From China with Love

It's been another week of slammed doors for Chinese vendor Huawei, with Australia the latest state to block the firm's attempts to win business because of security concerns. Huawei was told not to bother turning up to the tender process for the National Broadband Network because it had only two hopes—Bob Hope and No Hope—and Bob Hope's dead.

March 30, 2012

5 Min Read
From China with Love

By The Informer

It’s been another week of slammed doors for Chinese vendor Huawei, with Australia the latest state to block the firm’s attempts to win business because of security concerns. Huawei was told not to bother turning up to the tender process for the National Broadband Network because it had only two hopes—Bob Hope and No Hope—and Bob Hope’s dead.

Aussie PM Julia Gillard, commented this week the Government is obliged to “do its utmost to protect [the NBN’s] integrity and that of the information carried on it.” This includes barring Huawei from any participation.

Gillard isn’t the only one who has doubt over Huawei’s restraint when it comes to sensitive national information. Last year, the Chinese firm was locked out of the tender process for the US nationwide emergency communications network, and banned from acquiring server firm 3Leaf. Its joint venture with Symantec was dissolved last November because the US company feared losing out on information from the US government, according to the New York Times.

There have been similar situations in Taiwan and India, and Huawei’s offer to supply the infrastructure for cellular coverage in London’s underground rail network was also dismissed.

Of course, these countries could just be plain paranoid. Or maybe people just don’t understand China, which is the view of Huawei’s Australian spokesman, Jeremy Mitchell.

“If we were found to do one thing wrong, to have one back door in any of our equipment, our company would fold overnight. There’s no way in the world that we would ever risk that… I think anyone who would argue that the Chinese government would ask us to do that shows a…lack of understanding of modern China,” he told ABC’s daily current affairs radio show AM.

Informa analyst Tony Brown wrote in a comment that is well worth reading that Huawei’s treatment stemmed from the Australian government’s desire to be closely aligned with its US counterpart. But Brown pointed out that Huawei has plenty of other business in Australia, making this latest decision inconsistent at least, and that the anti-China stance over the NBN could have repercussions down the line for Chinese-Australian trade.

Here in the UK, operators have been hitting out at regulator Ofcom’s proposals to allow Everything Everywhere to use its existing 1800MHz spectrum to offer LTE services ahead of its competitors. O2, Vodafone and 3UK are not happy that they will likely have to wait until 2013 before they can deploy LTE services, while, under the proposal, Everything Everywhere will be able to do it this year.

O2 makes one interesting argument; that once Everything Everywhere is in a position to offer LTE services, it could attempt to delay the 4G auction, while it has a monopoly position for LTE in the UK. Vodafone UK CEO Guy Laurence, meanwhile, accused Ofcom of “taking leave of its senses”, by accepting the application from Everything Everywhere.

Meanwhile, the European Commission continued its war on prices for roaming across the EU. The European Parliament and Danish Presidency of the Council of Ministers provisionally agreed a deal to revamp the market, forcing operators in Europe to lower costs when their customers use their devices abroad.

The plans, which will be voted on in the European Parliament in May, could see roaming prices lowered to 29 Cents per minute for calls and 70 Cents per MB for internet access in July 2012, if approved. They will then decrease further to 19 Cents per minute for calls and 20 Cents per MB for internet access by 2014. The European Parliament aims to bring roaming tariffs into line with domestic prices by 2015.

And smartphone bedfellows Microsoft and Nokia have pledged to each invest up to €9m in a development program to drive training, support and startup business opportunities through the AppCampus program at Aalto University, Finland.

The AppCampus program will cater to the Windows Phone ecosystem, as well as Nokia’s legacy platforms, including Symbian and Series 40, “to create a new generation of self-sustaining mobile startups.”

From May, AppCampus intends to attract thousands of application proposals from students and entrepreneurs from all over the world and will supply support, training in mobile technology, design and usability, and funding to create innovative new mobile apps and services.

With mobile money a hot topic in the industry right now, UK payment provider Monitise has got a lot of tongues wagging with its attempt to create the “world’s largest pure-play mobile money company”. The firm will pay $173m to acquire its US counterpart Clairmail, conditional upon US regulatory and shareholder approvals.

“The future of payments, the internet, retail and social networking is all mobile,” said Alastair Lukies, group chief executive at Monitise, whilst rubbing his hands, presumably.

Should the carriers be in charge though? Especially when they have squandered more than $58bn due to inadequate billing systems. The accusation came from Juniper Research, which warned that the figure, which represents over six per cent of operators’ global revenues, is only going to grow, unless carriers address the issue.

The report suggests that under a ‘nightmare scenario’ whereby operators fail to implement any remedial measures over the next five years, the scale of losses could rise five-fold by 2016.

“Despite their initial costs, revenue assurance and fraud management systems demonstrate a strong case for return on investment,” said Windsor Holden, the Juniper report’s author.

Talking of nightmare scenarios, RIM’s new CEO Thorsten Heins has said that the Canadian firm will conduct a strategic overhaul aimed at refocusing the company on its enterprise service roots.

He said that he had spent the last ten weeks conducting a “personal reality check” on the business, concluding that “substantial change is what RIM needs”. But Heins conceded simultaneously that many of the firm’s traditional strengths are no longer valued as highly as they once were by its customer base. This represents rather a serious issue, doesn’t it?

A rush of stories appeared online claiming that RIM was planning to ditch the consumer business altogether, despite Heins saying that he intended to redouble the firm’s efforts in the high end consumer space. But the firm’s decision to refrain from offering any quantitative guidance from here on in does not exactly smack of confidence.

And that about wraps it up for the week.

Take care,

The Informer

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