What’s up with… Ericsson, stc, Deutsche Telekom

• Ericsson to pay $207m fine as it pleads guilty to DOJ charges
• Saudi operator stc engages with Ericsson and Huawei for its future networks
• FTTH joint venture in Austria is approved

In today’s industry news roundup: Ericsson says its guilty plea and fine brings its DOJ process to an end; Saudi operator explores cloud RAN and next-gen fibre networks with rival vendors; Deutsche Telekom’s FTTH joint venture in Austria is approved by the EC; and more!

Ericsson has concluded its lengthy engagement with the US Department of Justice (DOJ) over corrupt business practices and has pleaded guilty to deferred charges related to activity prior to 2017 and agreed to pay a fine of $206.7m. The vendor had set aside $250m for its anticipated fine. In 2019, Ericsson entered into a deferred prosecution agreement (DPA) with the DOJ to resolve previously disclosed Foreign Corrupt Practices Act (FCPA) violations relating to conduct in several countries between 2010 and 2016. “Since the start of the DPA, the DOJ has not alleged or charged Ericsson with any new criminal misconduct, and no new illegal conduct has been alleged or charged today,” stressed the vendor in its announcement about the guilty plea. “As previously announced in October 2021 and March 2022, however, the DOJ notified Ericsson that it had failed to provide documents and information to the DOJ in a timely manner and had not adequately reported to the DOJ information relating to a 2019 Iraq-related internal investigation,” it added. Now the company wants to leave the whole episode behind it. “Taking this step today means that the matter of the breaches is now resolved,” stated Ericsson CEO Börje Ekholm. “This allows us to focus on executing our strategy while driving continued cultural change across the company with integrity at the centre of everything we do. This resolution is a stark reminder of the historical misconduct that led to the DPA.  We have learned from that and we are on an important journey to transform our culture… we are a very different company today and have made important changes since 2017 and over 2022,” added the CEO. Still on Ekholm’s to-do list, though, is to hire a new compliance officer following the announcement earlier this week that Laurie Waddy is leaving the company.  

Still with Ericsson… The vendor is working with Saudi operator stc on the future of the telco’s “open” network infrastructure, for which the companies believe Ericsson’s cloud RAN and fronthaul systems could fit the bill. Cloud RAN and ‘open’ don’t always go together, of course, so it’ll be interesting to see how that engagement develops. Read more.  

At the same time, stc is working with Huawei to develop its next-generation fixed network infrastructure based on the specifications being developed by ETSI’s fifth-generation fixed network (F5G ISG) group.  

And still in Saudi Arabia… stc rival Zain is working with Huawei on its 5G-Advanced deployment strategy. Read more. 

The European Commission has approved the formation of a fibre-to-the-home (FTTH) joint venture in Austria, called Alpen Glasfaser, that is co-owned by Deutsche Telekom’s local operation, Magenta Telekom, and French investment firm Meridiam. Alpen Glasfaser’s owners plan to invest €1bn and pass 650,000 premises in Austria by 2030: Initially the network will be used for services offered just by Magenta Telekom, but the network will also be opened up for wholesale access by other ISPs at a later time. Using the new network, Magenta Telekom plans to be able to market its gigabit broadband services to a total of 2.5 million homes and businesses by 2030. The joint venture was first announced in August last year – see Austria’s FTTH fight club: As Magenta strikes €1bn JV, Drei taps A1’s network.

What with ChatGPT, Bard and Bing hitting the headlines with the popular press and scaring the living daylights out of technologically uninformed readers with ludicrous stories about sentient, evil chatbots bent on destroying humanity with untreatable viruses the bots will fabricate before becoming human themselves and taking over the planet, you might be inclined to believe that serious investors (except for a few megalomanic nutcases) wouldn’t touch the sector with a slightly singed 50 Russian rouble note, but you’d be wrong. Corporate investors know a gathering gold rush when they see one and are piling into the market in their droves. As proof of this, writerbuddy.ai (“your buddy for writing blog articles”) has analysed the funding data of more than 10,000 artificial intelligence (AI) companies between 2015 and 2023 as provided by CrunchBase, NetBase Quid, S&P Capital IQ, and NFX. It shows that corporate investment in AI is going through the roof. Investment in the sector has never been low but now it is booming. In 2015, AI investment volumes hit the US$12.75bn mark and by 2021 (the latest year for which  full statistics are available) that figure had risen to $93.5bn. That’s a 633.33% increase over six years. Over the past year, and 2023 to date, AI investment has continued to power ahead and, interestingly but not surprisingly given the frantic search for an anti-Covid vaccine, AI investment volumes rose significantly during the pandemic. In terms of individual companies, OpenAI (of ChatGPT fame/infamy) dominates AI funding having received more than $11bn. All the other AI companies combined raised about $3bn in investments. However, it is noteworthy and highly significant that the 10 most-funded machine learning operations (MLOps) startups attracted $100m in funding. MLOps are a set of practices designed to simplify workflow processes and automate machine learning and deep learning deployments and encompass all processes in the model, from data gathering to governance and monitoring. It is expected, indeed it is a racing certainty, that MLOps will become a global de facto standard as AI inevitably becomes part of everyday life and business. Among other AI companies analysed by writerbuddy.ai are Anthropic, which was founded by former employees of OpenAI and is the second-best-funded AI, having raised $1bn in three funding rounds. Meanwhile, Scale AI, founded in 2016, has raised $602,6m. A full list of other well-funded AI outfits can be found at https://writerbuddy.ai/. A writerbuddy.ai spokesperson said, “While we can’t predict how robust or accurate AI systems will get in the next few years, one thing is certain; the AI race has just begun. Our findings reveal that AI-focused startups have the potential to raise billions in funding, demonstrating corporate investors' confidence in artificial intelligence. Time will tell who will dominate the space, but OpenAI, with the launch of ChatGPT, seems to be doing everything fine.” By the way, no buddy (artificial) or body (human) aided or abetted the sole author of this article. Some of us can still string a few words together all by ourselves, and will continue to do so.

Video business intelligence and predictive analytics company NPAW’s fourth annual Video Streaming Industry Report (this one covers 2022) shows that daily user engagement per streaming service continues to decline as the number of content options continue to increase. The Barcelona, Spain-headquartered NPAW (which, by the way, stands for ‘Nice People at Work’ – not many people know that) says that although global streaming adoption continued growing overall last year, the huge and ever-growing number of viewing options meant that, on average, individual services captured a smaller share of users’ daily viewing time. In a detailed analysis, the report examines the evolution of streaming consumption and quality-of-experience (QoE) trends on global and regional scales and concludes that in 2022, for the second year in succession, providers around the globe saw a year-on-year increase in the total number of  plays while daily consumption per user and service continued to drop for both video on demand (VOD), which was down by 12%, and linear TV, down by 23%. Unsurprisingly, sports content remains immensely popular, as evidenced by the massive viewing figures achieved during the live coverage of the Qatar FIFA World Cup. Providers with streaming rights to the football tournament enjoyed an 80% increase in the total number of plays and an 83% higher total playtime when compared with the previous six months. More detail from the NPAW report shows that the time users spent watching VOD content on each service decreased by a further 12% compared with 2021, clearly demonstrating increased fragmentation and viewer choice, while viewers watched 7% fewer titles. Daily linear TV playtime per user and service took a big hit, declining by a remarkable 23% year on year, while users watched 11% fewer titles per day. Simultaneously, global VOD quality stabilised, largely because of the wide incidence of cross-industry technology upgrades made in 2020 and 2021. However, the average bitrate marginally decreased by a single percentage point, which might be a blip or, perhaps, an indication that the picture quality of VOD is starting to plateau. Service providers, after countless consumer gripes, have been keen to enable the best possible streaming experience and have focused on minimising buffering by proactively increasing the average 'join time’ (so that more of the content loads before the viewer can play it). However, there is a downside trade-off here with higher ‘exit before video starts’ rates rising as consumers have more time and opportunity to disconnect before a playback starts. Meanwhile, good old global linear TV QoE continued to improve and average join time also increased, indicating that providers are implementing longer time lags in video loading to allow for higher-quality content to load and so avoid the course mid-stream buffering, which so angers viewers and can result in the loss of advertising revenues when consumers abandon a movie part-way through. Another item of note is that consumers with the biggest and highest-definition TVs watch more content than those with smaller sets. Commenting on the publication of the report, Ferran Vilaró, CEO and co-founder of NPAW, said “With competition growing fiercer by the minute, it’s business-critical for streaming services to provide the right content and a superior streaming experience if they want to attract and retain users and maintain growth. To do so, they need to leverage their platforms' data to the fullest extent, implementing advanced analytics solutions that combine technical performance monitoring and user journey insights." 

Rakuten Mobile has announced that a former employee and “several outside parties” have been arrested by the Japanese police on suspicion of fraud. The Japanese telco explained that between mid-2019 and mid-2022, the person in question participated in a scheme with “multiple business partners” to inflate expenses for operations related to the storage and transportation of materials entrusted by the company, as well as illegally obtaining profits from the company. Following an internal investigation, Rakuten discovered the then employee had made a large amount of fraudulent claims and had obtained financial profits unlawfully, so it carried out a disciplinary to dismiss the offender in August 2022. The company confirmed that it plans to file a civil lawsuit seeking damages against those allegedly involved in criminal acts, including business partners. More can be found in Rakuten Mobile’s statement, available here in Japanese.

Bloomberg Intelligence (BI) has found that consumer uptake of virtual reality and augmented reality (VR and AR) has slowed markedly as inflation bites, and less disposable income is available for families to spend on the latest high-tech gizmos, reports Digit News.  Consumers are also disillusioned by the lack of standards in the sector and are concerned that the purchase of an expensive device could well turn out to be a costly mistake if or when various device models or even manufacturers disappear from the market leaving them high and dry. Does anyone still remember the disaster that was the V200O from Philips? It went down in history as “the video format that came third in two-horse race”. Overall though the Bloomberg report paints an optimistic picture and has it that when Apple enters what is currently a moribund market things will greatly improve. It adds that a new Apple headset (and it is widely and persistently rumoured that one will be released this summer) could even be a catalyst for “faster growth in the metaverse”. If that happens and better headsets do arrive, BI reckons the global AR/VR market could be worth massive sums by the end of the decade with uptake driven by virtual 3D for shopping, events, social media and other consumer apps. Mandeep Singh, senior industry analyst for technology at Bloomberg Intelligence says, “Metaverse offerings that leverage VR and AR devices for immersive 3D experiences beyond gaming – in areas such as e-commerce, concerts and education – have the potential to drive $615bn in spending by 2030, our analysis suggests. VR/AR hardware and token- and ad-based revenue will be critical on the consumer side, while public-cloud infrastructure and VR/AR enterprise software and design will be key to laying the foundation for experiences. Apple’s entry into this space with a new mixed-reality headset, which could take place in [the first half of the year], remains crucial to mainstream adoption. Industry revenue from the technology's use for entertainment may be delayed until the VR/AR user base is at least 50 million to 100 million.” That’s for the future, currently headsets remain very expensive to buy and “adoption could stay muted with limitations in application as well as use for multiple hours. Innovation will be key to gaining market share.” BI adds that companies including Meta Platforms "are likely to pare back their operating and capital spending amid pressure to boost profitability, which could be a drag on the metaverse’s pace of development.” BI also sees an improved route to monetisation in the VR/SR spheres and cites existing brand partnerships that the likes of Roblox and Decentraland already have with the likes of Gucci, Nike, Coca-Cola and others “creating unique experiences for users to see the brand through a different lens. The sale of high-end luxury items in the metaverse demonstrates the potential for monetisation.” Live events are also regarded as a hook that could attract millions of users with “the lure of experiences that defy limitations of the physical world.” 

- The staff, TelecomTV