Facebook might have cracked the mass market for VR

There have been murmurs that VR euphoria might be a bit of a dud, but they clearly haven’t made it to Mark Zuckerberg’s office as Facebook doubles-down on the tech.

Zuckerberg announced the Oculus Go, priced at $199, as the ‘most accessible’ piece of kit the industry has produced to date. And if it proves to be any good, he might have a point. $199 is still perhaps a bit on the expensive side, but it is a price point which has the potential to slip into the mainstream. Association with the Facebook brand won’t hurt it either.

“We believe that one day everyone is going to use virtual reality to improve how we work, how we play and how we connect with each other,” said Zuckerberg at the Oculus Connect conference. “We know the most important technologies don’t start off mainstream, in fact, a lot of them seem almost too crazy or complex to start.

“Conventional thinkers will always say there is something more familiar, so why build a completely new platform. Why build a PC when people only want a word processor. Why build the whole internet, when most people like dialling up through AOL. Why put a computer in your pocket when most people just want a phone that texts well. And why build virtual reality when most people think 2D screens are pretty good today.”

In fairness to Zuckerberg, he does have a point. The naysayers are not usually the ones who the technology is not geared towards. Smartphones didn’t enter the mainstream through the older generations, it was the ones who were in their 20s, 30s and 40s who made them ubiqtuous before the craze moved upwards. The argument could lend itself well to the world of VR as well. It will still be years before the technology penetrates the mainstream, but it will be a different generation of influencers at that point who may be more open to the technology.

This sounds like a logical argument, but Zuckerberg is a very charismatic bloke, and all his charisma will be needed to make this fad a trend. The pitch here is about connecting people in the virtual world. We might call it anti-social, but the generations of tomorrow might not. With every breakthrough the older generations will stick by the anti-social argument, and highlight it wasn’t like that in their day.

The phone meant people didn’t talk to each other in person, texting meant we didn’t talk to each other over the phone, social media platforms meant we didn’t go to the pub for gossip. We might look at virtual reality as an isolated experience, but who is to say future generations (assuming mass market penetration occurs) won’t find a way. It is simply redefining the concept of socialising, as we did with the technology breakthroughs we experienced.

The important thing with all of these breakthroughs is there eventually was a company who managed to get the price right. The Oculus Go bundle, which undercuts one of its main rivals in HTC, does have the potential to make this a reality. And the fact it is tetherless makes a difference as well. All of a sudden we have an affordable and practical device, which can be marketed to teenagers and adults alike, not simply the wealthy early adopters.

This isn’t the polished product which mass production will allow for, it doesn’t have inside-out tracking or fully tracked motion controllers, so it can’t compete with the premium pieces of kit on the market, but this is a product which seems to be designed for everyone. We’re still not entirely convinced the technology will dominate the world in the way Zuckerberg seems to think it will, but at this price point, it is being given every opportunity to make it into the hands of normal people.

Bharti says we’ll have a bit of Tata

Rumours have been swirling for a few days and it would appear there is some substance; Bharti Airtel will absorb Tata Group’s struggling mobile business.

The acquisition is still subject to regulatory approval, however it would transfer all customers and assets of Tata Consumer Mobile businesses to Bharti Airtel. It wouldn’t necessarily be considered one of the major players in the Indian space, but Bharti will still bolster its ranks by an additional 40 million customers. Not a bad bit of business considering all past liabilities and dues to be settled by Tata.

“This is a significant development towards further consolidation in the Indian mobile industry and reinforces our commitment to lead India’s digital revolution by offering world-class and affordable telecom services through a robust technology and solid spectrum portfolio,” said Sunil Bharti Mittal, Chairman of Bharti Airtel.

“The acquisition of additional spectrum made an attractive business proposition. It will further strengthen our already solid portfolio and create substantial long-term value for our shareholders given the significant synergies.”

The merger would include assets in the 1800, 2100 & 850 MHz bands, as well as the right to use Tata’s existing fibre infrastructure. This is where Bharti will have to fork out a bit more cash however, as it would undertake a small portion of the unpaid spectrum liability.

It’s a rumour which has been around for a while, as Tata never really got going in the Indian mobile space. Aside from being a side-player in the prolonged battle between Jio and Bharti, it has also been battling minority shareholder NTT Docomo in a $1.2 billion dispute. This was an argument which was settled a few months back, but it would appear Tata just wants clear of the raging consumer mobile war. Might not be a bad move considering how slim the profit margins are looking.

While consolidation will certainly help Bharti fight back against Jio, you have to wonder whether the consumer is going to get the sharp end of the stick. Tata is just the latest brand to disappear, with Telenor exiting in February and Vodafone merging with Idea; you have to start wondering whether there are going to be enough providers around to offer variety in the second most populated country in the world.

Vodafone says it’s ‘ready’ but does it speak for all operators?

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Niall Norton, CEO at Openet, a BSS and customer engagement systems provider, reflects on Vodafone’s recent rebrand and considers if it’s indicative of a wider identity crisis the global operator community is starting to recover from  

Vodafone recently announced a change in its brand positioning. It includes logo tweaking and a new strapline suggesting renewed optimism for the future. The renowned ‘Power to You’ will be replaced by ‘The future is exciting. Ready?’

Vodafone itself, through its CCO and CSO, Serpil Timuray believes the changes it has made reflect ‘the very good reasons to be optimistic about the future as emerging innovations in science and technology begin to have a profoundly positive impact on society.’

The announcement made me smile for two reasons. Firstly, it’s always good when the leading lights of our industry feel bullishly confident about the future. Secondly, it shows that Vodafone has invested serious time and money in working out how it’s going to deliver meaningful brand engagement.

The unwritten truth here is that all global operators, not just Vodafone, have had their world’s turned upside down over the past five years or so. They are all having to deal with deep structural change because of new technologies and new competitors changing all the rules.

They are all contemplating a future where they must justify a monthly tariff, despite voice and SMS being free, and with mobile data rapidly heading in the same direction. They seek new revenues despite not being entirely clear on where they might come from. They are trying hard to work out how to deliver better customer engagement and brand value despite a reliance on largely invisible, utility-like connectivity making them more invisible to the consumer.

To make matters worse, from a technology enablement perspective, most operators have tried to enact change with their hands tied behind their backs. Legacy technology from the old world, is being hopelessly out maneuvered by agile, webscale, cloud-based architecture from the new world.

A combination of these factors has led to something of an operator identity crisis. All have been asking themselves ‘where and how do we offer value today, and how do we build on this to prosper in the future?’

There are no shortage of possibilities. New revenues will likely come from IoT, bundled partnerships with third parties and contextual marketing services. Greater network and service efficiencies will be realized by embracing AI, automation and NFV to radically improve time-to-market and herald a new era of customer relevance.

All the component parts are there to help operators identify how they’re going to be successful. New services will be supplemented with innovative, context-aware capabilities that offer actionable insights and help operators build in new levels of personalisation. This will combine to create an emotional attachment for operator customers to try and make them feel part of an exclusive club. This will deliver engagement that’s valuable, not just noisy.

The global vendor community will continue to deliver the R&D the operators need to remain successful. As always, the operators that will be successful will be those that possess the agility to embrace change quickest. Crucially this means effectively communicating positive messages while helping customers navigate this change and selecting technology that can deliver this change.

Vodafone describes its purpose as helping its customers ‘adapt and prosper as remarkable new trends reshape the world.’ This is a decent summary of the challenge operators face. It’s down to us technology vendors and other partners to work closely with them so we can all work out how we’ll be successful.

 

Niall_NortonNiall Norton has been Chief Executive Officer of Openet Telecom Limited since September 2006. He served as Chief Financial Officer of Openet Telecom Limited since joining in February 2004. He served as the Chief Financial Officer and Company Secretary of O2 (Ireland) where he was responsible for O2’s financial control functions, business process re-design, strategy planning and wholesale. He also took the lead management role for the Ireland element of the BT Wireless demerger and O2 IPO process. He has been a Director of Openet Telecom Limited since August 2006. Mr. Norton holds a degree in Commerce from University College Dublin and is a Fellow of the Institute of Chartered Accountants in Ireland.

Distributed cloud delivery company Akamai is buying DNS specialist Nominum

Akamai, a prominent player in distributed content delivery, is buying privately-owned DNS specialist in order to boost its security offering and its telco channel.

Nominum’s focus on the Domain Name System gives it novel insight into internet traffic and thus cyber security matters, and the operator channel has been one of its key targets. Akamai provides content distributors with a distributed cloud platform that allows them to serve their content from servers closer to the consumer, and thus more quickly.

There have been a growing number of security incidents involving both the content-owner and the operator industries, while at the same time those two worlds are increasingly colliding through both M&A, such as AT&T and Time Warner, and the fact that viewing habits are increasingly on-demand and thus reliant on telecoms rather than broadcast networks.

“Akamai knows how critical it is for carriers and enterprises to ensure their online experiences are safe, reliable and fast for their users,” said Robert Blumofe, EVP, Platform and GM of the Enterprise and Carrier Division at Akamai. “We believe this acquisition is a key investment in our security capabilities because Nominum will bring complementary technology, engineering, technical support and sales talent to better reach and serve our carrier partners and their enterprise customers.” Nominum hasn’t said anything yet.

The price of this all-cash acquisition hasn’t been published, but that aside this move seems to make sense. As well as the confluence of content and telecoms, the broader tech world is moving wholesale towards the distributed cloud – something that is in Akamai’s DNA. If as a result of this acquisition Akamai not only augments its core offering, but positions itself at the centre of those broader trends then it will surely be viewed as a success.

Disney sneaks in with content aggregator move

A couple of weeks ago on the podcast we discussed an idea where telcos could add worth to the content value chain, and now Disney has snuck in there ahead of the telcos.

The idea of the super-aggregator of content is an interesting one, because there is just so much content out there. Ericsson released a survey recently which stated 70% of consumers would want a super search engine which would collect all the content in one place. The time it takes to find something you want to watch is increasing, which will probably lead to frustration, or at least it does for your correspondent.

Disney has decided to launch Movies Anywhere, a free app and website that enables consumers to manage and watch their personal digital movie collections across studios, retailers and platforms. Right now it brings together the Disney studios (Disney, Pixar, Marvel, and Lucasfilm) but also third-parties including Sony Pictures Entertainment, Twentieth Century Fox, Universal Pictures, and Warner Bros. Entertainment. It’s still a small list of participants, but the idea of being a content aggregator which sits on top of all the squabbling is a good one.

“Movies Anywhere means that consumers never have to remember where they purchased a film or which device they can watch it on, because all of their eligible movies will be centralized within their Movies Anywhere library and available across platforms through the Movies Anywhere app and website and also available at their connected digital retailers,” said Karin Gilford, General Manager of the Movies Anywhere team.

We’re wondering whether this is a missed opportunity for the telcos. The telcos have a very unique relationship with their customers, as it is very singular. The content providers are all fighting for your attention, but the telcos don’t have to; most people only have one personal smartphone.

And considering trends are moving more towards watching content on mobile devices, the singular relationship between the telco and the customer becomes more of a coup. There is a challenge for the consumer, and there is an opportunity to create an offering which addresses this challenge, why should the telcos take on the traditional content players at their game, when they can just help them play better with the consumer?

People and companies generally aren’t very good at doing things they’ve never done before. This should be a statement which most would except without any issues, but this is essentially what the telcos are doing in the content space. Throwing a bit of money around, but not as much as the traditional content players, and believing they will be able to recapture dwindling profits.

And generally, there hasn’t been a notable amount of success. You could argue BT is doing an alright job in the sport content space, albeit for a big price tag, but this isn’t really doing content. It is buying the right to broadcast something which is happening. This isn’t really creating anything, its relaying it to the customer, which is something the telcos could be very good at. This is essentially what Disney is doing here.

The idea of the super-aggregator doesn’t have to include your own content. In this case it does, Disney’s own productions are included in the deal, but it is simply a place for the consumer to collect content so he/she doesn’t have to navigate several gateways before finding the right title.

All is not lost for the telcos in this space, as the focus of Disney’s aggregator is pretty limited; it’s just movies at the moment. There are other content areas which consumers subscribe to and find the same frustration, so there is an opportunity to create an interesting offering, but it will come down to speed and relationships.

Another area which might be worth bearing in mind is Netflix. It is widely regarded as the most popular OTT content provider out there, and it is unlikely to feature in any future Disney proposition (assuming they move outside of the movie circle), considering the bitter battle which is raging on between the two. Disney has recently pulled all of its content from the Netflix platform, so a reunion between the two is unlikely. Bagging Netflix as a partner could be a winning move.

Once again, it comes down to the ambition of the telcos. Are they willing to do something different to survive the utilization slide?

28% of telcos expect to deploy 5G in 2018 – Ericsson

Ericsson has released its annual 5G Readiness Survey, and the results are starting to look very positive. In fact, 28% of respondents expect to deploy 5G next year.

Comparing the last two reports, the trends are certainly heading in the right direction. 78% are in the trial phase of 5G, compared to 32% in 2016, while the strategies to actually make use of the technology are starting to become a bit clearer. 59% now have a clear strategy in place for 5G use cases, while 36% feel they have a clear business model. 50% are still working on the business model side of things, but they still have time. Overall it is looking pretty positive.

In terms of actual progress, as mentioned before, 28% are confident of deploying 5G in 2018, which is up from 18% who thought 2018 was realistic last year. Of course there are the more cautious operators, having been burnt by the 3G euphoria in previous years, as 34% are going to sit and wait to see how it goes for competitors. Could be a sensible approach if it goes wrong, but we get the impression there is enough demand from customers to ensure 5G will be an almost immediate success. Playing catch-up is not an enviable position to be in.

Plus there’s all those cat videos people want to watch on the train.

“In the 2016 survey, 90% of the respondents pointed to consumers as the main segment in their 5G business planning,” said Thomas Noren, Head of 5G Commercialization at Ericsson. “This year, it is an even split between three segments and operators have identified business opportunities not only in the consumer segment but also with enterprise users and specialized industries.”

What might be flagged as a slight concern however is the monetization of 5G. It is supposed to be a breakthrough which would allow operators to recapture lost fortunes of yesteryear through the monetization of areas such as IoT, but old attitudes don’t seem to have been lost.

23% of the respondents to the survey said they would monetize the services through stealing market share from competitors on the back of new features and performance, while an additional 18% think the money will come from undercutting on price. While growth will always be partly fuelled by stealing market share, technology breakthroughs are supposed to generate new idea and new revenues for growth.

The last couple of years has seen new threats emerge and take bigger and bigger slices of the telco pie. Revenues have been lost to those outside of the industry and the communications segment on the whole has become less profitable. The answer was supposed to be realising the potential of 5G and reinvigorating the spreadsheet with new revenue.

But if the objective is to steal market share from the rest of the industry, the spiral downwards will continue. The OTTs will continue to grab a bigger and bigger slice of the pie, meaning the total amount of cash being passed between the operators will be less and less. Especially considering the price of a GB is getting cheaper and cheaper. A lack of ambition to look into new areas and generate revenue which didn’t exist previously is very worrying.

Why are telcos complaining about commoditization if this is the attitude to new technology? One thing you can guarantee is companies like Facebook, AWS and Google have got some clever people thinking about some wonderful ways to activate 5G which doesn’t exist today. This is the reason profits in Silicon Valley are continuing the astronomical growth, while it is flatlining in the telco space. They show courage, a sense of adventure and ambition. Where is this attitude for the telcos?

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Taiwan fines Qualcomm $773 million for antitrust violations

US mobile chip giant Qualcomm has been the recipient of yet another fine for claimed anticompetitive business practices.

This time it’s Taiwan, where its Fair Trade Commission has concluded that Qualcomm abused its dominant position in the mobile chip market for at least seven years by refusing to provide products to companies that didn’t agree with its conditions. The ruling itself is currently only published in Taiwanese, so the specifics are sketchy, but it looks like Qualcomm’s dominance is being used against it.

This is part of a growing number of legal actions against Qualcomm for similar reasons. At the end of last year Korea fined Qualcomm $850 million for very similar reasons. Europe is still in the process of investigating the company, the implications of which could be far greater, and Apple is putting its considerable resources into attacking the entire premise behind Qualcomm’s licensing business model.

As with many tech-related antitrust actions, it’s clear that once a company achieves a certain level of market dominance a different set of rules apply to its behaviour. Terms and conditions that would be considered acceptable in a more competitive environment are considered illegal when used by a company that is considered to be dictating the market.

Qualcomm hadn’t returned a request for comment at time of writing but it’s reasonable to assume it will appeal. The even bigger issue at stake for Qualcomm is not just the growing cost of these fines but its very way of doing business. The licensing model means that Qualcomm doesn’t just get revenue from selling its chips (mainly modems), but also a fee for every product sold that contains them. There is a growing movement opposing that model which must have Qualcomm very concerned.

Alibaba sets aside $15bn R&D war chest to be a world beater

How do you try and become one of the biggest and most influential technology companies in the world? Just move the $15 billion you have stashed away into the R&D business.

This might not be realistic for most companies, but apparently it is a goer for Alibaba. This is a company which has serious ambitions to emulate Huawei on the global stage. By 2036, the company wants to serve two billion consumers, create 100 million jobs around the world and serve 10 million companies through its various platforms and services. It certainly aims high.

But wishing big is never enough; there has to be some substance behind the dream. This is the part of the equation which most cash-shy telcos seem to be missing. Over the next three years, Alibaba will invest $15 billion into future applications of the technologies which we are finding out about today. Some might say it sounds similar to the Moonshot labs over at Google, and why not try to emulate one of world’s most successful businesses.

“The Alibaba DAMO Academy will be at the forefront of developing next-generation technology that will spur the growth of Alibaba and our partners,” said Alibaba Chief Technology Officer Jeff Zhang at the company’s Cloud Computing Conference (thank you to Alibaba’s news service for a breakdown of the conference).

“We aim to discover breakthrough technologies that will enable greater efficiency, network security and ecosystem synergy for end-users and businesses everywhere.”

Just in case you are wondering, DAMO is an acronym for Discovery, Adventure, Momentum and Outlook. The initiative will open seven labs in Beijing, Hangzhou, San Mateo, Bellevue, Moscow, Tel Aviv and Singapore, initially hiring an additional 100 researchers, though this will increase. The initial focus areas will include data intelligence, the Internet of Things, fintech, quantum computing and human-machine interaction; the type of tech which people are hoping will turn business on its head.

Alibaba looks to be one of those companies who has the ambition to take on the technology world, but let’s hope a slowish start does not count against it. Cash injections in the R&D department are certainly a good sign, but perhaps reaching out to the international community is a much more positive one. Widening the international footprint is a necessity to ensure a business is capturing the best talent, and this is where Alibaba has been lacking to date.

When you look at all the Chinese firms who have successfully ventured (or hoping to) into the international arena, research has been geographically diverse. Huawei is all over the place, ZTE is getting more prominent as well. Tencent has announced plans to open up an AI research site in Seattle and Baidu has a research centre in Silicon Valley specializing in big data, deep learning and artificial intelligence.

Alibaba is slow off the mark in this regard, but first off the line doesn’t always mean first to the finish.

Singtel chooses Ericsson for 5G Center of Excellence

The launch of Singapore’s first 5G Center of Excellence has been claimed by operator Singtel in partnership with kit vendor Ericsson.

The two will chuck an initial $1.5 million onto the pot over the next three years to get things going. On top of all the usual 5G R&D, the CoE will focus on the commercial implications of 5G and will align itself to the state-sponsored Smart Nation initiative.

“This is a critical next step in our journey to 5G,” said Mark Chong, Group CTO of Singtel. “We’re pleased to partner Ericsson to enhance our 5G core competencies and create a robust 5G ecosystem that will allow Singtel and our enterprise customers to benefit from the anticipated growth opportunities 5G will bring. We invite customers in various verticals, such as transportation, port operations and next-generation manufacturing, to start shaping their new digital business models with us.”

“The establishment of the 5G CoE is timely and goes hand in hand with the Government’s move to encourage industry trials in 5G,” said Ericsson Country Manager for Singapore Martin Wiktorin. “Together with Singtel, we plan to set up a 5G test bed in 2018 for trials with key enterprise customers, with the objective of enabling a strong foundation to help design Singapore’s 5G future.”

The various 5G use-cases that will be explored by the CoE include opportunities created by low-latency connectivity such as remote control. Most tech megatrends are exploited first by industry and that seems to be the focus here. Singtel and Ericsson have a long established partnership, and cited their joint winning of the ‘Advancing the Road to 5G’ Global Telecoms Award as evidence of their great double-act.

Apple moves into semi-original content

Having boasted of a $1 billion investment into the original content space, Apple is sort of backing it up with a deal  to remake Steven Spielberg’s Amazing Stories.

It’s the first big bit of news we’ve seen from the iBoss after it lured Hollywood heavy-hitters Zack Van Amburg and Jamie Erlicht into its iFamily, with the mission statement of making Apple better at content. According to the Wall Street Journal, the initial agreement with Spielberg’s Amblin and Universal Television will be for 10 episodes, but it hasn’t been confirmed whether Spielberg will be directly involved.

Now Apple is known to be a bit combative, its slugfest with Qualcomm is evidence of this, but it seems to have found a couple of new nemesis’ in those who write dictionaries. As far as we can see, Apple seems to feel commanding such control over its cult-like following of iLifers allows it to have a stab at redefining a common word; original.

Original programming can make fortunes for companies, but it can also lead to a couple of duds. Apple’s attempts at ‘original’ programming has shown this. ‘Planet of the Apps’ is a brilliant example, as Apple essentially copy-catting ‘Dragon’s Den’ or ‘Shark Tank’ with app developers as the focal point of the show. Whether this constitutes as original is dubious, and in your correspondents opinion, it was frankly awful content.

But back to Amazing Stories. This was a series which was originally envisioned in the 1980s by Spielberg and despite gaining positive reviews from the critics, it wasn’t able to crack the mainstream market. Budgets were big, famous actors were drafted and Spielberg was already a massive name thanks to movies such as Close Encounters of the Third Kind and ET. But it didn’t work.

So Apple’s stab at original content is redoing an idea from the 80s. Fair enough. But just because it didn’t work then, doesn’t mean it won’t now. Netflix has shown with the Black Mirror series there is an appetite for the more unusual and potentially offensive content.

This is another area where Apple is skirting with the definition of original; it isn’t doing anything particularly risky, its following in the footsteps of Netflix. And to go one step further, Netflix didn’t even take the original risk by debuting the potentially controversial Black Mirror, it was Channel Four.

That said, you shouldn’t be too harsh on Apple. It isn’t a content company, it isn’t used to taking risks in this part of the world, and quite frankly, it hasn’t done anything particularly revolutionary in the last couple of years. The removal of the headphone jack was seen as controversial, but it was hardly a defining moment in the mobile industry.

Another good example is the launch of iPhone X, the ultra-premium smartphone. It has a big OELD screen, a new chip and 3D facial recognition. Hardly earth-shattering upgrades to previous flagships, which is worrying considering this device was supposed to be the decade celebration of the iPhone. And all for the super-convenient cost of $1000.

Apple hasn’t really had to do anything exceptional in the last couple of years, as it has such a loyal following. Collecting new customers will always be an objective, but cultivating this audience of iCultists and expanding their Apple universe will continue to make a load of cash. You can sell them laptops, tablets, watches, music services, insurance and more.

Sweating assets is a common practise in the business world, and if the iFollowers are the biggest asset the company has, it is certainly cranking up the heat. But you have to question how long this tactic will lead to the monstrous profits iExecs are used to. Original content will help its services business grow, but only if it is any good.

Apple doesn’t need to take risks with its core business, so why should it? The same attitude seems to have leaked into its content ambitions. Is Apple capable of being innovative anymore?