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5G, NFV, Cloud, Security, APAC: Telco 2.0 News Review

AT&T: heading for 5G via NFV

Last week, we saw the FCC filings; this week, AT&T gave details of its “roadmap to 5G”. Field trials are going to begin this year, in collaboration with Ericsson and Intel, and AT&T intends to feed back experience from them into the 3GPP standards process. Interestingly, although the FCC special authorisation provides for mobile, AT&T only refers to fixed-wireless in the press release. Re/code points out that AT&T has a considerable interest in, and a regulatory commitment to, replacing its rural copper with broadband wireless.

Much more interestingly, throughout the statement, they repeatedly link 5G, SDN, and NFV. This combination of new radio technology, cloud, and network virtualisation is the zone of disruption STL Partners identified in our May, 2015 Executive Briefing How 5G is Disrupting Cloud and Network Strategy Today. This week, we’ve issued a new Executive Briefing, AT&T: Fast Pivot to the NFV Future, which provides an in-depth update on AT&T’s cloud and NFV strategy and how far the transition has come on the way to 75% virtualisation by 2020. If we may be forgiven a spoiler: it’s going pretty well.

The New York Times profiles CEO Randall Stephenson’s brother Kevin, an AT&T lineman in Moore, Oklahoma, who got his kid brother a job with Southwestern Bell in 1982. It goes on from there to detail the consequences of the transition for hordes of AT&T workers, who are being encouraged to re-train. In much of the sprawling fixed network, surprisingly little has changed since divestment, and there is likely to be change ahead.

Wind River, the embedded Linux company Intel bought, has a new virtualised CPE product out. Virtual CPE is one of the highest priority topics across the NFV ecosystem, so this is quite a big deal.

Here’s a really outstanding interview with Red Hat chief technologist, Chris Wright, on the development of 5G. The very fact that Red Hat is contributing to a 3GPP standardisation tells us a lot about the increasing integration of 5G and the cloud.

5G’s ultra-low latency targets (the industry is discussing end-to-end latencies between services and service consumers on the order of 1ms round-trip) are the real challenge, though: It not only requires a new radio access technology, but the physical limits of speed-of-light mean that some services, including their compute and storage, will have to move closer to the users and their share of the latency budget will be much smaller than today. This means more decentralization and improvements in management and orchestration of infrastructure and workloads. We also need more work on further reducing response times of massively scalable distributed systems.

The vendor that has internalised this the most seems to be Nokia. How’s the quarter been. then? It’s the last one before ALU is consolidated, and here goes. Not bad; net sales were up 2.8% and operating-level income 46%. However, the core Networks business was actually down, as infrastructure spending in China slowed down (that doesn’t sound good!). The difference is made up by licensing revenue from Nokia Technologies, notably a patent payout from Samsung, and the sale of HERE to the German car makers.

Rajeev Suri brings the bad news, admitting that some jobs are duplicated and will go. Interestingly, he promised the French government that they wouldn’t be in France. He also says he wants to avoid the “internal politics” that resulted from the Siemens acquisition.

Meanwhile, Nokia launched Ava, a “cognitive services platform”. That seems to mean some sort of semi-automated network-management and customer-care setup. To be honest, we were on the embargoed briefing and we’re none the wiser. Perhaps the demo at MWC will make it a bit clearer.

And tiny Manx Telecom has moved all its fixed voice to a virtualised IMS, from Metaswitch. This is mostly interesting because its big brother O2 UK often tests new stuff there.

Exit VZ; AWS surge; Google, Qualcomm team up on ARM servers; Netflix’ last server; Akamai Q4

The cloud is an awfully crowded market. In the US enterprise space, Microsoft and Amazon Web Services are growing like crazy. Centurylink, having bought Savvis’ data centres, is now pulling out. AT&T’s Strategic Business Services line is doing great business. And Verizon is shutting down two of its cloud services, Public Cloud Reserved and Marketplace. Users have to move by April 12th before their data is “irrevocably deleted”, and VZ recommends they move to their Virtual Private Cloud product.

Last week, Facebook announced the shutdown of its PaaS offering, Parse. The Amazon Web Services Official Blog provides detailed instructions on how to move a wide range of projects out of Parse and into AWS. They’ll probably do the same for VZ cloud users…if there are enough to make it worth their while, which you might ask.

As we pointed out in this Executive Briefing, AWS is growing its revenue and also its margins.

Google may be helping Qualcomm develop a 64-bit ARM processor for data-centre applications. That’s a big deal - so far, servers have been a staple and hugely lucrative market for Intel x86 processors, because power consumption isn’t as brutally constrained as it is in mobile. Only a few weird pioneers like Free’s Scaleway have experimented with very densely packed racks of low-end ARM-based servers. It’s also a big deal because Google buys 300,000 CPUs a quarter. 100,000 a month. That’s a launch customer all on their own. And it’s bad news for Intel’s historic arch-enemy AMD, which is also working on an ARM server product.

Meanwhile, Google and Level(3) have renewed their peering agreements. This wouldn’t be news, but the terms have changed quite significantly. It used to be a traditional peering relationship, but now it’s a “bit-mile agreement”. This means it takes into account how far traffic is carried. In practice that might mean a shift from the default Internet “hot-potato routing” (X hands off traffic to Y as soon as possible) to “cold-potato” (X carries traffic as far as possible before handing off to Y).

Netflix has closed down its last dedicated server, as it completes its transition to 100% cloud. This is being described as moving the whole company to AWS, but that’s not true; as well as the IT running in the cloud, Netflix has a huge CDN infrastructure pushing the video out of the door.

Which brings us to Akamai. Q4 results are in. Profits were up 8% year-on-year for the quarter, 12% for the full year. Within that, their security products were the growth star, interestingly enough. The company is re-organising into two divisions, one for web, one for media.

And Cisco-owned cloud voice specialist Tropo is coming to Europe. Cisco itself says it’s yet to see any benefit from the Ericsson deal, but its profits were up substantially.

Comcast prepares to rock the Bells; TIM Brasil 4.5G; TurkTel CAPEX; EE Q4s; bidding on T-Mobile.nl

Comcast announced last week that gigabit cable is rolling out. Specifically, they’re going to hit the top 5 AT&T GigaPower markets first, as FierceTelecom points out here. And then they’re going after Verizon’s 9-state FiOS service area. Fight! Fight! According to the cable vendor, Arris, delivering this means pulling more distribution fibre and adding capacity at the head-ends. Of course, Comcast’s business Ethernet operation has been growing like crazy for some time, so that might not be much of a challenge.

This will certainly help - CableLabs and Cisco are working together on a virtualised CPE implementation for the cable world.

Not that the cableguys are going to have it all their own way. Google Fiber surged into Atlanta, and now Comcast is leafleting the city with the message “Don’t believe the hype”, emphasising their X1 set-top boxes, but as one recipient pointed out, very much not emphasising their usage cap. Centurylink, which had a reasonable quarter, is looking at trialling a cap.

Elsewhere, New York City is sceptical of the Altice-Cablevision deal and is lobbying against it. Verizon, Frontier, and Florida Power & Light are having a row about access to electricity poles. FP&L is threatening to tear down the lines, that VZ is selling to Frontier, if it doesn’t get what it wants. Louisville wants to let competing ISPs (read: Google Fiber) use city-owned and AT&T poles. Neither AT&T nor Time Warner Cable, also present, are in the least bit happy about that.

Verizon Wireless will be using SpiderCloud’s distributed antenna system to test LTE-U.

TIM Brasil is getting ready to launch LTE-A, specifically, 2-band carrier aggregation across the 1800 and 2600MHz bands. The carrier claims it’s now up to 59% coverage of the Brazilian urban population - a qualifier that speaks volumes - with 4G and 82% with 3G. They also say 70% of their traffic (although again, not their cell sites) is now on fibre backhaul.

Millicom’s opco Tigo Senegal is now up to 495 cells on 3G in 101 localities, while the Orange acquisition of Cellcom Liberia has been approved. Orange went on to snap up Millicom’s Tigo DRC.

ViaSat throws out a handful of announcements about its planned 100Mbps satellite service. Don’t ask about the latency.

Turk Telekom is investing $3.4bn in what it calls a “digital revolution”, which seems to be more FTTH. Their revenues are up 7% year-on-year.

EE’s revenue is flat, or up 1.1% when you ignore regulatory changes. They are now at 31.5m subscribers, and the installed base of M2M devices is growing 13% year-on-year - so flat revenue implies the M2M ARPU is truly awful. EBITDA is up, however, 12% year-on-year. 4G does seem to be good for your margins. Meanwhile, a Rootmetrics survey is in and it suggests EE was best on all the indicators except for “reliability”, which went to 3UK. 3UK actually came second overall, having placed a strong second for “Mobile Internet performance” and aced “reliability”.

BT says it’s demonstrated that the latency-sensitive “fronthaul” link in a C-RAN can work over copper using G.fast. Just because you can do it doesn’t necessarily mean you should.

Telefonica said it was going to spin out a towers company, and here it is.

And we’re down to two private equity bidders for T-Mobile Netherlands. Apparently the one headed by former Ziggo CEO Réne Obermann isn’t going to turn around and sell it to Ziggo parent Liberty Global. Apparently, even though mobile-cable integration works everywhere else and Tele2 NL is about to throw a Xavier Niel-style price disruption.

Terrifying Cisco, Microsoft security flaws; GSMA IoT advice; creepy ad company knows how you vote

Cor. If you’re a network engineer in a Cisco shop, this security advisory probably already destroyed your weekend. A specially crafted UDP packet is enough to force some Cisco machines to reboot, or as if that wasn’t bad enough, to execute arbitrary code. And where is the vulnerability? In the firewalls! Worse, the patch seems to cause weird side effects with some NAT configurations.

Once you’ve got that one under control, there’s a critical Microsoft Windows vuln out there that affects everything from Vista to Server 2016 Tech Preview 4. Attackers could trick you into clicking on a crafted Journal file to get full remote code execution. What else?

The GSMA has issued a 200-page manual on security considerations for IoT systems.

Ad company Dstillery claims it tracked tens of thousands of voters around the Iowa caucus. Because you vote by physically joining a caucus, that means it knows who they voted for. How did they do this? By piggy-backing on online advertising networks. No wonder Google changed its mind and cleared ad-blockers back into the Play Store.

Russian hackers discover how to reverse banking transactions, so they can withdraw unlimited amounts of cash.

A Massachusetts police officer tried to access a suspect’s iPhone with a view to destroying video evidence. He destroyed the evidence all right, by guessing the password wrong enough times that the phone automatically erased everything. Which of course also made it very, very obvious he tried to get in.

TSMC snags iBusiness; Error 53; Qualcomm; grim Q4 at Twitter, Tango, Rocket Internet

Korean news reports suggest that the applications processor in the next iPhone will be fabbed by TSMC, not Samsung. TSMC supposedly won the 10nm device, while Samsung concentrates on 14nm work for its own Exynos SoCs and Qualcomm, and researching 7nm for the iPhone after that.

Apple is being sued by users whose iGadgets are returning “Error 53”. Basically, the Secure Enclave chip in the iPhone periodically asks the touch sensor to cryptographically sign a message it then checks against some Apple-provided key material, in order to guarantee that it’s not been replaced by, say, a device that always responds “Yes”.

If it has in fact been replaced by another touch sensor, and the key hasn’t been updated, you’re out of luck. This typically happens if you had a third-party repair, because only Apple stores can update the key. That said, remember the story about the policeman above…

Qualcomm clears its pre-MWC announcement queue. They’re offering an LTE Pro modem, the X16, which is meant to be good for 1Gbps, plus a “wearables platform” based on the Snapdragon 2100, as well as three mid-market phone SoCs.

LG won’t be showing a payments system at MWC.

Here’s an interesting Google hardware project - a high-spec microcontroller that might be used in numbers to make a networking switch or a parallel computer.

Zyptonite is a voice app that wants to be like Skype when Skype was like Skype.

Twitter Q4s are in. They’re pretty awful; the company lost money in the quarter, although it was profitable for the full year, revenue is disappointing, and the user base actually shrank. Still, at least they remembered to rename “favourites”.

It’s the new Silicon Valley - unicorns making job cuts. Tango just slashed 20% of the work force, the second round of layoffs in three months.

On a similar theme, German super-VC Rocket Internet, famous for its global clones of US Internet brands, hasn’t been doing so well and the shares are sinking fast. At the beginning of February, it put a string of food delivery businesses in Spain, Italy, Mexico, and Brazil on the market. British competitor Just Eat took them for €150m. And what does Rocket do with the money? Buy back stock.

More specifically, the company issued a large sum in convertible bonds last summer, and now it’s buying them back. The idea is apparently that the possibility of them converting into shares is an overhang, but then, the break-even price for conversion is €47/share, Rocket floated at €42.50, and the shares are trading around €21. It’s as if they were more worried about the 3% cash coupon.

It’s not as if Rocket doesn’t have good ideas. Here they are with a venture to sell insurance in Africa with local Internet company, African Internet Group, and mobile operators Millicom and MTN.

1bn Indian subscribers; how Free Basics failed; Opera sold; Telenor, Softbank Q4s

One. Billion. Mobiles! Ovum reckons India is now the second country to pass a billion subscribers, although it doubts it will catch up with Chinese mobile broadband adoption, data usage, or ARPU any time soon.

In that light, this discussion of Facebook’s Free Basics and how it managed to alienate India is interesting. Facebook offered cheaper Facebook, but the Indians were more interested in building out more infrastructure and developing Indian Internet startups. It seems reasonable.

More detail of TRAI’s decision is here. Discrimination based on content is out, and so is zero-rating, with a fine set per day and an exception for grave emergencies (e.g. free Whatsapp during a flood).

A Chinese consortium is buying browser maker Opera for $1.2bn. You wonder whether the Opera Mini proxy will go behind the great firewall.

Here’s an interesting blog post on Chinese UX design.

Telenor finishes the year with 203 million subscribers, having gained 17 million in 2015, 6.6m of those in Q4. More than 50% of its revenue now comes from the six Asian networks. That said, they lost money in Q4 thanks to a writedown of the Danish opco after the Euregulators shot down the merger with TeliaSonera.

Softbank says its revenue is up 7.9% and Sprint is showing “signs of a turnaround”. All the shareholders could see was the $4.4bn buyback they’re offering - with negative interest rates, surely a bit of a no-brainer.

Opportunity: Oman’s third MNO.

Just thank your lucky stars you weren’t responsible for the “embarrassing human error” that brought down Telstra’s 2G, 3G, 4G, ADSL, and NBN services all at once.

RIP Ken Olsen

Ken Olsen, founder of Digital and creator of the iconic PDP/8, PDP/11, and VAX-series minicomputers, has left us. Well-known users of the PDPs included NASA, the young Bill Gates, the young Steves Jobs and Wozniak via the People’s Computer Company, the young Werner Vogels, Bell Labs digital switching, the early ARPANET, and most of all, tens of thousands of enterprises which computerised for the first time. The Soviet computer industry even copied them. Even if Ken did say that:

“The personal computer will fall flat on its face in business”

Forecasting makes fools of us all.

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