TECHNOLOGY SPECTATOR – Mobile payments mania
In this week's deals wrap-up the local mobile payments market gets a little crowded with the launch of PayPal 'Here' and Huawei gets the cold shoulder from Canberra.
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Government gives Huawei the cold shoulder
We start with some bad news for Chinese giant Huawei which is apparently set to miss out on the NBN deal bonanza. Huawei may be working with some of Australia’s biggest mobile carriers and playing a role in building’s New Zealand’s broadband future but as far as the NBN is concerned the second biggest telecom equipment provider in the world need not apply.
According to The Australian Financial Review, the government has told Huawei to not bother with putting in a tender for any NBN supply contracts because it’s never going to get its hands on anything.
The apparent justification is that given the importance of the NBN as critical infrastructure letting a company with links with the People's Liberation Army is a security hazard.
The paper further reports that while NBN Co had endorsed Huawei as a major supplier the government’s hand has been dictated by intelligence agency ASIO.
The security concerns should not come as a complete surprise, after all it was only three years ago that China’s Minmetals was prevented from buying OZ Minerals’ Prominent Hill mine because of the facility’s proximity to the Woomera missile testing range.
Huawei chief executive officer Ren Zhengfei is a former PLA officer and the Australian government isn’t the only one that has had an issue with that. US carrier Sprint dropped Huawei as a possible contender for a multi-billion dollar contract in 2010, citing security concerns, and the Indian government did the same.
However, what should make Huawei hot under the collar is that the Gillard government is clearly unimpressed by the company’s efforts to dispel any concerns, including the presence of former foreign minister Alexander Downer and former Victorian premier John Brumby on its Australian board. That board is chaired by John Lord, the chairman of DMS Maritime Services and a member of the Victorian Government's Defence Council. You can’t get better credentials than that, but it’s apparently not enough for ASIO.
Huawei is already working with Optus and Vodafone but yet to sign a deal with Telstra and it looks like NBN is out if the question, unless there is a change of heart.
The thing to keep in mind is that Huawei is supplying equipment to eight of the nine countries that are now rolling out national broadband networks – including Singapore, New Zealand, and Britain – and if the reports about ASIO’s involvement are true then there might be some mixed signals coming from Canberra right now.
Vodafone Australia’s new man on a mission
The winds of change sweeping across Vodafone Hutchinson Australia (VHA) have swept away the mobile carrier’s boss Nigel Dews and you won’t find too many raised eyebrows about the end of Dews’ eventful 18 months at the helm. If anything, most of the conjecture had been on how he had managed to hang on to the spot for so long, given the depth of Vodafone’s problems.
The cost-cutting drive announced in January has finally claimed its biggest scalp in Dews and interestingly the timing of his departure comes hot on the heels of speculation that VHA’s owners – Vodafone Group and Hutchinson Whampoa – were losing patience.
Well, they have evidently run out of patience with Dews but as far as the fate of VHA is concerned, bringing in a veteran turnaround specialist in the form of Bill Morrow is a clear signal that Vodafone and Hutchinson Whampoa aren’t leaving Australia in a hurry.
Both have made their commitment to VHA crystal clear and will be hoping that Morrow can finish the rehabilitation work currently underway.
Morrow has a solid history with Vodafone and is credited to have reversed the flagging fortunes of Vodafone’s Japanese and European businesses in the early half of the last decade. In fact, he has built up quite a reputation of rescuing struggling carriers from the brink.
Morrow’s last job was with US wireless wholesaler Clearwire, although things there didn’t exactly go to plan.
He left Clearwire in March 2011, soon after the company decided to ditch its retail strategy, citing personal reasons, and has since told The Australian Financial Review, that his sudden departure was precipitated after Clearwire’s biggest shareholder Sprint Nextel had a change of heart about investing heavily in the business.
Morrow has told the paper that "going into ‘hunker down’ mode” is not his forte and he will be hoping that Vodafone and Hutchinson don’t start getting cold feet about investing in VHA, especially as the spectrum auction gets closer.
Both will need to inject a substantial amount of capital to not only get their hands on the spectrum but also ensure that the carrier is fiscally flexible in the evolving local landscape.
Installing Morrow as VHA’s captain certainly sends a strong message to the market that the carrier is on the right track and customers will no doubt pick up on that, but Morrow’s first priority has to be to get the network fixed as quickly as possible.
As for Dews, he hasn’t been completely banished from the fold but is set to take up a senior role within Hutchison Whampoa. Evidently, the Hong Kong conglomerate still sees some value in keeping him on the team.
Mobile payments mania
The local mobile payments market just got a little crowded with the launch of PayPal Here and the entry of home-grown start-up Sniip, which is headed by former Myer executive John Hawker. PayPal Here will undoubtedly worry the banks and credit companies but its real target is Square, which is a pioneer in the mobile payments scene.
Founded in 2009 by Twitter founder Jack Dorsey, Square has so far ruled the roost in the US but PayPal is now well and truly in its turf.
Commonwealth Bank’s Kaching app has met with a good response, although there are no figures on how many customers are buying the special NFC-enabled iPhone case, and Sniip is just the latest in a burgeoning list of apps that are helping shoppers use their smartphones to do their shopping.
The one facet of the mobile payment phenomenon yet to make waves in Australia is near-field communication (NFC) but that’s something Paris-based Gemalto NV plans to change very soon.
The head of Gemalto’s telecom business unit for Oceania, Michael Zerelli, says that Gemalto is in the process of introducing its mobile financial services (MFS) solutions to Australian service providers, including banking, payments, money, international remittance and NFC for contactless payments.
Gemalto, which is the inventor of the smart chip used in bank and phone cards, said in February that it was set to introduce a card tested by Mastercard Inc, Visa Inc and American Express Co to get more mobile operators on board with wireless payment. The company has been heavily involved in Singapore’s IDA-led NFC consortium, Isis in American and now has its sights on the Australian market.
Zerelli says that the Australian market was getting closer to attaining the sort of maturity for the deployment of NFC solutions, driven by smartphone adoption and a co-ordinated push by banks and retailers.
However, widespread NFC deployment is probably still a while away simply because consumers aren’t quite ready to trade in their credit cards and cash.
Symantec has signed a definitive agreement to acquire Nukona, Inc, a privately-held provider of mobile application management (MAM), to make the most of the "Consumerisation of IT” and "Bring Your Own Device” trends. The acquisition of Nukona will extend Symantec’s enterprise mobility portfolio to include a cross-platform mobile application protection solution to help IT organisations protect and isolate corporate data and applications across both corporate owned and personally owned devices.
Meanwhile, the company has doubled the capacity of its cloud services in Australia by signing a three-year, multi-million dollar deal to co-locate servers and associated equipment in a Fujitsu data centre in Sydney. The investment will enable Symantec to meet growing business demand for secure, reliable and high-performance cloud services including email, endpoint, web and instant messaging security as well as backup and archiving solutions.
Unified communications provider ShoreTel has signed adjoined Telstra’s Business Systems program. Under the terms of the agreement, ShoreTel and Telstra will jointly market and support ShoreTel’s IP telephony, unified communications (UC), contact centre and mobility solutions in Australia. There are currently more than 20 Telstra Business Partners accredited to install ShoreTel’s solutions in the Australian market, with this number expected to grow as a result of the new ShoreTel and Telstra partnership.
Satellite company NewSat is in the news again, this time signing a five year contract with a leading GCC (The Cooperation Council for the Arab States of the Gulf) company. The commitment is for the purchase of $US32.4 million of Jabiru satellite transmission capacity and covers the entire GCC region and parts of the Middle East. The customer and financial details of the deal were not disclosed. The latest deal takes the total of binding pre-launch contracts for Jabiru satellite capacity to US$558 million.
MCM Entertainment Group has sealed a four-year strategic agreement to migrate its online video platform Movideo to Microsoft’s cloud platform Windows Azure. The two year-old Movideo platform now counts Network Ten, MNC Group in Indonesia, South China Morning Post in Hong Kong, Reader’s Digest in Singapore and Astro in Malaysia as customers.
Finally, ATM company GRG International has entered into an agreement for Radiant Systems – Chennai (India) to distribute GRG automatic teller machines (ATMs) and cash products throughout India. Radiant Systems will also provide national service and maintenance for GRG ATMs and related banking products.