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Telcos must adapt – fast

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No industry will remain undisrupted in 2018 and the years to come. But for African telco providers, who have feasted on near-uninterrupted subscriber and revenue growth over the past two decades, the need to adapt is paramount, writes MARIAM ABDULLAHI, Telco Industry Lead at SAP Africa.

In a market where the average business lifespan is 12 years (compared to 25 years in the last two decades) the objective is not to simply improve that which is already working. African telcos need radical transformation of entire business models in order to become digital supply networks and re-imagine work, resources management, and contingent worker management.

Since the advent of the Internet and the more recent emergence of technologies that include machine learning, IoT, cloud computing, and predictive analytics, businesses with exponential growth models such as Amazon, Uber, Airbnb and MPESA have entirely transformed their industry sectors almost overnight.

Thanks at least in part to these companies, customer expectations have ballooned, with modern consumers demanding personalised, efficient service at low cost and with added convenience. Talented employees have also increasingly gravitated toward these companies, putting further pressure on incumbents who suddenly are outperformed and out-innovated at every turn. “Too big to fail” in today’s market is a near-certain recipe for decline and eventual disaster.

Telco execs heeding the call

Telco executives across Africa and other emerging markets have scrambled to reinvent their business models in the face of shifting customer demands and the arrival of agile, customer-centric competitors. Airtel Africa merged its Ghana operations with Tigo Ghana and sold off operations in Sierra Leone and Burkina Faso to adapt to rapidly changing market conditions. South Africa’s Cell-C is seeking investments into fibre-to-the-home providers to enable its diversification into new service offerings including insurance and media.

Further afield in India, LTE and Voice-over-LTE operator Jio acquired 100 million subscribers in only six months by offering free voice services for life to its customers, prompting a sudden merger between Vodafone India and Aditya Birla Group’s Idea operations to form India’s largest telecoms company.

Kenya’s Safaricom is building on its much-lauded MPESA platform by diversifying into new revenue streams, including Uber competitor Little and e-commerce portal Ma Soko to claim a greater share of its customers’ wallets.

These companies have already felt the effects of declining traditional revenue streams as disruption from the likes of OTT players such as WhatsApp, Skype and YouTube put pressure on what was until recently primary (and highly dependable) sources of revenue. According to PwC, many telco operators globally are seeing revenue drop-offs of as much as 30% in SMS, 20% in international voice, and 15% in international roaming. Incremental improvements and operational changes are no longer enough. Those that can adapt to take advantage of technology megatrends such as hyper connectivity, cloud computing, and IoT are far better placed to reinvent their business models and can further incorporate Software Defined Networks and Network Function Virtualisation to speed up the innovation cycle.

The nature of transformation in 2018

Digital transformation in 2018 is not about cutting costs or optimising existing processes. It is a relook of the entire telco business model. It is asking the hard questions: Am I serving my customers in the right way? Are my operations efficient? Is cost-cutting adequate and sustainable? Am I able to hire the correct staff, attract the best talent, and empower them to contribute to an inclusive and innovation-focused workplace?

Telco executives must ensure their companies’ day-to-day culture drives innovation across the entire business. The aim should be on developing personalised services and to deliver such services in a way to meets the demands of an empowered customer base. The only way to do that is to have access to the correct customer insights – such as data usage and consumption habits, call volumes, area of residence – and to act on such insights in a humane and personalised manner. For this, analytics and data are key, especially when matched to an in-memory computing platform that enables real-time actionable insights.

At a time when telco offerings are highly commoditised and there’s not too much distinguishing one operator from the other, telcos need to simplify their core business operations to allow for the development of a clear unique value proposition for sustainable growth that takes local conditions into account. For example, with so many African countries not yet fully adopting 4G technology, does it truly make sense to invest heavily in emerging 5G technology?

The African telco market has moved away from improvement to large-scale disruption and transformation. Telcos who embark on a process of total business model change underpinned by powerful exponential technologies will be far better placed to withstand and overcome the challenge posed by the new breed of disruptors.

2018 will determine who adapts, maximises on operational efficiencies, leverages innovation for new revenue streams and who relies on old ways of doing businesses that negatively impacts their Go To Market offerings.

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Which IoT horse should you back?

The emerging IoT is evolving at a rapid pace with more companies entering the market. The development of new product and communication systems is likely to continue to grow over the next few years, after which we could begin to see a few dominant players emerge, says DARREN OXLEE, CTOf of Utility Systems.

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But in the interim, many companies face a dilemma because, in such a new industry, there are so many unknowns about its trajectory. With the variety of options available (particularly regarding the medium of communication), there’s the a question of which horse to back.

Many players also haven’t fully come to grips with the commercial models in IoT (specifically, how much it costs to run these systems).

Which communication protocol should you consider for your IoT application? Depends on what you’re looking for. Here’s a summary of the main low-power, wide area network (LPWAN) communications options that are currently available, along with their applicability:

SIGFOX 

SigFox has what is arguably the most traction in the LPWAN space, thanks to its successful marketing campaigns in Europe. It also has strong support from vendors including Texas Instruments, Silicon Labs, and Axom.

It’s a relatively simple technology, ultra-narrowband (100 Hz), and sends very small data (12 bytes) very slowly (300 bps). So it’s perfect for applications where systems need to send small, infrequent bursts of data. Its lack of downlink capabilities, however, could make it unsuitable for applications that require two-way communication.

LORA 

LoRaWAN is a standard governed by the LoRa Alliance. It’s not open because the underlying chipset is only available through Semtech – though this should change in future.

Its functionality is like SigFox: it’s primarily intended for uplink-only applications with multiple nodes, although downlink messages are possible. But unlike SigFox, LoRa uses multiple frequency channels and data rates with coded messages. These are less likely to interfere with one another, increasing the concentrator capacity.

RPMA 

Ingenu Technology Solutions has developed a proprietary technology called Random Phase Multiple Access (RPMA) in the 2.4 GHz band. Due to its architecture, it’s said to have a superior uplink and downlink capacity compared to other models.

It also claims to have better doppler, scheduling, and interference characteristics, as well as a better link budget of 177 dB compared to LoRa’s 157 dB and SigFox’s 149 dB. Plus, it operates in the 2.4 GHz spectrum, which is globally available for Wi-Fi and Bluetooth, so there are no regional architecture changes needed – unlike SigFox and LoRa.

LTE-M 

LTE-M (LTE Cat-M1) is a cellular technology that has gained traction in the United States and is specifically designed for IoT or machine‑to‑machine (M2M) communications.

It’s a low‑power wide‑area (LPWA) interface that connects IoT and M2M devices with medium data rate requirements (375 kb/s upload and download speeds in half duplex mode). It also enables longer battery lifecycles and greater in‑building range compared to standard cellular technologies like 2G, 3G, or LTE Cat 1.

Key features include:

·       Voice functionality via VoLTE

·       Full mobility and in‑vehicle hand‑over

·       Low power consumption

·       Extended in‑building range

NB-IOT 

Narrowband IoT (NB‑IoT or LTE Cat NB1) is part of the same 3GPP Release 13 standard3 that defined LTE Cat M1 – both are licensed as LPWAN technologies that work virtually anywhere. NB-IoT connects devices simply and efficiently on already established mobile networks and handles small amounts of infrequent two‑way data securely and reliably.

NB‑IoT is well suited for applications like gas and water meters through regular and small data transmissions, as network coverage is a key issue in smart metering rollouts. Meters also tend to be in difficult locations like cellars, deep underground, or in remote areas. NB‑IoT has excellent coverage and penetration to address this.

MY FORECAST

The LPWAN technology stack is fluid, so I foresee it evolving more over the coming years. During this time, I suspect that we’ll see:

1.     Different markets adopting different technologies based on factors like dominant technology players and local regulations

2.     The technologies diverging for a period and then converging with a few key players, which I think will be SigFox, LoRa, and the two LTE-based technologies

3.     A significant technological shift in 3-5 years, which will disrupt this space again

So, which horse should you back?

I don’t believe it’s prudent to pick a single technology now; lock-in could cause serious restrictions in the long-term. A modular, agile approach to implementing the correct communications mechanism for your requirements carries less risk.

The commercial model is also hugely important. The cellular and telecommunications companies will understandably want to maximise their returns and you’ll want to position yourself to share an equitable part of the revenue.

So: do your homework. And good luck!

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Ms Office hack attacks up 4X

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Exploits, software that takes advantage of a bug or vulnerability, for Microsoft Office in-the-wild hit the list of cyber headaches in Q1 2018. Overall, the number of users attacked with malicious Office documents rose more than four times compared with Q1 2017. In just three months, its share of exploits used in attacks grew to almost 50% – this is double the average share of exploits for Microsoft Office across 2017. These are the main findings from Kaspersky Lab’s Q1 IT threat evolution report.

Attacks based on exploits are considered to be very powerful, as they do not require any additional interactions with the user and can deliver their dangerous code discreetly. They are therefore widely used; both by cybercriminals looking for profit and by more sophisticated nation-backed state actors for their malicious purposes.

The first quarter of 2018 experienced a massive inflow of these exploits, targeting popular Microsoft Office software. According to Kaspersky Lab experts, this is likely to be the peak of a longer trend, as at least ten in-the-wild exploits for Microsoft Office software were identified in 2017-2018 – compared to two zero-day exploits for Adobe Flash player used in-the-wild during the same time period.

The share of the latter in the distribution of exploits used in attacks is decreasing as expected (accounting for slightly less than 3% in the first quarter) – Adobe and Microsoft have put a lot of effort into making it difficult to exploit Flash Player.

After cybercriminals find out about a vulnerability, they prepare a ready-to-go exploit. They then frequently use spear-phishing as the infection vector, compromising users and companies through emails with malicious attachments. Worse still, such spear-phishing attack vectors are usually discreet and very actively used in sophisticated targeted attacks – there were many examples of this in the last six months alone.

For instance, in late 2017, Kaspersky Lab’s advanced exploit prevention systems identified a new Adobe Flash zero-day exploit used in-the-wild against our customers. The exploit was delivered through a Microsoft Office document and the final payload was the latest version of FinSpy malware. Analysis of the payload enabled researchers to confidently link this attack to a sophisticated actor known as ‘BlackOasis’. The same month, Kaspersky Lab’s experts published a detailed analysis of СVE-2017-11826, a critical zero-day vulnerability used to launch targeted attacks in all versions of Microsoft Office. The exploit for this vulnerability is an RTF document containing a DOCX document that exploits СVE-2017-11826 in the Office Open XML parser. Finally, just a couple of days ago, information on Internet Explorer zero day CVE-2018-8174 was published. This vulnerability was also used in targeted attacks.

“The threat landscape in the first quarter again shows us that a lack of attention to patch management is one of the most significant cyber-dangers. While vendors usually issue patches for the vulnerabilities, users often can’t update their products in time, which results in waves of discreet and highly effective attacks once the vulnerabilities have been exposed to the broad cybercriminal community,” notes Alexander Liskin, security expert at Kaspersky Lab.

Other online threat statistics from the Q1, 2018 report include:

  • Kaspersky Lab solutions detected and repelled 796,806,112 malicious attacks from online resources located in 194 countries around the world.
  • 282,807,433 unique URLs were recognised as malicious by web antivirus components.
  • Attempted infections by malware that aims to steal money via online access to bank accounts were registered on 204,448 user computers.
  • Kaspersky Lab’s file antivirus detected a total of 187,597,494 unique malicious and potentially unwanted objects.
  • Kaspersky Lab mobile security products also detected:
    • 1,322,578 malicious installation packages.
    • 18,912 mobile banking Trojans (installation packages).

To reduce the risk of infection, users are advised to:

  • Keep the software installed on your PC up to date, and enable the auto-update feature if it is available.
  • Wherever possible, choose a software vendor that demonstrates a responsible approach to a vulnerability problem. Check if the software vendor has its own bug bounty program.

·         Use robust security solutions , which have special features to protect against exploits, such as Automatic Exploit Prevention.

·         Regularly run a system scan to check for possible infections and make sure you keep all software up to date.

  • Businesses should use a security solution that provides vulnerability, patch management and exploit prevention components, such as Kaspersky Endpoint Security for Business. The patch management feature automatically eliminates vulnerabilities and proactively patches them. The exploit prevention component monitors suspicious actions of applications and blocks malicious files executions.
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