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Bill Bennett

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Spark’s timid Covid-era 5G mobile launch

There could not be more contrast between Spark and Vodafone’s 5G launches. The two launch events tell a tale about the effect of the Covid-19 pandemic on carriers.

Last December Vodafone launched its 5G network. On day one it had 100 5G towers in Auckland, Wellington, Christchurch and Queenstown.

This week Spark’s 5G network opened for business. In Palmerston North.

That’s right. Spark chose New Zealand’s eight largest city to showcase the latest mobile generation.

Toyota

The company says it is working with Toyota to uncap the value of 5G in Palmerston North.

You might think this would involve something exciting like driverless cars. After all, Spark tested New Zealand’s first autonomous vehicles last year.

Instead, the partnership delivered a dreary virtual test drive app. It’s the kind of video streaming application that 4G mobile handles with aplomb.

Vodafone’s launch had holograms, long-distance veterinary surgeons, remote cranes and 5G controlled factories.

Contrast

There could not be more contrast between the two 5G launches. Vodafone had exciting technology and glitz. Spark has Palmerston North and 4G apps.

Vodafone went hard and early. Spark’s launch is timid. The company says it will offer 5G in four more locations before the end of the year. By then it will be a full 12 months behind Vodafone.

To be fair, Spark had to wait for the government to deliver 5G spectrum before it could move. Vodafone had suitable spectrum in its pocket.

While we are being fair, the world has changed a lot since Vodafone’s launch. Spark’s cautious arrival on the 5G scene could be the right strategy for pandemic times.

Prudent

Like New Zealand’s other telcos, Spark may yet have a wall of bad debt to deal with. Not splashing money on a big 5G roll out and a fancy launch looks prudent today. It’s possible Vodafone’s investors wouldn’t have funded a 5G launch if they knew what was coming.

It is not as if rivers of gold will flow into the coffers after a 5G launch. As Telcowatch shows, Vodafone’s market share didn’t move after it launched its 5G network.

Vodafone may look confident. Yet that confidence doesn’t extend to charging customers more to use its 5G network. Likewise, Spark isn’t going to ask the people of Palmerston North to pay a 5G premium.

Even the boring Toyota demonstration app seems sensible and wise. It’s not as if there are any practical applications for everyday users that depend on 5G to work. Why pretend otherwise? Vodafone’s examples looked exciting, but it will be ages before they are everyday reality here.

And that’s the key. While the above story may read like a criticism of Spark, it is not. Spark has cut its coat according to its Covid-19 era cloth. We need to adjust our expectations for less techno-dazzle and more back to basics.

Bloomberg on patchy 5G networks


(Bloomberg) — Fifth-generation networking hype has been in full force since Qualcomm Inc. declared “5G is here, and it’s time to celebrate” in February of last year. The reality, however, has required patience from consumers due to the time needed to roll out the new networks and the dearth of applications to put speed to compelling use.

Source: We Tested 5G Networks Across Asian Cities. The Verdict: Patchy

The message at last February’s Mobile World Congress, the phone industry’s annual gathering, was that 5G is ready.

The technology was working then. It still is. There is a lot more 5G around the world than last year. Dozens of carriers have launched networks. This includes Vodafone in New Zealand.

5G is not about consumers

Bloomberg’s report makes clear there is a gap between reality and consumer expectations.

To get acceptance of 5G, carriers need to sell the idea to consumers. They promised consumers faster speeds on mobile handsets. Up to a point they delivered, although as Bloomberg points out, delivery is patchy.

The truth is that 5G is not and never was about the consumer experience. It is all about enterprise and industrial applications. Engineers optimised 5G for communications between machines, not person-to-person calling.

A voice call on a 5G phone is no different from a voice call on a 4G network. Video streaming works fine on a 4G connection. There are no obvious mobile consumer applications that must have faster data.

The only 5G consumer user case anyone talks about is mobile games with lower latency.  Gaming is a big and important business. Yet carriers did not invest billions so commuters can shoot aliens faster while sitting on a bus.

The world wasn’t waiting for faster mobile phone data

A lack of must-have consumer apps explains why phone makers didn’t race to get 5G models to market. Yes, people will want to buy phones that can make use of the faster speeds. But they are not going to go out at midnight and queue around the block for the privilege of getting them first.

Wonderful things happen when mobile devices and sensors communicate at fibre-like speeds. No doubt 5G will transform many aspects of life. Everything imaginable will connect and either report back or act on the result of data.

Like an iceberg looming in front of a giant transatlantic steamer, the part of 5G that matters most is out of sight. It will have the biggest impact. The technology was always going to underwhelm consumers. It’s not for them. Let’s stop pretending otherwise. There is a better story to tell.

UK plans anti-Huawei 5G alliance

According to The Times, the UK plans to form an alliance of democratic nations to create a 5G alternative to Huawei.

The Times says the group will include the G7 nations: Canada, France, Germany, Italy, Japan, the UK and the United States as well as Australia, South Korea and India.

No doubt if the plan goes anywhere there will be pressure on New Zealand to join. It is the only Five Eyes intelligence alliance member not in the Times’ list.

Huawei top equipment maker

Huawei is the world’s top telecommunications network equipment maker. It has the most advanced cellular technology and is a leader when it comes to 5G networks.

Thanks to favourable currency conditions Huawei manages to make better 5G technology and, in many cases, sell it for less than rivals.

There are dark mutterings from the US that Huawei climbed to the top of the telecommunications market by stealing intellectual property.

Whether or not this is true, Huawei also enjoys significant tax breaks from the Chinese government and favourable trading conditions in the world’s second largest economy. Unlike western governments China is not frightened to intervene in key markets. The nation has long had an industrial policy to become a world leader in telecommunications technology.

Spying accusations

The headline reason Huawei has western democracies clinging together are reports the company either already does, or could soon start, giving Chinese intelligence agencies access to data carried on networks.

While there is no smoking gun proof this has happened yet, the potential for it to happen is real enough. And that’s before you consider the rising tensions between China and the US.

Behind the headline reason is a second, more nuanced argument. Huawei dominates telecommunications hardware.

Huawei’s main competitors still in the market are Nokia and Ericsson. Both are a fair distance behind Huawei. They can’t compete with Huawei’s rapid development cycles, they struggle to match Huawei’s price advantage.

Monopoly

Before the spying accusations became public the gap between Huawei and the also-runs was widening. There was a danger Huawei would move from dominance to something more like a near-monopoly.

Think of how Google dominates web search. Strictly speaking search is not a monopoly, but only one company matters.

Believe it or not, the world could manage without web search. It can’t manage without telecommunications networks. And much of the world would certainly be in trouble if the only supplier of that network technology was based in an increasingly aggressive, potentially hostile country.

Crippling

So crippling Huawei before it reaches that position stops it from becoming a serious threat. Well, that’s the theory and the thinking behind the UK’s alliance plan.

There’s another angle to this. Huawei aside, Chinese companies dominate the supply chains for telecommunications hardware. Both Nokia and Ericsson have operations in China. Many of the chips and components they use come from Chinese factories.

During the early stages of the Covid–19 pandemic we saw the chaos that comes when supply chains shut down. The Chinese government could shut them down whenever it chooses. Sure that would come at a huge cost, but the risk cannot be ruled out.

Tensions between China and the West, especially the US, are higher than they have been for decades. Things have reached the point where even suggesting the formation of an anti-Huawei technology alliance will be seen as ratcheting up the tensions.

Precious little optimism

The UK plan may come to nothing. It’s possible tensions will reduce. But optimism in this area is in short supply right now.

Nokia and Ericsson are the most likely winners if the UK plan gets anywhere. Samsung and NEC also have 5G network equipment, but the two are even further behind and can’t offer a comprehensive suite of products.

Assuming it is Nokia or Ericsson or both the winners will get guaranteed markets and, presumably, buckets of government money. The move won’t be good for innovation and will reduce choice for mobile carriers.

On the other hand, it will bring much needed certainty to the sector. Everyone will be able to get back to building networks and stop worrying about the politics of what should be engineering or commercial decisions.

Rakon impatient shareholders can’t wait for 5G payoff

A group of Rakon shareholders are getting impatient with its undervaluation and want directors to put the company on the block.

In Tech company shareholders frustrated at low value RNZ reports:

A group representing 14 percent has written to the board asking it to immediately market the company to international investors through a tender, amid reports that some Australian investment funds have been showing interest.

“[We] believe the company is significantly undervalued and the company is failing to highlight this value to outside investors,” the letter said.

The story doesn’t carry a byline.

Rakon’s disgruntled shareholders want the company sold to international investors as a way of unlocking their investment. They make it clear they don’t think they will get a big payout from what should be a boom as the 5G mobile telephony market gathers momentum.

Waiting for 5G acceleration

RNZ goes on to quote Rakon chief executive and managing director Brent Robinson. He says:

“As 5G accelerates, so will Rakon and its financial position will be more attractive.

“Be patient, it’s early days for 5G and I believe Rakon’s performance should improve a lot, as far as profits are concerned over the next few years.”

Rakon is a 50 year old New Zealand technology company. It makes frequency control components including quartz crystals. Telecommunication accounts for over half the company’s revenue.

On paper, Rakon is well placed to profit from the worldwide 5G roll out. It appears to be the kind of company New Zealand’s economy needs.

Mobile carriers are spending billions building 5G networks and will continue spending vast sums for the best part of a decade as they build out 5G further and further. Rakon sells its components to 5G equipment makers like Huawei and Nokia. It should be a bonanza.

Not fast enough

The problem is that despite the huge investments in 5G, the roll-outs are not proceeding at the predicted speed. Asia is moving fast. Vodafone has already built a network here, Spark is about to follow. Other countries are not moving as quickly.

It doesn’t help that Rakon’s customers are caught up in a trade war, possibly an espionage row, between the US and China. It is possible that Rakon can supply one team, but not the other. That would hurt its market.

Rakon’s share price has languished to the point where it is a possible takeover target. The shareholder letter suggests at least some of Rakon’s owners want out.

 

5G tower attacks: It’s not protest, it’s sabotage

RNZ reports two more cell towers were attacked early today:

Police are investigating after two fires in Ōtāhuhu and Favona in the early hours of this morning.

Towers were also damaged in Māngere earlier this week and another in Papatoetoe late last month.

Elsewhere an RCG 4G cell tower was attacked in Northland.

It’s no longer the case of a one-off attack. Clearly something serious is going on.

Critical infrastructure

If New Zealand was at war, we would regard an attack on critical infrastructure as treason. If a hostile foreign power sabotaged critical infrastructure, it might not be an act of war. It would be a serious diplomatic incident.

In a sense, this is what is now going on with the so called anti–5G protesters. People around the world are being wound up, fed a careful diet of lies and misinformation in order to trigger this kind of behaviour.

There’s no question some of this propaganda is, at some point, serving or even directly controlled by state controlled organisations. It is quite deliberate. You can speculate which states might be behind the messages.

Target

New Zealand may not be in their direct sights. It’s unlikely anyone sitting in a foreign capital is high-fiving a colleague because a cell tower was taken out in Ōtāhuhu. We are probably collateral damage in a slow-motion underground cold war.

That doesn’t absolve the people who start and feed these rumours and misinformation campaigns. It does go part way to explaining it.

There’s little likelihood any information campaign organised by New Zealand’s government or telcos can counter this propaganda. For a start, the people who believe these conspiracy theories would be unwilling to take, say, Vodafone’s word on anything to do with 5G.

Moreover, any information campaign would naturally be spread by mainstream conventional media. Conspiracy theorists are allergic to mainstream media.

That’s if they see it at all. They are far more likely to believe the rants of red faced presenters promoting dubious health products on You Tube, other social media on underground channels.

It doesn’t help that high profile commentators work so hard to undermine reasonable government actions and messages in other areas.

This goes some way to encouraging a climate where an attack on critical infrastructure might feel more like fighting for freedom than destroying essential infrastructure that helps everyone.

No easy answers

As a first step, it’s probably a good idea to install low cost cameras at cell sites to monitor suspicious activity.

This is hardly another step on the road to tyranny… using security to protect private property is reasonable and well established.

Where things get more dangerous and contentious is dealing directly with misinformation. Incitement to commit a crime is a criminal offence.

Sure, there is often a thin line between incitement and legitimate free speech. But anyone who is, say, sharing information on how to attack a cell tower or broadcast an attack is clearly committing a crime.

Beyond that I don’t have anything to contribute. There are no easy answers. As I said in an earlier post about cell tower attacks, it’s not as if we don’t have other, bigger problems to deal with at the moment.