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It’s outrageous!

It’s a bit of a Daily Mail headline but it captures the sentiment expressed by web giant Google this week after the emergence of a ‘top secret Post-it note’ suggesting the NSA hacked the data links between Google’s private cloud and the public internet in order to access Google-hosted information.

Indeed the Big G must have been feeling much like German chancellor Angela Merkel who also discovered the NSA has been tapping her phone for more than a decade but at least she had a hotline straight to President Obama in order to seek answers and an apology. Instead Google had nothing to contend with but a Post-it note, a Post-it note? What incredulity the company must feel. It’s a bit like that episode of Sex and the City where Carrie Bradshaw’s boyfriend breaks up with her on a Post-it. Come on, we’ve all seen every episode, just like Friends. The Informer’s pretty sure there are entire channels just dedicated to re-runs of those two shows.

But back to the story and the NSA really rubbed salt in the wound with this particular rectangle of yellow paper by having the audacity to even add a little smiley face next to the arrow highlighting the point at which the spooks strip SSL encryption off traffic flowing through Google’s front end servers.

The leak is one of the documents made available by whistleblower Edward Snowden, who incidentally this week started a job in a ‘tech support’ role at a ‘major’ Russia website. VK – Russia’s answer to Facebook – is thought to be the most likely employer. According to the docs, the NSA is able to infiltrate the link between the private and public network connecting Google and Yahoo datacentres to the internet as part of a project codenamed MUSCULAR (who names these initiatives?) – which is operated jointly by the agency’s British Counterpart GCHQ under the broader project WINDSTOP.

While PRISM is an operation that targets front-end access, where the government legally compelled companies to turn over information on the communications of its users, MUSCULAR adds a significant backend dimension to the agency’s intelligence gathering operations. Can they not stop themselves or is it more: “I’m sorry, I can’t, don’t hate me.”

“We are outraged at the lengths to which the government seems to have gone to intercept data from our private fiber networks, and it underscores the need for urgent reform,” said David Drummond, chief legal officer at Google in a statement.

And that’s not the only thing Google was outraged about. Remember back in 2011, when one time giant Nortel finally folded? Remember that stockpile of patents that amounts to something similar to a nuclear warhead? Remember the hilariously named Rockstar patent consortium, jointly owned by Apple, Microsoft, BlackBerry, Ericsson, Sony, and EMC? Well, Rockstar finally pushed the button and set the crosshairs on Android.

Google made an unsuccessful bid for the patent portfolio when it came up and at the time kicked up a stink about the inflated price ($ 4.5bn actual versus $ 1bn expected) for what is essentially an armoury. So Rockstar has filed suit in the US District Court in Texas against Google, Samsung, HTC, and Huawei – all Android cheerleaders – for infringing patents related to search terms and advertising. This thing is about to go nuclear. Maybe the patent group should have plumped for Dr Strangelove instead?

But you can almost see why the patent holders are so upset as it looks like Android is the real rockstar of the mobile market. Estimates from Strategy Analytics suggest that Android has passed the magic 80 per cent in terms of global smartphone market share, jumping from 75 per cent in the third quarter of 2012 to 81.3 per cent in the same period this year. Apple’s own star looks to be on the wane with its market share shrinking from 15.6 per cent to 13.4 per cent over the same period, while Windows, as championed by Nokia, has seen its share double from just over two per cent to just over four per cent. While poor old Blackberry is shrinking into insignificance, dropping from 4.3 per cent to one per cent.

According to its financials, Apple shifted 33.8 million iPhones in the third quarter, a record number of units sold, after launching two models in September – the iPhone 5s and iPhone 5c. It sold 26.9 million iPhones in the same quarter last year. But Google this week unveiled its response in the shape of the Nexus 5, made by LG, which bears more than a passing resemblance to its predecessor the Nexus 4. Most of the difference is under the hood, especially the software, which is the latest confectionary version of the Android OS, Kitkat or 4.4.

The most competitive element however is the price, especially when compared to an Apple device. A 16GB version of the Nexus 5 will cost $ 349 in the US (£299), unlocked and without a contract, while the 32GB version should cost $ 399 (£339).

The latest version of Android is designed to be more memory efficient so it works on lower end devices as well as higher end ones. On that note, Google-owned Motorola Mobility is working on an open hardware platform which would allow users to create, modular customised smartphones.

Project Ara is led by Motorola’s Advanced Technology and Projects group, and promises “to do for hardware what the Android platform has done for software”. The aim is to create a third-party developer ecosystem, lower the barriers to entry, increase the pace of innovation and substantially compress development timelines. If it all sounds a bit Phonebloks, that’s because Moto is working with Dave Hakkens, the creator of Phonebloks, to tap into an existing community.

The partners said they are anticipating an alpha release of the Module Developer’s Kit (MDK) sometime this winter, so keep your eyes peeled for that.

We’ve covered the ridiculous use of celebrities as tech brand ambassadors before, in fact the Informer warned companies considering such a move not too long ago that it seems to just smack of desperation. Well Chinese manufacturer Lenovo certainly didn’t heed the warning, having just announced the appointment of lowbrow sitcom specialist and one time Demi Moore toyboy, Ashton Kutcher, as company spokesman and product engineer.

According to Lenovo, Kutcher will help develop and market the Yoga line of tablets, providing input into design, specifications, software and usage scenarios. Yeah, this is a guy who has modelled underwear, and is best known for roles in That ‘70s Show, Two-and-a-Half Men and Dude, where’s my car?

To be fair however, Kutcher does have a good track record for investing in successful tech start ups including Skype, Foursquare, Airbnb, Path and Fab.com. And let’s not forget he was recently channelling the spirit of Steve Jobs for his role as Big Steve in the Jobs biopic, so maybe Lenovo is hoping to channel that. Although the film did receive somewhat lukewarm reviews.

On the subject of lukewarm reviews, smartphone users do not see mobile operators as the natural providers of a range of key future services, according to research published by network equipment provider Ericsson this week. The Swedish vendor’s ConsumerLab research division surveyed smartphone users in Sao Paolo, Beijing, New York, London and Tokyo to gauge demand for a range of future services related to aspects of city life that drive satisfaction and dissatisfaction. Survey respondents instead favoured vertical specialists as providers of mobile services related to their sectors.

No surprises that the biggest drivers of satisfaction among consumers in the five cities were shopping, eating out and leisure facilities, while the primary sources of dissatisfaction were things that stop them from doing that, namely caring for children and the elderly, communication with municipal authorities and traffic.

For services related to the three key areas of satisfaction, mobile operators were felt to be less natural providers than both retailers and leisure services operators and internet companies. That or live-in carers and flying taxis.

On the plus side for operators however, densification of the network will be fundamental to the availability of new services in the future, which the research suggests will grow in number by a factor of five over the next three years. But this in itself is an increasingly familiar conundrum that mobile operators will be forced to bear the brunt of investment with no certainty of incremental revenues from the growth in services and usage.

Unfortunately for Chinese vendor Huawei, it won’t be bearing the brunt of anything in Australia except the government’s disapproval after the newly elected conservative government upheld a previous ban on the firm participating in the country’s National Broadband Network. Huawei was banned by the former Labor government from tendering for the NBN project over security reasons. Naturally the firm is “disappointed” or “extremely disappointed” depending on which report you read.

Rival Nokia Solutions and Networks (NSN) was having a bit of trouble of its own, having announced that its 3Q13 sales dropped 24 per cent year on year to €2.59m. The firm blamed reduced wireless infrastructure deployment activity and a negative impact related to foreign currency fluctuations. Net sales decreased 6.1 per cent quarter on quarter reflecting seasonality and NSN’s strategic focus, the vendor said.

On the flip side however, NSN was selected by Brazilian operator Oi Brasil to supply the infrastructure for its LTE network and will also implement a “significant share” of China Mobile’s TD-LTE network.

There were expansion moves going on in India, as Vodafone confirmed its intention to raise its stake in its Indian subsidiary from 64.38 per cent to 100 per cent. The firm has made the request to India’s Foreign Investment Promotion Board and will pay around 101.4 billion rupees ($ 1.65bn) for the additional stake.

Vodafone moved into India in 2007, buying Hutchison’s local operation and several other European operators are currently present in India, including  Telenor and Sistema, as is Malaysia’s Maxis. However, they have had to partner with local firms in order to acquire telecoms licences and it has not been an easy road for them.

Previously, the level of foreign direct investment (FDI) permitted in Indian operators was capped at 74 per cent, but the country has seen much investment from European and US firms putting pressure on that cap to be lifted. As a result, the Indian government this year liberalised the FDI regime in several sectors, including telecoms and power.

According to rumours there are similar games to be played in the USA, where AT&T is believed to be taking a fresh shot at buying up Vodafone Europe. We’ve heard this one before but if the acquisition does go ahead it would create the world’s largest telecommunications operator by sales with a market cap in excess of $ 250bn and more than 500 million wireless subscribers worldwide.

However, any real movements are unlikely to happen until early next year when Vodafone has concluded the sale of its 45 per cent stake in US carrier Verizon Wireless. There are murmurings however that AT&T’s appetite for Europe is so strong that if the Vodafone deal doesn’t amount to anything then EE might be a viable alternative. EE, which is the broadband brand of what used to be Orange and T-Mobile, had just shaken up the UK market by launching the country’s first pay as you go (PAYG) 4G tariff. The operator said that 40 per cent of mobile users in the UK want prepay plans and that all 4G handsets currently available to pay monthly customers will be available on PAYG.

With All Hallows Eve just behind us it would be amiss not to talk about spectral phenomena, especially since the industry has been pushing this week for more global harmony for LTE in the 700MHz spectrum band.

The UMTS Forum has urged regulators in Latin America to speed up the release of digital dividend spectrum in the 700MHz band, when in his keynote address at Futurecom in Rio de Janeiro, UMTS Forum chairman Jean-Pierre Bienaimé congratulated the Brazilian Authorities for their decision use newly-liberated digital dividend spectrum for mobile services, following the APT700 band plan.

APT700 has been getting a lot of good press recently and there was even a shocking capitulation from leading operators in the US (or so it seems) following the FCC’s endorsement of a voluntary industry agreement to establish interoperable LTE service in the lower 700MHz band. The move should give smaller US players access to a wider range of devices and increase competition.

AT&T and Verizon Wireless operate their LTE networks using 700MHz spectrum blocks, as do a number of smaller carriers. It was these smaller operators that petitioned the FCC to create interoperability changes arguing that certain smartphone vendors manufacture devices for AT&T’s and Verizon Wireless’ spectrum bands but not for their own.

Since movements from AT&T and Verizon effectively marginalised the A block of spectrum, these smaller players claim to have struggled to get hold of devices. After all, manufacturers are mainly interested in large volume production, but also cannot sell affordable devices if there is not the scale to mass produce them. So this latest move is a direct result of that lobbying and the FCC said that the standards were developed by several wireless providers and the Competitive Carriers Association, to give consumers more choice in using their devices with large and small carriers. It will promote widespread deployment of mobile broadband services, especially in rural areas, the regulator added.

On a final note, something that’s a bit more paranormal in terms of spectral phenomena is the report that respected security consultant Dragos Ruiu has been the first victim of a highly sophisticated attack using malware capable of attacking and communicating over the high frequency soundwaves accessible by PC speakers and microphones.

Ruiu noticed that airgapped machines in his lab – machines that have never been connected to the internet and have no physical or wireless connection to a local network – were updating themselves and performing seemingly autonomous tasks of their own accord. Even when running on battery alone, with fixed and wireless network adapters removed, these machines were able to download and install new firmware and ‘fix’ themselves after he tried to disable or remove malicious code. The only way he got the machines to stop communicating and infect other machines was by ripping the speaker and microphone hardware out of the motherboard.

That’s the kind of stuff that would freak you out when alone in a secure computer lab late at night – when unconnected machines starting talking to each other. Spooky.

Take care

The Informer

Telecoms.com

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