The tech sector might appear to be in rude health, thanks to the global population’s growing dependence on smartphones, social networks and the increased permeation of the internet into most aspects of consumers’ lives. Yet all is not quite what it appears to be.
Globally, mobile operators have a bit of a problem – they have invested billions in building super-fast wireless 4G networks. They also fear they will be sidelined as ‘dumb pipes’ while all the advertising revenues and glory will go to internet giants, like Facebook or Google.
The internet giants and nascent new media barons themselves have a problem because in order to reach consumers and attract advertising coinage they need the best networks and the best devices in the hands of more and more people.
The device makers – also known as original equipment manufacturers (OEMs) – have a problem because in their race to bring out the next must-have consumer gadget or gizmo they are discovering that the smartphones, tablet computers and PCs are evolving faster than the networks can keep up.
One Irish technology company, Cubic Telecom, has identified the crux of the problem and has positioned itself to be something of a peacemaker and enabler for the next phase of the digital revolution.
Cubic, under the leadership Barry Napier, CEO, has developed mobile technologies that will allow mobile operators, internet giants and OEMs to co-exist and potentially generate ample revenues and profits for years to come.
In recent weeks, the company, which is headquartered in Sandyford in Dublin, revealed plans to create 70 new jobs after securing US$5.2m in funding from US telecoms giant Qualcomm, as well as ACT Venture Capital, TPS Investments and Enterprise Ireland.
Among Cubic Telecom’s 70 new employees will be software engineers, network engineers and user interface (UI) developers.
Pivoting into growth markets
Napier said that originally the company had focused on selling MaxRoam-branded SIMs that allowed travellers passing through airports to make low-cost calls and get low-cost data roaming while overseas, but he and the management team decided to pivot the company in a different direction.
Instead of being a mobile brand, Cubic Telecom, which is licensed by the GSM Association as a mobile operator in its own right, has forged alliances with some of the world’s biggest mobile operators, such as AT&T and China Unicom. Cubic Telecom will also work to embed SIMs and software inside the latest devices to come from OEMs like HP.
The result will be the next generation of consumer electronics devices, from smartphones to tablet computers and cars, that will be able to guarantee users affordable data, content and communications anywhere in the world. For example, consumers in the future may buy an e-book reader or a smartphone that will always be connected to the internet and the price of the connection may be absorbed by the price of the device or the purchase of e-books or music.
Mobile networks, as a result, will get paid for the use of their networks. OEMs will sell devices to consumers, and internet and media giants will be able to channel content and catch advertising eyeballs.
“You will never see Cubic Telecom’s branding on the side of a Formula One racing car,” said Napier, who likened the pivot to morphing the company from a Tesco into an IBM.
Napier said the idea is to work between the key operators, device makers and internet and media companies to become a single-source provider for wireless connectivity.
Cubic Telecom serves both the telecoms operators and OEMs by putting in place core network architectures and real-time billing engines via a software layer.
“The ultimate objective is that when a consumer buys a new device – be it a phone, tablet or PC – they get connected right away,” Napier said.
In addition to carrier deals with AT&T and Sprint, Cubic is working with three out of the five largest computer manufacturers, including HP, to have mobile connectivity built into future computers and phones. Other deals with global media brands may also result in specific hardware products for consumers.
Napier joined Cubic Telecom in 2009 and instigated its move away from being a mobile brand to being more of a partner that aligns with operators, hardware makers and internet firms to get things done.
Prior to Cubic Telecom, Napier served as chairman of BPI Telecom, a €137m a year distributor of hardware in Ireland for manufacturers like Microsoft, Samsung and Sony. The company was sold to DCC plc for an undisclosed sum two years ago.
One of the key things Napier did upon joining Cubic Telecom was bring in a seasoned telecoms management team, including Gerry McQuaid, former commercial director at O2 Ireland, and Peter Maxwell, former director of Core Network at Eircom.
Over the past three years, since receiving its GSMA licence, Cubic Telecom has been forging agreements with mobile operators all over the world and has reduced the roaming agreement cycle from 12 months down to less than three months by putting in place core infrastructure and software to streamline the process.
“We are attempting to do what no one else has tried to do in the telecoms world,” Napier said. “Every operator in the world is ultimately a single operator in each country and often they don’t think of joining it all together except via individual roaming agreements.”
OEMs are trying to sell products from the point of manufacture to multiple countries around the world and don’t have the time to be fussing with individual roaming agreements and alliances, Napier said. “They just want to get something included in the device they are making or have it sit on the firmware and have it in there for the life of the device.”
Hardwired into the network
Cubic Telecom’s network is hardwired into the various operators around the world and the company is molding it all together so new device owners just switch on and get connected. Then, as they travel the world, they don’t have to worry about roaming costs or agreements or about security.
Napier said the company’s plan is to enable the connected lifestyle. This could extend from phones and computers today to healthcare, smart metres, and in-car systems.
“The reality is the craving for data is more than the networks can handle,” Napier said.
When the iPhone first came out in 2007, the network congestion was greater than operators expected, he said. Now consumers are in a world where more and more things, including cars, will be connected to wireless networks.
“People just want things to work in a secure manner,” said Napier.
The idea isn’t to be a disruptive tech player but to join together different tech camps, he said. “We are going to be a company that aligns different entities together that don’t actually want to appear to be aligned because they are all massive in their own particular industries.
“We can create the special lemonade that will allow carriers, OEMs and media companies to form a bond with consumers. For example, if you are a subscriber to a TV company and you access specific services on a mobile device, the price of the wireless data could be covered by the price of the content you are already paying for.”
Consumers in the future will buy into a package for the TV or news content that they want and they will be inside a walled garden. Once they step outside those walled gardens they pay separately, Napier said.
“The good news for the mobile network operators is they are no longer relegated to being ‘dumb pipes’ and they get paid for the content that flows through their networks and they can get fresh revenue without losing subscribers. The idea is that they can actually get more revenue than before.”
The aim, Napier said, is to align the device and the internet companies with the best carriers.
Qualcomm is one of the world’s biggest mobile technology hardware makers and its Snapdragon processor features in the latest mobile devices from smartphone makers like Samsung and HTC.
The investment in Cubic Telecom is Qualcomm’s second investment in the company in recent years. It’s no accident that both companies view themselves as facilitating the growth of the telecoms, internet and computing worlds.
“They saw the glint in our eyes and liked our vision. They got behind us and they gave us plenty of room to trip up, but we didn’t. We have proven ourselves every step of the way,” Napier said.
A version of this article appeared in The Sunday Times on 2 June