokia’s, it was considerably more profitable (gross margin at 38.4% vs. Nokia’s 31.3%), and its operation more efficient (€1.3 billion operating cost vs. Nokia’s €2.1 billion).

These are also the two key aspects the Nokia management are focusing on to turn things around. On the profitability side, Suri said “we will continue to take a balanced view, and are prepared to invest prudently in cases where there is the right longer-term profitability profile.” On the efficiency side, the company is “also progressing well with our previously announced EUR 700 million cost savings program,” Suri said in his statement.

AT&T will stick with 5GE after settling with Sprint

US operator Sprint has settled the case it brought against AT&T for unfair competition with the 5GE marketing gimmick with apparently little to show for it.

The legal trade publication Law360 reported that Sprint and AT&T have reached a settlement of the case Sprint brought to a federal court in New York in February. A short statement was mailed to the media, “The parties have amicably resolved this matter,” it said. A source told Law360 that AT&T will continue to use “5G Evolution” or 5GE in its marketing and ads materials. No details on the terms of settlement have been disclosed.

In the court case, Sprint complained that AT&T was conducting false advertising, therefore misleading consumers, and in turn, directly harming Sprint’s business interest. In addition to the law suit, Sprint also took out a full-page ad in the New York Times in March to warn consumers “Don’t be fooled. 5G Evolution isn’t new or true 5G. It is fake 5G.”

The other big US operators were not holding back from attacking AT&T’s antics either. Verizon’s CTO wrote an open letter calling on the industry “to commit to labeling something 5G only if new device hardware is connecting to the network using new radio technology to deliver new capabilities,” as well as promised that Verizon “won’t take an old phone and just change the software to turn the 4 in the status bar into a 5.” T-Mobile, on the other hand, in keeping with its CEO’s maverick spirit, uploaded a video showing someone taping over the LTE indicator on the phone with a sticker labelled “9G”.

Even the OEMs would not let go the chance to mock AT&T’s shenanigans. Xiaomi, when launching its 5G smartphone before MWC in Barcelona, pointedly highlighted the 5G network by Orange it used for the demo was real 5G, “not fake 5G”.

A few days before the announcement of settlement AT&T defended itself at the court that consumers were not fooled into believing the 5GE is actually 5G. On the other hand, for the purists like the EU-backed 5G Infrastructure Association or Qualcomm, none of the 5G networks launched so far in Korea and the US can be called “real 5G”.

Apple capitulates to end war with Qualcomm

Qualcomm and Apple agreed to settle all the ongoing litigations with the iPhone maker paying the chipset maker an undisclosed amount and signing a six-year licensing agreement.

On Monday, Qualcomm and Apple went to court over the allegation that Qualcomm has been abusing its monopoly position to over-charge for its chips. The stakes could have run up to tens of billions of dollars, with the OEMs Foxconn and Pegatron already demanding compensation of $9 billion dating back to 2013. The case at the Southern District Court of California in San Diego was meant to last for five weeks.

On Tuesday, the two companies released a brief statement to announce a settlement. “Qualcomm and Apple today announced an agreement to dismiss all litigation between the two companies worldwide. The settlement includes a payment from Apple to Qualcomm. The companies also have reached a six-year license agreement, effective as of April 1, 2019, including a two-year option to extend, and a multiyear chipset supply agreement.”

This is definitely good news for the two companies especially for Qualcomm, and good for the industry and consumers. Specifically, for Qualcomm it means its business model will remain intact and the company can put an end to a multi-year legal saga; for Apple, in addition to avoiding the punitive $31 billion penalty, this settlement will be able to quicken its steps to launch a 5G iPhone, making up the gap already expanding between itself and the leading pack.

A few hours later, Intel announced that it intends “to exit the 5G smartphone modem business and complete an assessment of the opportunities for 4G and 5G modems in PCs, internet of things devices and other data-centric devices. Intel will also continue to invest in its 5G network infrastructure business. The company will continue to meet current customer commitments for its existing 4G smartphone modem product line, but does not expect to launch 5G modem products in the smartphone space, including those originally planned for launches in 2020.”

It must have been a blow to Intel’s mobile ambition, especially after it announced only late last year that it would bring the launch of its first 5G modem forward by half a year to the second half of this year, an act to prove the doubters wrong. That originally planned 5G modem to be launched in 2020 referred to in the announcement, presumably a second generation, was supposed to power the first 5G iPhone, after Apple all but officially declared that it would enter into an exclusive relationship with Intel.

Putting the two things together it may be reasonable to infer that Apple agreed to settle after it had realised that it does not have other options than coming back to Qualcomm for the supply of 5G modems (assuming Intel had updated Apple about its imminent decision to withdraw from the market).

In addition to leaning in on Intel, Apple has also been reported to be strengthening its in-house modem development capability, ultimately aiming to rid itself of reliance on external suppliers. Based on the terse announcement released together with Qualcomm, it looks Apple does not believe the home-grown modems will be good enough to compete with Qualcomm in the next few years. Huawei is another supplier that has launched its own 5G modem, but it may be safe to estimate that the chance of Apple going for Huawei chips is slim.

In keeping with the normal practice of settlement cases like this, the companies did not disclose the amount Apple will pay. However, Qualcomm updated the SEC shortly after the settlement announcement was made, as the settlement would have material impact on the earnings. The company expected an EPS incremental of about $2 “as product shipments ramp” without giving a specific timespan. As a reference, in the quarter ending 30 December 2018, Qualcomm delivered an EPS of $0.87 on the back of a total revenue of $4.8 billion. Therefore, assuming Qualcomm’s operational efficiency remains largely constant, the payment Apple will make could run into the $10 billion range.

Payment aside, there must be some soul-searching going on inside Apple, including by Tim Cook, the CEO, who came from a supply chain management background: how could Apple have let itself be cornered so badly in the first place? It’s hard to view this as anything other than complete humiliation for Apple, especially when you consider how aggressively it pursued this case.

On top of the millions it will have paid to lawyers Apple’s negotiating position in arriving at this settlement, considering what was widely assumed about its 5G modem situation, must have been very weak. So it’s quite possible Apple has ended up paying considerably more for Qualcomm’s chips than it would have if it had never initiated this war. Having said that, Apple’s share price seems completely unaffected by the news, probably indicating offsetting relief that it’s back in the 5G game. Qualcomm’s share’s however, surged 23% on the news.

New research claims employees do not own Huawei

Two academics researched the ownership and control structure of Huawei and concluded the company is not owned by employees, contrary to what the company has officially claimed.

Christopher Balding, an Associate Professor of Economics at Fulbright University Vietnam, and Donald Clarke, a Professor of Law at George Washington University’s Law School, published a preprint paper titled “Who Owns Huawei?” on SSRN, the online sharing platform for scholars. The scholars combed the publicly available information, from both China and overseas, and pieced together a picture of Huawei’s ownership and control structure.

Huawei has repeatedly stated that the company is jointly owned by Ren Zhengfei, the founder, who has 1.14% of the share, and the 100,000 or so employees who own the rest. “Huawei is a private company wholly owned by its employees”, says the company’s annual report. The company “involves 96,768 employee shareholders”. The founder repeated the message at his interview with a group of journalists from the global media earlier this year. The scholars dug into the opacity and found the reality is more complex and less clear.

They started with distinguishing the different entities enshrined in the name. Huawei Technologies is the company that produces and sells products and services, and employs around 188,000 people (according to Huawei’s 2018 Annual Report). This entity is 100% owned by a holding company called Huawei Investment & Holding Co., Ltd., which employs no more than a couple of hundred people. Ren Zhengfei owns 1.14% of the holding company, the rest is owned by an organisation called Huawei Investment & Holding Company Trade Union Committee (the scholars abbreviated the name to “Huawei Holding TUC”).

Huawei ownership

There is no information on how Huawei Holding TUC is constituted or what the governance model or decision-making process is. Probably more importantly, the TUC is associated with the holding company (which employs a couple of hundred people), not with Huawei Technologies (which employs 188,000 people). Even if all the employees under Huawei Technologies are represented by the TUC, according to the labour law in China, “trade union officials are appointed by management or by the administratively superior trade union organization, not chosen by the members.” (P.9) In other words, the employees cannot decide who can sit on the committee, less how they make decisions.

The authors of the paper also attempted to separate ownership from control, or in a hypothetical case of insolvency, right to claim to company’s residual assets. Again, according to the law in China, “residual assets of a trade union go up, not down, to the trade union organization at the next highest administrative level” (P.9), theoretically all the up to the “All-China Federation of Trade Unions at the central level. The Communist Party controls the ACFTU, with the head of the ACFTU sitting on the Politburo.” (P.10)

There is further opacity related to how the boards are created. In the official transcript of the founder’s interview distributed afterwards, one can read that recently Huawei underwent a year-long voting process among the “96,768 shareholding employees” to select the 115 members to the Representatives’ Commission, which, according to the owner, “is the highest decision-making authority in Huawei”. This Commission then would select Huawei Holding’s Board of Directors and Board of Supervisors. But here is another ambiguity, as the authors of the paper pointed out: if the shareholding employees vote as shareholders, then their votes should be weighted; if they vote as employees, then all employees shareholding (about 100,000) or not (about 90,000) should have the chance to vote.

This points to the true nature of the “shares” the 100,000 or so employees own. The scholars found that, after a few stages of historical morphing, the shares are no more than stock options public listed companies incentivise their employees with. In other words, the employees do not own a part of the company through their “shares”. Instead, the “virtual stock is a contract right, not a property right; it gives the holder no voting power in either Huawei Tech or Huawei Holding, cannot be transferred, and is cancelled when the employee leaves the firm, subject to a redemption payment from Huawei Holding TUC at a low fixed price.” (P.5). The owner said in his interview that shareholding employees also include “retired former employees who have worked at Huawei for years.”

The two factors put together, the opaque governance model of Huawei Holdings and the lack of ownership associated with the shares half of the employees own, led the scholars to the key conclusions. First, though they could not be sure who actually owns Huawei, they are pretty sure the employees do not. Second, the lack of transparency of the governance model of Huawei Holdings looks to put Huawei between a rock and hard place.

On one side, the authors commented, “if Huawei Holding is in fact controlled by a trade union committee, then given the way such bodies are supposed to operate in China, it makes sense to think of it as state-controlled and even state-owned.” (P.12). Otherwise, if Huawei Holding is not actually owned and controlled by the trade union or its committee, Huawei has not been telling the truth. Then it is up to Huawei to make its case. “The information necessary to do so is in Huawei’s control,” the scholars said. (P.11)

Orange Spain and ZTE complete Europe’s first standalone 5G call

The mobile operator claimed that the voice and data call over end-to-end 5G network in Valencia was the first of its kind in Spain as well as in Europe. All other trials have been done over non-standalone networks.

The Spanish branch of Orange successfully trialled a voice and data call on a “100% 5G” network with standalone architecture, the company announced. The end-to-end solution was provided by ZTE, one of Orange’s suppliers. The test achieved a peak downlink data rate of 876 Mbps on one test terminal, and 3.2 Gbps with 12 test terminals working simultaneously in the same cell.

“It is critical to understand this new and disruptive technology, with which we could close the gap from our 4G networks to offer our customers the best possible 5G network in the world when the time is right,” said Mónica Sala, Director of Networks at Orange (translated from Spanish). “The know-how of ZTE is evident in achieving this milestone and we are very proud of the results.”

The live 5G networks today, in South Korea and the US, for example, are primarily providing enhanced mobile broadband services, which can be achieved with non-standalone mode, i.e. overlaying 5G radio networks on top of 4G core. This was the architecture that Huawei used when demonstrating 5G at MWC on Vodafone’s network. On the other hand, to achieve 5G’s full capabilities, including to provide virtualised networks (e.g. network slicing for a particular client) and to run the extreme low latency applications (e.g. automatic cars) there would need end-to-end 5G networks, i.e. 5G radio and 5G core.

ZTE was also obviously happy with the success of the trial. “It is a great pleasure for us to work hand in hand with Orange for technological innovation and 5G leadership,” Xiao Ming, President of Global Sales at ZTE stressed. Orange is one of ZTE’s two biggest accounts in Europe (the other being the Three group), so holding on and expanding the partnership is critical for the company that has been struggling in the mature markets.

Orange Spain plans to extend 5G trials to other industries including construction, energy, health, automotive, and tourism, to test out the use cases. The company also said that it is going to test 5G in a handful of cities with the support provided by Red.es, the country’s digital transformation programmes, operated under the direction of the Secretary of State for Information Society and Digital Agenda.

Despite a $1 billion loss ZTE is seeing light at the end of the tunnel

The Chinese telecom vendor ZTE reported a total annual net loss of over $1 billion from its business in 2018 but is foreseeing returning to profit in Q1 2019.

After a roller-coaster year, ZTE reported a total operating revenue of RMB 85.5 billion ($12.7 billion, at the exchange rate $1=RMB6.7233) in 2018, a 21.4% decline from a year ago. The net loss amounted to RMB 6.9837 billion ($1.04 billion), down from a net profit of RMB 4.57 billion from 2017, or a decline of 253%. After pulling off a surprising return to profit in Q3 last year,  the net profit in Q4 came down to RMB 276 million, narrowed by more than a half from the RMB 564 million from the previous quarter, despite that the quarterly revenue increased by over 38%.

When looking at the results by business lines and by sector, we can see that its consumer business, mainly smartphones, which account for more than a quarter of ZTE’s business before the US sanction, suffered the heaviest decline. The unit’s total revenue came down by 45%, and only accounted for 22% of the total business in 2018. The revenue from carrier’s network business shrank by 10.5%, and that from B2B business including public sector was down by 6%.

When it came to its performances in different markets, the heaviest decline came from its business in mature markets in Europe, Americas and Oceania, where the revenues dropped by 45%, followed by that from Asia, which was down by 25%. The domestic market, representing 63.7% of ZTE’s total business, suffered a decline of 12%. Its business in Africa actually registered a growth of 8.4%, despite that it only accounted for less than 5% of ZTE’s total business. Incidentally, it was in Africa that ZTE reaped the highest gross margin of 48%, compared to 38% in China, and only 13% in Europe, Americas and Oceania.

The decline of the annual total business could largely be attributed to the heavy fines of $1.4 billion ZTE had to pay the US government for the settlement in the middle of last year, in addition to the wholesale change of management and the board. The market has chosen to look at the upside after the ban was lifted. Its share price had already gone up by over 50% by the end of last year and has now more than doubled the low of last July.

Looking forward, ZTE predicted that it would generate between RMB 0.8 billion and RMB 1.2 billion ($119 million to $178 million) net profit during Q1. To power future growth, the company spent 12.8% of its income on R&D during 2018 and will continue to do so this year. In particular, ZTE “has continuously concentrated on the core 5G technical fields and further intensified 5G R&D investment.”

However, 5G is a long play, and is a game that there is no guarantee ZTE will win. The prospects in China, by far ZTE’s biggest market, are less than certain, as the Chinese operators are among the cautious ones when it comes to 5G investment. Africa and Pakistan, where the company has a relatively strong position, are not going to deliver results from 5G very soon. In Europe and North America, where its customer base is already limited, ZTE has been included in the list of “Chinese vendors” which the US government is lobbying to ban, despite the limelight is often on Huawei, ZTE’s arch-rival.

USB4 specification unveiled, featuring Intel Thunderbolt 3

The next generation USB standard will be based on Intel’s Thunderbolt protocols, as well as be backward compatible with earlier generations of USB.

Intel earlier announced that its upcoming 10nm processor will be the first to integrate Thunderbolt 3, and it has already been supported by both Windows 10 and macOS. According to the latest announcements from both Intel and the industry association and standardisation body USB Promoter Group, Intel has made the Thunderbolt 3 specifications available for royalty free use by the industry.

“Releasing the Thunderbolt protocol specification is a significant milestone for making today’s simplest and most versatile port available to everyone,” said Jason Ziller, General Manager, Client Connectivity Division at Intel. “By collaborating with the USB Promoter Group, we’re opening the doors for innovation across a wide range of devices and increasing compatibility to deliver better experiences to consumers.”

The USB community is obviously happy to see that the move from Intel will likely avoid the branching of the next generation USB standards. “The primary goal of USB is to deliver the best user experience combining data, display and power delivery over a user-friendly and robust cable and connector solution,” said Brad Saunders, USB Promoter Group Chairman.

The key advantages of USB 4 include:

  • High speed: up to 40 Gbps operation, which will double the 20 Gbps speed of USB 3.2 and Thunderbolt 2, or more than 80 times faster than the USB 2.0 speed of 480 Mbps;
  • Multi-channel data communication: enabling multiple simultaneous data and display protocols
  • Backward compatibility: USB4 will be compatible with USB 3.2, USB 2.0, and Thunderbolt 3

“The USB 4 solution specifically tailors bus operation to further enhance this experience by optimizing the blend of data and display over a single connection and enabling the further doubling of performance,” added USB Promoter Group’s Saunders.

After making the Thunderbolt specs public, Intel’s role will expand to industry wide testing, auditing and certification.

The USB4 interface is likely to continue with the USB Type-C standard, which will save more real estate for computer OEMs, if they can replace most of the legacy ports. When it comes to mobile devices, the co-existence of different standards of USB connections for charging and for data transmission has been a source of consumer frustration as well as a key contributor to electronics wastes. Apple has also been notorious for going its own way with cable standards, though recently there has been rumour that the next iPhone might ditch Lightning for USB Type-C connection.

The USB4 specifications will be published around mid-2019, according to the USB Promoter Group announcement.

KT and Nokia will join hands to launch first ‘true’ 5G this month

Korea’s mobile operator KT is going to launch nationwide 5G service this month and will collaborate with Nokia to provide services and tools for the business and the public sectors.

Hwang Chang-Gyu, KT’s Chairman and CEO, recently announced that KT’s nationwide 5G network will be switched in March to cover 24 major cities, key transport routes such as expressways, subways, high-speed railways, large universities, and neighbourhood shopping areas. This will be an upgrade from the synchronised launch of 5G services with limited scale on 1 December 2018 by all the three national mobile operators.

“In March, KT will be the first in the world to introduce ‘True’ 5G mobile services,” said Hwang. “In the 5G era, neckband cameras, AR glasses and all kinds of devices will be connected to 5G, contributing to a better life for mankind.” That this was a personal historic moment should not to be lost. Exactly four years ago at MWC 2015, Hwang predicted a commercial 5G network by 2019. “Today, I would like to announce that the promise I made four years ago has finally been fulfilled,” Hwang added in his MWC speech.

The current 5G service that KT, SKT, and LG Plus are offering is fixed-wireless access targeted at business users. During the recent MWC, KT demonstrated plenty of 5G gimmicks for the consumer market, from a 5G connected robot butler bringing a bottle of water to the doorstep to a 5G and AI powered robot barista fixing cocktails.

KT is clearly banking big hope on 5G. Its Economic and Management Research Institute predicted that the socioeconomic value created by 5G will contribute to 1.5% of the country’s GDP by 2025. To realise such potential and to achieve serious monetisation of 5G, KT is looking towards the enterprise market and the public sector. The company announced that it plans to focus on five key areas with its 5G offers: smart cities, smart factories, connected cars, 5G media, and the 5G cloud. It says it is collaborating with various businesses as well as the Korean government to develop 5G services for both Business to Business (B2B) industries and Business to Government (B2G) sectors.

This is an echo to what Marcus Weldon, Nokia’s CTO and the President of Bell Labs, called for during his own speech at MWC. Weldon suggested the telecom industry should focus more on serving other verticals instead of on consumer markets, to deliver the true value of 5G. He did concede that it would need three to five years before telcos can see meaningful revenues from enterprise 5G. But when they do, Weldon predicted the business will soon equal that being made in the consumer 5G segment.

It just happened that KT and Nokia are going to collaborate closely in 5G. During MWC the two companies signed a Memorandum of Understanding (MoU) to collaborate on various 5G technologies. “We are excited to partner with Nokia to conduct these path-breaking trials,” said Jeon Hong-Beom, KT’s CTO. “This collaboration will ensure that we are able to leverage Nokia’s proven solutions and best-in-class professional services to provide a superior and differentiated experience to our subscribers.”

“With Korea, one of the lead countries in the early deployment of 5G, we are delighted to be working with KT to help them build a future-ready network,” added Bhaskar Gorti, President of Nokia Software. “Nokia’s end-to-end portfolio will empower KT to improve its customer experience and network efficiency.”

The key areas of the collaboration will include Service Orchestration and Assurance for the 5G era, with the aim of delivering end-to-end automation and new revenue opportunities for KT’s enterprise customers. This will be supported by the enabling technologies like NFC and network slicing. The joint work will start in Seoul later this year.

We’re simpler, faster and cheaper – Huawei

For years the Huawei message has been we’re better, but its MWC tag-line might have a slightly different look to it this year.

With security concerns continuing to rage around the world, the vendor has to prove itself more than worthy to be considered in 5G plans. And it seems to be doing that quite effectively. As of today, Huawei claims to have shipped more than 40,000 5G base stations to customers around the world, and has signed 18 5G commercial contracts in Europe, nine in the Middle East and three in Asia Pacific. But with the US on an anti-China road-trip, what is convincing these telcos to buddy up with the Chinese vendor?

Simpler, faster and cheaper

Simpler, in terms of ease of deployment, faster, in terms of speed of deployment, and cheaper, in terms of running a 5G business. These are the promises for the new products and business model undertaken by Huawei.

The 5G base stations which were paraded around the conference room this morning certainly fit the bill. A 64T64R 5G base station on display was roughly 40% of the size of its 4T4R 4G counterpart, and when you combine the weight of 32kg, Ryan Ding, CEO of Huawei’s Carrier Business Unit, claims the kit can be installed by two people in a matter of hours. No need for expensive cranes anymore.

Another interesting factor to consider is the power consumption of this kit. Huawei claims the kit is much more energy efficient than previous generations, when you factor in the increase in capacity and performance, generating a much more compelling business case. Ding was also bold enough to insist Huawei equipment is 30% more energy efficient than anything else on the market. While it might not sound like the most glorious of statements, it fits into the message which was booming off the stage this morning.

For Ding and co. the aim over the next couple of years is to reduce the cost-per-bit for telcos. With the pressure on for telcos to rollout 5G at a faster pace than 3G and 4G, this could come as a very important consideration. When you also ponder the network densification requirements of tomorrow’s world of connectivity, the boring arguments of energy consumption and ease of deployment become much more significant. Ding’s claim here is Huawei can reduce cost-per-bit for connectivity by 80-90% compared to 4G.

There are many around the world who would consider Huawei the leader in terms of innovation, but when combined with ease of deployment and an attractive reduction in OPEX, the Huawei machine could keep churning forward despite the security concerns. In fact, this doesn’t seem to be too much of a bother for Ding.

Looking at the revenues of the Carrier Business Unit, Ding pointed to the last two years as some of the toughest the business has faced. Huawei is not alone here, though Ding suggested revenues were only growing by 2-3% for the unit over 2017 and 2018. With 5G spending expected to ramp up, Ding expects the business to hit attractive growth numbers once again.

Coming back to the elephant in the room, the security concerns will have an impact, but only marginally. Ding suggests the markets where Huawei has been snubbed are not traditionally its most successful.

“In regard to security concerns, there will be some impact in some countries, but not in 95% of their markets,” said Ding.

Korea is an excellent example of this point. It is the world leader in the 5G race, and of course it would have been of interest to Huawei, but you have to consider the competition. Samsung, as a domestic technology champion, was always going to have home-field advantage over the competition.

While the security accusations directed towards Huawei will remain for years to come, the tides do seem to be turning. The US might have found some early success in turning governments against Huawei, but recent months have not been as fruitful. The UK and Germany are seemingly insistent on welcoming the business, while US Secretary of State Mike Pompeo’s propaganda tour of Eastern Europe was met with an icy hello. Perhaps the statesman should not accuse the bloc of a susceptibility to corruption before arriving next time.

For those who have been predicting the downfall of Huawei, now might be time to reconsider. It certainly won’t have the same tsunami of success it experienced in the 4G world, but trends suggest it will maintain its leadership position not only built on a booming portfolio, but also a more tender consideration of telcos bank accounts.

Simpler, faster and cheaper.