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December 23, 2009

Telco 2.0 Events in 2010

We’re delighted to publish our events schedule for 2010 here. As well as expanding the popular Telco 2.0 Exec Brainstorms into new geographies, we will be running some smaller ‘summit’ meetings (bringing telco together with other industries, esp entertainment, utilities and healthcare), and launching an exciting new ‘virtual event’ format, to spread the word globally, instantly.

As readers of this blog will know our events are an integral part of our research agenda. In 2010 we’ll be undertaking more analysis on: strategy and finance, machine-to-machine/embedded mobility, video distribution, digital payments, mobile marketing, mobile broadband, cloud computing customer data/privacy and ICT for the healthcare, smart grid and entertainment sectors. Our focus in all of these is ‘business model innovation’. We will publish some material on this blog, with more detailed analysis reserved for subscribers of our Executive Briefing subscription service.

If you have any questions, thoughts ideas, please contact us or, even better, please take part in our survey. What would you like us to focus on?

In the meantime, the Telco 2.0 team will be taking a rest till 4th January. We wish you all the best for the festive season and look forward to interacting with you in 2010.

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December 21, 2009

1st Privacy 2.0 International Summit - Telcos as ‘mediators of trust’?

Is there a growth opportunity for telcos to act as ‘mediators of trust’ in the digital economy? To help consumers manage their ‘digital persona’ in a flexible and secure way, enabling them to benefit from better services while helping merchants and governments reduce costs?

The Telco 2.0 Initiative is delighted to be working with MIT Media Lab and Nokia Siemens Networks on the 1st Privacy 2.0 International Summit on 3-4 February 2010 in Boston, focused on unlocking the value of consumer data.

It’s a private invitation-only roundtable event for 60 representatives from global leadership organizations across telecommunications, technology, healthcare, finance, entertainment, academia and government.

We’ve been delighted by the response - the event is very timely, as effective business models for digital marketing, payments, healthcare and content distribution become even more pressing. We’ll share some of the input and output with readers of this blog over the next few months, and will be running tracks on this topic throughout our public events in 2010.

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In the meantime, here is some more context:

Introduction:Part of a new series of Telco 2.0 events for 2010, The 1st Privacy 2.0 International Summit addresses for the first time a strategically important question for all players in the ‘digital economy’: What is the role of the telecoms industry in the management and governance of consumer data?

Summit goals:
• To identify and clarify the commercial opportunities and risks related to proactively managing consumer data, identity and privacy.
• To understand how best to align the interests of the key stakeholder groups: consumers, merchants, legislators, tech companies, and telcos.
• To define the parameters and next steps for the creation of a common international policy and strategy for the telecommunications industry in relation to consumer data governance.

Format:
The Summit uses a mix of specially commissioned research and market analysis, stimulus presentations, panel discussions and brainstorming using Telco 2.0’s ‘Mindshare’ interactive format.

Questions Addressed by the Summit:

• Corporate Strategy: Assuming the critical role played by consumer data, identity and privacy management in future broadband business models, what are the commercial opportunities and critical risks and how do we collectively approach realizing/mitigating them?
• Consumers: What is the value to consumers of enabling them to manage their ‘digital persona’ directly?
• Marketing: What is the brand opportunity for telcos in becoming proactive in enabling consumer data management?
• Technology: How do companies implement ‘Privacy and Security by Design’ to balance interoperability and personalization, while ensuring privacy and security?
• Public Policy: How should the telco industry engage with regulators and NGOs on this topic?
• Implementation: What are the best market entry strategies for consumer data/identity/privacy services?
• Collaboration: What sort of common strategic framework for data governance does the telco industry need to create?

Background:
Consumer Data, Identity & Privacy - A topic too hot to handle or too important to ignore?

Telecoms operators process vast quantities of data related to their customers: lifestyle characteristics, interests, tastes, communication and relationship preferences, device capabilities, attitudes, beliefs and behavioral patterns. Mobile devices in Europe and North America alone are generating over 1 trillion geo-spatially tagged transactions per day.

From this data, a wealth of information can be gleaned which has enormous potential value to third party organisations (businesses, public services and not-for-profit organisations) looking to optimise their everyday interactions with customers.

A growing number of third parties are already applying advanced analytic techniques to mash this rich time, space and travel data with other sources of insight. These activities have the potential to a.) stimulate a whole new wave of services and b.) to help enterprise business and service processes become much more efficient.
As this activity increases, there is an urgent need for telcos and ISPs to collectively agree on their role in enabling the use of consumer data. There is both a significant opportunity for telcos to act as trusted guardians of such data, and significant risks.

As telcos come to terms with the structural pressures on their core business model - decline in voice revenue and uncertainty around the economic viability of broadband provision - the time is ripe to look at new market opportunities and business models. Telcos have a unique relationship with the consumer and hold the key to helping consumers, organizations and enterprises in all sectors to take advantage of the ‘analytic super-food’ flowing through their networks.

The Telco 2.0 Initiative has defined a significant growth opportunity for the telecoms industry to harness consumer data to create new ‘two-sided’ platform-based business models. Leading telcos are publicly announcing ‘smart pipe’ strategies as the antidote to ‘dumb pipe’ commoditization. These rely heavily on leveraging the customer data that flows through their networks. But data mining, profiling and personalization practices are steeped in controversy, primarily related to privacy.

The urgent need for a sensible and structured debate
National authorities struggle to apply legal concepts to new business models in a borderless world. Privacy groups cry foul at corporate “big-brothers”, while consumers carelessly propagate “sensitive” information across an ever-expanding myriad of services and devices. Governments have suffered embarrassing losses of medical and social security records, Mobile advertising is under attack.

Initial forays by companies such as Phorm in the UK and NebuAd in the US have been met with hostility. Google and Facebook are having to continuously adjust their privacy policies. In this environment, telco operators are understandably cautious of exploiting their customers’ data assets.

However, at the same time, innovative companies have developed ways of aggregating mobile data, addressing user concern and are creating successful businesses from this.

New consumer research by Nokia Siemens Networks demonstrates that telcos enjoy a unique opportunity to build a more privileged position of trust with customers as their data custodians in a digital age. But the advantages they enjoy in seeking to fulfill such a role will not last indefinitely.

Privacy 2.0 - How can Telcos realize the value of consumer data?

Part of the challenge is that consumers’ attitudes vary widely. Privacy is very personal. Some individuals care about data that relates to them and want to be very active in managing how it is shared. Others care about keeping their data private but don’t really want to spend time managing it. Yet others are quite comfortable with sharing (indeed positively seek to broadcast) information about themselves and don’t want to bother with it.

A ‘data custodian’ needs to be able to serve all groups with the same platform. This requires flexibility and a clear strategy.

The 1st Privacy 2.0 International Summit:
• Provides the first focused debate on what the telecoms industry must do to strengthen its role in consumer data for the benefit of all stakeholders - merchants, service suppliers, NGOs and public sector bodies, consumers and citizens.
• Seeks to set out the debate for what is potentially one of the biggest fundamental transformations in telecommunications since the advent of IP communications and the emergence of Web2.0 business.
• Aims to clarify the potential role that telecoms operators could play in managing consumer data in the digital age and provide a framework for moving forward.

Many thanks to the Subscriber Data Management team at Nokia Siemens Networks and Professor Sandy Pentland at MIT Human Dynamics Lab for supporting the event:

Nokia Siemens Networks
Nokia Siemens Networks is a leading global enabler of communications services. The company provides a complete, well-balanced product portfolio of mobile and fixed network infrastructure solutions and addresses the growing demand for services with 20,000 service professionals worldwide. Nokia Siemens Networks is one of the largest telecommunications infrastructure companies with operations in 150 countries. It is the market leader in Subscriber Data Management. The company is headquartered in Espoo, Finland. www.nsn.com/sdm.

The MIT Human Dynamics Laboratory
The Lab invented the technology of reality mining, which uses sensor data to extract subtle patterns that predict future human behavior. These predictive patterns begin with “honest signals,” human behaviors that evolved from ancient primate signaling mechanisms, and which are major factors in human decision making in everything from job interviews to first dates. By using data from mobile phones, electronic ID badges, or digital media to track these honest signals, we can create a “god’s eye” view of how the people interact, and even “see” the rhythms of interaction for everyone in a city. Management insights based on Honest Signals were Named a “Breakthrough Idea of 2009” by Harvard Business Review, and Reality Mining was declared “a technology poised to change the world” by Technology Review. http://hd.media.mit.edu/.

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Telco 2.0 News Review

Telco 2.0 Top Stories

Please help Telco 2.0 improve our analysis service to you, via this short survey on your research interests for 2010: brief survey.

TNS (a consumer research company) reckons the mobile industry is about to pull out of the recession, with a burst of growth expected in handsets. (Although, as we described a few weeks ago, will the vendors actually make any money?)

Want a real network-killer application? Try live, streaming unicast video of baseball games, now available as an iPhone app to AT&T customers. This is precisely what broadcast is for; live transmission of high-grade video that millions of viewers watch concurrently. It’s not at all a valid use case for unicast IP; no wonder AT&T are worrying about their data network. Ralph de la Vega reckons 3% of users are getting through 40% of the capacity - but will he dare to have Apple kick Major League Baseball off the App Store? Surely not.

Here’s a problem with sender-pays data; if the job is big enough that payments from the sending party would be significant, it’s probably big enough that the sending party has significant bargaining power, so what happens if it’s enough data to flatten your network? Up the price? But you might end up being The Network With No Baseball. It’s easier to punch filesharers, who rarely have expensive lobbyists. (Bruce Schneier is not keen.)

AT&T’s users, meanwhile, are planning to protest in an original fashion, by trying to use as much bandwidth as possible for an hour - a crowd-sourced denial of service attack.

It’s also telling that, even with applications like that one and (it seems) a willing user base, that nobody’s doing very much with mobile broadcast TV - where’s MediaFLO when you need it? In a related event, the BBC has finally got clearance to proceed with Project Canvas, its proposed platform for integrated video delivery. TalkTalk and Channel 4 have joined the project.

Also, AT&T was this week trying to position itself as a champion of net neutrality in filings to the FCC. Nice try. However, we’re not so sure of this bit of Wired’s report:

But opponents, including the wireless industry and free-market groups, argue that consumer pressure will keep the net open and that written rules will stifle attempts at innovation, such as finding ways to prioritize video calls over less urgent traffic such as photo uploads.
Video calls in UMTS, for the half a dozen people who make them, get a guaranteed bandwidth circuit like voice calls do…while we were in the States recently, we noticed AT&T newspaper ads that boasted “Our 3G network lets you talk and surf at the same time!”, which must be the first time that the distinction between the CS and PS domains in UMTS has been treated as an end-user proposition.

Arch-rivals Verizon Wireless were also in and out of the FCC this week, defending their early termination charges on the grounds they “help the poor”. Chutzpah seems to be a theme this week, what with that and the Iraqi insurgents who tune into unencrypted US video surveillance feeds. Could be a business model - the Drone Channel.

Iliad/Free.fr finally got its 3G licence this week; Le Monde runs the numbers, with a little help from various bank analysts, and reckons it’s a goer if the first 25% population coverage required by the licence comes in under a billion euros. Free itself claims it’s going to pay for the build out of cashflow.

In the US, the first list of projects to be funded under the broadband element of the stimulus plan is out - public middle-mile fibre appears to be a big theme. Come to think of it, that was the secret sauce in much of Iliad’s deployment…

Telstra, meanwhile, is planning to force all its employees to “engage with social media”, and they’re using a truly awful CGI video avatar to do so. You’d think a recently privatised operator facing the creation of a national open access FTTH network would have better things to do than trying to get its call centre staff to Twitter.

Twitter itself was in the news, after an unfortunate case of DNS hijacking sent its users to the “Iranian Cyber Army“‘s doubtless malware-laden Web site instead.

Admob, meanwhile, mined its ad request logs and drew conclusions about the world smartphone market. iPhone growth is spectacular in Japan; the British are the most likely smartphone users to go for Apple; and there’s a truly terrifying chart for Nokia.

AAARGH!

RIM had issues with the One Big Server, which took out their e-mail service across the entirety of North America last week. Their app store also launched a mobile money application, but as it depends on PayPal, which depends in turn on your having a bank account, it’s an incremental gain at best.

And the GSMA has recruited Duran Duran for the next Mobile World Congress. Hey, Telco 2.0 had Feargal Sharkey. Perhaps eComm will get Jello Biafra to headline?

Our friends at Telephony Online have their top business models of 2009 here; M2M, APIs, advertising, and prepaid are all in there. Telco 2.0 associate Dean Bubley also has predictions for 2010 out. Catch him out and he’ll buy you a pint. Perhaps. Science-fiction author Charlie Stross is having a debate on the future of mobile devices; he once wrote a book on a HTC Universal, they say.

And finally, is business school making you incompetent?

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December 18, 2009

Telco 2.0 User Survey

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BitTorrent’s uTP: The Art of Getting Out Of The Way

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Media vs P2P vs Telcos: The Internet’s Civil War

At the 8th Telco 2.0 Executive Brainstorm in Orlando last week, Eric Klinker, CEO of Bittorrent.com, had some fascinating things to say about technical solutions to the interlocking intellectual property and bandwidth issues we’re constantly debating around online video. (He also remarked that the whole debate about P2P, piracy, and intellectual property had begun to remind him of the US Civil War - by 1863, it was clear that the South could never win, but the war went on anyway, and the majority of the casualties died pointlessly between then and 1865.)

He said that both the telecoms and media industries hated BitTorrent, but that this was in part a reflection of their own mutual distrust. BitTorrent was a very small company being ground between these two huge interest blocks. Despite that, it’s still global - the only country where there are no BitTorrent applications running is North Korea - BitTorrent.com has 66% of the market, and the monthly peak throughput of the BitTorrent network is 4 terabits per second.

Congestion, not Traffic, Drives Cost

ISPs tend to be concerned about BitTorrent because they see it as a bandwidth hog. Klinker pointed out that he had himself been an ISP engineer and that he therefore understood their concerns. He remarked that traffic was not, in fact, a driver of cost - congestion was.

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Specifically, costs are incurred when one of various stages in the end-to-end relationship becomes congested - usually the CMTS in cable or DSLAM in telco networks, or either transit costs or peering relationships. For the first two, costs are incurred when congestion degrades the user experience, and there is a need to upgrade; for the second, they occur when the link fills up and more capacity is required. For example, the impact of the iPlayer video surge on UK ISPs was driven by the fact that the BT IPStream pipes were sold in 155Mbit minimum commits, so when a link filled up, the cost of that link doubled at a stroke.

A Technical Solution for the Video Surge

Originally, BitTorrent the technology (as opposed to the company) relied on the native congestion control in TCP to manage congestion. TCP is designed to provide reliable delivery over the stateless and nondeterministic underlying IP network. It does this by requiring acknowledgement of each data packet. If it is not acknowledged after a pre-negotiated timeout has passed, the packet is retransmitted until it is acknowledged or a final time-to-live expires. In the late 1980s, the nascent Internet experienced what is known as congestion collapse - because of congestion, data packets were lost, and the ACK messages coming back began to go missing, so the TCP stacks connected to the Internet began retransmitting more and more packets, stuffing more data into the congested links.

In an all-out emergency effort, the Internet engineering community (notably Van Jacobson, the future chief scientist at Cisco) rushed out a fix to the problem. Since then, TCP stacks progressively increase the maximum size of the packets - the window size, which all other things being equal governs the transfer rate - towards line rate, until packet loss is detected or the path maximum is reached, at which point they back off by cutting the window size. After a waiting period, they try to return towards the maximum speed at which packets are not being lost. This prevents congestion collapse and should also result in a fair division of the available bandwidth.

However, a common critique of BitTorrent from the network point of view is that as it communicates with multiple peers, it creates large numbers of TCP connections. It must, after all, have at least as many connections as it has peers and trackers. As the congestion control operates at the connection level, this means that the BitTorrent traffic can get more than its fair share of the capacity - TCP divvies up the link between hosts and applications equally, but if an application has 10 separate TCP connections it will get 10 shares of the link.

Klinker introduced a revision to the BitTorrent network protocol intended to fix this issue. The new protocol (uTP) essentially implements congestion control at the application layer, so that the BitTorrent application sets a target latency for each transfer. If the round-trip latency begins to approach the target value, an indicator of either congestion or routing instability, BitTorrent will then back off and reduce the transmission rate across all the TCP sessions until the link is no longer congested.

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Essentially, this creates a scavenger class of traffic, which expands to fill empty capacity when it is available but voluntarily backs off when it encounters congestion. It’s therefore possible to run the network at much higher levels of capacity utilisation, because the BitTorrent traffic is essentially a spinning reserve - if VoIP, SSL, or whatever needs to get through, it gets the extra capacity from scaling down the BitTorrent flows. It’s rather like demand response on the power grid.

5.5 Gigawatts of TV

And the power grid is the right comparison. Klinker introduced data on the current traffic passing through the BitTorrent peer network. With around one exabyte a month passing through, he said, this was equivalent to 292,000 years of television streaming at 1Mbit/s. He pointed out that serving such volumes of traffic from a traditional client/server architecture would require very large amounts of electricity, and that even delivering it from a globally distributed CDN would require the creation of a second CDN the size of Akamai Technologies’ existing infrastructure.

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It would only get worse, he said, as more and more television was distributed through the Internet. US viewers consume about 220GB/month of television - 300 million broadband subscribers doing this would use 66 exabytes a month of bandwidth, or $5bn worth of CDN service at current prices - and would require about 5.5 gigawatts of electricity to power the servers, or six typical nuclear power stations.

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December 16, 2009

Smartphones and App Stores: where is the Telecom Industry Being Led? (Guest Post)

Ed: This is a guest post from Cato Rasmussen of Martin Dawes Systems. Delegates at the Telco 2.0 America event were almost evenly divided about the possibilities of app stores - a large proportion (45%) didn’t expect them to add much value - as this chart shows:

orlando-appstore-vote.png

Can we find ways of delivering on their promise?

Mobile app stores are where the industry is building high hopes for customer retention and revenue growth. Frantic manoeuvring over which operator wins the developers’ attention is evidence of this, as is the rush to open application stores that sell apps and content for smart phones.

But my fear is that while the industry is being dragged along by social networking brands like Facebook and Twitter, we are not taking the time to fully comprehend the implications of building a service versus building a business.

The industry also needs to take a reality check about the Apple iPhone in particular. Selling this device doesn’t automatically trigger a jump in profitable revenues even though customer numbers rise, according to independent analysts. In fact, a recent Strand Consult report suggests that the most recent exclusive iPhone deals make no difference to those operators’ profits or market rankings.

Of course, this may no longer be relevant as exclusive deals are coming to an end in many markets. Whether this means operators can strike better deals on the iPhone is hard to discern but they should be worried by retail powerhouses like UK supermarket giant Tesco getting its hands on the iPhone through a deal with O2 UK.

In rushing to embrace smartphones, operators are further adopting a culture of over-subsidising the likes of the iPhone in the hope of driving up mobile data revenues when voice revenues are flat or falling. But this is illusory when the devices are sold with all-you-can-eat data packages, and operators get little or no share of the revenues being made from buying apps and content from independent content store fronts, such as iTunes.

Another possible issue is that handset lifecycles are going to get a lot longer, especially high-end smartphones. Improving the functionality of the phone is tied into operating system updates and app downloads, rather than swapping an old handset for the latest model. A PC hardware model could begin to take root where software is king with customers less inclined to upgrade handsets than in the past.

The challenge for operators therefore is; how are they going to maintain revenue over the longer lifecycle of the smartphone? The answer could be to find ways to get a slice of the revenues from content downloads. As a result, operators are ploughing ahead with grand plans around dedicated stores and other content services.

Great news, except I detect a whiff of the dotcom hyperbole around apps and app stores. Yes, customers seem to love apps but their willingness to pay is low if not invisible. People talk about the “freemium” model but the evidence shows that people won’t pay for premium content even when they’ve had limited access to free content. So, although they might help customer retention, the app store model is no guarantee of regular revenue and cash flow.

All of my anxieties about how operators are warping their operations around smartphones and app stores could be allayed. What I want to see the industry doing is spending more time on thinking through viable revenue models that are fit for purpose.

This is no easy task, and the exact details aren’t yet clear, but I would suggest the following basic features:


  • The model needs to take account of product cross-subsidy on a per item basis and do so dynamically.

  • Operational processes in billing, charging, provisioning and support need to be thoroughly reviewed and streamlined to give an operator the agility to not just compete with new entrants on the same level, but quickly pre-empt those initiatives.

Building new revenue models in telecom is a real challenge. If we don’t get this right, operators will dwindle into being the bit pipe utilities that they dread becoming. Wrapping themselves in the latest fads and consumer technology is not a worthless objective but should come after the industry has spent more time and energy on working out how they will generate revenue for the long term.

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If LTE Disappoints, What About WiMAX? (Guest Post)

Ed: Below is a guest post by Ofer Karp, President, Wireless Broadband at Alvarion. In it, he addresses some of the issues we raised in our LTE - Late, Tempting, Elusive? article and at the November Telco 2.0 Exec Brainstorm to make the case for WiMAX. We’d be interested in comments from our readers…meanwhile, you can help Telco 2.0 improve our service to you by taking a brief survey.

A recent study by Unwired Insight claims that growth in data traffic will bring about a 3G network capacity crisis from some mobile network operators as early as 2010. As 2G users continue to migrate to 3G services, the available capacity per 3G user will decline rapidly in networks utilising HSPA, to less than 100MB per user per month in some cases.

As the need for data-oriented mobile broadband services continues to escalate, so does the need for advanced wireless networks with increased capabilities. Given the majority of the world’s population still doesn’t have access to broadband, we need multiple technologies - both wired and wireless - to satisfy growing demands.

Commercially available WiMAX™ networks and devices are proven at delivering lightning-fast speeds, allowing people to get more accomplished online in less time. Until recently, the early adopters of WiMAX and other broadband wireless access systems have been operators serving areas not covered by traditional wireline broadband connections. However, the two fundamental technological advantages of WiMAX - superior radio technology and an open IP-based access network infrastructure - are making it the technology of choice for operators looking to build a successful business case as they look to profit from the delivery of mass market broadband applications and services around the globe.

The Market for WiMAX

WiMAX is the first ‘4G’ technology to have commercial networks, services and devices available today. At this stage of rollout, operators are using WiMAX to address two distinct markets: primary broadband and personal mobile broadband services. The primary broadband addresses residential and enterprise broadband in developing world as well as underserved and rural areas in developed economies of the world. Specifically for developed areas, WiMAX offers an alternative to DSL, allowing operators to ultimately enable fixed mobile convergence (FMC) of networks and services.

For personal mobile broadband, WiMAX addresses more densely populated areas, such as metro centers and suburbs, providing the opportunity to mobilize broadband connections by offering high speed internet while on the go. This is possible because WiMAX facilitates always-on broadband connectivity, complete with mobility, handover and roaming services, thereby ensuring that subscribers are always connected and have access to applications and the Internet.

WiMAX is a technology that compliments, not competes with HSPA and LTE. There is no reason for an operator not do take advantage of WiMAX while using or waiting for HSPA and LTE. Operators today can offer a true mobile broadband experience while using another technology for voice. In such an arrangement an operator can meet the data needs of today’s consumer while protecting the integrity and QoS of its voice network - without exorbitant operational expenses.

TCO Optimisation

WiMAX offers operators the opportunity to increase revenues through a proven business case and user experience for mobile broadband services. Given the growing number of devices and network platforms offered today by a mature ecosystem, operators are benefitting from the quick-time-to-market and the attractive economics afforded by interoperability and volumes now prevalent in products that provide anytime, anywhere connectivity.

The WiMAX Business Case

In today’s competitive market, the key to an operator’s success is the ability to have choice in business models that they can pursue, which is limited only by their own strategic decisions. The market is fast moving and dynamic, which means that an operator must be able to adapt its current business models and roll out new services quickly in order to stay ahead of the competition. Today, an operator that can adapt quickly and offer services and applications to consumers who have ever growing demands, while minimizing costs will be able to carve market share. To do so, operators must address a number of real-world challenges, including:

Service Provider Value Proposition

Personal broadband in underserved areas

  • Linkem Spa currently delivers wireless broadband/hotspot/Wi-Fi services to 300 towns nationwide and holds WiMAX licenses covering nearly 80% of Italy’s population in thirteen regions. Last year Linkem turned up its first commercial WiMAX service as part of the first phase of its project to deploy WiMAX across Italy by 2013.
  • Aria offers broadband services to all 21 Italian regions using Alvarion’s 4Motion Mobile WiMAX solution. Given Italy’s 58 million highly-dense population, WiMAX is the most economical and high-performance technology to deliver 4G broadband to businesses and residential subscribers in a wide geographic area.
  • Open Range Communications, a U.S. broadband service provider, was recently approved for a $267 million RUS grant and intends to use WiMAX to bring broadband Internet to underserved populations in the U.S. The deployment will focus on end users, consumers and businesses, in 17 states, more than 546 rural communities, eventually servicing over 6 million people.
  • High capacity services and applications for enterprise

    • Connected Communities, Scotland

      Connected Communities is a next generation broadband wireless network connecting businesses, teleworkers, schools, community centres, airports, post offices, remote learning centres, doctors, hospitals, and citizens across the populated islands of the Outer Hebrides of Scotland.
      High-level broadband communications is a prerequisite for future development and underpins their aspirations to grow the economy and breakdown geographical barriers. Their aim is to develop the concept of a Connected Hebrides, a place which combines quality of life offered by rural living with global connectivity, opportunities for employment and inward investment, business creation, skills and learning.

    • True broadband experience in dense urban areas

      • Yota

        Yota offers fixed, nomadic, and fully mobile wireless broadband Internet access. It is particularly proud of the stability of its full mobile access, quoting field tests that demonstrated stable connectivity at speeds up to 120 km/h within the coverage area. Yota’s network provides broadband Internet access speeds of up to 10 Mbps, which makes it possible to offer streaming movies, TV programs, and online music in its mobile services catalogue.

      • Comstar

        United TeleSystems, the largest operator of integrated telecommunications services in Russia and CIS, provides voice, data, Internet, pay-TV and other value added services to more than 400,000 residential and corporate Internet subscribers in Moscow alone and provides services in 69 other cities in fi ve Russian regions, including Armenia and the Ukraine. Fully launched in May, Comstar-UTS’s mobile WiMAX network is providing subscribers with mobile Internet service with data transmission rates of up to 2 Mbps in Moscow.

      • ELRO

        A Danish utility company began offering voice and broadband services in 2008 in Randers, a community of approximately 60,000 residents. Based upon its success, the company expanded it’s network at the 3.5 GHz and 3.6 GHz frequency bands, allowing current and new customers to benefit from faster Internet speeds and high quality voice services.


      Vertical markets: Municipalities, Utilities, Electricity

      • Mobile WiMAX Acceleration Group (M-WAG), a consortium of companies in the United Kingdom, joined together to create an ecosystem for Mobile WiMAX. Alvarion and MLL Telecom deployed a pilot network targeting a variety of applications ranging from public safety to mobile data, VoIP and video streaming.
      • Hafslund, one of the largest listed utility companies in the Nordic area, recently deployed Alvarion’s Mobile WiMAX solution over the 2.5 GHz, providing broadband services to the Ostfold, Norway region.

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December 14, 2009

Ring! Ring! Telco 2.0 News Review

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Top Stories, 14th December 2009


Rich Karpinski Editor of Connected Planet (previously known as Telephony Online) has been blogging from the first-ever Telco 2.0 America Executive Brainstorm: if you weren’t there, there’s a taste of the event here and here.

Meanwhile, pictures and details of what is supposed to be a Google Phone leak. If true, Google is making its own stab at an Android device and will be marketing it direct to consumers, which means that it will at least look expensive compared to the competition with their handset subsidies. However, you can be fairly certain that this device will come with Google Voice. Google was also working hard to snag more phone numbers this week: after Google Voice users got the ability to use the service with their existing phone numbers, they’re now being given the chance to “upgrade” and get a Google-assigned number instead.

At the 8th Telco 2.0 Executive Brainstorm, held this week in Orlando, Sprint’s VP Corporate Strategy, Russ McGuire, said that “we must break the Big Bell dogma” against partnering with external innovators. He argued that nobody really wanted carriers to try to innovate at Silicon Valley speed, and therefore we needed an open development model, like Sprint’s Business Mobility Framework, that would make key telco assets available to third-party innovators if we wanted new applications and services.

What about the core services? Sprint CEO Dan Hesse suggested that in the future, not only would users pay for gigabytes of data, they would do so instead of paying for minutes; at the same time, Sprint recreated the job of President of 4G, and assigned Matt Carter to it. He’s better known for starting the $50/month for unlimited everything MVNO, Boost Mobile.

That suggests that Sprint’s strategy, with both the 1xEVDO and the WiMAX networks, will be the exact opposite of AT&T’s - Ralph de la Vega recently broached the subject of usage-based pricing, in the light of the surge in data traffic driven by iPhones. Interestingly, user research suggests that users think e-mail is the biggest user of bandwidth, when in fact it’s video (of course).

With the war of words between VZW and AT&T raging on, a network test vendor decided to do some experiments and find out whose coverage was best. Connected Planet has the results.

Microsoft has decided that its cloud-server business, Azure, would probably be best off in the server and cloud division.

Embedded Linux specialists Wind River are doing Android. Inevitably, the restrictions on the Motorola Droid have been defeated by hackers in order to get access to the device as the root user. Good for them, but it’s probably the right moment, given the great iWorm hooha, to remind everyone that if you’re going to expose the root console on a Linux-based device of any kind, you’d better change the default password to something random…Vodafone, meanwhile, has dropped the HTC HD2 Windows phone, presumably to give the H1 and the iPhone a clear run.

Orange has an app store, and there will be operator billing available. And the iPhone now has speech to text.

However, as Rich Karpinski points out, what difference does it make? All the smartphones are converging on a very similar design, the size and shape of a trouser pocket (as Richard Kramer pointed out at Telco 2.0) with the face taken up entirely with a big touchscreen, probably with a Unix-like operating system, and with an applications layer made up mostly of Web-based widgetry.

Telefonica has announced that its Amobee mobile ad platform will be available across 18 countries; this comes after O2 UK presented on their successful third-party ads program at Telco 2.0 EMEA.

On the downside, OFCOM reports that the UK telecoms industry has stagnated since mid-2008, and the good point is well made that BT’s 21CN plans appear to have disappeared. For comparison, Australia’s National Broadband Network, which started digging in July, is estimated to be worth a saving of 5% of Australia’s CO2 emissions.

BT, in slightly more optimistic news, is in talks about building a huge CDN infrastructure in the UK; the Government wants to tax unused phone lines in order to fund their FTTC rollout. The Radio Society of Great Britain, meanwhile, is vexed about powerline Ethernet and specifically that some devices haven’t been adequately tested - if it doesn’t work properly, your whole ring main will become a giant antenna broadcasting all your traffic…

Brough Turner wants to stop the mobile operators getting all the whitespace spectrum; and Kigali gets its WiMAX.

In the content field, another Spotify - a rightsholder-backed streaming service - is rising in the US. Even if the negotiations over content licensing with EMI dragged a little…actually a lot, it’s going to be interesting how this works out. And the Boxee media centre/TV launched successfully this week.

There’s a row going on about privacy at Facebook after a major change to the terms of service was partly reversed. In that line of business, here’s Bruce Schneier’s presentation on The Future of Privacy at the Open Rights Group in London.

Internet cockup of the week: it turns out that two organisations have been assigned the same AS number.

And finally, if you read the Guardian, there’s an app for that.

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December 7, 2009

Ring! Ring! Telco 2.0 News Review

Telco 2.0 Top Stories

So you thought content was king? Think again; Comcast, the huge US cable operator, star of multiple net-neutrality rows, and now significant wholesale provider, has bought a controlling stake in NBC Universal. In a slightly curious deal, they’re paying GE some $6.5bn in cash and $7.25bn in kind - specifically, in rights to programming they own. That gives them 51% of NBC, owner of movie studios and TV channels.

There has been much comment; Informitv points out that the whole thing raises serious questions about the future of Hulu, in which the new company will have a minority, but significant, stake - it’s not long until the content licensing deal between Hulu and NBC Universal runs out.

The deal inspired Harold Feld to develop a new metric of industry concentration - the trade association index. The closer you are to joining all the top 10 lobbies, the bigger the anti-trust problem you are. It’s worth reading.

Meanwhile, Google is supposedly in talks about charging for streamed TV shows on YouTube.

In related news, the BBC’s Project Canvas is being relaunched with a new website, a partnership with the Digital TV Group (a standardisation forum), and an intention to publish all the specifications and SDKs. We can’t help but think the BBC might do well to suggest making all the Canvas work open-source…

One thing that’s been helping to drive the video traffic up is the iPhone. AT&T is suffering, with iPhone users burning about seven times the bandwidth of an average subscriber. Therefore, it’s suggested, they may be looking at going back to usage-based pricing; alternatively, there’s Benoit Felten’s suggestion of just putting up the price of a flat-rate data plan a bit.

He also points us to the announcement that Free.fr has fibred-up another 13 kilosubscribers in Valenciennes; the key detail is that the city of Valenciennes provided access to its ducts, pipes, trenches and the like. As Benoit points out in a related post, this should be almost a test case for broadband as an economic recovery strategy.

In other fibre news, Optical Reflection reports on the drivers of success in French fibre deployment - as well as Layer Zero openness, another key element was public investment in backhaul fibre to enable LLU operators to reach more local exchanges. And Univers Freebox has an interesting piece on their new data centre, with photos! It looks pretty neat now, but give it time; the place will no doubt end up looking like a technicolor rats’ nest…

John Naughton asks in The Observer whether Facebook will really make money from advertising; the real information in this story is an estimate from ComScore that the percentage of Internet users who clicked a banner ad in a given month went from 32% to 16% between 2007 and 2009. Apparently, 85% of clickthroughs come from 8% of users; but the really interesting number would be the percentage of users who never click on banners.

After last week’s disappointing 2.6GHz auction in Finland, Handelsblatt reports that the German auction of the old 800MHz TV band, planned for Q2 2010, is now looking like another disappointment; where early predictions had suggested that they might go for as much as €5bn, more recent ones revise that down to €2.5bn.

On the other hand, there are reports of a possible burst of tech IPOs as confidence gradually returns to the stock markets. A major Danish study shows no link between mobile phones and brain tumours. And the FCC wants to extract some 150MHz of spectral goodness from the TV networks and reuse it for mobile broadband.

The US regulator is also coming after Verizon Wireless over its contract termination fees and over a $1.99 charge levied every time a customer with no data plan presses the “Mobile Web” button on certain handsets. Verizon is also starting up a cloud-computing consulting company.

Ericsson’s new chief is confident that they can keep ahead of Huawei, and is emphatically denying that he might be complaining about their use of state funds, while making sure to mention their $30bn credit line with China Construction Bank, dedicated entirely to vendor financing. (That’s vendor financing on a scale that would impress even Nortel….)

On the upside, Indian state telco BSNL has kicked Huawei off a gigantic order for mobile network kit - the aptly named “megatender” runs to no fewer than 93 million lines. This comes after they landed a preliminary contract for 8 million lines in southern India. Ericsson is reportedly still in the running for preliminary contracts in northern and central India, but they must stand a chance of getting the biggy.

Fring has launched an iPhone app that permits you to make video calls over its SIP VoIP system; the only problem is that the iPhone doesn’t have a user-facing camera, so you can see the other party but they can’t see you. Anyway, video calls are famously a feature nobody uses, so it probably won’t matter. But it does remind us of a good story told us by Zygmunt Lozinski of IBM and OSA-Parlay.

Sometime in the 1980s, the British government commissioned IBM to install a video-teleconference system in the offices of top officials and ministers around Whitehall. As some of the end points were located in the military command-and-control system, it had to be hardened against electromagnetic pulse and TEMPEST-shielded - so the gadgets were quite tough and overengineered. A few weeks after go-live, IBM engineers were called back to investigate a wave of inexplicable hardware failures; to their mystification, there seemed to be no common mode to the failures whatsoever. It was as if they were being randomly battered until something broke.

In fact, user interviews showed, the problem was that the then Prime Minister, Margaret Thatcher, insisted that all other users of the system keep the cameras switched ON at all times, so that she could see if they were conspiring against her. For her part, she kept hers permanently OFF. The reaction of the various Sir Humphreys to this repurposing of the system as a CCTV network was simply to throw the devices on the floor and kick them about until the camera failed, or something else broke.

So Fring’s one-way video call might be surprisingly popular. Privacy control is valuable.

Deutsche Telekom is about to demonstrate this; in an effort to combat the black market in subscriber data, they are planning to withdraw several million heavily spammed telephone numbers and issue new ones, in the hope that the lists on sale will be rendered worthless.

Spinning in like an Atlantic storm, here comes the next surveillance scandal: Sprint-Nextel apparently provided location data from their E911 system to the police on some 8 million occasions. There’s even a secret website. But is there an API?

In other paranoid news, Google is now offering a public DNS server; but will they use their powers for good…or evil? They’re also starting Visual Search, a service which accepts a photo of an object and searches for it. What happens if you send it a photo of a person?

Meanwhile, PayPal can’t tell the difference between one of its own messages and a phishing attack.

In devices news, Nokia is planning to cut its range of smartphones back sharply next year, while launching the heavily trailed N900 Linux phone and radically revising the S60 user interface. So the plan is to have fewer SKUs but to put more effort into each one.

Steve Jobs reportedly intervened to clear an iPhone app that otherwise breached the App Store terms of service by using a private API (to scrape the screen). RIM has joined a wireless power standards body. DARPA released red balloons at random this week, in an effort to test how effectively a search for them could be crowdsourced. MIT researchers won the $40,000 prize, finding them within hours using a private social network.

Rich Karpinski will be editor in chief of the new Connected Planet, which stands up this month after Telephony magazine stands down. They’ll be covering sessions at this week’s Telco 2.0 Americas. And if you’ve ever wondered how you go about cooking a DSLAM, Rich has photos of Adtran’s thermal test chamber here.

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December 4, 2009

New Opportunities in Online Content Distribution

As part of our new ‘Broadband End-Games’ report, we’ve been defining in detail the opportunities for telcos to distribute 3rd party content and digital goods in new ways.

Telecoms operators have traditionally retailed their services to consumers, businesses, not-for-profit and public sector organisations. Carriers have also resold services to other operators as wholesale services (including regulated services such as interconnection).

At the Telco 2.0 initiative, we have long argued that there is an opportunity for telecoms operators to develop a new “2-sided” revenue stream, broadly divided into B2B VAS platform revenues and Distribution revenues. These services enable third party organisations in multiple vertical sectors to become much more effective and efficient in their everyday interactions and business processes. We have valued the potential to Telco’s’ at 20% of additional growth on core revenues in ten years’ time…. if they take-up the opportunity.

Figure 1: 2-sided business model framework

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There’s more on our definitions of the Distribution Opportunities here.

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Telenor’s Voice 2.0 Strategy: ‘Mobilt Bedriftsnett’ Case Study

Telenor’s new ‘Mobile Business Network’ integrates SME’s mobile and fixed phone systems via managed APIs, providing added functionality and delivering greater business efficiency. It uses a ‘two-sided’ business model strategy and targets the market via developers.

The enterprise is the key field for new forms of voice and messaging; it’s where the social and economic value of bits exceeds their quantity by the greatest margin, and where the problems of bad voice & messaging are most severe.

People spend hours answering phone calls and typing information into computers - calls they take from people sitting behind computers that are internetworked with the ones they sit behind. Quite often, the answer is to send the caller on to someone else. Meanwhile, other people struggle to avoid calls from enterprises.

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It’s got to change, and here’s a start: Mobilt Bedriftsnett or the ‘Mobile Business Network’ from Telenor. We’ve written a Telco 2.0 Analyst’s Note on it here.

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Mobile Advertising and Marketing: Text-based Local Search Use Case

We’re working on some new “Use Cases” that are detailed worked examples and outline business plans for realistic near-term Telco 2.0 applications.

We’ll be publishing them all in a Strategy Report in early 2010, and for our Subscription Customers we are publishing in advance a new “Use Case” for Digital Marketing, including the customer experience and outline business case.

Please see here for more.

Sample Schematic: Outline End-User Experience


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‘Demolition Derby’ for Smartphones in 2010

‘Hyper-competition’ in the mobile handset market, particularly in ‘smartphones’, will drive growth in 2010, but also emaciate profits for the majority of manufacturers. Predicted winners, losers and other market consequences.

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See here for the analysis from Arete Research, a Telco 2.0™ partner specialising in investment analysis.

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December 1, 2009

Cloud Computing - a mathematical inevitability?

We’re delighted to have Joe Weinman, VP of Strategy for AT&T Business, on the Cloud Computing 2.0 panel at the America Executive Brainstorm next week in Orlando. As a warm-up, some analysis he’s just published on the “Mathematical Proof of the Inevitability of Cloud Computing” is here.

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Telco 2.0 Strategy Report Out Now: Telco Strategy in the Cloud

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