Networking

Huawei has once again filed a lawsuit against the United States government, this time picking a fight with the Federal Communications Commission (FCC) for its decision to designate the company as a national security threat.
According to the legal complaint, Huawei is seeking a review of the designation on the grounds that the execution of the order was beyond the FCC’s scope of powers; violated federal law and the Constitution; arbitrary, capricious, and an abuse of discretion; and not supported by substantial evidence.
Huawei also said in the complaint that the designation could adversely impact the financial interests of the telecommunications industry as a whole.
The FCC designated Huawei, alongside ZTE, as a national security threat back in June, which has resulted in US telcos no longer being able to use the FCC’s Universal Service Fund to purchase equipment or services from these Chinese companies. 
Departing FCC chair Ajit Pai said at the time there was an “overwhelming weight of evidence” that both Huawei and ZTE had close ties to the Chinese Communist Party and China’s military apparatus.
The designation arose after former US President Donald Trump signed legislation barring US companies from using federal funds to purchase equipment from companies that have been deemed as national security threats.
The law also established a $1 billion reimbursement program to help smaller providers with the cost of ripping out and replacing the prohibited equipment from Huawei and ZTE. 

The FCC is not the only federal agency that has faced legal action from Huawei. Shortly after the US Commerce Department added Huawei to its “Entity List” — which bars US companies from transferring technology to Huawei without a government-approved licence — Huawei filed a lawsuit against the agency on claims that it acted unconstitutionally in enforcing the ban.
That lawsuit was eventually dismissed in February last year on the grounds that Congress was within its rights to enforce the ban.
“Contracting with the federal government is a privilege, not a constitutionally guaranteed right — at least not as far as this court is aware,” District Judge Amos Mazzant said in the February ruling when addressing Huawei’s arguments. 
Huawei has also filed a legal action requesting for the law that enforced the ban to be thrown out. This legal action is still being considered by the courts.
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Two charismatic gentlemen: Minister Paul Fletcher and NBN CEO Stephen Rue
Image: Chris Duckett/ZDNet
The company responsible for the National Broadband Network (NBN) has dispensed with its previous earnings before interest, tax, depreciation and amortisation (EBITDA) games as it gears up to report positive earnings at year end after a solid first half.
For the six months to the end of 2020, NBN reported a 25% increase in revenue to AU$2.26 billion, which it said was thanks to 660,000 premises joining the network and increased demand for higher speed plans. Revenue from business customers was also up by a quarter compared to this time last year, and was reported as AU$397 million. Average revenue per residential user remained flat over the past year at AU$45 each month.
On the EBITDA front, the company reported AU$424 million, a AU$1.1 billion turnaround on the AU$663 million EBITDA loss reported last year, and included AU$809 billion in payments to Telstra and Optus as users switch onto the government-owned network. Those payments had previously been excluded as NBN paraded an “adjusted EBITDA” figure as its headline number.
The company said it was “focused on raising AU$27.5 billion of private debt” by the end of the middle of the 2024 calendar year and has repaid AU$3 billion of its AU$19.5 billion loan from the federal government during the half, thanks to the AU$1.6 billion it raised in medium term notes at 1% interest and AU$1.4 billion from its bank credit.
“The strong total revenue growth in the first half puts us in solid position to achieve positive full year statutory EBITDA for the first time, which will be a significant financial milestone for the company,” NBN CEO Stephen Rue said.
“We will continue to put our customers at the centre of everything we do. We will support businesses by extending the competitive benefits of NBN to more regions, and we will continue to co-invest with state governments and local councils to help ensure that the benefits of fast broadband are extended to more Australians than ever before.”
Across the first half, the company spent AU$1.42 billion on capital expenditure, and announced the next 100,000 premises to hooked up with its fibre-to-the-node upgrades that will cost around AU$4.5 billion.

In NSW, the suburbs and towns of Campbelltown, Elderslie, Narellan, Maitland, Singleton, Tarro, New Lambton, Bathurst, and Orange are on the list; in Victoria, Deer Park, Sydenham, Berwick South, Cranbourne, and more parts of Narre Warren will be next; Albany Creek, Ashgrove, Bald Hills, Ferny Hills, Robina, Burleigh Heads and Townsville will get the upgrade in Queensland; for South Australia the list is Elizabeth, Gepps Cross, Salisbury and Golden Grove; while in Western Australia the suburbs are Girrawheen, Kingsley, Wanneroo, Canning Vale, and Jandakot South.
The company said it was “currently engaged in consultation” with ISPs on how customers will be informed of the upgrades, and what they need to do to get a fibre lead-in. NBN has previously said when a customer orders a service that their copper connection cannot handle, it would at that point build the fibre lead-in to the premise.
At the start of February, NBN confirmed it was pausing connecting new HFC premises to its network, due to coronavirus-related supply chain issues. Nevertheless, the company claimed its HFC footprint was “progressing well”.
“As at 10 February 2021, 94% of the 2.5 million premises in the HFC footprint can access the NBN Home Superfast [250/25Mbps] wholesale speed tier, and 46% of premises in the HFC footprint are able to access the NBN Home Ultrafast [500-1000Mbps/50Mbps] wholesale speed tier.”
NBN reported it had decreased its net loss by 25% to AU$2.1 billion for the half. In August, it reported an EBIT loss of AU$3.78 billion for the full 2020 fiscal year, compared to AU$3.89 billion a year prior.
The company reported its employee expenses increased by 3% due to restructuring charges and unused annual leave by its employees. Rue said the company had reduced its employee number by 800 during the first half, but would not be drawn on further cuts.
“The size and composition of the workforce changes all the time — it can change up, it can change down,” Rue told ZDNet.
“We’ve been hiring people in regional Australia, we’ve been hiring people … to go into people’s homes.”
Last week, Telstra resumed its T22 job shedding process as it flagged 1,425 employees would leave the incumbent telco.
On Monday, the CEPU informed its members that under the plans to restructure Telstra into three business, that “pretty much all the jobs at Telstra” are technically redundent.
“The truth is, that even if your role is redundant at Telstra, the three subsidiaries are going to have a whole lot of work with no employees to perform it. So, the scenario is one of thousands of jobless ex-Telstra employees and thousands of vacancies at the subsidiaries,” the union said.
“As you can see, the solution is the problem.
“In our preliminary discussions, Telstra has indicated the subsidiaries will seek to employ the same people from Telstra, to continue doing the same work once they have taken it over.”
The CEPU added the existing Telstra enterprise agreement for workers would follow the employees across until it is terminated or a new agreement is signed.
Updated at 11:10am AEST, 10 February 2021: Added more information
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Cisco on Tuesday published better-than-expected second quarter financial results, with growth coming from services and security products.  
Non-GAAP net income for the quarter came to $3.4 billion, or 79 cents per share. Revenue was $11.96 billion, flat year-over-year.
Wall Street was expecting earnings of 76 cents on $11.92 billion in revenue.

Overall, product revenue was down 1 percent year-over-year, totaling $8.57 billion. Within that category, security revenue was up 10 percent to $822 million. Revenue from infrastructure platforms declined 3 percent to $6.39 billion, while applications revenue was flat at $1.35 billion. Revenue from “other products” declined 39 percent to $4 million. 
Service revenue was up 2 percent year-over-year, reaching $3.39 billion. 
“Over the past year, our customers have relied on our innovation to accelerate their digital and cloud capabilities while protecting them from an expanding threat environment,” CEO Chuck Robbins said on a conference call. “In my numerous conversations with customers, it is clear that our technology will be a powerful engine for their recovery and growth as their technology needs continue to evolve at a rapid pace”
CFO Scott Herren noted in a statement that Cisco continues “to grow deferred revenue in double-digits through the shift to more software and subscriptions.”

Deferred revenue in Q2 was $20.8 billion, up 12 percent in total, with deferred product revenue up 16 percent. Deferred service revenue was up 9 percent.
Remaining Performance Obligations came to $28.2 billion at the end of Q2, up 13 percent.
Tech analyst Patrick Moorhead noted that, in addition to its double-digit growth in security sales, Cisco also reported strength in Cat 9K, data center switching, wireless and Webex portfolio numbers. 
“For webscale customers, it was the 5th consecutive quarter of rapid order growth increasing to triple digits,” Moorhead added. “This is important as these customers had walked away in many parts from Cisco opting for their own designs. In a very rough period for infrastructure providers, I believe Cisco proved its resilience by balancing infrastructure against software, security and collaboration businesses.”
Cisco on Tuesday also declared a quarterly dividend of 37 cents per common share.  
For the third quarter, Cisco expects revenue growth of 3.5 percent to 5.5 percent year-over-year.

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Image: SoftBank Group
SoftBank Group’s CEO Masayoshi Son has labelled his company a “golden goose” in response to its Vision Funds bouncing back from a record loss last year to post profit of ¥844 billion during the third quarter.
According to Son, the ¥1 trillion year-on-year turnaround was due to sectors such as e-commerce, entertainment, healthcare, education, and food delivery benefitting from the accelerated adoption of digital services that arose during the pandemic.
As of 31 December 2020, Vision Fund 1’s 82 investments have increased their value by 18% to $90 billion, compared with their purchase price of $76.3 billion.
Unrealised valuation gain for Vision Fund 1 as of the end of the third quarter totalled ¥1.5 trillion for listed portfolio companies, with DoorDash and Uber being the primary reasons for this uptick. The two companies have provided unrealised valuation gains of $8.3 billion and $3.6 billion, respectively, as of December.
Vision Fund 2, meanwhile, currently holds 26 investments with fair value amounting to $9.3 billion. The second fund’s investments had initially cost $4.3 billion.
Moving forward, Son during the results presentation said he expected SoftBank’s funds to produce between 10 and 20 initial public offerings a year.
“We’ve finally entered the harvest phase,” Son said while presenting an image of a golden goose laying golden eggs, which were meant to represent SoftBank’s IPOs and exits.

SoftBank Group’s Japanese telco, SoftBank, also reported being in the black by posting almost ¥213 billion and ¥1.37 trillion in profit and revenue, respectively.
For the third quarter, the telco’s consumer segment continued to carry the lion’s share of sales by posting ¥697 billion in revenue. Meanwhile, its enterprise and Yahoo segments chipped in ¥153 billion and ¥270 billion, respectively.
The telco also revealed that its smartphone subscriber base increased by over 1.2 million across a six-month period to December. Its broadband service, SoftBank Hikari, also gained an additional 450,000 subscribers over that same period.
In total, the gains from SoftBank Group’s various segments culminated in net profit of ¥1.17 trillion from ¥1.38 trillion in sales during the third quarter.
SoftBank’s profit marks a shift from the year prior, when the company revealed significant losses from WeWork and the COVID-19 pandemic, which forced the company to sell assets.
At the time, Son said he expected 15 companies in Vision Fund 1 to go bankrupt as the company tightened its financial belt.
Looking at the sale and monetisation of those assets, the company has amassed ¥5.6 trillion over the six months from April to September 2020 from partially selling its T-Mobile, Alibaba, and SoftBank Corp shares.
Providing an update on how the ¥5.6 trillion would be used, Son said the company would seek to make new investments for sustainable growth and return profits to shareholders.
He added that while share repurchases of up to ¥2 trillion were originally intended to be executed across 12 months from March last year, uncertainty in market trends has meant that the repurchases may not be completed by the end of March 2021, as originally scheduled.
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Telenor Myanmar said it was ordered by the Myanmar Ministry of Transport and Communications (MoTC) to temporarily shut down its data network in Myanmar on Saturday, while voice and SMS services remained open.
“In the directive, the MoTC cites legal basis in Myanmar’s Telecommunication Law, and references circulation of fake news, stability of the nation and interest of the public as basis for the order,” Telenor said in a statement.
“Telenor Myanmar, as a local company, is bound by local law and needs to handle this irregular and difficult situation.”
Despite following the orders, the telco giant expressed their “deep concern”.
“We have emphasised to the authorities that access to telecom services should be maintained at all times, especially during times of conflict, to ensure people’s basic right to freedom of expression and access to information. We deeply regret the impact the shutdown has on the people in Myanmar,” the company said.
However, data networks that were shut down was restored by Sunday. Telenor said it was “following instruction from the MoTC”.
The halting of data network services over the weekend followed a directive that was issued by the MoTC on Friday to block social media platforms Twitter and Instagram, until further notice, according to Telenor.

“Customers in Myanmar trying to access the affected services on web will be directed to a landing page, which states that the site cannot be reached due to the directive by MoTC,” Telenor said.
Telenor added the MoTC also decided to “temporarily” block access to Facebook in the country last week. Users began turning to the social media platform to protest against the military coup.
Meanwhile, Twitter has expressed concern regarding the situation.
“We’re deeply concerned about the order to block Internet services in Myanmar. It undermines the public conversation and the rights of people to make their voices heard. The Open Internet is increasingly under threat around the world. We will continue to advocate to end destructive government-led shutdowns,” a Twitter spokesperson told ZDNet.  
A similar sentiment was echoed by Facebook. 
“We are extremely concerned by orders to shut down the internet in Myanmar and we strongly urge the authorities to order the unblocking of all social media services. At this critical time, the people of Myanmar need access to important information and to be able to communicate with their loved ones,” Facebook APAC Emerging Countries director of public policy Rafael Frankel said.
Since last week, the country has been suffering internet and phone service disruptions amidst a military coup that has reportedly resulted in the National League for Democracy’s leader Aung San Suu Kyi and other senior political leaders being detained.
Military-owned TV network Myawaddy News reported that the military was taking control of the country for a year, during which a state of emergency had been declared. It pointed to a section of the constitution, drafted by the military, which outlined the army’s powers to assume control during a national emergency. 
Updated at 11:05am AEST, 8 February 2021: added comment from Facebook. 
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Vocus has informed the Australian Securities Exchange on Monday morning that it has fielded an indicative offer from Macquarie Infrastructure and Real Assets Holdings (MIRA), the infrastructure investment arm of the eponymous group of companies, and started to explore the deal.
MIRA is proposing to acquire the whole company for AU$5.50 a share, at close on Friday the company was trading for AU$4.38, which would put the deal in the range of AU$3.4 billion in total.
“After consideration by the board and its advisers, the board has concluded that it is in the best interests of Vocus shareholders to explore the potential for a transaction with MIRA, and has granted MIRA due diligence access to enable MIRA to potentially put forward a binding proposal,” it said.
“Vocus has appointed Credit Suisse as its financial advisor and Allens as its legal advisor.”
Back in the middle of 2019, Vocus had a torrid month as both EQT Infrastructure and AGL walked away from AU$5.25 and AU$4.85 per share proposals, respectively.
In its latest full-year results posted in August, almost AU$280 million in significant items turned a AU$101 million underlying profit into a AU$178 million statutory loss.
The significant items included a AU$202 million impairment to the goodwill of its retail division.

For the year to June 30, the company reported a 6% drop in revenue to AU$1.78 billion, with its recurring revenue down 1.1% to account for all but AU$25.5 million of the total and the remainder flowed from the large infrastructure line item, which was down by AU$94 million due to the completion of the Coral Sea subsea cable.
Statutory earnings before interest, tax, depreciation, and amortisation (EBITDA) increased 3.5% to AU$361 million, before the significant items came into play. Statutory EBIT dropped AU$215 million to a AU$109 million loss, thanks mainly to the impairment, and statutory net profit fell by a similar number to a AU$178 million loss.
In November, Vocus said it would look to spin out and list its New Zealand business.
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Image: Getty Images/iStockphoto
The Elon Musk-fronted SpaceX has told an Australian parliamentary committee that it could begin to offer its Starlink broadband services to the nations external territories as early as 2022, while much of Australia will be covered in “early 2021”.
“Certain more proximate islands within the external territories, notably the Ashmore, Cartier, and Coral Sea Islands, could be served by early 2022, when SpaceX has more fully populated its satellite constellation with ongoing launches and with the establishment of gateway earth stations at proximate mainland locations,” the company said in a submission to the Joint Standing Committee on the National Capital and External Territories’ Availability and access to enabling communications infrastructure in Australia’s external territories inquiry.
In order to fully cover Australia’s external territories, SpaceX would need more polar-orbiting satellites with “space-based lasers”. The company launched its first 10 polar-orbiting satellites last month.
“The more remote islands and the southernmost Heard Island and McDonald Islands will require deployment of polar-orbiting satellites employing inter-satellite optical links, a technology that allows customers to be even farther removed from supporting ground infrastructure,” SpaceX said.
“More satellites on orbit are needed in order to provide continuous services to those locations, likely nearer to the end of 2022.”
At the end of last year, SpaceX was among the purchasers of area-wide apparatus licences for 5G millimetre wave spectrum across Australia.
While geostationary satellites have latency in the order of 600-800ms, those in low Earth orbit can provide 20-40ms of latency. Starlink users last year were seeing internet speeds of 134Mbps.

“These new satellite networks are expected to be capable of providing cost-effective, high-speed backhaul which to date has been a barrier to delivering high speed fixed and mobile services to remote communities and territories,” Australian telco Pivotel wrote in a submission.
“Providers such as Pivotel will be in a position to launch 4G and 5G mobile networks together with high-speed wireless internet access to the home or premise, using small cells powered by battery-backed renewable energy sources like solar and/or wind. Small cells connected over low latency high-speed data links opens up the possibility of servicing the most remote locations with affordable, high speed and low latency mobile and broadband connectivity, comparable to what is available in urban areas.”
However, the Norfolk Island Regional Council is pushing for the island to return to the way it was, which means restoring a cable connection to the island, this is despite the island have its own NBN Sky Muster spot beam.
The council has spent AU$8 million over five years on satellite connectivity, and for its money, it gets a 113/37Mbps primary link with a 20/4Mbps redundant link. Norfolk Island previously had a cable connection, but it was cut. The island still has a cable landing station, and in 2003 the Australian government paid to have an “extensive underground” fibre to the node network installed, which now uses satellite backhaul.
In its submission, the council pushed for a branch off the Hawaiki cable that links Australia, New Zealand, and the United States.
Council said the island was previously offered the chance to connect in 2016 with 100Mbps of guaranteed bandwidth, but it was not taken up.
“In return for a (one off) ~AU$14m investment (plus on-going costs), Norfolk Island would have received a branch of approximately 90km long, unrepeated (unpowered) 2 fibre pairs branch with a design capacity of 100Gbps. This opportunity did not proceed, and efforts for improved connectivity have continued ever since,” it said.
“The last proposal was put forward to the island in 2020.”
Consequently, any branching on the cable will be further away and have to rely on the New Caledonia branching unit, but the window on that opportunity is closing.
Hawaiki, in concert with Vocus, said in a submission that the now approximately 400km long branch would cost around $27 million, which could be lowered if synchronised with rolling out other branches.
“The only constraint is the timing: A decision would need to be taken before New Caledonia builds their branch. Once the New Caledonia branch design is finalised (expected Q2 2021), there will be no future opportunities to connect Norfolk Island to the Hawaiki cable,” the submission said.
Another option could be the Chilean-backed Asia-South America Digital Gateway (ASADG) cable that would land in Chile, New Zealand, and Australia, and provide 270Tb of bandwidth.
“Vocus estimates that a connection to Norfolk Island as part of the ASADG initiative would cost ~$23.2 million, based on the assumption of 583km of cable to be manufactured and installed as a spur from the main ‘trunk’ cable’,” it said.
“A spur from the ASADG cable would cost approximately one-third as much as a stand-alone cable from Sydney to Norfolk Island, estimated at ~$74.9 million for 1,700km of cable. This estimate is based on the current indicative ASADG route and does not assume any adjustment to the main cable, which could potentially reduce the length, and cost, of the spur to Norfolk Island.”
Vocus said funding decisions for the cable would be made in the second quarter, and once the design was finalised, Norfolk Island would not have another opportunity to be a part of it.
In its submission, the Department of Infrastructure, Transport, Regional Development and Communications provided a glimpse of the state of connectivity on Norfolk Island.
“As of December 2020, there were 804 premises on Norfolk Island with an active NBN service. Across the 2020 calendar year 54 service faults were recorded. NBN Co’s [business satellite] services are not currently available on Norfolk Island,” it said.
“Many residents have both NBN Sky Muster and Norfolk Telecom ADSL services to provide redundancy if one service is not working. Some Norfolk Island premises have their own commercial satellite service agreements and dishes.”
Although the department said a cable would improve connectivity, it baulked at the “high cost both in absolute terms and per head of population”.
“While a submarine cable connection could provide Norfolk Island with high-bandwidth, low-latency backhaul not subject to disruption from weather and atmospheric conditions, the cost to lay and connect submarine cables is typically relatively high and the benefit relatively isolated compared to a satellite system that can service a much larger population,” it said.
“In other contexts, submarine cable operators have identified that the useful life of a submarine cable is about 25 years, and if cable was funded replacement capital would need to be factored in.
“Users of a cable’s capacity would also be subject to ongoing access fees and charges from the cable operator. Additionally … the condition of the existing network connecting premises on Norfolk Island would limit the quality of services available.”
Firmly in the pro-satellite camp, due to it running its own fleet, Optus pushed for the territories to remain dependent on space-based connectivity.
“Optus believes the territories could act as a test-bed environment for the government to satisfy itself as to the performance and reliability of satellite technology. If proven successful, this trial could be expanded to include those geographical areas serviced under the Universal Service Obligation in mainland Australia,” the telco said.
“Satellite connectivity would offer the greatest value for government whilst providing the broadest and most reliable form of network coverage to consumers and would serve as an effective alternative to subsea cables or other access technologies.”
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T-Mobile delivered better-than-expected fourth quarter financial results on Thursday, with the wireless carrier touting record postpaid phone net customer additions and progress in post-merger synergies with Sprint.

T-Mobile said Q4 earnings were $750 million, or 60 cents per share, on revenue of $20.3 billion. Wall Street was looking for fourth-quarter earnings of 51 cents a share on revenue of $19.9 billion.
The carrier added 1.7 million net additions in the fourth quarter, along with 1.6 million postpaid. T-Mobile’s postpaid churn came in at 1.03%, a slight increase for the company.
For the year, T-Mobile said non-GAAP earnings came to $2.65 per share on revenue of $68.4 billion. Analysts were expecting the company to report fiscal 2020 revenue of $67.7 billion on earnings of $2.70 per share.
By the numbers:
The company ended the quarter and fiscal year with 102.1 million customers.
For full-year 2020, total net customer additions were 5.6 million, with 5.5 million postpaid.
T-Mobile added 824,000 branded postpaid phone net additions in Q4, and 2.2 million for the full year.
Branded prepaid additions were 84,000 in Q4.
Service revenue in the fourth quarter was $14.2 billion and $50.4 billion in full-year 2020, driven by the Sprint merger.
T-Mobile said it covers 280 million people with Extended Range 5G.
For 2021, T-Mobile said it plans to add 4 million to 4.7 million branded postpaid net customers. Adjusted EBITDA will be between $26.5 billion and $27 billion.
On its Sprint synergies, the company said it delivered $1.3 billion of synergies in full-year 2020, exceeding its guidance from last quarter. Meanwhile, customer network migrations began in the fourth quarter and more than 4 million have been completed, the carrier said. Once the migrations are complete, T-Mobile will fully decommission and shut down the Sprint network.
“These results show that we’re pulling way ahead of the pack on what matters – overall 5G network performance – and executing to stay ahead,” said Mike Sievert, CEO of T-Mobile. “2020 was quite simply our best year yet, with our highest ever total postpaid net additions of 5.5 million. Our team delivered – leading the industry on customer growth, while being the only major player to grow profitability as well, with our synergy-backed business model.”

Shares of T-Mobile were down just over 1% after hours.

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