Euronews: Vodafone's Data Boom

Vodafone Group plc (NYSE: VOD), Huawei Technologies Co. Ltd. , ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) and Nokia Corp. (NYSE: NOK) proffer something for the weekend in today's jog through the EMEA telecom headlines.

  • While Vodafone's fiscal first-quarter numbers confirmed what we already know -- that times are hard for mobile operators in Southern Europe -- they also highlighted that data is now very much where it's at. Vodafone's data revenue grew by 17.1 percent year-on-year to £1.6 billion (US$2.5 billion), accounting for 16 percent of group service revenue in the three months to the end of June. More specifically, European mobile Internet revenue grew by 47.2 percent as smartphones become increasingly ubiquitous. Overall, Vodafone's group revenue declined by 7.7 percent year-on-year, though if the cuts in mobile termination rates and changes in currency exchange rates are discounted, a 1 percent increase magically appears. (See Vodafone Provides Fiscal Q1 Interims, Vodafone, Telefónica Merge UK Networks and Euronews: Vodafone Profits Slip as Europe Suffers.)

  • A French senator has produced a report recommending a ban on the import of routers and other network equipment from China for use in Europe, reports Telecompaper (subscription required), citing La Tribune. Jean-Marie Bockel argues that the likes of Huawei and ZTE could easily embed espionage systems into this equipment. (See More Chinese Whispers, Euronews: EC Sharpens Knives Over Huawei, ZTE, Australia's (Safe) Bet Against Huawei and Huawei, ZTE Probed by Intelligence Agency.)

  • On the face of it, Nokia's second-quarter figures were pretty scary, but the reaction on the Helsinki exchange was positive, with shares jumping more than 17 percent in Thursday afternoon trading, reports the Daily Telegraph, citing better-than-expected sales of lower-end devices as the main reason for the positivity. Sales of the flagship Lumia handset -- up to 4 million units in the second quarter from around 2 million in the previous one -- also cheered analysts, according to Bloomberg, giving them reason to believe that there might be something in this Windows Phone lark after all. (See Euronews: Nokia Loses $1.9B in Q2 and Nokia Cuts 10,000 Jobs, Restructures.)

  • MTN Group Ltd. and Zain Group have set their sights on South Sudan, the recently created African state, as the next big untapped "mobile money" market, reports Reuters. Just 13 percent of South Sudan's 8 million people own a mobile phone at present, and for every adult in the country there are fewer than 0.01 bank accounts.

  • Net Insight AB (Stockholm: NETI-B), the Swedish video transport equipment specialist, saw second-quarter operating profits more than halve year-on-year to 3.4 million Swedish kroner ($490,000). Increased operating expenses were cited as the main reason for the slump. (See Net Insight Reports Q2 Profit of SEK3.4M.)

  • The principality of Wales is to receive a fiber broadband boost to the tune of £425 million ($667 million), with £220 million ($345 million) of that coming from BT Group plc (NYSE: BT; London: BTA) and the rest made up of state aid from a range of sources, including around £90 million ($141 million) from the European Regional Development Fund and £57 million ($89.5 million) from the increasingly controversial Broadband Delivery UK (BDUK) pot. The Welsh Government is committed to providing 96 percent of Welsh homes and businesses with access to world-class broadband speeds of up to 80 Mbit/s by the end of 2015. (See BT to Boost Broadband in Wales and Broadband Delivery UK Formed.)

    — Paul Rainford, Assistant Editor, Europe, Light Reading

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    DCITDave 12/5/2012 | 5:27:12 PM
    re: Euronews: Vodafone's Data Boom

    The story from the French paper is a worldwide theme. Now are the world's governments just paranoid and scared of the Chinese or do they have a real point? What kind of espionage capability could one embed in a router, anyway?

    paolo.franzoi 12/5/2012 | 5:27:09 PM
    re: Euronews: Vodafone's Data Boom


    Well Phil, if you want to deploy a router in the US at an ISP you BEST build in at least port mirroring to conform to the Patriot Act.  If you can remotely access the configuration and turn on replication services like that then voila you can get all the data you want.

    Awesome eh?



    Soupafly 12/5/2012 | 5:27:08 PM
    re: Euronews: Vodafone's Data Boom

    Phil, as 1 of the senior editorial team your post and question surprises me.

    It should be obvious to all, that UBM Tech (your parent company) has a good working relationship and customer in ZTE & Huawei. The banner ads, sponsored stories & articles, etc - show that clearly.

    Having said that your parent companies editorial position is confused and open to a conflict of interest claim. UBM tech also publish "darkreading.com" and their focus is security, they regularly publish articles that cite the threat and challenges emanating from china, and they are not suckling on the ad revenue from Huawei & ZTE that you guys are. (I know you'll tell me it makes no difference, advertising has no editorial influence, etc, )

    To answer your question directly: Mentioning the router & stating a simple espionage angle is like painting a 2D picture. Its limited because it takes a single vector approach.

    Any analysis needs to go wider and look at the level of IP theft & cyber-attacks originating from chinese locations. Are they behind them all? Absolutely not. Are they directly involved in a significant proportion of them. 100% yes. Are some spoofed. Yep! But the volume we are talking about rules spoofing out as the main cause.

    Bear in mind that the mainland networks & web are directly controlled & monitored by the CCP. Therefore there is no way that they cannot know about these attacks.

    With control of IP layer data (be it packet optical or routing table & packet level access) you could analyse and manipulate the traffic in multiple ways and that activity be virtually un-detectable and traceable.

    And to Brooke's comments; Since 2001 all US ISP's have had Narus Network "boxes" live on the network monitoring and analysing network traffic and flows. There is also a operational & economic reason why 40% of the worlds IP transit flows across US nets.

    Now if the above is true & the US, EU, Israel, Russia, Iran, etc are all weaponising the net (their euphemism been "cyberspace") and building the kind of digital manipulation capabilities, I have already defined. Wouldnt you be nervous of a 3rd party who you didnt control & had limited leverage over, installing kit and controlling the network?

    Its comical because the chinese are already working around. Under the managed services and management of networks approach and the quest from carriers to increase operational response & decrease costs, many networks are been modelled and digitally reconstructed in China. That activity could be used to define & capture 0 day bugs & architectural weaknesses/ dependencies & windows. I am not claiming that is happening. I am saying it could.

    DCITDave 12/5/2012 | 5:27:05 PM
    re: Euronews: Vodafone's Data Boom

    Hi soup,

    Thanks for this bit of your comment:

    With control of IP layer data (be it packet optical or routing table & packet level access) you could analyse and manipulate the traffic in multiple ways and that activity be virtually un-detectable and traceable.

    My question is: What can be done by a router vendor without the knowledge of the service provider? In other words, is it a reasonable assesment of the technology out there that Huawei could place a router in a US network and "spy" on that router's contents without the US service provider knowing?

    If that's technically possible, how is it done? This is interesting stuff to discuss, no?

    DCITDave 12/5/2012 | 5:27:05 PM
    re: Euronews: Vodafone's Data Boom

    Thanks for answering my question. So via the router a company like Cisco or Huawei could, if ordered, could create a scenario where the data flowing through a router is copied on the fly and sent somewhere else for analyzing -- or am I oversimplifying?

    To what extent would the router maker be able to monitor certain data flows without the knowledge of the service provider?

    I think this sort of discussion is interesting because it puts some color on what gov't officials are saying (or not saying) in sound bites.


    paolo.franzoi 12/5/2012 | 5:27:02 PM
    re: Euronews: Vodafone's Data Boom


    The router vendor, if it had backdoor access to the box, can do anything it feels like including monitoring, adding, deleting, and changing data in any stream.  The data actually flows through it.  It would be much harder for encrypted streams (like HTTPS) but not impossible.

    In the voice world (and this stuff is supposed to be in place in the router world but is not yet), there is a standard for wiretapping where the service provider is not even aware that the wiretap in place.  This was done to make it impossible to threaten telco technicians to reveal wiretaps.  

    Now as Soup points out there are other kinds of information available like traffic patterns and other information which might be as or more important that might be available.



    Soupafly 12/5/2012 | 5:26:55 PM
    re: Euronews: Vodafone's Data Boom

    Truthfully Phil, I would completely agree with BrookSeven.

    To answer your question with any measure of granularity you would have to hire me. Because the answer would (a) include detailed technical discussions and (b) require me to reveal information that isnt typical for a public bulletin board, and (c) mean giving away information that has signifant commercial value.

    It wouldnt be harder to do what Brook describes with any encrypted streams, just more resource intensive. If you can access the traffic streams, you can crack/circumvent any protection.

    Let me also state that referring to the backdoor, is simple a case of it been added at anytime, via a security patch, software feature update, firmware/os upgrade or routine remote/physical maintenance.  Only a bunch of complete fools would even attempt to do it on Day1 without a very good operational need & orders from on high. And we havent talked about hardware BD's. Just software.

    So can it be done without the carriers knowledge? Absolutely!

    The level of data traversing the network is now so large that, at the control layer, significant automation is used to handle all routine response, orchestration & analysis.

    If you understand that statement and what it means, then parts of my answer become clearer.

    macster 12/5/2012 | 5:26:44 PM
    re: Euronews: Vodafone's Data Boom

    Also, it would be interesting to hear Ian Brown's thoughts on the 100% increase in Lumia sales.

    macster 12/5/2012 | 5:26:44 PM
    re: Euronews: Vodafone's Data Boom

    Quick question, then my long post-scripts :)

    Is Huawei the only vendor capable of this? 


    P.S. Phil, if you look up the details of Lawful Intercept, especially what is asked of mobile operators, might be helpful.

    P.P.S. Hmmm... title of the article is "Vodafone's Data Boom". Talking about that, see: http://www.telecomengine.com/article/data-growth-cannot-bolster-vodafone

    I strongly believe prices will be going up.

    paolo.franzoi 12/5/2012 | 5:26:42 PM
    re: Euronews: Vodafone's Data Boom



    Router vendor is generic.  I am hopeful that the CIA and NSA have such hacks in Juniper and Cisco routers and have been spying like mad on the Chinese (and others).  


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