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FRANKFURT/PARIS (Reuters) – Huawei [HWT.UL] faces fresh challenges in Europe after France’s Orange said it would not hire the Chinese firm to build its next-generation network and Germany’s Deutsche Telekom announced it would review its vendor strategy.
People walk past a Huawei shop in Beijing, China, December 11, 2018. REUTERS/Thomas Peter
The shift by the national market leaders, both partly state owned, follows Huawei’s exclusion on national security grounds by some U.S. allies, led by Australia, from building their fifth-generation (5G) mobile networks.
U.S. officials have briefed allies that Huawei is ultimately at the beck and call of the Chinese state, while warning that its network equipment may contain “back doors” that could open them up to cyber espionage.
Huawei says those concerns are unfounded. Tensions have been heightened by the arrest of Huawei’s chief financial officer in Canada for possible extradition to the United States.
“We don’t foresee calling on Huawei for 5G,” Orange CEO Stephane Richard told reporters in Paris. “We are working with our traditional partners – they are Ericsson and Nokia.”
Richard said he considered the security concerns to be legitimate: “I absolutely understand that all of our countries, and the French authorities, are preoccupied. We are too.”
Responding, Huawei said it was not a supplier to Orange’s existing 4G network in France and would not feature in the company’s 5G plans in France. Huawei does supply Orange’s networks outside France and expects to be involved in 5G there, it said.
Deutsche Telekom, Europe’s largest telecoms company, said it was reviewing its vendor plans given the debate on the security of Chinese network gear in Germany and the other European markets where it operates.
“Deutsche Telekom takes the global discussion about the security of network equipment from Chinese vendors very seriously,” the company said in response to a Reuters query.
Telekom already pursues a multi-vendor strategy, relying above all on equipment from Ericsson, Nokia, Cisco and Huawei. “Nevertheless we are reassessing our procurement strategy,” it said.
The shift is significant because, so far, German officials have said they see no legal basis to exclude any vendors from the buildout of fifth-generation networks in response to the warnings from Washington.
Nearly half of the German company’s revenues come, however, from its profitable and fast-growing U.S. unit T-Mobile, which is undergoing regulatory scrutiny of its $ 26 billion bid to take over Sprint Corp.
A source at one competitor said: “This looks like an appeasement strategy towards the U.S. government over the Sprint deal.”
Other German telecoms players say, meanwhile, that they are continuing talks with Chinese vendors as they draw up proposals to take part in Germany’s auction of 5G licences in early 2019.
“We are watching the discussion very closely, but we will not participate in the current speculation,” said Telefonica Deutschland, Germany’s No.3 operator that has existing relationships with Huawei and ZTE, another Chinese vendor.
United Internet, a potential new entrant that is weighing bidding for a 5G licence, said it was in talks with two vendors on its strategy – one of which is Chinese. A spokesman declined to identify the vendor but according to media reports it is ZTE.
Analysts say German telecoms operators depend heavily on Huawei, meaning it will be hard to rip out and replace its existing gear or to cope without the Chinese company, the world’s top network supplier, in building their 5G networks.
“If the Chinese companies are excluded, this would reduce the number of vendors – and that could drive costs higher,” said Hans Schotten of the Technical University in Kaiserslautern.
“For that reason, many vendors would be reluctant to do without Huawei.”
Additional reporting by Gwenaelle Barzic and Nadine Schimroszik; Editing by Gopakumar Warrier and Keith Weir
Late in 2015, Gilberto Titericz, an electrical engineer at Brazil’s state oil company Petrobras, told his boss he planned to resign, after seven years maintaining sensors and other hardware in oil plants. By devoting hundreds of hours of leisure time to the obscure world of competitive data analysis, Titericz had recently become the world’s top-ranked data scientist, by one reckoning. Silicon Valley was calling. “Only when I wanted to quit did they realize they had the number-one data scientist,” he says.
Petrobras held on to its champ for a time by moving Titericz into a position that used his data skills. But since topping the rankings that October he’d received a stream of emails from recruiters around the globe, including representatives of Tesla and Google. This past February, another well-known tech company hired him, and moved his family to the Bay Area this summer. Titericz described his unlikely journey recently over colorful plates of Nigerian food at the headquarters of his new employer, Airbnb.
Titericz earned, and holds, his number-one rank on a website called Kaggle that has turned data analysis into a kind of sport, and transformed the lives of some competitors. Companies, government agencies, and researchers post datasets on the platform and invite Kaggle’s more than one million members to discern patterns and solve problems. Winners get glory, points toward Kaggle’s rankings of its top 66,000 data scientists, and sometimes cash prizes.
Alone and in small teams with fellow Kagglers, Titericz estimates he has won around $ 100,000 in contests that included predicting seizures from brainwaves for the National Institutes of Health, the price of metal tubes for Caterpillar, and rental property values for Deloitte. The TSA and real-estate site Zillow are each running competitions offering prize money in excess of $ 1 million.
Veteran Kagglers say the opportunities that flow from a good ranking are generally more bankable than the prizes. Participants say they learn new data-analysis and machine-learning skills. Plus, the best performers like the 95 “grandmasters” that top Kaggle’s rankings are highly sought talents in an occupation crucial to today’s data-centric economy. Glassdoor has declared data scientist the best job in America for the past two years, based on the thousands of vacancies, good salaries, and high job satisfaction. Companies large and small recruit from Kaggle’s fertile field of problem solvers.
In March, Google came calling and acquired Kaggle itself. It has been integrated into the company’s cloud-computing division, and begun to emphasize features that let people and companies share and test data and code outside of competitions, too. Google hopes other companies will come to Kaggle for the people, code, and data they need for new projects involving machine learning—and run them in Google’s cloud.
Kaggle grandmasters say they’re driven as much by a compulsion to learn as to win. The best take extreme lengths to do both. Marios Michailidis, a previous number one now ranked third, got the data-science bug after hearing a talk on entrepreneurship from a man who got rich analyzing trends in horseraces. To Michailidis, the money was not the most interesting part. “This ability to explore and predict the future seemed like a superpower to me,” he says. Michailidis taught himself to code, joined Kaggle, and before long was spending what he estimates was 60 hours a week on contests—in addition to a day job. “It was very enjoyable because I was learning a lot,” he says.
Michailidis has since cut back to roughly 30 hours a week, in part due to the toll on his body. Titericz says his own push to top the Kaggle rankings, made not long after the birth of his second daughter, caused some friction with his wife. “She’d get mad with me every time I touched the computer,” he says.
Entrepreneur SriSatish Ambati has made Kagglers a core strategy of his startup, H2O, which makes data-science tools for customers including eBay and Capital One. Ambati hired Michailidis and three other grandmasters after he noticed a surge in downloads when H2O’s software was used to win a Kaggle contest. Victors typically share their methods in the site’s busy forums to help others improve their technique.
H2O’s data celebrities work on the company’s products, providing both expertise and a marketing boost akin to a sports star endorsing a sneaker. “When we send a grandmaster to a customer call their entire data-science team wants to be there,” Ambati says. “Steve Jobs had a gut feel for products; grandmasters have that for data.” Jeremy Achin, cofounder of startup DataRobot, which competes with H2O and also has hired grandmasters, says high Kaggle rankings also help weed out poseurs trying to exploit the data-skills shortage. “There are many people calling themselves data scientists who are not capable of delivering actual work,” he says.
Competition between people like Ambati and Achin helps make it lucrative to earn the rank of grandmaster. Michailidis, who works for Mountain View, California-based H2O from his home in London, says his salary has tripled in three years. Before joining H2O, he worked for customer analytics company Dunnhumby, a subsidiary of supermarket Tesco.
Large companies like Kaggle champs, too. An Intel job ad posted this month seeking a machine-learning researcher lists experience winning Kaggle contests as a requirement. Yelp and Facebook have run Kaggle contests that dangle a chance to interview for a job as a prize for a good finish. The winner of Facebook’s most recent contest last summer was Tom Van de Wiele, an engineer for Eastman Chemical in Ghent, Belgium, who was seeking a career change. Six months later, he started a job at Alphabet’s artificial-intelligence research group DeepMind.
H2O is trying to bottle some of the lightning that sparks from Kaggle grandmasters. Select customers are testing a service called Driverless AI that automates some of a data scientist’s work, probing a dataset and developing models to predict trends. More than 6,000 companies and people are on the waitlist to try Driverless. Ambati says that reflects the demand for data-science skills, as information piles up faster than companies can analyze it. But no one at H2O expects Driverless to challenge Titericz or other Kaggle leaders anytime soon. For all the data-crunching power of computers, they lack the creative spark that makes a true grandmaster.
“If you work on a data problem in a company you need to talk with managers, and clients,” says Stanislav Semenov, a grandmaster and former number one in Moscow, who is now ranked second. He likes to celebrate Kaggle wins with a good steak. “Competitions are only about building the best models, it’s pure and I love it.” On Kaggle, data analysis is not just a sport, but an art.