Microsoft Working with Samsung and Others on 5G Rollout

U.S. software giant Microsoft has announced plans to collaborate with telecommunications companies on the rollout of 5G networks with a view to making cloud and edge technologies more accessible via Microsoft’s Azure cloud service. In a blog post, Azure executive vice president Jason Zander said Microsoft intends to help operators unlock the potential of 5G by enabling them to offer a range of new services such as “ultra-reliable low-latency connectivity, mixed reality communications services, network slicing and highly scalable IoT applications.”

The company said its approach is built on the recent acquisition of two 5G telecom software providers, Metaswitch Networks and Affirmed Networks, and on the development of Azure Edge Zones. “By bringing together hundreds of engineers with deep experience in the telecommunications space, we are ensuring that our product development process is catering to the most relevant networking needs of the operators,” said Zander.

Separately, South Korean device manufacturer Samsung announced an agreement to collaborate with Microsoft on an end-to-end, cloud-based private 5G network solution. Samsung said the two companies plan to advance the virtualization of 5G solutions, including the deployment of Samsung’s virtualized RAN, virtualized core and Multi-access Edge Computing (MEC) technologies on Microsoft Azure. 

The aim is to achieve greater cost efficiencies in 5G deployments, lowering the barrier to entry for private 5G networks in businesses such as retail stores, smart factories and entertainment venues, said the company. 

The benefits of 5G to a broad spectrum of different kinds of consumers, in the large-enterprise, SME and consumer spheres, are apparent, and the push to make them accessible to as many customers as possible is on. In order to make 5G’s potential a reality, partnerships between technology companies, software developers and telecom operators are key. Microsoft’s current initiatives appear to be promising, although they betoken both advantages and challenges for mobile operators.

On the plus side, Microsoft Azure’s acquisition of two 5G software providers should enable the company to offer a one-stop shop for MNOs that are looking to improve the quality of their 5G signal, to provide bespoke IoT applications and to bring MVNOs into their ecosystem by way of network slicing. For MNOs, partnering with Microsoft could provide access to a range of solutions that otherwise could be more costly in terms of R&D.

On the other hand, Microsoft’s partnership with Samsung presages something of a problem for MNOs. Combining the expertise and infrastructure of a software and cloud computing provider and a device and technology developer is intended to make 5G networks available to companies on a private basis. If retail store, factories and entertainment venues can specify the design of their own private 5G networks and implement them, MNOs would effectively be shut out, and precisely in the area of their core business. As this possibility looms on the horizon, major MNOs should certainly be thinking about how to position themselves to meet the special needs of such enterprises, even to the point of collaborating with them to create local networks for specific venues and purposes.

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Korean Companies to Create Mobile ID System

In South Korea, a consortium of three mobile operators, three financial services firms and a technology company have created a partnership to launch a blockchain-based form of mobile identification in 2020, according to a report. Participating companies include SK Telecom, KT, LG UPlus, Samsung Electronics, KEB Hana Bank, Woori Bank and IT solutions company Koscom.

They will create a technology to help establish a “self-sovereign identity,” a new form of identification that will remove the involvement of intermediaries, enabling individuals and organizations to assert their identity in online transactions.

The consortium’s mobile system will allow individuals to store key pieces of personal information and use them whenever they need to. The safe and secure management of the stored data will be enabled by Samsung Knox, Samsung’s mobile security solution for enterprises.

Concerns about security and identity are rife today among consumers and enterprises alike, due to increasing numbers of incidents of hacking, malware installation and identity theft. Mobile operators, as key participants in and enablers of internet-based financial transactions and communications, are vulnerable to the consequences of fraud—directly in terms of lost revenue and indirectly in terms of lost customer confidence. If operators want to ensure that the maximum number of transactions go over their networks, they should convince users that their identities will be safe while making such transactions.

Blockchain technology has been getting a lot of attention in the media lately as the basis for cryptocurrencies such as Bitcoin and Facebook’s new Libra. Of course, not all of that attention has been positive; cryptocurrencies have been denounced as unreliable, meaningless or even Ponzi schemes. However, blockchain in and of itself is a very effective means of delivering assurance as to the provenance of transmitted data. As such, it is a valid technique to use in assuring identity.

As we have said, MNOs benefit from protecting the identity of their clients, whether consumer or enterprise. For South Korea’s three major operators to partner with technology firms and financial institutions in creating what amounts to a secure-ID ecosystem is a proactive and savvy move, in our view. The upfront costs will likely be more than redeemable in terms of revenues derived directly from selling the “self-sovereign identity” solution, while revenue from increased traffic in mobile money and retail transactions will benefit all parties. In order for the system to be of maximum utility, it is fitting that all three major operators are partnering rather than one of them achieving first-mover advantage. That is of course because the secure ID is most effective if it works across all mobile networks in the country.

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Huawei Romania Smartphone Sales Up 48 Percent in First Half of 2015

Huawei Romania’s sales of smartphones increased by 48 percent year-on-year in the first half, to 130,000 units, according to a report that cited the country manager of Huawei Devices Romania, Sorina Macarescu. In spite of the increase in sales, the average selling price for handsets is declining, Huawei said. Mobile operators represent the most important sales channel for the company, Macarescu said. Huawei’s smartphone models are offered by all Romanian mobile operators—Orange Romania, Vodafone Romania, Telekom Romania Mobile Communications and RCS & RDS’ Digi Mobil. The success of Huawei indicates a salient fact about today’s global smartphone market—that as technologies develop, budget-priced devices are closing the gap with high-priced premium devices like the iPhone and Samsung Galaxy in terms of features and reliability. Huawei has been particularly aggressive in expanding beyond China and other Asian markets into the rest of the world. In Romania, a less-affluent European market, Huawei’s smartphones have clearly taken on a dominant role. The lesson for mobile operators, in Romania as elsewhere, is that they can expect to rely less and less on smartphone sales as a revenue driver in the future. In this particular market, for example, prices are falling even as sales are rising. However, while low-priced devices will drive less revenue in terms of sales, they will drive revenue in the long term by virtue of their ability to increase demand for data among a widening user base.

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T-Mobile Austria Offers Four-Week LTE Trial

T-Mobile Austria has launched an LTE network test that gives new and existing customers the opportunity to try out both the network and LTE-enabled devices for four weeks at no cost. Along with the LTE access, the operator provides iPhone 6, Samsung Galaxy S6 and T-Mobile HomeNet Box devices to users. After testing the network for four weeks, the operator will apply charges for the tariff and the device, but if the customer is not satisfied with the network, the device can be returned to T-Mobile free of charge.

T-Mobile Austria claims that while it continues its 4G/LTE rollout (which is now at 67 percent), it is providing 99 percent coverage via its 2G network and 94 percent via 3G. The operator aims for 90 percent LTE coverage by the end of this year and more than 97 percent at the end of 2016. The new campaign launched by T-Mobile, allowing users to test the LTE network and all its capabilities for four weeks at no cost is an aggressive approach to promoting the network. Additionally, by bundling LTE services with new compatible devices, the operator provides the customers with the opportunity not only to test the network‘s abilities to the fullest but also to become familiar with the high-end devices. Once the trial period ends, those who decide to keep the device and subscribe to an LTE plan will become regular subscribers, while those who are convinced that the network’s quality does not meet their expectations can return the device to the operator at no additional cost and with no requirements. T-Mobile’s free network trial could attract new customers and create additional revenue for the operator from selling LTE services as well as the compatible devices. However, the success of this campaign depends entirely on the strength of T-Mobile’s network. If the network fails, the operator will most likely lose some of its credibility.

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world.

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance. Click here to contact a Tarifica Analyst

Warid Telecom, Bank Alfalah Partner on LTE Handset Offer

Pakistani mobile operator Warid Telecom has launched an LTE handset offer in partnership with the country’s Bank Alfalah. Warid’s postpaid customers who have a Bank Alfalah credit card with an adequate line of credit can avail themselves of an offer to purchase select smartphones on either of two installment plans—6 months or 12 months. The seven available devices include handsets from Huawei, Nokia, Samsung and Sony. Monthly costs for 6-month installment plans range from PKR 8,207.00 (US $81.34) for the Huawei Ascend P7 to PKR 15,513.00 (US $153.75) for the Samsung Galaxy Note 4. The 12-month installment plans, with the same range of devices, cost from PKR 4,503.00 (US $44.63) to PKR 8,157.00 (US $80.84) per month. Warid Telecom is also giving 8 GB of mobile data at no cost to customers who purchase any of the handsets on an installment plan.

Warid Telecom’s 26 December launch of 4G service made it the second of the country’s operators to launch 4G service, after Zong. It is not surprising that the country’s smaller operators launched 4G ahead of the larger ones. Pakistan experienced delays for many years in launching 3G service—it issued its first 3G licenses in April 2014—and with the country being so late in launching 3G compared to other nations in South Asia, it makes sense for the relatively small operators to move ahead faster with 4G deployment so as to gain advantage over their larger competitors. Warid Telecom’s strategy to promote 4G handsets in a partnership with Alfalah Bank, as well as the 8 GB of mobile data that customers who purchase these devices on installment receive at no cost, will likely help increase the operator’s 4G subscribers.

Although this offer requires the use of a credit card, it is interesting that Warid has chosen to partner with a banking institution, perhaps as a first step in trying to spark more use of mobile money by its subscribers. While the expansion of mobile money applications has been occurring quite dramatically in developing countries, Pakistan has witnessed relatively little of it in comparison with other emerging markets, particularly with regard to mobile wallet use by consumers. Warid’s offer, which appears to have been strategically developed to expand the ability to use 4G service, may also drive an increase in the use of mobile wallets by the country’s unbanked and underbanked population.

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues or to speak with the research team: http://www.tarifica.com/contactus.aspx

Global Smartphone Growth to Slow as Prices to Drop

Worldwide smartphone shipments will reach a total of nearly 1.3 billion units in 2014, an increase of 26.3 percent over 2013, according to a new forecast from International Data Corp. (IDC). However, the global market intelligence firm expects that in 2015, 1.4 billion smartphones will be shipped, representing a 12.2 percent year-over-year growth rate. Shipments will approach 1.9 billion in 2018, indicating a compound annual growth rate (CAGR) of 9.8 percent for the 2014–18 forecast period.  Smartphone revenues are expected to show a 4.2 percent CAGR over the same period. Smartphones are expected to have an average selling price of US $297.00 worldwide in 2014, dropping to US $241.00 by 2018. Emerging markets such as India will see much lower prices, from US $135.00 in 2014 down to US $102.00 by 2018. Android devices will continue to drive shipment volumes, while iOS devices will drive revenues, according to IDC. By 2018, Android will control 80 percent of global smartphones shipped and 61 percent of revenue, while iOS will control 13 percent of volume and 34 percent of revenue. While worldwide smartphone shipments will not be declining over the next four years, the rate of growth in shipments will decline, according to IDC’s projections, and that reflects several trends that we have observing, as well. Higher rates of penetration account for growth rates that are much lower than obtained during the period of rapid device adoption. In the developed markets this trend is particularly marked, but it is true to a lesser extent in other regions. In an increasingly saturated global smartphone market, it is simply not possible for growth to continue at the same pace as it has been. Also, though it is much less significant as a factor, it should be noted that cellular-enabled tablets with voice capability are squeezing smartphones in emerging markets, where users may choose to have only one device. As inexpensive smartphones come with more features and more power, inevitably there will be downward pressure on global pricing. This phenomenon is especially marked in emerging economies like India, though it is by no means limited to them. It appears likely that mid-range smartphones will have the hardest time competing with low-priced but relatively full-featured devices, whereas the highest-end smartphones, particularly Apple’s iPhone, will show the strongest growth in revenue.  The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week or to contact the Tarifica Research department:  http://www.tarifica.com/contactus.aspx

Samsung to Offer Fewer New Phones in 2015

South Korea-based device manufacturing giant Samsung Electronics says it plans to reduce the number of smartphone models it will offer next year. The move is part of a strategy of cutting costs to offset declining mobile-device profits. The company will cut the number of models by about 25 to 30 percent, according to Robert Yi, head of investor relations, who made the remarks during a presentation in New York. Samsung did not disclose the number of models that would be affected by the reduction.

Samsung’s position in the worldwide device market is being eroded by two forces—one, the new iPhone 6 models from rival Apple, whose larger screens compete directly with those of Samsung’s flagship Galaxy models; and two, a more fundamental challenge from Chinese manufacturers that are producing well-designed low-priced phones that approach or match many of the specifications of high-end devices. In the third quarter of 2014, Samsung saw its profits from mobile devices go down by 74 percent.

Cutting down on its range of devices could plug the hole to some extent, but cost reduction is by no means the whole answer. According to a recent report, the company is transferring hundreds of engineers from its mobile division to an Internet of Things (IoT) initiative. That makes sense on more than one level. Samsung already makes many non-mobile devices, from washing machines to TVs, that ultimately could be connected to mobile networks in the emerging smart-home sector of the IoT. Adding the ability to connect to the internet via mobile networks would be a natural step, and one for which Samsung is eminently well-qualified. Beyond that, though, if the idea of enabling a plethora of devices and appliances—not only in the home but in the workplace and elsewhere—to be controlled by mobile devices truly takes hold, there will be a wealth of opportunities for savvy manufacturers to profit from it. 

The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week or to contact the Tarifica Research department:  http://www.tarifica.com/contactus.aspx

Vodacom and Samsung Create Connected Police Car

Vodacom South Africa, in partnership with Samsung, has created what it calls the “police car of the future.” Each vehicle includes cameras that are capable of license-plate-number recognition. Connectivity is provided by 3G/4G technology via Vodacom’s fiber and microwave network. Information gathered by the cameras and shared via the mobile connection can be cross-referenced with databases such as those administered by South Africa’s Department of Transport and the Department of Home Affairs. Mobile printers will allow officers to issue summonses with information automatically populated from wirelessly linked databases. The cameras can send encrypted video footage, voice communications, instant messages and other data to a police command center in real time. The equipment can also be fitted to existing vehicles. We think it is extremely savvy of Vodacom to partner with Samsung to create this exclusive targeted offering. It combines the connected-car concept, which is gaining ground in many markets around the world, with the special security needs of law enforcement. While police vehicles in general already have computers and other devices on board that connect to mobile networks, the Vodacom-Samsung car comes already connected to one operator’s network in particular. By leveraging the advantages of the cameras and other technology, Vodacom intends to make sure that police departments in South Africa subscribe to its services rather than those of its competitors.

The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week :  Story Of The Week