The Impending Failure of Good Intentions: DNB’s 5G Roll Out (Opinion)

Written by Dr Rais Hussin, President and Chief Executive Officer of EMIR Research, a think tank focused on strategic policy recommendations based on rigorous research.

EMIR Research welcomes the continuous public engagement with DNB and their hired consultants, for, the aim of a debate is never a shallow victory but credible progress and, in this case, credible progress for the nation based on data, science and economics.

Though DNB has not been forthcoming, as DNB still does not answer the most pressing questions (“Malaysian 5G Rollout “Unanswerable” Questions”) but raises even more eyebrows instead by involuntarily (or voluntarily) giving out more details.

Nevertheless, this ongoing public engagement helps to keep track of what is coming out of DNB and spot potential red flags.

DETRIMENTAL IMPACT ON MALAYSIAN TELECOM INDUSTRY

DNB’s UK-based consultancy, Plum Consultancy, claims that EMIR Research misunderstood how DNB’s 5G Single Wholesale Network (SWN) works.

DNB-Plum explains at length how the “DNB approach is different and is not network sharing”, which is pure semantics and conveniently ignores the key issue that EMIR Research continuously emphasised based on hard evidence of science, data and economics. When individual MNOs have no freedom to fully deploy their active network equipment (and DNB, with the help of Plum, admits this fact themselves: “there will be one set of electronics… to carry data between base stations and end-user devices” which is widely understood to be active RAN sharing), we have a big problem — MNOs can no longer compete on the quality of network which is the key differentiating feature and all other features, including differentiation “on retail end” or “in terms of the services offered” which DNB keeps emphasising are only secondary to and totally dependent on the network quality.

If DNB-Plum has not grasped it from the first time, EMIR Research would like to reiterate that it is fully aware of and also acknowledged in its writings on numerous occasions that under DNB, the core networks will be by individual MNOs (at least until the implementation of 5G stand-alone solution).

However, this does not help the DNB’s argument because no matter how superior equipment you have at the core network level, it can do very little if the active network access equipment, which in the case of DNB is provided by one vendor and is entirely out of MNO’s control, provides substandard quality.

Globally and in the Malaysian market until this point, most differentiation between MNOs (other than pricing) has been based on critical innovation and differentiation in the RAN. In contrast, innovation in the core is minimal and, in turn, requires RAN-side support. In short, MNOs need to control both the core and access to compete effectively!

Note that GSM Association (GSMA), in its response to DNB, argumentatively echoes EMIR Research’s concern about this delinking of network ownership from service delivery and its various negative impacts on the industry and end consumers. 

And if Plum does not see this adverse effect on the telecom industry in Malaysia coming or does not want to see it (which is surprising, given their supposedly “over 15 years working on hundreds of such projects including extensive work on the deployment of 4G and 5G”) then maybe Plum could explain why SWN model turned out problematic for a handful of nations who attempted it for 4G and why the rest of the world so avoids it for 5G, including the UK where British mobile operators received 5G spectrum through auction. Apparently, Plum, a UK-based consultancy, has failed to convince their policymakers of the benefits of a nationwide SWN.

LOWER MOBILE DATA SERVICE PRICES UNDER SWN?

According to Plum, “in contrast, rational economic analysis indicates that EMIR’s proposal will lead to wholesale 5G costs [that are] four to five times higher than those of the SWN,” further explaining that “rolling out six 5G networks — one for each mobile operator — would require six times as many 5G base stations”.

This is a far-fetched assumption by Plum that telcos would not share base stations and other infrastructure! Given Plum’s claimed experience in the industry, they should be well aware that this has been one significant trend globally (Malaysia included) in the telecom industry for years now, even for 4G (what more for 5G where this is the only survival strategy), which makes the estimate by Plum that “the overall ten-year cost of 5G network ownership under this option [to] be four to five times greater than under an SWN”, a massively monumental overstatement.

Furthermore, MNOs can significantly reuse their existing infrastructure (in contrast to DNB’s current rollout) to lower total deployment costs — they would not “roll out a 5G network” but upgrade an existing 4G network to also support 5G. This is a very different scenario, and it is at far lower cost, especially with regard to ongoing or OPEX costs for the network.

However, Plum chooses to ignore the benefit of sharing fixed costs between the existing 4G network and the new 5G layer versus a much higher cost of adding a new 4G + 5G network as is required under the DNB’s current rollout.

Note that retail pricing of service to retail customers will consider the costs of both 4G and the 5G layers, at least until the 4G networks are withdrawn and switched off and it becomes stand-alone 5G.  So sharing, rather than duplicating the fixed costs between 4G and 5G, as in the case of the 5G rollout by individual MNOs, has clear benefits for retail customers.

Also, while being so focussed on the towers, DNB-Plum are silent about how much costs could be reduced by each respective MNO on the access equipment if the network is rolled out gradually in pace with demand and, importantly, in pace with the innovation in the industry and progressively reducing the cost of equipment!

As Plum acknowledges themselves the competition in the RAN infrastructure, which, as explained above, under DNB’s current proposition will be out of MNOs control, “is determined largely by the relevant standards bodies and then implemented by the global network vendors” but that is precisely where the big problem lies. Under the DNB’s current rollout model, MNOs will not be able to tap into this global pool of innovation by vendors!

Under DNB’s proposed model, each MNO would be locked for ten years, without access to vendor competition, with a fixed cost of equipment provided by one single supplier—as technology changes (becomes more advanced and cheaper), MNOs would not be able to continue to evaluate new options in terms of features and lower prices which will also hugely weight on the consumer prices.

Therefore, it is highly uncertain how “the end-user prices under the SWN are expected to be around 60% lower”, but it is highly certain, again, that this removal of innovation from the supply of 5G RAN will massively reduce competitive differentiation in the retail market and slow down the ongoing adoption of leading-edge RAN technologies for Malaysia while also compromising Malaysia’s ability to attract 4IR’s, 5IR’s and subsequent IR’s ecosystem players — massive opportunity cost for the nation the scale of which we probably would not be able even to grasp in its entirety.

SUFFICIENCY / INSUFFICIENCY OF 10,000 CELL SITES

Plum consultancy also defends the sufficiency of 10,000 cell sites to provide 90% populated area coverage with a dismissive “there is no evidence to suggest that these estimates (by DNB are faulty)”. Only they forget to attach solid evidence to substantiate the claim that they are correct. Where is the detailed technical report to substantiate that 10,000 cell sites will be sufficient to provide 90% populated area coverage, importantly, with the claimed 5G speed? How the populated area in terms of its density is defined has also never transpired in the discussion.

However, even more interesting is the following statement: “EMIR’s conclusion may have validity if, as it assumes, 5G spectrum is not available at 700 MHz”.

As it transpires now, DNB has 700MHz, 3.5GHz and 28GHz spectrum. Number of towers required to cover populated areas would be different depending on the frequency spectrum — 10,000 sites may be sufficient for 700 MHz, but more towers (and therefore substantially higher costs) would be associated with higher frequency spectrum. Until now DNB has not come crystal clear on this.

However, with 700 MHz, at best, we would be able to get 4G speed and the promise of 1Gbps speed will be gone. So 5G infrastructure, at 5G costs for 4G speed ?

Apparently, then, due to substantially increased coverage per cell site, 700 MHz band would be used to cover rural areas. If DNB is trying to change their goal-posts now and is telling us that we need 4G in the rural areas to “bridge the digital divide” (one of the key premises to their existence and so-called “supply-driven” approach) then this is exactly what EMIR Research and other experts have been telling all this while—that we do not need questionable and failed elsewhere SWN model to bridge the digital divide. Keep in mind 5G full functionality versus needs of the rural dwellers (Figure 1).

Therefore, for bridging digital divide there is a better and cheaper solution with older but well established technologies (see for example “Cheaper solution for rural broadband” or “Finding a cure for Malaysia’s broadband illness”). In short, Malaysia, and particularly rural areas are suffering due to the scarcity or even complete absence of passive network infrastructure, mainly fibre backhaul.

Therefore, EMIR Research, echoing the telecom experts’ opinion, has suggested that the primary focus of DNB should be to own and expand the existing passive network infrastructure only, while utilising for this purpose Universal Service Providers funds and prioritising rural areas, so that the large sums of tax-payers money could be saved and redirected elsewhere. Malaysia has many more pressing problems and impact per every dollar spent must be the priority now!

Furthermore, the proposed restructuring model for DNB will also resolve many other governance problems when the retail players are also DNB’s shareholders. There must be complete separation between retailers and wholesalers which is not what current DNB rollout model offers.

Given the seriousness of the issue, more details will be discussed in the Part 2 of this article as EMIR Research is trying, once again, to re-centre DNB-Plum on all the key issues. Hopefully we will have more direct answers from DNB-Plum, instead of rehashing of the archaic narratives that has been rebutted comprehensively by many including GSMA, EMIR and other telecom experts. We don’t want as what Shakespeare once said : “tale told by an idiot, full of sound and fury, signifying nothing”, to continue unabated.

Tianjin Port, Huawei advance cutting-edge digital twin plans

Tianjin Port Group and Huawei announced this week that the two companies will deepen cooperation to build a digital twin of the port, making it more automated and intelligent.

In a statement, Yue Kun, CTO of Huawei’s Smart Road, Waterway & Port BU, said: “Ports are a vital link in maritime transportation, connecting trade and supply markets across the globe. Building more efficient smart ports is becoming an increasingly pressing requirement for the global supply chain.

“Section C Terminal of the Port of Tianjin has now been operating stably for over one year. This proves that 5G and L4 autonomous driving have already been successfully adopted by industries in China, and are creating true commercial and social value.”

Yue believes that this progress will benefit various industries, with next-generation digital technologies, such as 5G and AI, combined to solve industry problems, promote digital industry transformation and upgrading, and generate social value.

As a major modern port, the Port of Tianjin boasts 300,000-ton-class terminals with a channel depth of 22 m. It has 213 berths of various types. In 2022, its container throughput exceeded 21 million TEUs, ranking among the top 10 ports worldwide.

Yang Jiemin, Vice President of Tianjin Port Group, explained that this plan consisted of three parts, namely construction of new automated terminals; upgrading of traditional terminals; and comprehensive digital transformation.

The Section C Terminal in the Beijiang Port Area of the Port of Tianjin was the world’s first smart, zero-carbon port terminal. It entered large-scale commercial operations in October 2021, and has been stably operating ever since. 5G and L4 autonomous driving technologies are applied at this terminal to make it both safer and more efficient. At the terminal, container cranes operate automatically and intelligent robots of the horizontal transportation system frequently come and go.

Remotely controlled quay cranes lift loaded containers from cargo ships and put them onto the intelligent robots for horizontal transportation.

Supported by the BeiDou Navigation Satellite System, these robots are guided to automatic locking/unlocking stations to unlock containers and then to the container yard along optimal driving routes that are calculated in real time. The entire process runs smoothly.

Pro-Russian hackers say they breached Samsung

Genesis Day, a pro-Russian hacktivist group, claims to have breached Samsung’s internal servers over South Korea’s cooperation with NATO.

Attackers posted an ad on a popular hacking forum, alleging they breached South Korea’s manufacturing conglomerate Samsung. 

Threat actors, who call themselves Genesis Day, claim they found their way into Samsung’s internal FTP service, used by Samsung Group in South Korea. 

“Because South Korea has recently strengthened its cooperation with NATO and targeted other countries. We hacked into the internal FTP service of the Samsung Group in South Korea, “the attackers said.

Sample data investigated by the Cybernews research team allegedly includes Samsung’s corporate manuals for logging in, an employee password, and several educational videos. However, the data sample doesn’t strike as containing sensitive data.

We reached out to Samsung for comment but haven’t received a reply before going to press. 

The attackers tried to build on the momentum, promising to leak an additional 2.4GB of data stolen from the South Korean conglomerate.

“We don’t mind a massive network crash in South Korea if they continue to take targeted action. This is just the beginning,” threat actors said.

While the motivation of pro-Russian threat actors is likely to advance the Kremlin’s interests in Ukraine, the rationale behind the attack seems murky.

The New York Times wrote on January 17 that the Republic of Korea refused to ship artillery shells to Ukraine, as the move would violate the country’s arms export rules. Instead, the government in Seoul opted to help the US replenish its stocks elsewhere.

Competing hacktivist groups have launched numerous attacks since Russia invaded Ukraine on February 24, 2022, with Anonymous, IT Army, Hacker Forces, OneFist, and many others targeting Russia’s state-owned enterprises and businesses.

Davos 2023: 5 takeaways from an Asian perspective (Opinion)

Written by KENJI KAWASE and AKITO TANAKA, Nikkei Asia chief business news correspondents

DAVOS, Switzerland — The annual meeting of the World Economic Forum that concluded on Friday was notable in the growing presence of Asian players.

The five-day session was held in-person in its traditional January slot for the first time in three years, bringing thousands of public and private-sector leaders to this small Swiss town.

In this typically Eurocentric gathering that touched on a wide-ranging topics from the war in Ukraine, supply chains to gender inequality, Asian business leaders offered deep insights into various issues.

Nikkei Asia has selected five key takeaways from an Asian perspective.

Who was more visible, China, India or ASEAN?

The profile of Asian participants in the annual meeting has been rising the past few years. India seems to be the most visible among regional peers, with major tech companies staging booths and a large billboard of Prime Minister Narendra Modi displayed on the city’s Promenade. Indian business leaders were at the forefront of debates over technology and supply chain issues.

Raghuram Rajan, a University of Chicago finance professor and former Indian central bank chief, mentioned this shift in the context of how IT service sector companies, like Infosys, are broadening their global reach.

“You’re seeing a fairly strong push up in the service exports at this point, and it could do far more. You see at Davos a lot of Indian firms are trying to expand their reach,” Rajan said.

While Association of Southeast Asian Nations members, such as Indonesia and the Philippines, sent large delegations as well, China’s visibility has ostensibly dropped, at least compared with three years ago. A veteran Davos participant attributed this to a “calendar factor,” as the conference was held a week before Lunar New Year, and not to a decline in China’s standing.

Can technology save the world?

While leaders in Davos kept trying to find clues to solving global problems such as climate change, the energy crisis, and inclusive growth, executives of tech giants boasted that many of their innovations could offer solutions.

Arvind Krishna, chief executive of IBM, said the company’s quantum computer would provide the ability to solve problems in areas such as materials science as soon as this year. He pointed out that this could lead to the development of a new fertilizer that would help food shortages and accelerate the innovation of electric vehicle batteries.

Amid concerns over a global economic slowdown, even tech giants are not immune to layoffs. Microsoft CEO Satya Nadella argued that digital technology, like artificial intelligence, “can help boost” the overall economy by increasing productivity in many industries.

Sunil Bharti Mittal, chairman of the Indian group Bharti Enterprises, said the spread of faster 5G communication technology would help emerging economies receive the same services as developed ones. The chairman added that with this, “millions” of people will be able to attend events such as the Davos conference — which has been often been called a gathering of the world’s elites.

‘Re-globalization’ of the supply chain

Will the end of globalization of international politics and the world economy continue, or is this the beginning of “re-globalization?” This was one of the hottest topics discussed in Davos this year. And the global semiconductor industry, which has been hit hard by a supply chain crisis caused by the pandemic, is leaning toward re-globalization.

At a session, Intel CEO Pat Gelsinger stressed that the American chipmaker is “fixing” the high concentration of high-end semiconductor production in Taiwan by adding new factories in the U.S.

“We had allowed ourselves to become acutely dependent on single points of failure in the supply chain,” Gelsinger said, adding the industry needs a “balanced, resilient supply chain.”

Ashwini Vaishnaw, India’s minister for railways, communications, electronics and information technology, who was on stage with Gelsinger, said the importance of India as a global tech manufacturing base is increasing as the tech rivalry between Washington and Beijing deepens.

“This is made in India,” the minister said, showing off the latest iPhone. He added the country would continue to attract the chip manufacturing industry, which is higher in the tech value chain.

Is China rescuing the global economy?

China emerged as a main focus in the debate surrounding global growth. While debates over whether, or how deep, a recession will hit the U.S. and Europe cast a shadow over most outlooks for the future, China’s unexpected U-turn from its stringent zero-COVID policy has provided a sense of optimism to some.

Kristalina Georgieva, managing director of the International Monetary Fund, hinted Friday on upgrading the global growth outlook based on two major factors — the expectation of inflation receding and the “prospect for China to boost growth.”

While similar sentiment was heard during the conference, many expressed skepticism about such optimism.

Kevin Rudd, president and chief executive officer of Asia Society and a former Australian prime minister, expects China “to face a combination of residual domestic headwinds and also the international headwinds,” including strategic rivalries against the U.S.

“If China and the U.S. can keep certain equilibrium, then we should see reasonable growth. If we don’t, then that will also act as an external headwind,” he said.

From left, South Korean President Yoon Suk-yeol, Philippine President Ferdinand Marcos, Jr. and Timor-Leste President Jose Ramos-Horta attend the annual meeting of the World Economic Forum. (Source photos by Yonhap/Kyodo, AP and Kenji Kawase)

No top stars from the U.S. and China

According to the organizer, over 50 heads of state or government attended the event in person, a record high. A few of them were from Asia, including South Korean President Yoon Suk-yeol, Philippine President Ferdinand Marcos, Jr. and President Jose Ramos-Horta of Timor-Leste, who were all newly elected last year.

However, no top leaders from China or the U.S. were present. For that matter, German Chancellor Olaf Scholz was the only G-7 leader at the event, while Russian politicians were also absent.

The major headline-grabbing news on U.S. and China occurred elsewhere in Switzerland during the Davos conference. U.S. Treasury Secretary Janet Yellen, who did not attend the WEF event, met Chinese Vice Premier Liu He, who was dispatched to Davos, on Wednesday, where both sides agreed to have had a “candid” discussion. The stage and the spotlight were in Geneva, not Davos.

Chinese tech giants Huawei and TikTok bankrolling MPs and peers in lobbying effort

Tech giants from China like TikTok and Huawei have donated tens of thousands of pounds to a parliamentary group, sparking calls for a review of lobbying rules to MPs and peers

Chinese firms Huawei and TikTok are among big tech firms bankrolling MPs and peers. More than £400,000 has been donated to a parliamentary group set up to explore technology issues since 2019.

Most of it came from the likes of GoogleFacebook and BT. Chinese giants Huawei and TikTok have given £42,000.

The money went to the influential Internet, Communications and Technology all-political parliamentary group.

The cross-party group, which has 21 MPs and peers, is said to be the largest of hundreds set up to explore policy issues. These are often targeted by lobbyists and corporate donors seeking to influence government policy on behalf of big business.

They rely on donations and benefits-in-kind to fund their operations, which have to be published in a register. Last night the group said Huawei was not “currently” involved or donating.

But anti-corruption charity Transparency International UK called for a review of lobbying rules.

Policy manager Rose Zussman said: “It’s astonishing that the rules allow companies with such close ties to foreign governments to bankroll these groups and gain privileged access to the legislature.

“They leave the door wide open to foreign interference in our democracy.”

Cyber-security expert Anton Dahbura added: “I am concerned about potential conflicts of interests.

“It should be a very easy decision for government officials to refrain from accepting funds from TikTok and Huawei.”

China’s role in our technology infrastructure is under scrutiny over security concerns. Huawei 5G equipment is being stripped from networks and TikTok’s parent company has denied user data goes to Beijing.

Last August MPs, including Tom Tugendhat and Iain Duncan Smith, raised fears user data was being transferred to China.

A Huawei spokesperson said: “Huawei is an independent, employee-owned company and these small, historic donations were made in full transparency and in line with all relevant regulations, alongside many well-known businesses from the UK and around the world.”

TikTok said its donations had always been “transparently declared”.

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