Taiwanese Whispers

The Informer has been in this industry a long time. He's pretty jaded and sometimes feels like he’s seen it all. That was until this week however, when Samsung – the Korean handset maker that sells the most phones of any company in the whole world – admitted that its Taiwanese arm had paid a bunch of local students to post scathing reviews about rival HTC’s devices online.

April 19, 2013

12 Min Read
Taiwanese Whispers

By The Informer

The Informer has been in this industry a long time. He’s pretty jaded and sometimes feels like he’s seen it all. That was until this week however, when Samsung – the Korean handset maker that sells the most phones of any company in the whole world – admitted that its Taiwanese arm had paid a bunch of local students to post scathing reviews about rival HTC’s devices online.

Quite what prompted the business to play such dirty tricks, the Informer does not know, but his suspicions are that it stems from insecurity. When the Informer was growing up, it was often the most popular, prettiest girl in the class or the alpha male sports star of the year who would begin rumours about the student they secretly felt most threatened by, in order to keep their social status intact.

Samsung said its Taiwanese operation displayed “insufficient understanding of [the firm’s] fundamental principles” and has vowed to “cease all marketing activities that involve the posting of anonymous comments”.

“We regret any inconvenience this incident may have caused. We will continue to reinforce education and training for our employees to prevent any future recurrence,” the firm added in a statement to the press.

The Informer wonders what happened to Samsung Taiwan’s marketing director as a result of this scandal, but imagines it’s a word that rhymes with ‘hired’ but means the opposite.

Over in the Middle East, UAE operator Du and Chinese kit vendor Huawei this week signed a Memorandum of Understanding (MoU), agreeing to exchange project management experiences, knowledge and research. The two will share best practice industry methodology, concepts, tools and techniques.

Wang Haitun, director at Huawei, said: “[The MoU] will facilitate a stronger relationship between our two companies as we work together to develop best practices that will be implemented in our respective project management offices for the benefit of the telecommunications industry.”

The news is not likely to be welcomed by Du’s rival Etisalat which has a MoU of its own with Huawei. In October 2011, Huawei agreed to work with Etisalat to help set the foundations for intensive internships. Senior officials from both firms worked together to tailor development of each trainee’s chosen career path. And just last month, Etisalat and Huawei signed a global consultancy services agreement, with Huawei’s business consulting team assisting the operator in developing the its mobile broadband services and its digital services portfolio.

With news of Huawei now getting into bed with its rival, the Informer can’t help but think Etisalat may have been put on its guard, unsure of whether the help it’s getting from Huawei is the same help going to Du. Then again, this model seems to work well enough in a managed services capacity.

But cast a look back to earlier this year, when at Mobile World Congress , Mozilla CEO Gary Kovacs defiantly declared that “the internet should not be controlled by any one or two companies,” and that, “we shouldn’t have one or two companies that approve every bit of content [on smartphones].” He added that Mozilla wants to “level the playing field”.

What he should have said was: “You guys can do what you want because I’m out of here.”

Rather than see the firm’s Firefox OS project through in a David vs Goliath type battle to overcome the dominance of Apple and Google in the Mobile OS space, Kovacs will instead be stepping down from his role later this year. In doing so, he is not only abandoning the Firefox OS project, but also the web browser project the firm is collaborating with Samsung on called Servo.

With Kovacs departing, Mozilla has decided to make wholesale changes to its workforce. Mitchell Baker, Mozilla CEO until 2008, has returned to the firm to become its executive chair. Jay Sullivan, previously SVP of products, has been appointed COO. Harvey Anderson has been appointed SVP business and legal affair, and Li Gong has been appointed SVP for mobile devices.

Fans of reality TV singing show The Voice will be familiar with one Jessie J who famously sings: It’s not about the money, money, money, to fans spending £60 to see her in concert. Turns out that the lady who likes to do it like a dude, is wrong, because this week has been all about the money, mobile money specifically.

One announcement this week saw payment processing firm Visa Europe introduce a service allowing consumers to make mobile payments across the region immediately and using any European currency.

Visa Europe’s Personal Payments service enables Visa credit, debit or prepaid card users to accept payments from another Visa cardholder without needing to share any account details. Customers need to register for the service and know either the mobile phone number or Visa card number of the person they are sending a payment to. They can then make payments using a smartphone app offered by the sender’s bank.

Visa Europe announced the launch of its Mobile Person-to-Person payments back in September 2011, but it wasn’t until last month that RBS and NatWest became the first banks to launch the service via their mobile banking apps. The payment provider said its personal payments system now has 17 “live and committed issuers” across Europe.

Meanwhile, M-Pesa has been fully launched in India by VodafoneIndia and local bank ICICI, following a pilot which began in November 2012. By launching the service in India, Vodafone hopes to help approximately 700 million Indian citizens who previously had no access to conventional banking.

The service will now be launched in eastern areas of India by more than 8,300 specially trained and authorised M-Pesa agents. It will be rolled out across the rest of India in a phased approach, said Vodafone.

And the mobile money news doesn’t stop there. Turkish operator Turkcell and SIM card and mobile security solutions provider Gemalto have each found themselves at the hearts of two mobile payment projects that promise to transform the transport and retail sectors in Turkey and the USA respectively.

Turkey’s Turkcell has integrated the country’s public transport card Urfakart into its mobile wallet solution. Now Turkcell Wallet users are able to make contactless payments for transport services in the Sanliurfa province using their mobile phones. In addition, they can check and top up their Urfakart balances without having to go to a payment point.

The operator has been somewhat of a pioneer in the mobile payments space. It launched its wallet solution in October last year, which works on both smartphones and feature phones, and supports contactless payments on NFC-enabled phones. It has also struck deals with the Turkish Football Federation (TFF) to sell match tickets to fans via their mobiles across the country, and with local bank Akbank to introduce an NFC-based mobile wallet service incorporating location-based elements.

Over in the US, the Merchant Customer Exchange – a body representing a group of retailers with the aim of setting up a standardised mobile commerce platform across the sector – has selected Gemalto to build its mobile wallet.

The MCX cited Gemalto’s expertise in mobile financial services and its track record of working with banks, governments, merchants and mobile operators as its reasons for selecting the firm.

The MCX wallet will be primarily barcode and cloud-based, the body said, and will run on Gemalto’s Allynis Mobile Payment platform.

In other news, this week, Finnish handset manufacturer Nokia published it financial results, in which it posted a €150m operating loss for 1Q13. The loss is a fraction of the €1.338bn the firm lost in the same quarter in 2012, however, net sales for the same period dropped 20 per cent year on year to €5.85bn from €7.35bn in 1Q12.

How long the firm can continue posting losses and see its revenue and market share erode is surely in question. Nokia sold 61.9 million devices in the quarter, 25 per cent fewer than the 82.7 million it sold in 1Q12 and saw sales drop year on year in every geographic region it operates in, with the exception of North America, which ironically is the company’s weakest traditional market.

CEO Stephen Elop is always keen to focus on silver linings every time Nokia’s results are published, but when the Informer takes a look back at what he said about them each quarter, it doesn’t make for comfortable reading:

“The actual sales results have been mixed. Establishing momentum in certain markets including the UK has been more challenging.” – April 19, 2012

“While Q2 was a difficult quarter, Nokia employees are demonstrating their determination to strengthen our competitiveness.” – July 20, 2012

“We are determined to carefully manage our financial resources, improve our competitiveness, return our devices and services business to positive operating cash flow.” – Oct 19, 2012

“Our Mobile Phones business faces a difficult competitive environment, and we are taking tactical actions and bringing new innovation to market to address our challenges,” – April 19, 2013.

The Informer is hoping the Finnish firm can reverse its fortunes, just to see a smile on poor Elop’s face.

Now, there’s confident and then there’s downright audacious. US satellite TV provider DishNetwork can be described as the latter.

In January, the TV player made an attempt to scupper the potential deal between US operator Sprint Nextel and Wimax operator Clearwire, and this week it went right for the source with a $25.5bn offer to merge with Sprint, which is already in advanced talks with Japan’s Softbank over a merger.

Dish claims its own $25.5bn proposal represents superior value to Sprint shareholders. The firm is offering Sprint shareholders $7.00 per share; $4.76 per share in cash and 0.05953 Dish shares per Sprint share, based upon Dish’s closing share price on Friday, April 12, 2013. Dish also said that its offer would give Sprint shareholders 32 per cent ownership in the combined Dish/Sprint entity. SoftBank is offering shareholders just 30 per cent interest in Sprint alone. According to Dish Network, its offer represents a 13 per cent premium to the value of the existing SoftBank proposal.

The Informer isn’t sure what has prompted Dish to make two offers so late in the day, but one thing is for sure, Softbank execs must be sat in their offices absolutely fuming at the antics of the satellite TV provider.

Meanwhile, Indian MNOs risk falling behind their counterparts in other Asian countries, , according to financial ratings agency Fitch Ratings. Over the next two years India’s operators plan to invest a significantly lower proportion of their revenues than operators in China, Indonesia and the Philippines, the agency said.

It believes the low level of investment is attributable to the weaker balance sheets of the Indian operators in comparison to other Asian carriers. According to Fitch, Indian operators’ balance sheets have become stretched due to intense competition and large spectrum payments between 2010 and 2012. It stated that Indian telcos have indicated that their capital expenditure will decline over the next two years, while it is set to increase in the three other countries.

And operator group France Telecom-Orange has said that its OTT communications app Libon will become Joyn-compatible and offer RCS services once it has deployed Joyn services across Europe.

The firm made the announcement as it launched Libon for Android devices. The service was launched for iOS devices in November 2012.The Android version is already available to Orange customers globally, downloadable from Google’s Play store, with the exception of the US where it will be launched next month.

Meanwhile, Spanish operator group Telefónica has completed a field trial of “flexible optical networking” technology, that it hopes could more than double its existing fibre capacity.

The trial, conducted on the operator’s live network in Spain, used technology supplied by kit vendor Alcatel-Lucent. The successful trial means that Telefónica España will be able to meet the growing capacity demand of its customers, according to the vendor. Alcatel-Lucent said that the trial is the first live network link running at 100Gbps, 200Gbps and 400Gbps speeds.

The technology allows Telefónica’s network to “operate at different combinations of line rate, reach, and spectrum width to provide the best balance between network performance and resource usage”, according to Alcatel-Lucent.

And Japanese vendor NEC has established a partnership with Portuguese incumbent operator PortugalTelecom that will see the two firms collaborate on SDN (software defined networking) and virtualisation technology for datacenters and carrier networks.

The two firms said that the agreement would “enable both companies to test and assess the commercial feasibility and benefits of SDN implementation for carrier datacenters”, adding that SDN and network virtualisation have “exceptional potential”.

As part of the programme the two will conduct a study into where SDN solutions might provide the most benefit within Portugal Telecom’s network infrastructure.

Internet hosting firm Rackspace is positioning itself as a supplier of cloud services to telcos and enterprises alike, as it seeks to integrate its own public cloud with service providers worldwide. As the OpenStack Summit kicked off in the US this week, Rackspace proposed to build and operate white label telco clouds within its own datacentre infrastructure.

The offering will be built on open source cloudcomputing software OpenStack, which is seen as an alternative self hosted platform to the likes of Amazon’s Web Services.

And Qatari consumers can now begin enjoying 4G services, as the country’s incumbent operator Ooredoo announced the launch of its LTE network. Ooredoo’s 4G service will initially be available via mifi and dongle devices, and the operator is currently working on making 4G available on smartphones in Qatar.

And finally, as much as we all love and rely on our smartphones, let’s face it, they can be a little annoying sometimes. That’s especially true when you forget to silence your smartphone in an important meeting, or even worse, during a court case. And that’s exactly what happened this week in a Michigan Court when a smartphone interrupted proceedings asking the owner for voice commands. The owner? Presiding Judge Raymond Voet. Consistent with his policy of fining such culprits for contempt, Judge Voet issued a fine to himself. As a first time offender, the judge only fined himself $25, but the Informer appreciates the gesture nonetheless.

And that’s about all for the week.

Take care,

The Informer

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