By The Informer

Social media darling Facebook this week had an eye on the future as it announced the acquisition of virtual reality technology provider Oculus for a hefty $2bn.  CEO Mark Zuckerberg explained that the decision to acquire Oculus was made to place the firm in a commanding position for the future, as it expects immersive virtual reality technology to soon become commonplace.

Oculus is a specialist in virtual reality technology, its flagship product being the Oculus Rift headset. Users don the headgear and enter a completely immersive computer-generated environment as if they were physically in a game or a movie scene.

In a post on his own Facebook profile page, Zuckerberg went into more detail about the deal, explaining that the technology opens up the possibility of completely new kinds of experiences.

“Immersive gaming will be the first, and Oculus already has big plans here that won’t be changing and we hope to accelerate,” he wrote.

He added that Oculus will continue operating independently within Facebook for the time being but beyond gaming, Facebook intends to make Oculus a platform for many other experiences.

“Imagine enjoying a court side seat at a game, studying in a classroom of students and teachers all over the world or consulting with a doctor face-to-face — just by putting on goggles in your home,” Zuckeberg continued.

“This is really a new communication platform. By feeling truly present, you can share unbounded spaces and experiences with the people in your life. Imagine sharing not just moments with your friends online, but entire experiences and adventures.”

And in what could be perceived as an attempt to inspire shareholders after splashing out $2bn on the acquisition, he added: “Virtual reality was once the dream of science fiction. But the internet was also once a dream, and so were computers and smartphones. The future is coming and we have a chance to build it together.”

Meanwhile Google is also looking to force technology right into users’ faces. Despite divesting its handset business Motorola Mobility to Lenovo in January, the firm is still very much focused on hardware and in particular its Google Glass project. This week Google announced a tie-up with eyewear specialist the Luxottica Group as part of the project. The Group is parent to several eyewear brands, including Ray-Ban and Oakley, and has over 5,000 retail outlets in the US. Financial terms of the deal were not disclosed.

The move seems to be in response to the dawning of realisation that users trialling Google Glass, or “Explorers” as Google likes to call them, look a bit daft wearing the gaudy spectacles.

The firm issued a list of “Top 10 Google Glass Myths” in a separate Google+ post last week, seeking to allay fears that Glass users are constantly recording what they see, quashing rumours that the project is ready for a full commercial rollout and arguing that Google Glass users are not “technology-worshipping geeks”.

“Our Explorers come from all walks of life. They include parents, firefighters, zookeepers, brewmasters, film students, reporters, and doctors,” the firm said.

“The one thing they have in common is that they see the potential for people to use technology in a way that helps them engage more with the world around them, rather than distract them from it.”

Good news came for Google this week in the form of research from content provider dotMobi’s Global Device Traffic Index. The research revealed that while Apple’s iOS devicesgenerate the most traffic on mobile networks in many mature markets, the rest of the world relies on Android. Android devices rank number one in terms of generating traffic on mobile networks in 67 of the 101 countries monitored while iOS is the dominant platform in the remaining 34 markets.

Apple’s iOS-based devices are most used in the UK, the US, Australia, Canada, France, Italy, Scandinavia and the Benelux countries, said dotMobi. iOS devices accounted for 65.26 per cent of total non-desktop web in the UK, 62.72 per cent in the US, 73 per cent in Canada and 65 per cent in France, according to the research.

Central Europe, on the other hand, has been described as “a stronghold for Android browsing” by dotMobi. Germany, Austria, Hungary and Switzerland, as well as several countries in Southern and Eastern Europe, see Android based devices generating the most mobile traffic according to the research. India and Spain also skew towards Android as does South Korea, home nation of Samsung, which sees 74 per cent of mobile traffic coming from Android devices.

It seems that everybody these days is seeing a future in wearable technology and chip maker Intel is no exception. The firm this week announced the acquisition of Basis Science, a specialist in wearable device technologies for health and wellness applications.

Intel showcased for wearable devices at the CES consumer trade show earlier this year and said that the Basis Science acquisition accelerates its wearable products focus, brings access to new technology to the firm and further expands the leadership team with people who have a proven track record of innovation in wearables. Financial terms of the deal were not disclosed.

Taiwanese smartphone player HTC launched its flagship device this week, the HTC One M8. The device is firmly in the high end of the smartphone spectrum and one of its defining features is its metal body. The Taiwanese firm claims that metal bodies have not been traditionally used for smartphones because the metal can inhibit the effectiveness of the phone’s antenna. However, HTC claims to have overcome that obstacle by integrating antennae into the metal body and as a result 90 per cent of the back housing of the HTC One M8 is metal.

The LTE-ready handset also has a “duo camera” – essentially two rear facing cameras – which according to HTC, allows the camera to capture detailed depth information from a scene. The device has a 5 inch screen with a 1080p HD display. It has a Qualcomm Snapdragon 801 processor with 2.3 GHz quad-core Krait CPUs and runs Android 4.4 KitKat as well as the latest version of the firm’s smartphone UI skin HTC Sense 6.

The firm’s managing director of the Nordic region, Peter Frølund, was in town for the launch and told Telecoms.com how HTC intends to swing back to profit in 2014 after posting quarterly losses in 2013. He said that HTC is refocusing on providing devices across more price tiers and will strive to improve its marketing efforts.

“There was a tendency in 2013 to say HTC is all about the HTC One,” said Frølund. “In Barcelona at Mobile World Congress we launched another flagship phone; our mid-tier phone, the HTC Desire 816 and more recently we launched the Desire 310, and that sits even further down the price tier. We believe we need to be relevant across more price tiers and we failed to deliver on that in 2013.”

He added that feedback from the mobile operator community also prompted HTC to act as operators have also told the firm that they want devices that span more price tiers.

“I think what operators want from us is two things: they want us to innovate and to support them when they invest in new technology, such as 4G,” he said. “But they also want us to offer devices in different price tiers.”

Another issue contributing to HTC’s poor financial performance of late has been the fact it has been overshadowed by the vastly successful marketing plays of its rivals Samsung and Apple. Frølund admits that there have been shortcomings in HTC’s marketing strategy and insists that this is another thing the firm hopes to put right in 2014.

“We can’t compete with our rivals in terms of marketing budget, but we feel we can definitely compete by having the best product, and that’s a good starting point,” he said.

“From a marketing point of view you will see us do more in 2014 than we did last year. And you will also see us being probably a little bit clearer in our communications. We need to be a bit critical of ourselves, we tried to do a bit too much last year; we talked about the new features we introduced but all our customers and store staff were talking about the design. We did begin to change that in 2013, but what you will see from us in 2014 is that we’ll be talking about design, full stop.”

Meanwhile, Chinese infrastructure vendor Huawei has responded to the US National Security Agency (NSA) following reports over the weekend claiming that the organisation gained access to Huawei’s email servers and source code of Huawei products.

According to Germany’s Der Spiegel newspaper and the New York Times, which both cited documents leaked by former NSA contractor Edward Snowden, the NSA initiated an operation codenamed Shotgiant in January 2009 to investigate supposed links between the vendor and China’s People’s Liberation Army, the nation’s military.

The operation also looked to exploit the software source code of Huawei products so that when the vendor sold networking equipment the NSA could access the data transmitted through it, the documents claim. The reports suggest that the NSA gained access to Huawei employees’ emails, including the accounts of CEO Ren Zhengfei and chairwoman Sun Yafang. “If the actions in the report are true, Huawei condemns such activities that invaded and infiltrated into our internal corporate network and monitored our communications,” Huawei said in a statement.

However, the vendor stopped short of threatening to cut ties with the US and instead reiterated its desire to work with governments to address transparency concerns.

“Corporate networks are under constant probe and attack from different sources – such is the status quo in today’s digital age. We reiterate that Huawei disagrees with all activities that threaten the security of networks and is willing to work with all governments, industry stakeholders and customers, in an open and transparent manner, to jointly address the global challenge of network security.”

Meanwhile rival ZTE announced an RMB1.36bn (US$219m) net profit attributable to shareholders in 2013, an improvement on the RMB2.84bn loss generated in 2012. The Chinese firm said the turnaround was due to its sharpened focus on 4G technology and cost saving initiatives.

Revenue generated during the year fell 10.6 per cent, however, from RMB84.12bn in 2012 down to RMB75.23bn in 2013. The firm said that last year it prioritised important operations in populous countries and the development of its business with major international operators. It added that it “exercised stringent control over contracts with lower margins”, which resulted in improved gross margin for international projects.

Over in Latin America, Brazilian mobile operator Claro outlined plans to roll out NFC mobile payments across Brazil by summer 2014, through a partnership with banking group Bradesco and SIM card provider Giesecke & Devrient.

Under the plan, Brazilians will be able to use their smartphones to pay for their shopping. The project will begin in the state of São Paulo and will later be expanded to the rest of the country. G&D is supplying the SIM cards with secure storage for the payment software and the SmartTrust Portigo mobile wallet for smartphones, which will store the sensitive customer information such as debit card numbers and account details. It will also provide the trusted service manage tools to Bradesco and Claro, which will allow them to receive Bradesco account holders’ payment card information onto their devices in an encrypted form via Claro’s mobile network.

Meanwhile, web firm Yahoo’s Japanese subsidiary has announced its intent to acquire mobile operator eAccess from Softbank for Y324bn ($3.17bn).

Yahoo Japan is actually part owned by Softbank, which controls approximately 35 per cent of its shares and around 42 per cent of its voting rights. Yahoo owns 35 per cent of the firm.

eAccess is the country’s smallest operator with 4.46 million subscribers as of December 2013, according to Informa’s WCIS. Market leader NTT Docomo, in comparison has 61.98 million subscribers, KDDI has 39.33 million and Softbank’s own branded operator business has 34.4 million subscribers. The acquisition is conditional on the merger between eAccess and personal handy-phone (PHS) operator Willcom, a wholly owned subsidiary of Softbank.

Australia’s operators have had their issues with customer services well documented of late. In September 2011, Australian telecoms regulator the Australian Communications and Media Authority (ACMA) warned operators to improve their customer service and complaint handling by February the following year or face tougher regulation.

It appeared the threat had worked and ACMA announced earlier this month a “sustained reduction” in complaints to the Telecommunications Industry Ombudsman (TIO) from consumers regarding customer service issues. However, issues that surfaced prior to the improvement have been dealt with in recent weeks. A fortnight ago operator Telstra was found to have made the personal details of almost 16,000 customers accessible via the internet between February 2012 and May 2013 after several spreadsheets containing customer data dating back to 2009 was found through Google Search. And this week, rival Optus has been formally warned by ACMA for inaccurately billing over 237,500 customers prior to September 2012.

The regulator found that between November 23 2008 and September 30 2012, Optus overcharged some customers of its SurePage and SpinVox services, which are additional messaging plans for postpaid users.

The authority revealed that errors in implementing an IT upgrade caused 2,600 customers to be overcharged between November 2008 and July 2011. Then, between July 1 2011 and September 30 2012  an additional 235,000 customers were overcharged by approximately AU$8.9m.

Although the error was made by an IT programmer during a project upgrade, ACMA also found that an oversight occurred in quality control of the software code for the upgrade. Optus’ SurePage product manager became aware of the problem in late August 2011 but the root cause of the problem was not identified until July 2012, and a permanent fix to address the root cause was not implemented until September 30 2012, according to ACMA.

Elsewhere, the Cloud Team Alliance, a partnership inked between Belgian operator Belgacom and French cloud computing specialist Numergy, announced this week that the group has extended its alliance to include two other European operators, Portugal Telecom and KPN.

The partnership, founded in the summer of 2013, enables participating organisations to extend the coverage of their cloud services by sharing networks and technical resources that help each operator optimise their network architectures to reduce latency. Belgacom said the Alliance helps to offer customers a local cloud infrastructure in the countries of their operations.

“In this way, the companies can increase their range and geographic coverage in all types of cloud, in order to meet the different needs of their international customers, particularly in terms of security and with European and local compliance,” it said.

The addition of big regional operators Portugal Telecom and KPN will see the Alliance extended to Portugal and the Netherlands, and according to Belgacom it could in time constitute “a real European alternative to the offers of American and Asian players.”

And UK operator EE has unveiled an own-brand LTE handset, targeting consumers at the lower end of the tier.  The operator has also launched a range of entry-level price plans to get more consumers using 4G.

EE said that it will “shortly” launch its Kestrel handset; an Android device with a 1.2GHz Qualcomm Snapdragon 400 quad-core processor, 4.5-in HD display and HD Voice compatibility. It will be available for £99.99 on pay as you go and free on 4G plans starting at £13.99 per month.

The tariff that is priced at £13.99 per month is one of EE’s new entry level plans. As well as the option of a free LTE handset, it includes 500MB, 500 free minutes of voice calls and unlimited SMS messages.

Connected cars have already proven to be a big theme for 2014 and this week French car manufacturer Peugeot Citroën announced plans to use software giant IBM’s Big Data, Analytics and MobileFirst solutions to provide customised connected car offerings.

Peugeot Citroën is working with IBM to collect vast amounts of data from cars, phones, traffic signals and other sources which the two firms intend to analyse in real time.

Drivers will also be able to access sources of information, such as improved weather updates via onboard sensors of temperature, lights and windscreen wipers in Peugeot Citroën cars.

“This innovation and collaboration with IBM is expected to offer new and essential services for both drivers and passengers,” said Brigitte Courtehoux, director of cars and connected services business unit for PSA Peugeot Citroën.

And finally, the co-founder and CEO of video service Netflix, Reed Hastings, took to the company blog to explain that sharing costs with internet services providers “makes no sense” for the firm.

In a bid to support net neutrality in the US, Hastings criticised the nation’s larger ISPs for charging “potentially escalating fees” to over the top (OTT) service providers to ensure quality of service on access networks. He noted that ISPs often cite the burden that OTT service providers place on their networks, but argued that it is not rational for OTTs to supplement ISPs’ costs.

“ISPs sometimes point to data showing that Netflix members account for about 30 per cent of peak residential internet traffic, so the ISPs want us to share in their costs,” said Hastings. “But they don’t also offer for Netflix or similar services to share in the ISPs revenue, so cost-sharing makes no sense. When an ISP sells a consumer a 10Mbps or 50Mbps internet package, the consumer should get that rate, no matter where the data is coming from.”

And that’s about all for the week. Take care,

The Informer