Category: Mobiles

ZTE pays $900 million fine

 

Chinese telecom equipment maker ZTE has agreed to plead guilty and pay up in a US sanctions case, drawing a line under a damaging scandal that had threatened its cut off its supply chain.

While the fine was larger than expected, ZTE, also a major smartphone maker, reported robust underlying earnings for 2016 and was upbeat in estimates for the first quarter.

A five-year investigation found ZTE conspired to evade US embargoes by buying US components, incorporating them into ZTE equipment and illegally shipping them to Iran.

It also made 283 shipments of telecommunications equipment to North Korea.

US Attorney General Jeff Sessions said in a statement that ZTE Corporation not only violated export controls that keep sensitive American technology out of the hands of hostile regimes like Iran’s, they lied … about their illegal acts,”

But ZTE relies on US suppliers for 25 percent to 30 percent of its components, many of which are key to its goods. It buys about $2.6 billion worth of components a year from US firms. This includes  Qualcomm, Microsoft and Intel.

ZTE Chief Executive Zhao Xianming said in a statement that his outfit acknowledges the mistakes it made, takes responsibility for them, and remains committed to positive change in the company.

The company agreed to a seven-year suspended denial of export privileges, which could be activated if there are further violations, as well as three years of probation, a compliance and ethics program, and a corporate monitor.

It also agreed to an additional penalty of $300 million that will be suspended during the seven-year term on the condition the company complies with requirements in the agreement.

ZTE has replaced executives allegedly involved, including naming a new president.

The company said it slid to a preliminary net loss of $342 million in 2016, its first loss in four years, due to the settlement.

ZTE cuts a deal with US prosecutors over Iran

ZTE is close to cutting a deal with US prosecutors over its Iran dealings.

Apparently ZTE will plead guilty to US criminal charges and pay hundreds of millions of dollars in penalties over allegations it violated US laws that restrict sale of US technology to Iran. We guess the upside of the deal is that the US will not shut the company down and prevent it using US tech in its products,

The company has not yet signed a deal with the US Department of Commerce, the U.S. Department of Justice and the US Department of Treasury, but it is pretty likely. ZTE really wants the incident to go away.

The only thing that can really go wrong is if Donald (Prince of Orange) Trump takes an interest. Trump is very much against Iran because his chum Bibi Netanyahu wants a world war against the country.  Trump also does not like Chinese companies coming into the US either so might take the opportunity to scuttle any deal.

ZTE is expected to plead guilty to conspiring to violate the International Emergency Economic Powers Act, among other charges, the source said, and pay penalties in the hundreds of millions.

The Commerce Department investigation followed reports by Reuters in 2012 that the company had signed contracts to ship millions of dollars worth of hardware and software from some of America’s best-known technology companies to Iran’s largest telecoms carrier.

Trump’s FCC boss calls Net Neutrality a mistake

FCC chairman Ajit Pai said today that net neutrality was “a mistake” and the Commission was taking steps to turn it into a telco’s wet dream.

Pai said that net neutrality injected tremendous uncertainty into the broadband market and uncertainty was the enemy of growth.

To be fair Pai has always been opposed to net neutrality and voted against the proposal when it came up in 2015. He had been widely expected to dismantle net neutrality to allow telos to charge people what they like. Basically, Pai’s thinks that internet providers were doing just fine under the old rules and that the new ones have hurt investment.

Both of those points have been discounted. There’s little competition in the wired broadband market, and Consumerist investigated the investment claims in early 2016 and found that internet providers were estimated to spend more in the coming year.

“Today, the torch at the FCC has been passed to a new generation, dedicated to renewal as well as change. We are confident in the decades-long, cross-party consensus on light-touch internet regulation … and we are on track to returning to that successful approach,” Pai said.

He cites the commission’s approval of zero-rating schemes — this, he says, is exactly why all four carriers are now offering unlimited data plans.

This is also rubbish as zero rating isn’t involved in these plans at all. Telcos offer highly competitive unlimited data plans because the last FCC chairman kept them in a competitive environment, leaving four nationwide wireless providers and a clear set of rules for them to follow.

Pai seems to think that the FCC should do nothing unless there’s a huge market failure and that competition can preserve an open internet even without rules.

The fact that the US telcos are hardly in competition and well just use their quasi-monopoly powers to double charge heavy web users is no part of Pai’s reality.

Bloke builds his own open saucy self-driving car

A self-driving car does not have to cost you a fortune if you can get away from the car industry, according to a University of Nebraska student.

According to MIT Technology Review Brevan Jorgenson used open source software to convert his Honda Civic into a high tech self-driving car,

His homemade device in place of the rear-view mirror can control the brakes, accelerator, and steering, and it uses a camera to identify road markings and other cars.

Jorgenson built the lot using plans and software downloaded from the internet, plus about $700 in parts.

He started his project after George Hotz of Comma.ai, a San Francisco startup that was developing a $999 device that could upgrade certain vehicles to steer themselves on the highway and follow stop-and-go traffic.

Hotz was forced to cancel plans to launch the product after receiving a letter asking questions about its functionality from the National Highway Traffic Safety Administration. In November, he released the company’s hardware designs and software for free, saying he wanted to empower researchers and hobbyists.

The whole thing is powered by a OnePlus 3 smartphone equipped with Comma’s now-free Openpilot software, a circuit board that connects the device to the car’s electronics, and a 3-D-printed case. Jorgenson got the case printed by an online service and soldered the board together himself.

Subsequent tests revealed that the Neo would inexplicably pull to the right sometimes, but a software update released by Comma quickly fixed that. Now fully working, the system is similar in capabilities to the initial version of Tesla’s AutoPilot.

Bryant Walker Smith, a law professor at the University of South Carolina, says that federal and state laws probably don’t pose much of a barrier to those with a desire to upgrade their vehicle to share driving duties. NHTSA has authority over companies selling vehicles and systems used to modify them, but consumers have significant flexibility in making changes to their own vehicle, says Smith, who advises the US Department of Transportation on law and automation.

Apple’s App store is the kiss of death for sales

For a long-time, developers have been forced to bend over backwards to satisfy the fruity cargo-cult Apple’s controls so that they can be granted entry to its App store.

While developers admit that Apple is a nightmare to work for, the belief is that they can be sure of getting money back by being involved in the store.

However, developers are starting to question the wisdom of their Apple involvement and are discovering that pulling apps from Apple’s store do them no harm at all.

Techcrunch spoke to Dash creator Bogdan Popescu who thought he was in trouble when Apple pulled his Dash app off of the App Store. In the 100 day period since the move, Dash maintained and even increased revenue and found that its users didn’t care which platform they were using.

More than 84 per cent of the customers simply moved over to the independent app license from the App Store license and Popescu found that he did not have to deal with Apple anymore. He had full control over his business and did not have any App Store installation/updating/purchasing issues.

Paul Kafasis tried something similar. When he pulled his Appl a year ago he found that the 50 per cent of sales which went through the App Store turned into direct sales through his website.

“It appears that nearly everyone who would have purchased Piezo via the Mac App Store opted to purchase directly once that was the only option,” he said.

It appears that the Mac App Store was not driving sales to developers it was driving sales away from our own site, and into the Mac App Store.

Maintaining the app for the app store is costly and much of his revenue went to paying the App Store a commission. Moving to a direct model was much better than trying to obey Apple’s channel rules.

Basically, developers are discovering that having more than one sales channel is also massively important.

Many developers are considering setting up a system where they exist on the App store but charge more for the product. Smarter customer will go to the website where they can get it cheaper, but the lazier types will effectively end up paying Apple’s tax.

ZTE fears US action could hit results

Chinese telco outfit ZTE fears that penalties it expects to incur for allegedly breaking US sanctions against Iran will be a kick in the bottom line.

In March, the US government hit ZTE with some of the toughest-ever US export restrictions for the alleged breaches. It has since issued temporary reprieves on the curbs, which are now due to take effect next month.

ZTE said in a filing to the Shenzhen Stock Exchange said that it had been actively cooperating and communicating with relevant U.S. government departments to reach a conclusion of the investigation.

“The outcome of the settlement issues still remains uncertain but will likely have a material impact on the financial conditions and operating results of the company.”

Measures it has taken to placate Washington include a management overhaul and the appointment of a new chief export compliance officer based in the United States.

If no settlement or reprieve extension were reached before the deadline, US suppliers would be banned from doing business with ZTE, which could cut off much of the Chinese company’s supply chain. ZTE relies on US suppliers for about one-third of its components.

Nokia does better than expected

Gold-Rush-Eating-boots-N_54Former rubber boot maker Nokia has reported a better-than-expected quarterly profit thanks mostly to the fact it bought Alcatel-Lucent and slashed its costs.

Nokia and its rivals, Ericsson and Huawei, are not having a good time as telecom operators’ demand for faster 4G mobile broadband equipment has peaked, and upgrades to next-generation 5G equipment are still years away.

Fourth-quarter group earnings before interest and taxes fell 27 percent from a year ago to $1.01 billion, but about 25 percent better than the cocaine nose jobs of Wall Street predicted.

The networks unit’s sales in the quarter fell 14 percent, more than expected, but its operating margin came in at 14.1 percent, ahead of a market forecast of 11.7 percent.

Nokia said that while networks sales were set to decline further this year, profitability could improve from a 2016 margin of 8.9 percent.

Chief Executive Rajeev Suri said in a statement that he was disappointed with Nokia’s topline development in 2016, he expected its performance to improve in 2017. He saw potential for margin expansion in 2017 and beyond, as market conditions improve and sales transformation programmes gain traction.

Still in the current market, Nokia’s results are strong.  Nokia bought Alcatel-Lucent last year in response to industry changes and is currently axing thousands of jobs as it seeks to cut 1.2 billion euro of annual costs by 2018.

Nokia was caught out by the rise of smartphones and ended up selling its handset business to Microsoft in 2014, leaving it with the networks business and a portfolio of technology patents.

EU clears final global roaming hurdle

EU and country flags - Wikimedia CommonsThe European Union sorted out a preliminary deal early to cap wholesale charges telecom operators pay each other when their customers use their mobile phones abroad, paving the way for the abolition of roaming fees in June.

The caps were the last sticking point to abolish retail roaming charges as of June 15, 2017, crowning a decade of efforts by Brussels to allow citizens to use their phones abroad without paying extra.

Wholesale charges for data – which were the most controversial given the exponential use of mobile internet – will be capped at 7.7 euros per gigabyte from June 2017, going down to 2.5 euro per gigabyte in 2022.

Caps for making calls will decrease from five euro cents per minute to 3.2 euro cents per minute, while those for sending text messages will halve to one euro cent from two euro cents on June.

“Goodbye roaming,” tweeted Miapetra Kumpula-Natri, the EU lawmaker who steered the law on behalf of the European parliament.

The European Commission – the EU executive – will look at the wholesale caps every two years and propose new ones if necessary.

Wednesday’s deal still needs to be confirmed by the full European Parliament and member states but it is likely to be accepted.

The move was being important to show the great unwashed, er ordinary EU citizens, that it looked after their interests and not just those of French and German businesses.

After the agreement to abolish retail roaming charges in June this year, policymakers grappled with the challenge of who would foot the bill as telecom operators still need to pay each other to keep their customers connected abroad.

Countries in northern and eastern Europe where consumers gobble up mobile data at low prices favoured lower wholesale caps to avoid companies raising prices in their home markets, effectively making poorer customers subsidize frequent travellers.

However, places which depend on tourists such as the south, were worried that their operators could be forced to hike domestic prices to recover the costs of accommodating the extra tourist traffic.

EU roaming charge agreement crucial

Europe with flags - Wikimedia CommonsThe European Union’s digital chief has said that failure to solve the last remaining barrier to abolishing mobile roaming charges across the bloc would lead people to question its ability to deliver on promises.

EU lawmakers and member states are set to hold a third round of talks today on where to set caps for the wholesale roaming charges telecom operators pay each other when their customers call, send texts or surf the web abroad.

It has taken Brussels a decade to reach the point where its citizens will be able to use their phones abroad without paying extra.

European Commission Vice President Andrus Ansip said that it was important to get the agreement sorted out because Brussels has sought to show it works for ordinary citizens.

He called on the negotiators to start showing some “significant flexibility” to achieve a final agreement

The two sides remain far apart on where the wholesale caps for data should be set, with the European Parliament pushing for an initial cap of 4 euros ($4) per gigabyte while member states want it to start at 8.5 euros per gigabyte.

Ansip wrote that if no political compromise can be achieved, people will rightly question its common will and ability to deliver on its promises.

“That is a risk we should not run,” Ansip wrote.

The split on wholesale roaming caps stems from wide differences in domestic prices and travel patterns across the bloc.

Countries in northern and eastern Europe with low domestic prices and generous packages favour lower wholesale caps to avoid companies raising prices in their home markets, effectively making poorer customers subsidize frequent travellers.

Countries in the tourist-magnet south worry that their operators could be forced to hike domestic prices to accommodate the seasonal tourist traffic. They also fear operators will put off investment in networks if foreign operators can gain cheap access to their infrastructure and undercut them domestically.

BT losing a pizza the action after Italian accounting scandal

banner_pizza_The BT Group is facing two shareholder lawsuits in the United States, after a fifth of the telecommunications company’s market value was wiped out in a single day amid a growing accounting scandal in Italy.

The lawsuits accusing the British company and three top executives of securities fraud were filed in the US District Courts in Manhattan and in nearby Newark, New Jersey.

Both lawsuits were brought by individuals seeking class-action status, and named Chief Executive Gavin Patterson, his predecessor Ian Livingston, and Finance Director Tony Chanmugam as defendants.

A spokeswoman for BT declined to comment on behalf of the defendants. BT had launched an internal probe into its Italian business after a whistleblower flagged concerns.

The price of BT’s shares in London and American depositary receipts in New York fell nearly 21 percent.

BT wrote-down its Italian division to £530 million from £145 million after Patterson expressed disappointment with the “inappropriate behaviour” uncovered.

BT reported slowing demand from government and corporate customers following last June’s vote by Britons to leave the European Union. It said that slowdown, together with the accounting problems, would weigh on results for two years.

But the lawsuits accuse BT of having concealed or made misleading statements about the accounting practices in Italy, causing it to inflate earnings and its stock price.

Companies are frequently sued in the United States after releasing negative news that investors say they did not expect.

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