Ring! Ring! Hot News, 27th July 2009
In Today’s Issue:
Strategy: The spoils of Nortel; why would RIM want to be Nortel 2.0 anyway? Ericsson the winners so far; reasons to be cheerful - AT&T spending on infrastructure again; the iPhone sends waves through AT&T’s balance sheet; Zain/Vivendi deal off, revenues up; Ahuja and friends launch WiMAX startup; East Africa online; Core Services: Data traffic booms; NSN reckons it will exceed voice by 2011; mobile broadband subscriber numbers; Vodafone results down despite data surge; America Movil results up because of data surge; O2 UK’s nightmare week; HOWTO get US Federal broadband funding; Quigley picked to run Aussie NBN; B2B Platform: KCOM in trouble over war on filesharers; Will Page: music industry actually OK, really; Apple considers iTunes-focused tablet; Enablers and APIs: Rackspace, the latest API-enabled cloud; Technology and Devices: Avaya in pole position for Nortel voice assets; NSN opts for Alvarion’s WiMAX kit; WiMAX trouble in Malaysia; Ericsson chief promises to back Sony-Ericsson; ZTE: SDR-based LTE/CDG Node B; Telus prepares for CDMA-LTE leap; SpinVox is people!; 26% of Chinese crooks wannabe hackers; no wonder, when it’s this easy; Symbian-approved virus spreads by SMS; Apple breaks Palm Pre-iTunes sync, Palm unbreaks it; Nokia buys super-address book startup; a watch in a phone in a watch
The vultures swirl around Nortel. And sometimes they turn on each other…RIM complains bitterly that it’s not getting a fair chance to buy the core CDMA and LTE assets; Nortel says they can only bid for them if they promise to buy more assets after that; RIM wraps itself in the flag and claims that it must keep these strategic assets in Canadian hands. Meanwhile, one of Nortel’s creditors threw in a low bid for the assets, Nokia Siemens Networks made an offer…and Telephony Online asked why RIM wanted to become an underscaled infrastructure vendor, just like…Nortel.
Good point; they reckon it’s because they are thinking of licensing Nortel’s patent portfolio, which is impressive, to other manufacturers in a business model similar to that of Qualcomm, or rather, Qualcomm in its CDMA glory days. But even as the row went on, Ericsson was preparing to double NSN’s bid and beat RIM and Matlin’s offers as well; it looks like that will seal the deal, barring an intervention by the courts.
So Ericsson stands to get the key mobile and switching assets; Avaya has bid $450m for the enterprise voice/unicomms ones, which would make them the market leader ahead of Cisco. That only leaves the optical and WiMAX stuff; perhaps somebody will find those missing Alvarion base stations in the end. Speaking of them, NSN has opted to resell Alvarion WiMAX gear rather than make its own; it’s clearer than ever that only the specialists are succeeding in WiMAX.
The Malaysian government, meanwhile, isn’t happy with its four WiMAX licence holders, only one of which has actually launched.
Ericsson is forking out over a billion dollars for the guts of Nortel; at the same time, it’s facing ugly results at Sony-Ericsson and more losses at the chipmaking joint venture STEricsson. In an interview with Handelsblatt, Hans Vestberg promised that Ericsson will go on backing the handsets operation and may even invest more money in it.
There are some reasons to be in the infrastructure business; AT&T is planning to increase its CAPEX in the second half of 2009 by 35 to 50%, as it rolls out HSPA and upgrades its backhaul to cope with soaring data traffic from all those iPhones. The Jesus Phone continues to cause upheavals in the industry; AT&T’s results also demonstrate a strange pattern, as each new version of the device causes their margins to dive as all that handset subsidy gets paid out, and then the margins come surging back with the data traffic.
Which, according to EITO statistics, has never been as high before. No surprise there, but the more interesting point is that the world recession hasn’t stopped the traffic boom or even slowed it down noticeably. NSN reckons that data traffic is going to overtake voice traffic sometime in 2011. But will data margins pass voice going up, or coming down?
Interestingly, the same telecoms.com report mentions that Informa Telecoms & Media’s figures show there were 225 million mobile broadband subscribers as at March, 2009; but NSN claims it has just gained its 500 millionth data subscriber. But there can’t be that many networks out there that don’t at least provide GPRS now, and NSN’s market share is very large; so this figure seems either high, if it doesn’t count GPRS, or low, if it does…
The promised Vodafone numbers were published, and they aren’t great; Vodafone UK’s revenues were down 4.7% in the first quarter, and 4.8% for the whole of Europe, despite the surge in data traffic. Interestingly, VF also announced that prepaid churn in India was only around 25%, compared to 57% for the UK.
ZTE has announced a base station capable of both LTE and EV-DO Rev.B, the rough equivalent of HSPA in the old CDMA world. Whether this will be particularly important is very doubtful - after all, Telus is about to join the club of carriers who’ve gone over the wall from CDMA to LTE - but it does show the flexibility that software-defined radio technology brings.
In Australia, meanwhile, plans for their national fibre network are moving ahead. This week, the government announced some of the first places that will get the service, and tapped Mike Quigley as CEO of their loopco. Remember him? Sure ya do; the man who would be king of Alcatel, called up from Australia to become Serge Tchuruk’s eventual successor, before being sidelined in order to make room for the Lucent monstermerger.
Industry rumours at the time said he’d never actually visited head office in Paris, having made his career in Australia, Asia-Pacific and North America; this was probably a myth, but it was no secret that a lot of people were shocked by the idea of an Anglophone boss. That was presumably nothing to the shock they got a few years later…
In the US, crafty broadband monkeys have discovered that it might be much easier to get government funding for public networks than they thought. The Feds came up with a definition of “underserved area” that set fairly strict requirements for anyone who wanted money; but it turns out that this definition is actually a definition of “underserved”, not of “area”. So, all you need to do is find somewhere that fulfils the definition of “underserved”, and add it to the area you want to deploy in…
Don’t assume community broadband solves anything, though; Kingston Communications, the unique telecoms operator in the British city of Hull, has been forced to change its draconian policy of terminating anyone they suspect of filesharing after a user revolt. Hilariously, they were actually more anti-filesharing than the British record industry lobby.
On that subject, friend of Telco 2.0 Will Page, the MCRS-PRS’s chief economist, has been crunching the numbers again; he concludes that the music industry is actually growing, with a declining recording business more than compensated by a booming box office business. In other “we were right” news, Ernst & Young concludes that telcos are well placed to ride out the economic crisis. Thanks!
Hosting firm Rackspace is the latest cloud computing player to offer an open API. Telephony Online reckons this is likely to be a further force pushing carriers to embrace Telco 2.0…
Zain announced much improved results for the first half, with profits up 4.4% and EBITDA up 46%. Etisalat is apparently interested in taking a 51% stake, thus creating a large Gulf-based telco with both sinister authoritarian tendencies and far-flung, lossmaking interests in Africa…what could possibly go wrong? Vivendi, meanwhile, pulled out of discussions about buying into their African operations. America Movil announced revenues up 11% and EBITDA up 13.4%, driven by growth in data traffic, although subscriber growth is slowing.
Former Orange execs led by Sanjay Ahuja announced details of their start-up, Augere, which aims to deploy WiMAX networks across the emerging markets; something of a crowded market already, you might think. The first deployment is planned for Bangladesh, with Pakistan and Uganda coming up next. In Tamil Nadu, meanwhile, BSNL is about to deploy WiMAX.
Which raises the question; what will they do with it? The SEACOM cable landed in East Africa this week; business Internet costs are expected to fall by a factor of 10 as a result. We suspect a wave of call centre outsourcing is on the cards; after all, that turned out to be SpinVox’s secret sauce.
It’s a risky business, though; a poll of would-be Chinese criminals discovered that 26% of them want to be hackers, more than any other specific crime. The options included “Freelance Hacker, Human Trafficker, Assassin, Drug Dealer, Gambler, Gang Leader, Spy, and Robber”. One wonders how, exactly, you get a statistically valid sample of would-be Chinese criminals, though.
The Electronic Frontier Foundation has successfully sued Apple over its attempts to silence an unofficial effort to document how iTunes and the iPhone sync. Last week, Apple pushed out an update to iTunes to stop people synchronising their Palm Pres with it; this week, Palm updated the Pre to make it work again. The ball is again in their court.
One of the Pre’s most popular features is its fancy address book, which will integrate with Facebook after this week’s software update. Nokia apparently would like something similar; they’ve acquired instant messaging/social network firm Cellity. We shall see whether this prospers or becomes one of Nokia’s many, many shuttered acquisitions.
Speaking of failure, it’s been a very bad week for O2; first, their UK data network suffered a major outage when it failed to issue IP addresses to mobile users, and then, their roaming service broke down entirely. Users affected by the first outage could apparently work around it by using a slightly different access point name.
And chatter is building up around the idea that Apple might launch a tablet/netbook/smartbook device at the end of the year. The interesting bit, and the hook of this Financial Times article, is that it might be linked with some sort of content offering through iTunes; at the moment, Apple uses iTunes to sell hardware, but the nice thing about a two-sided business model is that you can also flip it and use the hardware to drive sales through iTunes…
Finally, is it desperately sad that we quite like the look of Samsung’s touchscreen watch phone?