Governance, Politics and Markets in Telecommunications & Emerging Technologies | Week 18, 2020
Carlos Ruiz Gomez | @cruizgomez | May 01, 2020
POLITICS, ECONOMY & SOCIAL TECHNOLOGY
GOVTS. & AGENCIES According to Bloomberg, China is set to release “China Standards 2035” this year — a report that has apparently been two years in the making — that will describe the country’s plan to lead the next 15 years of technology innovation, from AI to 5G and Blockchain. Worrying times indeed.
If you have looked for N-95 face masks on Amazon, like I did, you should have noticed that most (all ?) announced products are misleading. No wonder that US trade representative’s office put five Amazon websites, including its sites in the UK, Germany and France, on a black list of “notorious markets” that facilitate the sale of counterfeit and pirated products.
NON-STATE ACTORS Last week, I reported on the all-time low D.C. lobbying spent of Google. This week, Politico reports that the Mountain View company has tapped a trio of lobbyists at The Roosevelt Group to advocate for the use of its cloud computing services at the US Defense Department. The new Washington D.C. company head really does seem to have different views on lobbying than his predecessor.
TECH RACES & WARS Since Trump pressured companies like Taiwanese TSMC and US Cadence to eliminate their exports to Huawei, chip supply has become a nightmare for the telecom vendor. FT reported that Ren Zhenfeng’s company is now partnering with the French-Italian STMicroelectronics to co-design chips for mobile handsets and for automotive use (connected and AI-powered automated vehicles). Is this a result of the more ambiguous European diplomacy towards China and Huawei ? And how long until Trump puts further pressure on Europe, allegedly his allies?
Actually, in an interview in The Wire China, a Harvard professor states that Intel is one or two generations behind TSMC. Along with “GlobalFoundries, giving up competing at the most advanced chip processes”, the US chip leadership is fading. But other sources actually report that TSMC is losing out to Intel. All this US-China tech battle is reshaping international relations, and the US has everything to lose.
And TikTok’s is trying to distance itself from China, by outlying the subsidiary company governance from that of its parent Beijing-based ByteDance: “A lot of that anti-China sentiment we really need to clear up and explain how this company is being run independently, and it’s not subject to Chinese law or a subsidiary of a Chinese company.”
TECHNO-NATIONALISMS China has adopted new rules to vet network equipment used by critical infrastructure providers, in the name of protecting national security. Since June, all such products will be subject to a cybersecurity review, according to the notice issued by the Cyberspace Administration of China (CAC) and 11 other government agencies. Does this all sound familiar to you ? China now (and finally, as it was to be expected) formalises the right of veto to its huge market to all those foreign — US, British, European, Australian … — companies that threat the global expansion of its own tech firms.
All these techno-nationalisms are giving way to new forms of geopolitical spheres of influence. Like in India, where Bharti Airtel awarded a multi-year radio access network (RAN) contract to Nokia. Is this a consolidation of the Indian aversion towards China, and of its inclination towards less-of-evils Western suppliers ? Remember that Facebook just became last week the largest minority investor of Reliance Jio.
SOCIAL & ENVIRONMENT After pausing work on this year’s Digital Services Act during the coronavirus crisis, senior EU officials are now considering plans to force companies such as Google, Twitter and Facebook to be more transparent, reports the Financial Times.
Everything seems indeed to be about bias in AI. Google launched made Google Translate corrects earlier gender bias, while the Financial Times reveals leading researchers have proposed a novel initiative to make AI more trustworthy: offer users monetary rewards in exchange for spotting bias in algorithms.
Finally, Apple and Google updated their contact-tracing plans — and decided to call it “exposure notification” instead of contact tracing. Wording matters.
CONNECTED INDUSTRIES
CONNECTED CAR Because of the Covid-19 crisis, Ford decided to delay the launch of their autonomous vehicle service until 2022.
ENTERTAINMENT Politico emphasizes the rise in all sorts of virtual events, actually becoming a normal part of life, from virtual yoga, attending barista classes and even doing wine tastings over Zoom. Hey, every Friday evening my local rugby club does training and third-time sessions :)
Xbox chief Phil Spencer confirmed this trend in entertainment, in that gaming is having a coronavirus-related moment: “Gaming is a social and community connection for many people, and as physical distancing … is requiring that people are physically apart, the social connections and community connections that the games industry brings to people is just expanded.”
FINTECH You would say that entertainment should not be the only industry to benefit from the current crisis. As bank branches close (temporarily), the digital services offered by some fintechs are more in demand than ever. Restrictions on the use of cash — amid fears that the coronavirus could be transmitted on banknotes — has also been a boon to companies involved in the area of contactless payments. Now, the issue is cash. With VC funding decreasing since last year, start-ups with not strong enough balance sheets (most of them ?) to last for the coming 12–18 months are essentially doomed. It’s a time to focus on the opportunity in fintech, with much shorter deals, as reports the Financial Times. But even the largest fish are not immune to the situation. The four largest Europe digital banks Monzo, Revolut, Starling and N26 saw their growth rate drop by between 18% and 36% in their native markets in March compared to February.
TECHNOLOGY ENABLERS
CONNECTIVITY First with Red Hat, then Altiostar and Parallel Wireless and Mavenir, open source is really making its way into the telecom carriers networks. A new telco open source community called Leitstand has emerged by the hand of Deutsche Telekom, focusing on the operation and management of telco carrier networks, complementary to Linux Foundation resources. Building on this topic, India Bharti Airtel selected Altiostar for a vRAN deployment.
Another trend now is that, with 5G deployments temporarily coming to a halt in Europe because of Covid-19 China is the place to be. For starters, it looks like it’s going well for Ericsson in the Asian country, that Börje Ekholm’s diplomacy is bearing its fruits, as China Mobile awarded the Swedish supplier the 5G RAN and Core contract for the second phase of the Chinese telco nationwide NR standalone rollout, planning to extend the deal to 17 provinces. On the other hand, China Unicom and China Telecom announced suppliers for their joint standalone 5G network, splitting the majority of two contracts valued at CNY183.5 billion between Huawei and ZTE, with Nokia omitted from the selection. Still-CEO Rajeev Suri though pointed at the possibility of being awarded part of China Unicom’s 5G network.
But Asia is not just China, and India seems to be a major bet for Western firms. Bharti Airtel awarded a multi-year radio access network (RAN) contract to Nokia, which will see the vendor deploy some 300,000 radio access units across four spectrum bands.
DEVICES & COMPONENTS Strategy Analytics showed shipments of 5G smartphones in Q1 surpassed the number for the whole of 2019, with China driving demand.
Despite of this, Samsung expects smartphone and TV sales to decline significantly in the second quarter owing to coronavirus. The situation could even delay or cut back the company’s investment in 5G technology.
CLOUD COMPUTING Again, the big winners in the pandemic are big tech. Google Cloud increased revenues by 52% y-o-y in 1Q2020. And Microsoft revenue climbed 15% to USD 35 billion in the same period.
INTERNET OF THINGS The current Covid-19 crisis is certainly a disaster for workers. I mean, it’s reaaally bad enough all the layoffs that are current happening, but it’s also accelerating the future of work, with machines replacing humans. Actually, in Japan, as Coronavirus sends factory workers home, companies are seeking to close the void of lack of employees with automation.
TECHNOLOGY EQUITY TRENDS
The UK government this week pledged GBP 1 billion to support local start-ups, and Portugal EUR 25 million, following on from similar measures announced by France (EUR 4 billion) and Germany (EUR 2 billion) earlier in the month.
Carlos Ruiz Gomez
International Industry Strategy and Business Development Director
Telecommunications Ecosystem & Connected Industries
00.34.672.025.194 | cruizgomez@gmail.com | linkedin.com/in/carlosruiz