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Ring! Ring! Hot News, 25th January 2008

In Today’s Issue: Obama inauguration causes Akamai to give off steam; world economy still awful; emerging market users can’t get enough WWW; Rwandan innovators sell electricity by SMS; Rwandan innovators start revenue sharing platform; Pakistan deploys FTTH through anarchy, also knit their own Akamai; Microsoft in dated, monopoly-minded product shock; NHS IT zombie army eats BT’s brains; OFCOM squeezes UK GSMers’ margins; Sprint launches rather sensible small business products; interesting new contacts/social network/IM app from Nokia Labs; Verizon’s new CPE is boring; more eldritch horrors creep out of the Bush

There was some sort of political event in the US last week; millions turned out to watch the Obama inauguration, but Telco 2.0 instead spent it reading posts to NANOG about the massive Internet traffic surge caused by all that streaming video, the most demanding form of content.

As Network World reports, Akamai broke all its own records, as did all the other major CDNs; total throughput peaked at 2 terabits per second, but the Internet stubbornly refused to crash. Despite the best efforts of enterprise sysadmins to spoil the fun by blocking streaming and p2p ports, network operators reported seeing traffic 150% above normal levels even on systems that were 80% business customers rather than eyeballs…

Meanwhile, the economy was still dire; Intel, Apple, IBM, Nokia, Ericsson and Philips have all announced layoffs, Nortel has gone bust, even the port of Dubai has suspended all construction at all sites worldwide.

But emerging market users are giving the Web a hammering from their mobile phones - growth rates in China are of the order of 110 per cent. You can be fairly certain it won’t be telco portals they’re reading, though. As we said in our review of the year, emerging markets are where the innovation is; check out Rwanda, where they’re using the business model of prepaid GSM airtime to sell electricity. The electricity company issues a load of electricity vouchers; they sell these wholesale to independent distributors, who SMS them to customers, who send a text message to the electricity company, who turn on the juice.

It’s almost traditional that emerging market electricity grids struggle because very few people who have electricity pay the bills, so there is no funding to extend the grid, so there is a permanent shortage; not any more. The really interesting thing here is that the people who started the service, based at the Kigali Institute of Science and Technology, are creating a business model for other developers - using their SMS platform, KIST and the developer share the revenue 50-50.

Brough Turner, meanwhile, points us at another fascinating emerging market story. In Pakistan, nobody knows or cares what the government or the telcos say about access to the right-of-way; so people are just stringing their own fibre-to-the-home networks. They lash ethernet switches to utility poles, run Cat5E cable into houses, then deal with an aggregator to hook up an optical fibre into their area, using a PC running Quagga, Zebra, OpenBGP or some other free router implementation to take care of the routing. As a result, urban Pakistanis can get 100Mbits/s Ethernet for cheap, much more easily than New Yorkers or Londoners.

Of course, there’s a downside; actual Internet connectivity is slow and expensive due to limited international cable capacity and incumbent dominance of interconnection. But they’re working around it; most of these networks already have a sort-of CDN, where they keep the video content so their users can grab it at line speeds, and they’re bound to reinvent the IX at some point.

Compare the latest greatest idea from Microsoft; Music! For your mobile phone! Nobody’s tried that before! Better yet, it’s music for your mobile phone with DRM that won’t let you move it between devices, so if you get a new phone you’ve got to buy it all again. And if Microsoft gets bored with the shiny toy, they might switch off the DRM authentication server and kill your record collection - they already did it once, after all.

Who on earth would buy this product? Look at the differences between it and the Pakistani greynets (I don’t know if that’s a word, but now it is) - on one hand, adaptation, technical innovation, openness, on the other, tired ideas, lack of inspiration, mean-spiritedness and secrecy. Further, what is Microsoft - Microsoft - doing trying to be a customer-intimate consumer media firm? Their main product is called “Office” - this should tell you something about their actual strengths, expertise and specialisation. Shouldn’t they be putting their effort into brilliant new CRM and Voice 2.0 products rather than poor imitations of products Apple, Amazon and Google do so much better?

The National Health Service’s giant IT project, meanwhile, began when Bill Gates came to see Tony Blair; as usual, Blair was captivated by him, which is quite an achievement in itself. The project soon became a byword for IT failure, beleaguered by not so much a lack as a total absence of user engagement, secrecy, bad management, and a toxic mix of huge spending and penny pinching. Now it looks like it’s done serious damage to BT, which is warning of a huge (hundreds of millions) charge to profits due to problems at BT Global Services. The FT’s sources reckon the NHS contracts are seriously underwater - and the scary bit is they’re big enough to account for the whole profits warning.

There is some good news for BT, though; OFCOM is bringing the regulated termination charges on UK mobile networks rattling down another 22 per cent. Not so good news for the mobile networks.

However, there’s good news in the Telco USSR; look at this sensible enterprise-focused offering, leveraging Sprint’s specialities in voice & messaging into a product for workgroups. $30 a line a month gets you unlimited push-to-talk both one-to-one and one-to-many; another $10 guarantees you unlimited Web browsing and a GPS phone for each group member, and there are attractive rates on bulk telephony shared among the group.

You could use the unlimited data for this rather nice looking integrated contacts/instant messenger application from Nokia Labs, for a kind of instant Lotus Notes deployment. It’s implemented in XMPP, so it interworks with all kinds of other IM networks.

Verizon, meanwhile, has a new better fixed-line phone product which incorporates a variety of Web services. But does it provide any of the call-routing/multiring/general Voice 2.0 features they developed for Iobi? Otherwise it’s a little meh; “does the same things as your mobile but isn’t mobile” is not the best sales pitch ever. Similarly disappointing is their new femtocell product; it costs $250 up front for the privilege of helping VZW with their backhaul bill, and it provides only 1xRTT (i.e. like GPRS but American) service - which looks poor as HSPA rolls out. And it’s not integrated with the new fixed phone!

Meanwhile, more of the truth emerges about illegal surveillance.

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