Newsweek: We’re Surrounded by Billions of Internet-connected (IoT) Devices. Can We Trust Them?
by Adam Piore
In 2009, just as consumers had begun to buy wifi-enabled thermostats and front-door cams and other early devices that now make up the “Internet of Things,” computer scientist Ang Cui had gotten the idea to scan the Web for “trivially vulnerable” embedded devices.
By trivial, he meant those devices that still carried the usernames and pass codes programmed into them at the factory—obvious usernames like “name” and passcodes like “1234.” Many of these codes were published in manuals available freely on the internet and easily scanned automatically with computer programs, so there was no need even to guess.
When he did his scan, Cui found more than one million vulnerable, publicly accessible devices in 144 countries. From this sample, he estimated that about 13 percent of all devices connected to the internet were essentially unlocked doors, waiting for a hacker to walk through. Even more alarming, four months later 96 percent of those devices had the same security holes.
Cui’s warning was no less terrifying for its deadpan delivery: “Widely deployed and often mis-configured, embedded network devices constitute highly attractive targets for exploitation.”
In the decade since, the number of vulnerable devices connected to the internet has increased sevenfold. The explosion comes from growing demand, fueled by hype, for smart devices. Manufacturers are now tripping over themselves to embed just about every ordinary object, it seems, with tiny computers that happily communicate wirelessly with the world around them. In this “smart” revolution, virtually any device with an on/off switch or up/down button can be controlled remotely with a cellphone or voice sensor. Do you want to turn up the heat, dim the lights and run the dryer without getting up off the sofa—simply by uttering your desire to an Amazon Echo? Do you want your toaster to send a message to the television when the bagel has popped? Do you want your oven to inform you that the casserole has cooked for the prescribed 20 minutes at 350 degrees and is now cooling in the kitchen at 200? The Internet of Things can make all such things happen.
There’s a dark side to this wireless-driven revolution in convenience. The danger goes beyond hacking. Unlike the traditional “Internet of Computers,” which is confined to a circumscribed digital “virtual” world, the Internet of Things has a direct connection to the physical one. That opens up a disturbing set of questions: What might happen if the computers inside our new-fangled toaster ovens, security cameras or smart cities were turned against us? Can we really trust the Internet of Things? Most cybersecurity experts are unequivocal in their answer to that last question. “No,” says Ben Levine, senior director, product management, cryptography at Rambus, a Sunnyvale, CA-based technology company, specializing in the performance and protection of data. “My short answer, right now, is ‘no’.”
Unlike the “Internet of Computers,” which has been created largely by technicians with a background in information technology or computer science, many manufacturers making the devices now lack the expertise necessary to build airtight systems. Some don’t realize the importance of doing so. As a result, the possibilities for mischief seem endless—a fact Cui and other cybersecurity mavens have demonstrated on multiple occasions.
Is your vibrator cheating on you?
Some of the more creative of these exploits in recent months come from the lab of Alvaro Cardenas, who challenged his students at the University of Texas at Dallas last year to crack a wide array of IoT devices. Among other things, they managed to turn on and hijack a drone and demonstrate they could use it to attack an innocent victim, Kamikaze-style, or to stream video and audio of a neighbor. They hacked into a popular children’s toy—a small, talking dinosaur networked to the internet so it could receive updates. Then they demonstrated they could take over the toy and use it to insult the child, instigate inappropriate conversations (using the trusted voice of the toy) or tell the child what to do. They showed they could take control of internet-connected cameras to spy on households. They even identified the existence of “sensitive devices”—vibrators—sometimes used by overseas military personnel to have remote virtual relations with their partners. Not only were they able to obtain private usage information, they warned it was possible to impersonate a “trusted partner” and “commit remote sexual assault.”
Cardenas reported their findings to device manufacturers and the CERT Coordination Center, a federally funded non-profit R & D group that works with business and government to improve the security of the internet. Then he submitted a paper to IEEE, a professional association for electronic engineering and electrical engineering, which published their findings in a special issue this fall.
“These attacks show how IoT technologies are challenging our cultural assumptions about security and privacy and will hopefully motivate more emphasis on the security and privacy practices of IoT developers and designers,” they wrote. (After the paper was published, all the manufacturers responded and attempted to fix the vulnerabilities, except for the drone companies).
Force multiplier
By the end of 2018, more than 23 billion IoT devices had been installed globally. Many consumers buying these smart devices currently don’t bother to hook them up to their WiFi, which means they’re essentially offline and out of reach of hackers. But that may change as manufacturers continue to tout the benefits of connectivity. And the number of devices is expected to more than triple, to 75 billion, by 2025.
The sheer number of vulnerable devices gives hackers powerful leverage. The Mirai attack of 2016, which may have been inspired by Cui’s original paper, illustrates how dangerous the threat has grown. Paras Jha, a quiet, socially awkward college dropout from New Jersey, ran a lucrative business renting space on his own private computer server to fellow aficionados of the video-game Minecraft, so they could play privately with their friends. It sounds pleasant, but the business is cutthroat. A common tactic of Jha and his rivals was to hack into the home computers of unsuspecting people, hijack them with malware and instruct them to send torrents of unwanted messages and data to the machines of their rivals, overwhelming them and hopefully shutting them down—known as a Distributed Denial of Service Attack (DDoS). Unsuspecting customers, frustrated by the “unreliable” service, were then easy targets for poaching.
In 2016, Jha and two Minecraft friends he’d met online decided to do his rivals one better. They hacked not only desktop computers but also the myriad security cameras, wireless routers, digital video recorders, household appliances and other IoT devices. Like Cui before him, Jha and his friends wrote a program that scanned the internet to locate vulnerable devices. But unlike Cui, they actually planted malware on the machine and took control of them. Leveraged by the proliferation of smart devices, Jha’s zombie bot army grew faster than he could have imagined–by the end of the first day, he had appropriated 65,000 devices; by some estimates his zombie army reached 600,000.
The attack, nicknamed “Mirai” (“the future”) after a Japanese television series, was so powerful that Jha wasn’t content with taking down his small-fry Minecraft rivals. He also trained the new weapon on the huge French telecom provider OVH, which hosted a popular tool that his rivals relied on to defend themselves against his attacks. Eventually, the cops took notice. Jha was fined $8.6 million and 2,500 hours of community service working for the FBI.
Cui, now the 36-year-old founder and CEO of Red Balloon Security, often gives talks at hacker conferences wearing a tee-shirt, a bead necklace, and a man bun and makes a good living advising companies how to protect themselves in a hostile cyber-world. He continues to marvel at how little has been done to patch not just the vulnerability his paper identified but also many others that he believes could arguably cause even more damage. While the security firms serving large well-financed companies like those targeted in the Mirai attacks have come up with new ways to defend client servers against DDoS attacks, many manufacturers of IoT devices are doing little if anything to protect the rest of us from cyber mischief—not just zombie device conscription, but also spying, sabotage and exploits that security experts argue should raise profound privacy and safety concerns.
What accounts for the neglect, Cui believes, is a gold-rush mentality to grab market share in the burgeoning IoT device business. Over the last five years, the hype over IoT has become so hot that many VC-funded startups in the consumer-device field—and even some major manufacturers—are adding internet connectivity, rushing their products to market, and resolving to fix any security flaws later. Some haven’t even thought about security at all. “You have to put in the time and resources to care about security,” says Cui. “But there’s a lot of VC money, and they want to very quickly roll out a thing that has an IoT feature that they think the market might like.”
The money is primarily spent to develop new devices. “The problem at the moment is that there’s really no incentive for security,” Cardenas told Newsweek. “Security usually gets in the back burner of these products.” Most consumers aren’t aware of the dangers and aren’t demanding protection. And the device manufacturers are under no obligation to provide it.
In a lab at the Georgia Institute of Technology, Manos Antonakakis, an associate professor in the school of electrical and computer engineering, and research scientist Omar Alrawi, have also been probing the gaping security vulnerabilities of the emerging IoT. Antonakakis notes that while there’s a class of well-known vendors that “at least try to get the security right in some cases,” even large manufacturers are under pressure to rush new IoT products onto the current market. “It takes a lot of quality assurance and testing, and penetration analysis and vulnerability analysis to get it right,” he says. But the rush to market “comes into violent disagreements with proven security practices.”
Many of the largest tech companies have invested heavily in tapping into the market for “smart home” devices, one of the fastest growing areas for IoT devices. Amazon is among those dominating the market for smart hubs, along with Google, which purchased the digital thermostat maker Nest in 2014 for $3.2 billion. Google has since expanded it to become a digital hub that also includes smoke detectors and security systems like smart doorbells and locks. Samsung has the SmartThings hub, which it acquired in 2014 for $200 million, and now connects to air conditioners, washers and TVs. Apple has a home kit which can control any number of devices through voice commands delivered in range of its HomePod.
Gaping vulnerabilities
Once these systems are installed, devices from a growing number of companies can be added to the home network, including those made by well-known home appliance manufacturers like GE, Bosch and Honeywell. Belkin makes a line of connected appliances that includes a Crock-Pot WeMo Smart Slow Cooker, smart Mr. Coffee maker and a smart home humidifier. There’s a lot of money to be made. All told by the end of 2019, more than $490 billion in profits will have been earned on the nearly 2 billion consumer devices sold over the previous 12 months, according to the property management consulting firm iProperty Management.
To try to draw attention to the dangers—and the things consumers should be asking questions about when buying new IoT products—Antonakakis and Alrawi, in collaboration with researchers at the University of North Carolina at Chapel Hill, have developed a rating system and begun evaluating the security of a wide array of IoT devices. And surprisingly they found gaping vulnerabilities in devices and systems produced by even some of the most tech-savvy companies.
The vulnerability of IoT devices goes well beyond holes in password protection, the vulnerability exposed by the Mirai attack, they argue. IoT devices can also be accessed and taken over directly through the home network they are connected to, and that home network is only as strong as its weakest link. That means that even if each device comes with a unique password and username, it’s not necessarily secure. Once hackers find a way onto the home network through one vulnerable device, the path is often wide open to the rest of the network.
To secure an IoT device, they argue, manufacturers need to patch vulnerabilities in four different areas : direct access to the device itself, the mobile app used to run it, the way it communicates with its home network and, in many cases, the cloud-based server that manufacturers use to push out updates, collect user data, or provide new services.
Getting all that right is not easy. For a vendor to secure all four parts, Alrawi notes, it needs a good mobile-app developing team “that knows secure development,” a “system team that does very good embedded system development and secure development” and cloud experts who can design a secure cloud “backend” that allows the device to be managed without exposing it to additional risk. Finally, the device manufacturers need somebody who has network knowledge on how to build efficient and secure internet protocols and what protocols to avoid.
“They have to balance all this with usability,” he says “So you can see that this is already getting really hard to manage just mentally. When a startup team that comes up with this great idea wants to push a product to market, they’re usually a small team that doesn’t have all this expertise. But even with big vendors, some of these problems are really hard to pin down and manage.”
Indeed, while Antonakakis, Alrawi and their team give relatively high marks for device security to the mainstream products like the Amazon Echo and the Belkin Netcam, they gave them Cs, Ds, and Fs for network security—a measure of how protected these devices are from intruders who manage to access the home wireless network through other vulnerable devices. And while a number of devices associated with Google‘s Nest smart home products (like thermostats, smoke detectors, smart locks and doorbells) receive As and Bs for device and network security, they got Cs and Ds for mobile and cloud protections—meaning a resourceful hacker intent on say, unlocking the front door, could still access a home.
The cloud category is the most worrisome. Since many of these services are cloud based and connected to central company servers, if a determined, well-financed hacker—say, China, North Korea or Russia—were to use the same kind of sophisticated exploits they have used to bypass security on the traditional internet of computers, there’s no telling what they might do.
“You’re talking about getting access to potentially millions of people’s homes, and when that happens, think about all of the microphones and cameras and actuators that you have around your house, and multiply that out by all the people who use these things,” Cui says.
“Many consumers don’t fully understand the risks associated with installing some of these devices in their homes,” adds Alrawi.
Until they do, the situation is unlikely to change. Many experts wonder how big a price we will have to pay before that happens. “It’s a mess,” says David Kennedy, a cybersecurity expert who designs security for a wide array of manufacturers and has testified before Congress on the IoT. “An absolute mess. We’re going into this very blind, without a lot of security discussions around what the impacts are going to be to our lives and to our safety.”
Kennedy, whose current title is CEO of the company TrustedSec, has hacked into his share of devices over the years to make a point, including smart TVs, thermostats, smart fridges, robotic house cleaners and controllers that are connected to the energy grid. But Kennedy’s biggest concern at the moment is in the area of automotive safety.
There have already been some cautionary tales. In 2015, Fiat Chrysler had to issue a safety recall affecting 1.4 million vehicles in the United States so it could patch software vulnerabilities, after two security researchers hacked into the internet-connected entertainment system of a Jeep Cherokee carrying a magazine reporter, took control of the vehicle, blasted the radio and AC, then brought traffic to a standstill in the middle of a freeway.
The problem, says Kennedy, is that most cars have scores of different pieces of technology in them, many of which are connected directly to the internet to allow them to transmit data needed for preventive maintenance. But the manufacture of these different IoT devices is often subcontracted out to scores of different contractors, which makes it logistically difficult to provide security updates and patches when new security vulnerabilities are discovered. (He pointed to Tesla as the major exception because, he argues, it is “a software manufacturer first and car manufacturer second,” and thus knows how to build secure systems.)
The idea of regularly pushing out preventive security updates to patch newly discovered vulnerabilities in IoT-networked cars—a standard practice for products like Microsoft windows and the Apple iPhone—is new and has not yet been incorporated into the automotive industry. “I can’t talk about which car manufacturers I’ve done assessment work for, but I can tell you that I’ve worked for a number of them, and security practices need a lot of work,” he says. “They’re not pushing patches out to the cars, which makes them extremely vulnerable to specific attacks—everything from eavesdropping in your car to driving them off the road.”
The nightmare scenario is a mass fleet takeover, where a bad actor hacks different cars across the world to cause mass mayhem. “That’s definitely something that’s possible now with these interconnected cars, no question about it,” Kennedy says. “Someone will lose their life and then eventually they’ll kind of knee jerk into fixing the whole industry. I think that’s what it will take to change the mentality of car manufacturers.”
Lawmakers in some jurisdictions are beginning to wade into the murky waters of IoT regulation. In January, California will become the first state to implement an IoT security law. The bill, passed in 2018 with a January 2020 deadline, will require companies that make connected devices to equip them with “reasonable security features,” explicitly requiring that each device come with either a unique passcode or require the user to generate one before using the IoT device for the first time—taking aim at patching the vulnerability exploited so successfully in the Mirai exploit and the copycat attacks that have followed. Beyond that, however, the law seems to have been written to be purposely vague, allowing room for further state guidance in the future.
Cybersecurity experts have called on the Federal government in the U.S. to step in to regulate the industry. The U.S. House of Representatives last March introduced a bill, for the third session in a row, that would require the National Institute of Standards and Technology (NIST) in the U.S. Department of Commerce to develop recommended standards for IoT devices, and would assign the Office of Management and Budget (OMB ) the task of issuing guidance to agencies that aligns with NIST‘s requirements. The law would also require NIST to offer guidance on vulnerability disclosure and report on IoT cybersecurity threats.
Two and half years ago, NIST started a program to look at the issue and this past summer solicited public comment on a voluntary set of minimum “baseline” security functions that any internet capable device should offer, whether it is intended for consumers, businesses or federal agencies, says Katerina “Kat” Megas NIST program manager, Cybersecurity for Internet of Things.
Among them, every single device must have a unique number or identifier associated with it that shows up on the network, which would make it easy to locate quickly and unplug the source of any problems that arise—a feature that many IoT devices currently do not offer. Other features would manage access to each device through secure methods of user authentication; protect data by encrypting it; and provide secure updates and log cyber-events so investigators can track how problems develop.
Few experts have illusions these measures will solve the problem soon. The standards would be voluntary. And even if Congress were to enact laws mandating security standards, a profound security vulnerability would remain: users themselves.
“No matter how strong your system is, it’s only as strong as your weakest link—and the weakest link is always the human,” says Jason Glassberg, cofounder of Casaba Security, a leading cybersecurity firm. “The largest breaches, the largest attacks for the most part have not been because of some super significantly technical attack. It’s been because someone’s been fooled into giving up their credentials. They’ve been fooled into clicking on a link which installed malware or asked them to provide their password. And it certainly doesn’t change in the Internet of Things world.
Original article is at:
https://www.newsweek.com/2019/11/01/trust-internet-things-hacks-vulnerabilities-1467540.html
Verizon: strong wireless growth, 5G ultra wideband, relaunch of “5G Home” service, much more
Verizon reported Q3 net income of $5.3 billion, compared to $5.6 billion in the year-ago period. Total consolidated revenue came in at $32.89 billion versus $32.61 million a year ago.
The company, which is the #1 U.S. wireless telco (in subscribers) reported strong wireless growth in the third quarter. It added 615,000 postpaid (monthly contract) smartphones in Q3; and signed on 444,000 pay-as-you-go prepaid customers. Wireless revenue for the quarter was $23.6 billion.
CEO Hans Vestberg said on the earnings call:
And as you can see in our operation performance, we had a really good quarter when it comes to wireless additions here, one of the best quarter — third quarter we had in several years.
The company has deployed its 5G Ultra Wideband (its 5G mobile service) in 15 markets and is committed to deploy it in 30 markets by year-end.
Verizon has relaunched its fixed wireless “5G Home” fixed wireless broadband service in Chicago, using the 3GPP 5G New Radio release 15 spec, rather than the Verizon proprietary fixed 5G specification used for the initial launch in October 2018. Verizon said that maximum download speeds via 5G Home remains at 1 Gbit/s, with 300 Mbit/s as the promised minimum speed.
“It’s a new business model,” Verizon CEO Hans Vestberg said on Friday’s call. “Now we have it on the global standard [1], and now we have it on the self-install.”
Note 1. Once again, Vestberg is confused. 3GPP Release 15 (and any other 3GPP spec) is NOT a standard.
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Vestberg on the earnings call:
We’re also doing a lot of things in One Fiber, continue to have a very high pace in that. And that One Fiber is so important for our overall Intelligent Edge Network that we are deploying in the company in order to realize the market-purpose network to gain all the efficiencies and serve our customers even better over time. So in short, a lot of progress in the network.
We continue to deploy also 5G Ultra Wideband in stadiums especially now with NFL, 13 stadiums when the season kicks off having 5G coverage. This is important for us because it’s part of the dense urban areas where you have a lot of viewers at the same time when really our 5G is coming to excel. Because of the 5G build that we’re doing with our assets is — we’re making a real big difference here.
We’re going to launch the first 5G mobile edge compute center in the fourth quarter. (Verizon is) engaging much more with large enterprises because with the 5G platform and 8 currencies, we are now a lot of interactions. We announced in this quarter, for example, collaboration with SAP, Corning. All of them are use cases for the 5G mobile edge compute. So we’re excited all that opportunity we’re creating with the 5G mobile edge compute with the largest companies in the market.
CFO Matt Ellis on Verizon FioS and Business/Enterprise segments:
Fios Internet net additions of 30,000 were relatively flat sequentially and down year-over-year. Fios Video results continued to be impacted by the ongoing shift away from linear video offerings with losses of 67,000. Our customers see value in our high-quality broadband offering paired with multiple choices for video through linear TV bundles or over-the-top options, such as YouTube TV and the recently announced Disney+.
Business wireless volumes remain strong with a 12% increase in gross adds for the quarter primarily within small and medium business and public sector. Postpaid net adds were 408,000 compared to 364,000 in the prior year. This includes 205,000 phones, 112,000 tablets and 91,000 other connected devices. Our continued strong customer loyalty across the Business segment led to phone churn of 0.98%, which is relatively flat sequentially and up slightly over the prior year. Total postpaid churn of 1.22% was up 5 basis points compared to the prior year. Total postpaid device activations were up 5.7% while our retail postpaid upgrade rate was 4.5% versus 4.8% in the prior year.
From a customer group perspective, global enterprise revenues declined 2.4%, driven by legacy pricing pressure and technology shifts. Wholesale revenues declined by 13.7% driven by price compression and volume declines, which we expect to continue in a highly competitive marketplace. Small and medium business revenue increased 6.2% driven by wireless service and Fios growth, partially offset by ongoing declines in traditional data and voice services. Public sector and other revenue increased 1.2% as a result of growth in wireless and wireline products and services.
Vestberg, answering a question from Timothy Horan:
Hans, can you give us maybe some more thoughts what you think people are going to do with gigabit speeds instead of megabits? When we rolled out 4G, we had a lot of new innovative kind of applications. Just any thoughts on that as you’re talking to the Fortune 500 companies. And are there ways for you maybe to participate in some of the revenue from some of these new applications with lower — also maybe lower latency? Just any more thoughts what you’re seeing on use cases.
Vestberg’s reply:
5G Home is a totally new way how we use the technology, which we have never been able to do before because a stand-alone fixed wireless access can never be sustainable financially. In this case, it is.
Then of course when you think about the 8 currencies coming out from 5G, I think that our conversation with the large enterprises today is a lot about the latency and the mobile edge compute. Because suddenly, you can transform your factory with robotics by having a low latency. You don’t need a wired factory, so the future digital factory will have 5G. We see also much bigger 5G private networks, where you get security much higher because it’s going to be your network. You define your network, you have a compute and storage for your enterprise. This is a new way of charging and actually interacting with our customer. And sometimes, there’s going to be a software in between that come from a software company, so we need to work with them as well.
And as I said earlier, I mean this quarter, we’re going to launch our first 5G mobile edge compute center. So we are on the path of doing this, which actually will add more opportunity. Then on the Consumer side, which usually question starts with, which are now end with because I see so many other opportunities, is of course AR/VR. We see now quite a lot of money coming into the ventures side when it comes to 5G innovation. And I think that as we move into 2020, we’re going to see much more. We have our 5G challenge, which we announced at CES where we had a lot of companies participate what they’re going to do with 5G. It ranged from everything what they can do with 5G.
I think we’re at the moment of 4G, but way bigger. When 4G came, I didn’t know what type of application and new service companies would show up. I think this is far bigger that we’re standing in front of right now, and we have much more insights to it as well.
We close with a Verizon assessment from Phillip Leasure:
Verizon has continued to engage in conservative and well thought out initiates compared to the excitement and drama of its competitors. It has not recently engaged in any historic mergers, it has not made any large corporate purchases to try to move into new sectors and it has fended of lower-priced competitors and continued to add subscribers. It has made smaller investments and purchases designed to strategically enhance the future of the business. It is clearly the market dominator in its sector and for the most part, has continued to focus on its core business and engage in competitive deals with other content creation companies to provide services rather than try to buy out content creators to provide services to their customers. So far this has helped them avoid taking on excessive levels of debt and held margins steady. We’ll see if this continues to be a winning strategy going forward for the top dog of telecommunications.
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Nokia: 5G Costs Hit Q1 Outlook as Shares Crash and Dividend Suspended
We’ve strongly warned for some time that making money in 5G will be extremely difficult until the core IMT 2020 standards (radio and non radio aspects) are complete and widely implemented. Today we heard proof of that from Nokia:
“Some of the risks that we flagged previously related to the initial phase of 5G are now materializing,” Nokia CEO Rajeev Suri said, noting that its third-quarter gross margin was impacted by the “high cost level associated with our first generation 5G products.”
“Competitive intensity has increased in some accounts as some competitors seek to take share in the early stage of 5G,” Nokia said in a statement. Yet the company said it has 48 commercial 5G deals and has launched 15 live (pre-standard) 5G networks. It’s telco customers include Sprint, Verizon, AT&T, and T-Mobile in the U.S.
China has been a disappointment for Nokia, too. Greater China made up 8% of Nokia’s net sales in the third quarter, the company said Thursday. But revenue from the region fell by 21% from the year-earlier period.
Nokia shares had one of their worst days ever on Thursday after the Finnish telecom equipment maker reduced its profit outlook to reflect the costs of developing 5G products. The stock fell by -24% to $3.87 — the largest drop since 1991 — as Nokia also disclosed in its third-quarter earnings release that it would not be paying a dividend for that quarter and the fourth quarter in part to “guarantee Nokia’s ability to increase 5G investments.”
The elimination of Nokia’s dividend contradicted what the company said about dividends on its website to attract investors:
The dividend is the principal method of distributing earnings to shareholders. Over the long term, Nokia targets to deliver an earnings-based growing dividend by distributing approximately 40% to 70% of non-IFRS diluted EPS, taking into account Nokia’s cash position and expected cash flow generation.
Instead of paying a dividend, the company wants to use its cash to increase its 5G investments, strengthen its cash position, and invest in strategic areas such as software. The company expects to start paying dividends again after it reaches a cash balance of 2 billion euros.
Nokia reduced its earnings forecast this year from an operating margin of 9-12 per cent to one of 8.5 per cent, plus or minus one percentage point. For next year, it slashed its estimate of a 12-16 per cent operating margin to 9.5 per cent, plus or minus one percentage point.
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It will take much longer than most pundits believe to realize to monetize the potential and make a decent profit from 5G!
AJW Comment: We are at the start of the 5G transition and Nokia appears to be having the usual problems of refining and finding cost efficiencies in its technology in its first iterations. Gross margins were hit by “a high cost level associated with our first generation 5G products” combined with “pricing pressure in early 5G deals” as it has been limited in what it can charge for the next-generation equipment by competition for those key first customer wins. There are also “profitability challenges in China,” where there has been patriotic domestic buying and support of Huawei 5G equipment by the three state owned telcos. Also, the proposed (but not consummated) merger of Sprint and T-Mobile in the U.S. is causing uncertainty on future demand in one of Nokia’s main early markets for 5G where the company largely competes only with Ericsson (as Huawei has been shout out of the U.S. telecom equipment market, except for earlier sales to rural wireless carriers).
Nokia is the world’s second-largest telecom gear maker by market share, but way behind #1 Huawei. Ericsson is #3 (see Positive Note below).
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From Nokia’s 3rdQ-2019 earnings statement:
The overall decrease in Nokia gross profit in the first nine months of 2019 was primarily due to lower gross margin in Networks. We experienced relatively high 5G product costs in Networks, as well as elevated levels of deployment services, consistent with being in the initial phase of 5G. This was partially offset by lower costs related to network equipment swaps, net sales growth in both Networks and Nokia Software, as well as higher gross margin in Nokia Software. In the first nine months of 2019, Nokia gross profit benefited from lower incentive accruals.
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From the company’s 3rdQ-2019 slide presentation:
Key drivers of Nokia’s outlook-
Net sales and operating margin for Networks and Nokia Software are expected to be influenced by factors including:
• Our expectation that we will perform approximately in-line with our primary addressable market in full year 2019 and full year 2020, as we further prioritize profitability and cash, while continuing to drive growth in our Nokia Software and Nokia Enterprise businesses. (This is an update to earlier commentary to outperform our primary addressable market in full year 2019 and over the longer-term.) On a constant currency basis, we expect our primary addressable market to grow slightly in full year 2019, and for growth to continue in full year 2020;
• Competitive intensity has increased in some accounts as some competitors seek to take share in the early stage of 5G, which is particularly impacting Mobile Access. (This is an update to earlier commentary that competitive intensity could increase);
• Additional 5G investments focused on accelerating our product road maps and cost competitiveness. Investment areas include System on Chip based 5G hardware, including diversifying and strengthening the related supplier base (new commentary);
• Additional digitalization investments focused on driving automation and productivity, including further simplification of IT tools and operational processes (new commentary);
• Temporary capital expenditure constraints in North America related to customer merger activity, as well as other potential mergers or acquisitions by our customers (This is an update to earlier commentary for potential mergers or acquisitions by our customers);
• The timing of completions and acceptances of certain projects, particularly related to 5G. Based on the evolving readiness of the 5G ecosystem and the staggered nature of 5G rollouts in lead countries, we expect full year 2019 will have seasonality characterized by a particularly weak first quarter, a strong second quarter, a solid third quarter and an expected strong fourth quarter (This is an update to earlier commentary for an expected soft third quarter and an expected particularly strong fourth quarter);
• Some customers are reassessing their vendors in light of security concerns, creating near-term pressure to invest in order to secure long-term benefits;
• Our expectation that we will improve our R&D productivity and reduce support function costs through the successful execution of our cost savings program;
• Our product and regional mix, including the impact of the high cost level associated with our first generation 5G products (This is an update to our earlier commentary, providing additional details); and
• Macroeconomic, industry and competitive dynamics.
On a positive note: “As I look to the future, it is clear to me that Nokia has some unique advantages,” Suri said, citing “a powerful, end-to-end portfolio that allows us to benefit from 5G investments across all network domains.”
Nokia’s dismal earnings report contrasts with that of rival Ericsson which last week beat quarterly earnings expectations and lifted its market forecast for this year and its sales target for 2020. The Swedish firm said demand for (pre-standard) 5G networks was robust: “5G is taking off faster than earlier anticipated,” CEO Börje Ekholm said in an earnings statement. The Swedish telecom equipment company said it had signed 27 commercial 5G contracts.
Other Voices:
Some analysts had thought that Nokia would benefit from the pressure on Huawei. But the disappointing results published Thursday were driven primarily by weakness in the division responsible for rolling out 5G.
“The report was a major disappointment … outlook was cut across the board reflecting the company’s continuing stumbles as the new cycle of network market is starting to take off,” Inderes analyst Mikael Rautanen said in a note to clients.
“This is all very disappointing,” said Lee Simpson, an analyst at Jefferies. “There is something almost embarrassingly irrelevant about the Nokia story now.”
“He has been in the position now for over five years and is still struggling to put in place a sustainable, comprehensive set of results and targets,” sad Neil Campling of Mirabaud Securities.
References:
https://www.nokia.com/system/files/2019-10/nokia_results_2019_q3.pdf
https://www.nokia.com/system/files/2019-10/nokia_slides_2019_q3.pdf
T-Mobile US to cover 200M in U.S. using 600MHz spectrum; OnePlus 7T Pro 5G McLaren smartphone exclusive deal
T-Mobile US plans to cover 200 million people with its 5G network by the end of this year, using 600 MHz spectrum. The “Un-carrier” said it has been working towards the launch of 5G using 600 MHz for the past two years, and will be deploying 5G-ready equipment for both indoors and outdoors.
To date, T-Mobile US has thousands of 5G-ready towers and cell sites capable of lighting up 5G on 600 MHz spectrum, and no other 5G signal will be as strong or as reliable for broad coverage. That means T-Mobile’s nationwide 5G network will be able to cover more people in more places and work indoors and out, unlike the competitors current 5G networks which can be blocked by things like walls, glass and leaves.
T-Mobile says their 5G network operating on 600 MHz spectrum is just the start of the journey to 5G and provides a critical low-band foundation. Together with Sprint, the New T-Mobile will have the ability to add critical depth with mid-band spectrum for broad coverage and performance as well as mmWave spectrum for hotspot-like coverage in dense urban areas. Only this combination will deliver a 5G network with both breadth and depth, something the carriers simply cannot do as quickly. The stakes are high for the U.S., as billions in economic growth and jobs are expected to come from 5G and the innovations it will unleash.
Observation: By deploying 5G on low band spectrum this year, T-Mobile US will be well ahead of AT&T, which has recently promised to launch 5G on its unspecified low band spectrum (probably 700MHz) by the middle of 2020.
T-Mobile CTO Neville Ray said in April that the Un-carrier would provide speeds of 60 Mbit/s to 70 Mbit/s using 5G in the 600MHz band. He said that would be roughly double the speeds the operator currently provides on its 600MHz spectrum with its 4G LTE network.
Mike Dano of Light Reading had this to say about T-Mo’s 5G on 600 MHz announcement:
T-Mobile’s lowband 5G network won’t provide speeds anywhere near the 1 Gbit/s peak speeds that Verizon is providing with its 5G network over millimeter-wave (mmWave) spectrum. Nor are those speeds nearly as fast as the roughly 500 Mbit/s peak speeds that T-Mobile is already providing on a mmWave 5G network the operator launched this summer in parts of six cities.
However, the key element of T-Mobile’s launch of 5G in its 600MHz spectrum is that it will reach across major portions of the US population. That’s because transmissions in 600MHz spectrum can cover large geographic distances, while transmissions in mmWave spectrum can’t go more than a few thousand feet. The tradeoff, though, is capacity and speeds: mmWave 5G can handle enormous amounts of data, while lowband 5G can’t.
Once again, we warn readers that none of the spectrum that’s being used for pre-standard (IMT 2020) commercial services have been approved by the ITU-R for 5G. That will only happen after WRC 19 has concluded as per this recent WRC 19 Preview article. Also note that mmW 5G will require line of sight transmission and many more small cells due to limited reach so will be restricted to dense urban areas.
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In the same T-Mobile US press release, OnePlus announced its OnePlus 7T Pro 5G McLaren smartphone, which it will be providing exclusively in the United States with T-Mobile US. The limited edition McLaren phone will have a 6.67 inch Fluid Display, a 90 Hz refresh rate, three cameras including a 48 MP main one, 3X optical zoom and a 117 degree Ultra-Wide-Angle lens. The 4085 mAh battery will come with Warp Charge 30T, for a full charge in one hour. Finally, the phone case will be made of Alcantara, a composite fabric material made to be soft, durable and very gripable. Pricing will be provided later this year, as will availability dates.
“At OnePlus we believe that 5G is the future,” said Pete Lau, CEO and Founder of OnePlus. “T-Mobile has always been a great partner, and T-Mobile’s expansive 5G network on the 600 MHz spectrum makes it the perfect opportunity for us to exclusively launch the OnePlus 7T Pro 5G McLaren in the United States,” he added.
The OnePlus 7T Pro 5G McLaren will launch exclusively at T-Mobile and take advantage of the Un-carrier’s 5G network
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Separately, T-Mobile US has launched a new campaign against Verizon, highlighting how the rival operator charges more for 5G but has limited coverage. The ‘VerHIDEzon’ campaign points out how Verizon does not provide customers with maps of its 5G coverage.
The campaign will run online and outdoors, including on T-Mobile’s Times Square display in New York city. It also promotes T-Mobile’s pledge to bring 5G to all of the US if its merger with Sprint goes ahead.
References:
https://www.t-mobile.com/news/oneplus-7t-pro-5g
To learn more about the new OnePlus 7T Pro 5G McLaren at T-Mobile, please visit https://www.t-mobile.com/devices/5g-phones. For more about T-Mobile’s 5G network, visit www.t-mobile.com/coverage, and to learn more about the proposed T-Mobile/Sprint merger, visit www.NewTMobile.com.
Spain has almost 10M FTTH lines installed; Global FTTH market to grow to $16.8 billion at 15% CAGR
Spain is likely to have 10 million FTTH lines by the end of the year. A total of 112,000 fiber to the home (FTTH) lines were added in Spain in August to increase the number of active connections in the country to 9.6 million, according to the latest monthly update from regulator CNMC. Fiber lines rose by 1.8 million year on year, offsetting a 1.2 million decline in DSL lines, said the watchdog. HFC lines totalled 2.3 million, down around 147,000 year on year, bringing the fixed broadband total to 15.03 million, up from 14.56 million a year earlier.
Nearly 4 in 10 (39.88%) of fixed broadband lines correspond to Telefonica, which gained around 1,700 in August. The Masmovil group once again topped the monthly net fixed broadband ranking, adding 30,400 lines in August to reach 39.88% percent of the market, while Orange (26.2%) returned to growth with a 2,400 monthly gain. Vodafone (20.9%) shed a net total of 8,300 lines, with all the other operators attracting 2,900 more lines to reach 4.4 percent of the market.
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According to a new ResearchAndMarkets.com’s report -“Fiber-to-the-Home/Building (FTTH/B) – Market Analysis, Trends, and Forecasts,” the Fiber-to-the-Home/Building (FTTH/B) market worldwide is projected to grow by US$16.8 Billion, driven by a compounded growth of 15%.
50 to 100 Mbps, one of the segments analyzed and sized in this study, displays the potential to grow at over 15.8%. The shifting dynamics supporting this growth makes it critical for businesses in this space to keep abreast of the changing pulse of the market. Poised to reach over US$15.6 Billion by the year 2025, 50 to 100 Mbps will bring in healthy gains adding significant momentum to global growth.
The United States will maintain a 13.3% growth momentum. Within Europe, which continues to remain an important element in the world economy, Germany will add over US$651.3 Million to the region’s size and clout in the next 5 to 6 years. Over US$543 Million worth of projected demand in the region will come from Rest of Europe markets. In Japan, 50 to 100 Mbps will reach a market size of US$781.6 Million by the close of the analysis period. China exhibits the potential to grow at 19.2% over the next couple of years and add approximately US$4.1 Billion in terms of addressable opportunity for the picking by aspiring businesses and their astute leaders.
Top Key Players: China Telecom., China Mobile Ltd., Verizon Communications Inc., AT&T Inc., Vodafone Group plc, Nippon Telegraph & Telephone Corporation, Softbank Group Corp., Deutsche Telekom AG, Telefonica S.A., America Movil
For more information about this report visit https://www.researchandmarkets.com/r/o3hlvj
A similar, if not identical report is available from: https://www.theresearchcorporation.com/enquiry-before-buying.php?id=39505
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References:
https://www.telecompaper.com/news/spain-hits-96-million-active-ftth-lines-in-august–1312974
Preview of WRC‑19: Enabling Global Radiocommunications via Radio Frequency Spectrum and Satellite Orbit Resources
By Mario Maniewicz, Director of the ITU Radiocommunication Bureau
The ITU’s upcoming World Radiocommunication Conference 2019 (WRC‑19) will play a key role in shaping the technical and regulatory framework for the provision of radiocommunication services in all countries, in space, air, at sea and on land. It will help accelerate progress towards meeting the Sustainable Development Goals (SDGs). It will provide a solid foundation to support a variety of emerging technologies that are set to revolutionize the digital economy, including the use of artificial intelligence, big data, the Internet of Things (IoT) and cloud services.
“The World Radiocommunication Conference, which opened today (October 28th), will address some of the leading-edge technological innovations set to play a pivotal role in tomorrow’s digital economy and the future development of services, systems and technologies,” said ITU Secretary-General Houlin Zhao, noting that digital inclusion provides the chance to improve the lives of millions across the world. “A transformative revolution in connectivity is in the making with immense implications for the trillion-dollar telecommunication and ICT industry and in advancing many of the United Nations SDGs.”
Every three to four years the conference revises the Radio Regulations (RR), the only international treaty governing the use of the radio-frequency spectrum and satellite orbit resources. The treaty’s provisions regulate the use of telecommunication services and, where necessary, also regulate new applications of radiocommunication technologies.
The aim of the regulation is to facilitate equitable access and rational use of the limited natural resources of the radio-frequency spectrum and the satellite orbits, and to enable the efficient and effective operation of all radio communication services.
WRC‑19 will be held in Sharm El-Sheikh, Egypt, from 28 October to 22 November 2019 and its agenda covers a wide range of radio- communication services (see examples at the end of this article).
The preparations for the conference include studies and discussions that take place in the ITU–R Study Groups, the Conference Preparatory Meeting, the ITU inter-regional workshops, and also within the regional groups. The very nature of the process and study cycle helps build consensus and facilitates the work of the conference, where final decisions are made. See the infographic for more information on the preparatory process.
Each World Radiocommunication Conference affects the future development of information and communication technologies (ICTs) in many ways, including:
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- Introducing and expanding access to the radio spectrum for new radiocommunication systems and applications;
- Protecting the operation of existing radiocommunication services and providing the stable and predictable regulatory
environment needed for future investments; - Avoiding the potential for harmful interference between radio services;
- Allowing the provision of high-quality radiocommunications while protecting vital uses of the radio spectrum, particularly for distress and safety communications; and
- Facilitating international roaming and increasing economies of scale, thereby making it possible for network and user
devices to be more affordable.
2nd ITU Inter-regional Workshop on WRC-19 Preparation
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Currently, billions of people, businesses, and devices are connected to the Internet. ICTs are transforming each and every aspect of our lives, from the way people interact and communicate to the way companies do business.
People expect instantaneous high-quality connectivity, whether stationary or on-the-move, in their homes or outside in a crowd.
Companies search for new ways to increase their business and operational efficiency, whether by monitoring the condition of equipment and conducting predictive maintenance, or by monitoring customer data to offer personalized solutions. The increasing need for a new underlying ecosystem will be made possible by utilizing a variety of complementary terrestrial and satellite technologies/services.
The fifth generation of mobile technology, International Mobile Telecommunications (IMT) 2020 (5G) promises to enhance the connectivity infrastructure that delivers high-speed networks to end users, carries the flow of information from billions of users and IoT devices, and enables a whole array of services to different industry verticals. Spectrum for 5G services will be one of the main topics of WRC‑19. More specifically, new allocations will be considered for the mobile service and identification for IMT of frequencies in the mm Wave bands (above 24 GHz).
In addition, satellite services aim at increasing connectivity, whether by providing access to broadband communications to unserved rural communities, or to passengers on aircrafts, on ships and on land, or by expanding backhaul of terrestrial networks.
WRC‑19 will address fixed and mobile satellite services, earth stations in motion, and will revise the assignment procedures pertaining to satellite networks.
Leveraging the economic opportunities brought by technology should be possible not only for some, but for all. One target of SDG No. 9 is to increase access to ICTs and strive to provide universal and affordable access to the Internet in least-developed countries by 2020.
Fortunately, new technological innovations support this goal. They aim at expanding broadband connectivity and telecommunication services to least-developed countries, underserved communities, rural and remote areas, including mountainous, coastal and desert areas.
Towards this end, WRC‑19 will consider spectrum for High-Altitude Platform Systems (HAPS) and will revise the regulatory framework for Non-Geostationary Satellite Systems (non-GSO). HAPS, operating in the stratosphere, can be used to provide fixed broadband connectivity for end users, and backhaul for mobile networks, thus increasing the coverage of these networks.
Constellations of non-GSO satellites aim at improving quality, increasing the capacity and reducing the costs of satellite services, which should enable satellite operators to bring market solutions that increase access to connectivity.
These are times of transformation, but also of uncertainty. The number of natural disasters have increased considerably in the last decades: hurricanes, earthquakes, storms, floods, and fires. Climate change is a reality: we are experiencing heatwaves, and observing long-lasting glaciers melt.
Taking this into account, SDG No. 13 on climate action targets to strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries. To reach this target, several radiocommunication services offer the solution required to monitor, mitigate and adapt to these events.
Satellite communications, and in particular space sensing and Earth observation systems are used to monitor the state of the oceans and the conservation of forests. They can detect natural disturbances in the state of the atmosphere and provide accurate climate predictions.
Radiocommunication services are a crucial accelerator towards the achievement of all the SDGs in both developed and developing countries.
Other radiocommunication systems are also used to collect and transmit data related to weather conditions (humidity, rainfall rates etc.), for example IoT systems and radars. These sources of information form the critical mass needed to detect climate-related hazards.
Broadcasting and broadband services provide early warning to the population which reduces the impact of natural and environmental disasters by strengthening the resilience and increasing adaptive capacity.
Amateur radiocommunication services, among others, assist relief operations especially when other services are still not operational. More recently, HAPS have also been deployed to rapidly deliver services with minimal ground network infrastructure in disaster-relief missions.
WRC‑19’s decisions will affect services of utmost importance in these times of transformation and uncertainty. They will allow us to harness the power of ICTs to overcome the challenges and seize the opportunities of today’s digital economy.
Radiocommunication services are deeply transforming the health, education, and transportation sectors. They are improving financial inclusion, increasing transparency and supporting accountable institutions, promoting sustainable agriculture, helping to preserve life in the air, at sea and on land. They are a crucial accelerator towards the achievement of all the SDGs in both developed and developing countries.
The four year preparation cycle leading to the WRC, the high-level of commitment of participants from governments and industry, done through arduous work and extensive international negotiations, both in the preparatory pro‑ cess and during the WRC‑19, will culminate in the signing of the WRC‑19 Final Acts and revising the Radio Regulations — the invaluable international treaty that is the foundation for rational, efficient and economical use of the radio-frequency spectrum, enabling radiocommunication technology developments since the start of radiocommunications, 113 years ago.
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Backgrounder:
WRCs review the way radio spectrum is organized around the world, bringing together governments to negotiate and agree on the relevant modifications to the RR and commit to them. The preparatory process of WRCs involves extensive studies and preparatory discussions among all stakeholders (equipment makers, network operators, industry forums and users of spectrum) at national, regional and worldwide levels. Many of these stakeholders also serve as members of national delegations at the conference itself. This multi-stakeholder approach enables the necessary consensus to be built to ensure that WRCs maintain a stable, predictable and universally applied regulatory environment which secures long-term investments for a multi-trillion dollar industry.
The four-week program of a WRC includes the review and update of the global technical, operational and regulatory provisions that govern the use of the radio-frequency spectrum for terrestrial and satellite applications. In conducting its activities, the conference attempts to cast a proper balance:
- between the need for worldwide harmonization (to benefit from economies of scale, connectivity and interoperability) and the need for flexibility in spectrum allocations,
- between the need to accommodate new and innovative systems, applications and technologies as they arise and the need to protect existing radiocommunication services, including from non-radio equipment and appliances.
References:
https://news.itu.int/wrc‑19-enabling-global-radiocommunications-for-a-better-tomorrow/
Synergy Research Group: Hyperscale Data Center Count > 500 as of 3Q-2019
New data from Synergy Research Group shows that the total number of large data centers operated by hyperscale providers increased to 504 at the end of the third quarter, having tripled since the beginning of 2013. The EMEA and Asia-Pacific regions continue to have the highest growth rates, though the US still accounts for almost 40% of the major cloud and internet data center sites.
The next most popular locations are China, Japan, the UK, Germany and Australia, which collectively account for another 32% of the total. Over the last four quarters new data centers were opened in 15 different countries with the U.S., Hong Kong, Switzerland and China having the largest number of additions. Among the hyperscale operators, Amazon and Microsoft opened the most new data centers in the last twelve months, accounting for over half of the total, with Google and Alibaba being the next most active companies. Synergy research indicates that over 70% of all hyperscale data centers are located in facilities that are leased from data center operators or are owned by partners of the hyperscale operators.
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Backgrounder:
One vendor in the data center equipment space recently called hyperscale “too big for most minds to envision.” Scalability has always been about creating opportunities to do small things using resources that happen to encompass a very large scale.
IDC, which provides research and advisory services to the tech industry, classifies any data center with at least 5,000 servers and 10,000 square feet of available space as hyperscale, but Synergy Research Group focuses less on physical characteristics and more on “scale-of-business criteria” that assess a company’s cloud, e-commerce, and social media operations.
A hyperscale data center is to be distinguished from a multi-tenant data center as the former is owned and operated by a mega cloud provider (Amazon, Microsoft, Google, Alibaba, etc) while the latter is owned and operator by a real estate company that leases cages to tenants who supply their own IT equipment.
A hyperscale data center accomplishes the following functions:
- Maximizes cooling efficiency. The largest operational expense in most data centers worldwide — more so than powering the servers — is powering the climate control systems. A hyperscale structure may be partitioned to compartmentalize high-intensity computing workloads, and concentrate cooling power on the servers hosting those workloads. For general-purpose workloads, a hyperscale architecture optimizes airflow throughout the structure, ensuring that hot air flows in one direction (even if it’s a serpentine one) and often reclaiming the heat from that exhaust flow for recycling purposes.
- Allocates electrical power in discrete packages. In facilities designed to be occupied by multiple tenants, “blocks” are allocated like lots in a housing development. Here, the racks that occupy those blocks are allocated a set number of kilowatts — or, more recently, fractions of megawatts — from the main power supply. When a tenant leases space from a colocation provider, that space is often phrased not in terms of numbers of racks or square footage, but kilowatts. A design that’s more influenced by hyperscale helps ensure that kilowatts are available when a customer needs them.
- Ensures electricity availability. Many enterprise data centers are equipped with redundant power sources (engineers call this configuration 2N), often backed up by a secondary source or generator (2N + 1). A hyperscale facility may utilize one of these configurations as well, although in recent years, workload management systems have made it feasible to replicate workloads across servers, making the workloads redundant rather than the power, reducing electrical costs. As a result, newer data centers don’t require all that power redundancy. They can get away with just N + 1, saving not just equipment costs but building costs as well.
- Balances workloads across servers. Because heat tends to spread, one overheated server can easily become a nuisance for the other servers and network gear in its vicinity. When workloads and processor utilization are properly monitored, the virtual machines and/or containers housing high-intensity workloads may be relocated to, or distributed among, processors that are better suited to its functions, or that are simply not being utilized nearly as much at the moment. Even distribution of workloads directly correlates to temperature reduction, so how a data center manages its software is just as important as how it maintains its support systems.
References:
https://www.zdnet.com/article/how-hyperscale-data-centers-are-reshaping-all-of-it/
https://www.vxchnge.com/blog/rise-of-hyperscale-data-centers
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Synergy’s research is based on an analysis of the data center footprint of 20 of the world’s major cloud and internet service firms, including the largest operators in SaaS, IaaS, PaaS, search, social networking, e-commerce and gaming. The companies with the broadest data center footprint are the leading cloud providers – Amazon, Microsoft, Google and IBM. Each has 60 or more data center locations with at least three in each of the four regions – North America, APAC, EMEA and Latin America. Oracle also has a notably broad data center presence. The remaining firms tend to have their data centers focused primarily in either the US (Apple, Facebook, Twitter, eBay, Yahoo) or China (Alibaba, Baidu, Tencent).
“There were more new hyperscale data centers opened in the last four quarters than in the preceding four quarters, with activity being driven in particular by continued strong growth in cloud services and social networking,” said John Dinsdale, a Chief Analyst and Research Director at Synergy Research Group.
“This is good news for wholesale data center operators and for vendors supplying the hardware that goes into those data centers. In addition to the 504 current hyperscale data centers we have visibility of a further 151 that are at various stages of planning or building, showing that there is no end in sight to the data center building boom.”
Reference:
https://www.srgresearch.com/articles/hyperscale-data-center-count-passed-500-milestone-q3
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About Synergy Research Group:
Synergy provides quarterly market tracking and segmentation data on IT and Cloud related markets, including vendor revenues by segment and by region. Market shares and forecasts are provided via Synergy’s uniquely designed online database tool, which enables easy access to complex data sets. Synergy’s CustomView ™ takes this research capability one step further, enabling our clients to receive on-going quantitative market research that matches their internal, executive view of the market segments they compete in.
Synergy Research Group helps marketing and strategic decision makers around the world via its syndicated market research programs and custom consulting projects. For nearly two decades, Synergy has been a trusted source for quantitative research and market intelligence. Synergy is a strategic partner of TeleGeography.
To speak to an analyst or to find out how to receive a copy of a Synergy report, please contact [email protected] or 775-852-3330 extension 101.
Gartner: 5G IoT endpoints to triple between 2020 and 2021; Surveillance cameras to be largest market over next 3 years
Executive Summary:
After 3GPP release 16 has been completed and included in IMT 2020 RIT/SRIT, 5G networks will offer ultra-reliable, ultra-low-latency and high-bandwidth capabilities. That will open up new enterprise market opportunities for communications service providers/wireless network operators. Therefore, understanding the future market is key to an effective strategy. Gartner Inc. says that IoT use cases like surveillance cameras and connected cars will offer the biggest markets for 5G IoT.
| Segment | 2020
Volume |
2020
Market Share (%) |
2023
Volume |
2023
Market Share (%) |
| Connected cars — embedded (consumer and commercial) |
393 |
11 |
19,087 |
39 |
|
Outdoor surveillance cameras |
2,482 |
70 |
15,762 |
32 |
|
Fleet telematics devices |
135 |
4 |
5,146 |
11 |
|
In-vehicle toll devices |
50 |
1 |
1,552 |
3 |
|
Emergency services |
61 |
2 |
1,181 |
2 |
|
Others |
400 |
11 |
5,863 |
12 |
|
Total |
3,522 |
100 |
48,590 |
100 |
Due to rounding, figures may not add up precisely to the totals shown
Source: Gartner (October 2019)
Connected Cars Will Offer the Biggest Opportunity for 5G IoT in the Long Term:
In 2023, the automotive industry will become the largest market opportunity for 5G IoT solutions. It will represent 53% of the overall 5G IoT endpoint opportunity in that year.
Within the automotive sector, embedded connected-car modules are the major use case for 5G. Embedded endpoints in connected cars for commercial and consumer markets will represent an installed base of 19.1 million units out of a total of 25.9 million 5G endpoints in the automotive sector in 2023.
“The addressable market for embedded 5G connections in connected cars is growing faster than the overall growth in the 5G IoT sector,” said Ms. Baghdassarian. “Commercial and consumer connected-car embedded 5G endpoints will represent 11% of all 5G endpoints installed in 2020, and this figure will reach 39% by the end of 2023.”
In addition, the share of 5G-connected cars actively connected to a 5G service will grow from 15% in 2020 to 74% in 2023. This figure will reach 94% in 2028, when 5G technology will be used for Cellular V2X communications that enable messages to be sent and received within vehicles and between vehicles, infrastructure, pedestrians, cyclists and more. Ultimately, connected cars actively connected to a 5G service will help keep traffic moving and improve road safety.
“As the automotive industry will be the largest sector for IoT endpoints and 5G IoT use cases in the long term, we recommend that CSPs that want to be relevant in the 5G IoT market put this industry at the forefront of their investments. They should do this in terms of personnel who understand the sector and of partnerships that will move the market forward,” said Ms. Baghdassarian.
Other Analyst and Industry Opinions:
“The industrial IoT market is among the most fractured especially amongst the verticals like healthcare and automotive,” said Lee Doyle, principal analyst with Doyle Research. “Large companies such a Cisco, HP and IBM have been challenged to address it because it is so fractured. It’s not at all clear any one of them has the overall network architecture to handle it all.” Vendors need to show users on a case-by-case, application-by-application basis what works, Doyle said.
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“With 5G, you can put more video cameras up in a big facility to monitor where folks are going and what they’re doing. Then bring analytics into the picture to increase efficiency. Speed really matters when you’re adding that many cameras,” said Samsung Networks’ VP of Networks Strategy & Marketing Alok Shah.
Shah believes the most “magical” element of 5G for enterprise users is decreased latency (so does this author, but it won’t happen till 3GPP Release 16 is finalized). “Bringing latency down substantially allows the user to perform from a remote perspective much more. Robotics in factories can be manipulated without being there in person,” he elaborated.
In addition, with 5G, the number of IoT sensors that can be implemented can skyrocket. “It can go up to a million sensors around a facility, which is huge,” Shah stated. “It’s a combo of these different things. You don’t get all of this at once because different devices have different requirements, but network slicing will help with this,” Shah added.
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Ericsson’s new 5G business potential report considers a set of “5G-enabled B2B use case clusters” as drivers of industrial 5G revenues. Among these use case clusters, it said “enhanced video services” represents the largest opportunity for telecoms providers in terms of value across industrial sectors, worth up to 17 per cent or $118 billion of the total value by 2030.
Ericsson said enterprise 5G services will drive up to $700 billion of new revenues in the period. However, the total market, of 5G services for industry will be worth more than twice that, it said. The $700 billion operators can go for corresponds to 47 per cent of the total 5G business-to-business (B2B) market to be served by ICT players. Network operators must extend their reach “beyond connectivity” and consider newer roles for their services and expertise within the B2B value chain, and “what use case clusters to address.” Operators must act urgently, Ericsson warned, if they are to capture new value from industrial transformation services, as revenues for existing airtime services will remain stagnant through to 2030.
The chart below superbly illustrates the dire dilemma of network operators- traffic increasing exponentially, revenues (measured by ARPU) decreasing!
Jan Karlsson, senior vice president and head of B2B digital services at Ericsson, said: “The journey to grow the 5G business starts now by building momentum and identifying 5G-enabled B2B opportunities.”
Ericsson looked at the following industrial sectors for its report: manufacturing, automotive, energy and utilities, public safety, healthcare, media and entertainment, public transport, financial services, retail, and agriculture.
Other use cases in the report, besides enhanced video, include real-time automation, connected vehicles, and augmented/virtual reality. The company said use case examples building up these ‘clusters’ include live streaming of events, real-time monitoring of distributed energy, and autonomous cars.
–>Please refer to my comment in box below this article for more on the Ericsson report.
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“Clearly there is no single access technology out there that solves all the problems and challenges of networking especially in the industrial arena where customers have one of every type of communications device imaginable, but 5G and Wi-Fi 6 will deliver a whole bunch of new use cases and address many multi-access requirement challenges,” said Liz Centoni, senior vice president and general manager of Cisco’s Internet of Things Business Unit, in an interview with Network World.
“Many industrial IoT use cases mandate wide mobility, low latency, and mission-critical reliability, such as mobile-robot control in production automation and autonomous vehicles in open-pit mining. These use cases rely on wireless access at 50ms to 1ms latency and service reliability from 5 nines to 6 nines,” Centoni wrote in a recent blog about 5G.
“4G/LTE has attempted to address these use cases but has often failed due to unsatisfactory performance. 5G’s combination of ultra-reliable and low-latency connection will extend industrial IoT to unconquered spaces,” Centoni.
Cisco’s Scott Harrell, senior vice president and general manager of enterprise networking told Network World the company expects to see a lot of 5G being used in branches as a faster backup and bandwidth alternative to current 4G or LTE links. Keeping an enterprise’s branch and campus locations all connected to each other and the internet has traditionally fallen to wired technologies like T1/E1 and xDSL, Harrell said. Today, 4G is often used to quickly bring up sites or as a back-up link, but it’s seldom used as a primary link, due to bandwidth limitations and cost, Harrell said.
https://www.networkworld.com/article/3446457/cisco-pushes-5g-to-hasten-industrial-iot.html
https://blogs.cisco.com/news/how-5g-will-accelerate-industrial-iot
https://www.ericsson.com/assets/local/5g/the-5g-for-business-a-2030-compass-report-2019.pdf
Nokia and Wipro partner to develop 5G use cases for accelerating technology adoption in India; 5G end-to-end live network trial in Indonesia
At the Indian Mobile Congress (IMC 2019) in New Delhi, Finland headquartered Nokia announced it has partnered with Indian IT services company Wipro to develop 5G use cases for telecom operators and enterprise customers. Nokia said it is testing several 5G use cases at its research and development lab in Bengaluru (previously known as Bangalore) India, while Wipro is expected to provide domain-based solutions required for this new 5G ecosystem.
The collaboration will explore technical and operational feasibility of use cases, such as augmented reality/virtual reality (AR/VR)-based immersive learning experience, as well as drone-based applications for agriculture, public safety energy, and utilities, using real-time network analytics, life cycle operation management and edge computing. While Nokia will provide a live 5G end-to-end system, including radio, core and devices in its lab, Wipro will integrate its application solutions for 5G use cases that include software solutions and user devices along with key system integration and delivery capabilities. The turnkey solutions are expected to help operators and enterprise customers realize full value from their 5G investments, Nokia said in a press release.
“We are thrilled to be an open-innovation partner to Nokia to work on innovative and creative 5G use cases,” K R Sanjiv, Chief Technology Officer, Wipro, said in a statement. “With Nokia’s expertise and leadership in 5G, we are confident that we will create more useful 5G use cases in the future, which will help the operators in the rapid adoption of the technology and faster realisation of their 5G investment,” Sanjiv added.
As part of the partnership, Nokia will provide a live 5G end-to-end system, while Wipro will integrate its application solutions for 5G use cases that include software solutions and user devices along with key system integration and delivery capabilities. Several enterprise use cases, tested by Wipro in a live 5G network at Nokia’s Bengaluru lab, are being showcased at India Mobile Congress 2019 here.
Nokia and Wipro have already conducted lab tests of two 5G use cases – drone-based transmission line monitoring within the utility domain and in immersive entertainment experiences for large scale events, such as sports championships, aimed at enhancing the user experience. These use cases will be further developed and validated, along with other new use cases that can be rapidly executed for field trials for mass adoption, once the 5G spectrum is available, Nokia said.
“Globally, Nokia is at the forefront of developing the 5G ecosystem. Our state-of-the-art Bengaluru R&D centre is working with several partners to do just this, and we are committed to supporting Indian operators in their 5G journey. Our work with Wipro is a crucial step in this direction. The initiative also supports the Indian government’s plans to fast-track the development of use cases that will be socially beneficial and unique to India” said Randeep Raina, Chief Technology Officer at Nokia India.
Nokia said its network function virtualization infrastructure (NFVI)-based secured edge cloud comes in handy for low-latency use cases whereas its internet of things (IoT) impact platform-based device management to host and manage the lifecycle support 5G use cases in different industry verticals.
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The companies have already conducted lab tests of two use cases – drone-based transmission line monitoring within the utilities domain and in immersive entertainment experiences for large scale events such as sports championships, aimed at enhancing the user experience. The companies are looking to further develop and validate other use cases that can be rapidly executed for field trials for mass adoption.
India’s central government is planning to conduct 5G spectrum auctions by the end of this year. Indian Union minister for communications and information technology Ravi Shankar Prasad said earlier this week that reforms are expected in the pricing of the 5G spectrum.
Source: Business Insider Intelligence
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Separately, Nokia and Hutchison 3 have completed the first 5G end-to-end live network trial in Indonesia. The trial, which was conducted on a Nokia network on millimeter wave frequencies, demonstrates the 3ID network’s ability to support end-to-end 5G deployment.
Multiple tests were conducted on the 28 GHz spectrum, obtaining the highest data download speeds of up to 1.62 Gbps with 11ms latency while upload speeds of 75.9 Mbps were measured. The trial also included a voice call test, which was initiated on the 5G trial network and realized over VoLTE (voice over existing LTE network) to demonstrate how basic telephony services would be handled in 5G.
The trial, which also involved the Indonesian Ministry of Communication and Information Technology, was conducted at the Sepuluh Nopember Institute of Technology (ITS) in Surabaya, East Java. It focused on education-related use cases, utilizing 5G technology to enable a public lecture conducted in real-time between two major cities, Surabaya and Jakarta. During the trial, ministry officials and academics from the ITS delivered a public lecture, with a representative from the Indonesia 5G Forum joining them via a live stream holographic projection from Jakarta.
The tests were conducted over a Nokia-built network, including radio, core and transport, providing high, unfettered download and upload speeds with low latency. They demonstrated how 5G technology can be used to give students remote access to learning materials that may be difficult to access due to physical distances. The trial also showed how the learning experience can be made more immersive while helping students compete with their academic peers in other locations. It also confirmed the ability of 5G to go well beyond simple connectivity in supporting economic and social development in Indonesia.
KP Goh, Head of Indonesia at Nokia, said: “Completing the first 5G end-to-end trial in Indonesia is an important milestone. 5G is going to change just about everything – every industry, every business, and every experience – including the student experience. With Nokia’s end-to-end 5G technology, Indonesia is ready to support 5G deployment now and Indonesian students are able to reap the benefits of faster connections with lower latency. With 48 commercial 5G contracts and more than 100 customer engagements, we are pleased to see the pace of 5G progress accelerating across the globe – including Indonesia.”
Cliff Woo, Chief Executive Officer at Hutchison 3 Indonesia, said: “This trial, powered by Nokia’s end-to-end capability, showcases how 5G technology can help students across Indonesia to have equal opportunities and compete with their peers in other countries – by connecting them to sources of knowledge from all across the world. Nokia is one of our key technology partners in Indonesia. We are pleased to have completed this important trial with Nokia. It will pave the way for the 5G journey to serve the Indonesian people and industry.”
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References:
https://www.digianalysys.com/nokia-and-wipro-to-develop-5g-use-cases/
https://nokiapoweruser.com/nokia-and-wipro-joined-hands-to-develop-5g-ecosystem-in-india/
https://www.nokia.com/networks/5g/
Verizon CEO Hans Vestberg: The 5G Revolution and Separate 5G Standards?
Verizon CEO Hans Vestberg has warned that a lack of trust among telcos could lead to separate standards being set for 5G networks. The assumption here was that Huawei would implement one type of 5G standard with rest of the world implementing another. That would be very bad Vestberg said, just as the CDMA and GSM specifications split the cellular industry during development of 3G standards.
“If there are going to be different 5G global standards, it will impact the whole telecom industry,” he said. “Right now, 5G is defined as a standard and everybody has agreed to it… 6G is probably coming in 7 or 8 years from now,” Vestberg said.
Vestberg’s comments came at Yahoo Finance All Markets Summit in New York. It was in a response to a question about whether U.S. security concerns about China’s telecommunications giant Huawei Technologies were justified, as that company has emerged as the leader in 5G technologies. The Verizon CEO declined to comment on possible security issues regarding Huawei Technologies.
However, he said that if trust – among the various technologies’ developers, and the nations that would use them – is lost, the consequence might be that different 5G providers would devise different standards.
–>We view such a statement as remarkable, if not outrageous, since Verizon does not send a representative to attend ITU-R WP5D meetings where the ONLY 5G radio standard- IMT 2020- is being progressed. Not once during this Yahoo interview did Vestberg say “IMT 2020.”
You can watch the video of the Vestberg interview here.
“The 5G technology is ultimately one of the most important infrastructures for the 21st century,” said Vestberg. “If we go back to – some of you might remember – the CDMA and GSM age, that really was not good.” “The tech development is moving fast, software improvements are quick. We are going to see an extraordinary impact from 5G in the next couple of years. Verizon plans to have 5G coverage in 14 NFL stadiums,” he added.
Verizon Communications chief executive Hans Vestberg interviewed during the Yahoo Finance All Markets Summit in New York on Thursday. Photo: Invision via AP
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About the Yahoo All Markets Summit:
The theme of Yahoo’s All Markets Summit on 10/10/2019 in New York is Generational Opportunities. We are living in a time of profound generational change and young people today are informed by new trends like diversity and inclusion, political resets, economic dislocation and technological change like no generation before. Understanding and managing this change is essential for businesses and leaders, as the implications on all constituencies, including shareholders, customers and employees is critical. For additional information or questions please email [email protected].
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References:
https://sg.news.yahoo.com/verizon-ceo-warns-against-separate-173849596.html
https://finance.yahoo.com/video/verizon-ceo-hans-vestberg-5g-154910283.html (video of Vestberg interview)
https://www.scmp.com/news/world/united-states-canada/article/3032434/verizon-ceo-warns-against-separate-5g-standards (seems to be a copy of the 1st reference)