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Google I/O, Gigabit Cable, Xiaomi, Yahoo! - Telco 2.0 News Review

Google I/O: new apps, Assistant, radar UX, Chromebooks, TPU, much more

It was Google I/O time. Google announced a wave of new products, very few of them original, but all circling around what they hope is a competitive advantage in natural language processing, machine learning, and the data centres that underpin them.

There’s a new instant messaging app and a new voice/video app, both using a WhatsApp-like phone-number-as-ID model, but the point is probably to create a touch point for Google Assistant, the revamped OK Google. ZDNetpoints out that Google social apps don’t have a great record, but that might not be the point.

There’s a new version of the Android Wear operating system, letting app developers create their own UX elements on the watch (or whatever) and watches (or whatever) communicate directly to the Internet without going via a smartphone. More excitingly, Project Soli is a very short-range radar on a chip, manufactured by Infineon, that’s intended to support gestural UIs on tiny devices. It’s the work of Google Advanced Technologies and Products, the lab responsible for Project Tango. Interestingly, ARM Holdings just bought a company that designs chips for the kind of advanced video processing you need to do this stuff.

Android Instant Apps basically lazy-loads the components needed to run an app you’ve not installed yet, as and when you want to run it. The demonstration shows this triggered by an NFC tag. It seems harsh to point out that this is actually very like a Web page in HTML5.  

Chromebooks have become much more useful, after getting the ability to run Android apps - importantly that means the full line of Microsoft Office applications is available, and they might therefore become an option for enterprises. This could be interesting - Chromebooks outsold Macs in Q1, for the first time ever. Business Insider thinks it’s more of a threat to the PC industry, which would imply interesting changes in the Microsoft ecosystem, with Redmond going further down the road of apps and cloud services, Windows the OS being further de-emphasised, and heavy pricing pressure on the OEMs.

Data Center Knowledge is on the ball, as usual, picking up on the announcement of the Tensor Processing Unit or TPU, the machine Google uses for its AI projects like AlphaGo. There’s some more detail in the official blog post, which claims the device is 3 Moore’s Law generations ahead of any commercially available CPU or GPU.

Firebase, the messaging/sync platform Google acquired a few years ago, is being developed as its primary mobile app developer offering. It looks a lot like Facebook’s defunct PaaS, Parse. It will be interesting to see if this one beats the temptation of cheap IaaS.

At Google I/O, the company offered journalists some feedback from Project Loon. That’s the one without the robot Internet balloons. It’s gained a new mission - collecting weather data that Google “might” share with weather forecasters and scientists - but it’s still having problems with the balloons bursting.

Before the balloons, Google was keen on satellites and actually invested heavily in O3b Networks. You don’t hear so much about that one any more, which is a pity as it’s just deployed with an ISP in Chad.

And this is fascinating; after everyone had a good laugh at a string of Oracle and Google engineers trying to explain programming to the respective lawyers during their patent lawsuit, it turns out the judge is a hacker with a maths degree, and not at all impressed with Oracle’s claim:

I have done, and still do, a significant amount of programming in other languages. I’ve written blocks of code like rangeCheck a hundred times before. I could do it, you could do it. The idea that someone would copy that when they could do it themselves just as fast, it was an accident. There’s no way you could say that was speeding them along to the marketplace. You’re one of the best lawyers in America —how could you even make that kind of argument?

Google Allo, in the clear by default; wildlife scares 26% off Internet trade; $12bn of ad revenue, blocked

Google Allo, the new messaging app, has end-to-end encryption using Open Whisper Systems’ Signal protocol. Strangely, though, it only uses it if you explicitly tell it to, which led Edward Snowden to denounce it as “unsafe”. The answer seems to be that Google wants you to use all the fancy bot stuff, and that requires in-the-clear messaging. When you go off-the-record, the bots are no longer available.

Obviously, the bots could be given their own public keys - but in that case, they would collect lots and lots of private information to train their machine-learning models. That information would be vulnerable to security incidents, leaks, or demands for search and seizure by the government, but the users would think it was secure, being encrypted. That is presumably why Google did it this way.

For the “Don’t have nightmares” file, academic researchers reverse-engineered the NSA call-detail record mining program and concluded it’s as bad as everyone thought. Interestingly, well-known phone numbers like big corporate customer-service lines seem to allow the agency to circumvent the restriction on following up links beyond two degrees of separation - Joe Terrorist is almost certainly within one hop of, say, the American Airlines booking line, and so are you!

A survey conducted for NTIA suggests that material numbers of people are deterred from doing normal things on the Internet, like e-commerce, online banking, or howling into the maelstrom of rage, by security threats. 26% of all online households reported having avoided making an online purchase at least once on security grounds - that’s a lot of money left on the table.

pests.pngAlso, 19% report being deterred from “expressing a controversial opinion”, which was even more worrying when we realised that the group included…us.

Maybe no surprise, then, that adblockers might eliminate as much as $12bn of US ad revenue by 2020. Interestingly, the forecaster estimates that Facebook, with its focus on native ads, will be only minimally affected.

Why are Tor-based blogs so difficult? Uber turns out to be monitoring how long your phone battery will hold out, but it promises it’s not using this to charge the desperate higher fares. 

Simwood has launched its new VoIP fraud detection app, at Kamailo World this week. Speaking of which, all the talks from Kamailo World are online here and they’re usually well worth it.

Much of the evidence in the Megaupload case has been lost because the old hard disks involved failed.

The FCC has handled no fewer than 21,000 net neutrality complaints.

The new Public Safety LTE blog looks interesting. Did you know 3GPP laid down latency targets for “aquatic or submarine” robot control applications?

DOCSIS 3.1 “good for 2040” at 10Gbps; cable winning in the US; Cisco Q1; new VMED roll-outs

Tom Cloonan, CTO of cable vendor Arris, reckons that DOCSIS 3.1 will be good all the way to 2040 before the cablecos need to replace the final co-ax segment into homes. He argues that incremental upgrades, pulling backhaul fibre closer to the last street cabinet, adding more RF spectrum, and perhaps integrating exotic technology from the 5G space like full-duplex radio, will provide enough capacity to get to multi-gigabit speeds while also keeping up with 50%-ish annual traffic growth.

Relatedly, Bell Labs (sorry, “Nokia Bell Labs”) announced a successful trial of a 10Gbps symmetrical link over co-ax. The key detail does seem to be spectrum - they used 1.2GHz of it, compared to 1GHz in stock DOCSIS 3.1.

Telcos should expect no respite at all from the cableco challenge. That’s precisely what we see in the next story - Leichman Research reckons the US telcos saw basically no net-adds in fixed broadband during Q1, while the cablecos saw over a million. Although AT&T and Verizon net-gained 300k FiOS/GigaPower/U-Verse subscribers, they net-lost 324k DSL subs.

Wells Fargo knocked $343m and 50k net-adds off their estimates of VZ’s Q2 revenue and FiOS subscribers due to the continuing strike action. Speaking of which, the two parties to the strike are back around the table, with a US government mediator holding their hands.

The Google Fiber roll-out in San José seems to have been signed off by the city government. The only answer for telcos is to get the fibre out there, and AT&T is doing just that, with the GigaPower roll-out in San Francisco cranking up and deliberately targeting the Google fibrehoods.

Here’s an interview with the head of Sprint’s new wireline unit. Stand by for a major push on business Ethernet services, and even a rollout of Ethernet over DOCSIS. After all, it’s the only bit of Sprint that’s making money.

It’s going to be tough, though - Comcast is a huge player in this segment and it just became a Microsoft Office 365 reseller. 100/100Mbps, unlimited NANPA VoIP, and Office 365 sounds like a hard bundle for an SMB to resist.

As the Charter/TWC/Bright House deal closed, the co-CEOs of TWC sent the 50,000 employees a letter saying goodbye. This may prove prophetic.

Cisco saw a frankly weak Q1 in the key switching and routing segments, with sales down respectively 3% and 5%. They say a number of major service providers are going slow on the CAPEX. One of them is almost certainly Sprint. Meanwhile, CEO Chuck Robbins gave an actual number for sales through the Cisco/Ericsson strategic partnership: 17. This compares poorly with the “200 customer engagements” they were talking about. Although it’s only natural that there’s a pipeline outstanding, and not every lead turns into a sale, that could surely be better.

The CEO of BT has kissed a bonus goodbye because complaints are up. The British government has bitten the bullet and started the process of reviewing the Electronic Communications Code, which governs planning and tenancy terms for telecoms infrastructure. It’s a longstanding demand of basically everyone except BT and sometimes even them.

Gigabit cable comes to Denmark. Gigabit FTTH comes to Romania. Virgin Media announces the first rollouts under “Project Lightning”.

4G drives FTTH drives 4G; Vodafone “back to growth”; French price war eases; iPhone BOGOF

One reason to pull more fibre is that it serves multiple purposes. Verizon CFO Fran Shammo says that its renewed FiOS build in Boston was motivated by the need to put in more 4G coverage and find backhaul for it. Once the decision was taken to start building, it made a lot of sense to deploy extra fibres so as to serve business customers, and using those as the metro-distribution network for a FTTH build was a no-brainer. You can’t say that about football rights.

Vodafone’s Q1, meanwhile, announced a return to organic service revenue growth for the first time since 2008. Also, it’s declaring victory on the Project Spring CAPEX program. Despite that, it’s also announced a target to get much more fibre to base stations, something it’s been weak on for years. By 2020, it wants to pull fibre to 95% of sites in “European cities” over 100k population. And at the same time, it wants to have 5G launched and 3G shut down.

Interesting detail: the key driver of service revenue growth is greater in-bundle revenue, up by almost a billion, so it’s successfully upselling data bundles. That said, note that “reported” service revenue is still falling.

Screenshot from 2016-05-23 16:17:24.png
Around the Vodasphere, Vodacom reported revenue up 7.5%, profits up 3.2%, and data revenue up 32%. It’s also dropped its trial of M-PESA in South Africa, apparently because too many people have bank accounts. On the other hand, a trial of LTE-U has gone live in Johannesburg, using the 5.8GHz band. Vodafone-Hutchison Australia has also been testing, a pre-standard (ha!) NB-IoT network. (Orange, however, just joined the LoRa Alliance.)

VHA used to be famous for outages, but Telstra has probably managed to beat that with yet a third national outage across the mobile, PSTN, and NBN networks this week. Interesting thought: there’s been a huge surge in IPv6 takeup in Australia recently. Is there an important bit of kit at Telstra whose IPv6 implementation leaves something to be desired?

MTS says it’s going to deploy a 5G test network in 2018, probably at a football ground, with Nokia. Sprint, meanwhile, is zero-rating football streaming during the Copa America. EE, for its part, has released a lot of data about streaming on their 4G network during the FA Cup Final.

ARCEP reckons the price war is slowing down - mobile service prices fell 5.5% in 2015, which is still very “fall-y”, but it’s not 26.6% like 2013. Relatedly, Free Mobile’s Q1 results are in. It’s now at 11.9m subscribers and 4.3m on 4G, after 215k net-adds in Q1 - the 4G number has doubled in a year, while 4G population coverage is at 67% and 3G at 82%. Service revenue was up 14%, while the broader Iliad group including fixed saw revenue up 6.6%.

Bouygues, meanwhile, actually outscored them on net-adds, very rare, with 240k. That takes it to 12.1m, of which 5.6m are on 4G. Revenue was up 6% but EBITDA only grew €28m. The company expects to reach 99% LTE population coverage by 2018, when it will have 20,000 eNode-Bs.

O2 UK CEO Ronan Dunne may be planning a management buy-out of the carrier, now that the 3UK/O2 deal has fallen through. Ex-T-Mobile and Virgin Mobile CEO Tom Alexander, also said to be planning something similar, may yet join his consortium.

Add unlimited data for your car, just $40/mo from AT&T (which suggests they don’t expect your car to use it). Sprint may be getting back out of 2-year contracts. And buy one iPhone 6, get one free. Guess who. Their residual CAPEX will be pretty much nothing but devices at this rate.

Xiaomi says Chinese volume has peaked; GfK says smartphones still growing; Nokia phones are back, sort of

Xiaomi’s CEO says the Chinese market for smartphones has probably peaked below 500 million units/year, and the IPO is well and truly off. Not only doesn’t the company need money, but volatility related to the Chinese economy and the US elections makes it unwise. The US elections? Oh. Right. We see it.

GfK disagrees dramatically with Strategy Analytics, saying that the world smartphone market grew 6% in 2015 rather than shrinking.

Meanwhile, it looks like the Chinese investment fund bidding for Opera Software is struggling to get enough shareholders to sign up ahead of the deadline. It’s at 73% and need 90% by tomorrow evening.

Apple has signed up to supply Reliance Jio with iPhones. Still no word on when there’s actually going to be a network, though…

A Finnish company has bought the old Nokia Phones business off Microsoft, and licensed the Nokia brand, so there will at last be a Nokia Android phone in some sense, although the actual Nokia content will be minimal as the devices will be manufactured and distributed by Foxconn.

Sony’s new Android flagship, the Xperia XA Ultra, is a photography-focused device with a huge borderless screen and a selfie cam that’s better than the main cam on most phones.

And the latest iteration of the Motorola Moto G adds 1080p video and a fingerprint sensor. At £169, it’s a lot of value as usual.

Yahoo! going cheap; MCX doesn’t look well; clampdown on Chinese video

The great Yahoo! sale may yet be a disappointment - after seeing due diligence information including Marissa Mayer’s sales presentation, the bidders have lowered their sights from $4-8bn to $2-3bn. That must have been quite a presentation.

MCX, the payments-and-customer-data play supported by a consortium of US retailers, has postponed a national launch and made 40% of its staff redundant (that’s 30 people). This doesn’t look good - one of the biggest backers, WalMart, has launched its own unilateral project, while another one, Best Buy, has started accepting Apple Pay.

The Chinese Communist Party is planning to have the government buy stakes in major Chinese streaming video platforms and impose its nominees on their boards. It’s mostly surprising it took this long.

Comcast’s CTO says advertisers are “doing the limbo” to get ad space on the X1 platform. They also have to comply with very strict guidelines to make sure their ads gel with the X1 look and feel. Both Google and Facebook want their simplified-publishing standards to do something similar.

Britain spends far more on online ads than any other European country. Meanwhile, Sprint has its own ad agency.

Cloud boom, cloud bust; is there any cannibalisation? Metaswitch vNow; HPE’s $100m for startups

This is interesting: over the last year or so, cloud companies have been buying up data centre space faster than the industry can create it. Now, however, a lot of capacity is about to hit the market. Will it get absorbed, or will there be a data centre glut?

Digital Realty is hoping not, as it’s just bought up the Equinix European data centres they had to sell for regulatory clearance to buy TeleCity.

In forecasting cloud revenue, you have to answer three questions: how fast is cloud adoption going to happen, what is the limit on its share of the market, and how big is the addressable market. This piece argues that there’s been a big surprise - the addressable market has grown enough that there’s been effectively no cannibalisation of the enterprise data centre yet.

AWS announces a new EC2 instance type for extremely RAM-intensive applications.

Here’s MetTel, a company using SD-WAN to run something like the old Savvis business model.

Metaswitch is offering an “NFV starter kit”.

And HPE is investing $100m in cloud startups.

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