Daily Tech Snippet: Tuesday February 17

• Wi-fi first telcos might be about to disrupt the telecom business: It would not be an insult to say Republic Wireless and FreedomPop are obscure little companies. But they dream big. The two companies are at the forefront of a tantalizing wireless communications concept that has proved hard to produce on a big scale: Reduce cellphone costs by relying on strategically placed Wi-Fi routers. And when there are no routers available, fall back on the traditional cellular network. They have been at this for nearly five years with mixed success. The companies say they are already profitable and gradually adding subscribers. But they are tiny — both say their customers are in the hundreds of thousands. Verizon Wireless, by comparison, has more than 100 million. Still, the upstarts have been trailblazers, proof that alternative wireless networks are feasible and maybe even profitable. Now some giant companies look to be following their lead. Last month, Cablevision announced a phone service that would be powered entirely by Wi-Fi, for $30 a month, while a traditional wireless contract costs around $100 a month. Google has also been working on a cellphone service that relies heavily on Wi-Fi, according to people briefed on the company’s plans. For consumers, all this could be very good news. The big American carriers — Verizon Wireless, AT&T, Sprint and T-Mobile USA — have not been worried about their Wi-Fi-powered competitors. But Cablevision and Google could force them to pay attention. And an industry already engaged in a price-cut war could be compelled to go even lower to keep the upstarts at bay. “Wi-Fi first is a massive disrupter to the current cost structure of the industry,” said Stephen Stokols, chief executive of FreedomPop. “That’s going to be a big shock to the carriers.” The concept championed by the two little companies in their nationwide services is surprisingly simple. The traditional wireless carriers operate their services with cell towers, but occasionally in areas with extra heavy traffic they resort to Wi-Fi to bear some of the load. FreedomPop and Republic Wireless do the opposite. They offer services that rely primarily on Wi-Fi networks, and in areas without Wi-Fi, customers can pull a signal from regular cell towers.

• Infosys acquires SaaS provider Panaya in deal valued at $200M: Consulting and IT services provider Infosys announced today that it will acquire Panaya, an enterprise resource planning (ERP) software company. Worth an enterprise value of about $200 million, the deal is expected to close by the end of March.Infosys, which is based in Bengaluru, India, said that it will integrate technology from Panaya’s CloudQuality suite to bring automation to some of its software. CloudQuality helps businesses test changes to SAP, Oracle EBS, and Salesforce software by identifying functions that might break and providing potential solutions including code corrections. Infosys, one of India’s largest software exporters, is currently in the midst of revamping its strategy as it faces challenges including slower revenue growth than competitors like HCL Tech and TCS, and the departure of several key executives. Sikka told TechCrunch’s Ron Miller last July that he would take time to understand Infosys’ problems and that he believes software solutions should be about expanding the knowledge and capability of an organization. According to Crunchbase, Panaya has received $59 million in funding. Its last round, a Series E of $20 million, was disclosed in January.

• Ford and Tencent in talks to build messaging functions for Ford's cars in China: Ford said it was in talks with Tencent, maker of the popular WeChat messaging app, to develop messaging functions for the manufacturer’s cars in China. David Huang, a senior engineer who heads Ford’s Asia Pacific connected-services unit, said, “People want to stay connected, stay informed and stay entertained all the time, even when they’re driving.” Drivers would sync their phone to their car’s software system and control WeChat functions, chosen by Tencent and certified by Ford as safe, through voice commands or limited use of buttons. Yale Zhang, managing director of the Shanghai-based consultancy Automotive Foresight, said connectivity was a deciding factor for Chinese customers buying a car. “Those kind of things are the fundamental things people will consider,” he added. Many Chinese use WeChat’s free voice messaging feature instead of phone calls, holding up their smartphones like walkie-talkies as they speak, tap and listen to replies. Rivals including Daimler and Nissan are also looking at ways to give drivers safe, hands-free access to mobile apps in China, home to the world’s largest number of smartphone users. WeChat is China’s most prevalent chatting app, with about half a billion active monthly users.

• China’s internet restrictions are hurting business, survey finds:  Foreign businesspeople in China are increasingly frustrated by the growing obstacles to wide Internet access, including the onerous system of censorship known as the Great Firewall, according to survey results released this week by the European Union Chamber of Commerce in China. The survey was answered by 106 companies that are based in the European Union and have offices in China. Eighty-six percent of the respondents said their businesses had been negatively affected by the blocking of certain websites or tools. That was an increase from 71 percent in last year’s survey. The chamber also asked its members about the greater tightening of Internet access that occurred in China at the end of 2014 and this year. Eighty percent reported a worsening impact on business. Starting in late 2014, the Chinese government cut off access to Gmail from third-party apps, forcing people in China to rely on virtual private network, or V.P.N., software to get to Google’s email service. The regular Gmail site and other Google pages had been blocked consistently since last summer, but people in China had been able to use third-party apps to download Gmail to their devices until December. After blocking Gmail downloads through those apps, forcing more people to turn to VPN software, the government went on to aggressively attack V.P.N.’s. The chamber found that 13 percent of survey respondents had recently deferred investing more in research and development in China, or had been unwilling to set up those operations here, since restrictions grew at the beginning of the year.

• Russian cybersecurity firm alleges the US embeds super-sophisticated spyware in Iran, Pakistan, Russia and elsewhere: The United States has found a way to permanently embed surveillance and sabotage tools in computers and networks it has targeted in Iran, Russia, Pakistan, China, Afghanistan and other countries closely watched by American intelligence agencies, according to a Russian cybersecurity firm. In a presentation of its findings at a conference in Mexico on Monday, Kaspersky Lab, the Russian firm, said that the implants had been placed by what it called the “Equation Group,” which appears to be a veiled reference to the National Security Agency and its military counterpart, United States Cyber Command. It linked the techniques to those used in Stuxnet, the computer worm that disabled about 1,000 centrifuges in Iran’s nuclear enrichment program. It was later revealed that Stuxnet was part of a program code-named Olympic Games and run jointly by Israel and the United States. Kaspersky’s report said that Olympic Games had similarities to a much broader effort to infect computers well beyond those in Iran. It detected particularly high infection rates in computers in Iran, Pakistan and Russia, three countries whose nuclear programs the United States routinely monitors. Some of the implants burrow so deep into the computer systems, Kaspersky said, that they infect the “firmware,” the embedded software that preps the computer’s hardware before the operating system starts. It is beyond the reach of existing antivirus products and most security controls, Kaspersky reported, making it virtually impossible to wipe out. In many cases, it also allows the American intelligence agencies to grab the encryption keys off a machine, unnoticed, and unlock scrambled contents. Moreover, many of the tools are designed to run on computers that are disconnected from the Internet, which was the case in the computers controlling Iran’s nuclear enrichment plants.