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April 26, 2010

Telco 2.0 News Review

Telco 2.0 Top Stories

  • Strategy & Finance: Apple profits up 90%, iPhone shipments up 131%
  • Customer Data 2.0: Facebook vs. Google: Unconvincing Privacy Wars!
  • Technology Disruptions: Hackers get location of any GSM phone
  • Voice & Messaging 2.0: Carriers: we love mobile VoIP developers
  • 2-Sided Business Models: Werner Vogels on the hunt for new platforms
  • [Ed: Before we dive into this week’s Apple newsfest, a last minute reminder that the 9th Executive Brainstorm is in London this week - the volcano dust has been swept off the runways, the weather is surprisingly welcoming here in London, and there’s a great line up of speakers, attendees and content, so we’re looking forward to seeing some of you there.]

    Apple’s Q2 numbers are now out and they are startling: profits up 90%, iPhone shipments up 131%, Macintosh shipments up 33%, although the iPod fell 1% year-on-year. (And only real geeks even remember there’s an Apple server division…) 58% of iPhone sales are currently going for export as Apple signs up more and more carriers as exclusive channels.

    As comic relief from that, it was the week an Apple engineer left the prototype iPhone 4 in a bar, triggering a good old-fashioned press gold rush to get the first hands-on as the lucky finder charged members of the media to fiddle with his thingy. Behind the journalists came the Apple lawyers on a mission to retrieve the device; by the end of the week, the finders had agreed to turn the device in, like a Cold War spy being exchanged on the Glienicke Bridge, and the over-refreshed Cupertinik had been identified as one Gray Powell, although Apple MobileMe’s remote-wipe capability successfully zapped the device the night it was lost. Next time they’ll use a drone.

    Wired reports that iPads account for 26% of their mobile traffic, which may tell us more about Wired readers than anything else.

    Meanwhile, a rumour spread that the next version of Mac OS would implement the code-signing process from the iPhone, requiring all Mac developers to submit their applications for approval via the App Store. This has now been officially denied by means of a one-word e-mail (“Nope”) from Steve Jobs.

    Apple seems to be interested in games for the iPhone/iPad; they’ve recruited a well-known Nintendo reviewer as “global editorial games manager” for the App Store. They also refused a customer more iPads; you’ve had quite enough already, sir, and we don’t want any trouble.

    But the best Apple story of the week must surely be that hackers have succeeded in installing and running Android on the iPhone, admittedly only for 2G. Android is spreading fast; Dell announced no fewer than four smartphones based on it this week.

    Facebook and Google are having a moment; Facebook has started providing basic information on its users to third-party Web sites, which a whole gang of Googlers considers to be a breach of privacy. Many of them have now deleted their Facebook presence and moved to Google Buzz, which is not the obvious choice if that’s your concern. What they’re angry about is the new Open Graph API, which lets other Web sites grab your preferences from Facebook; music site Pandora is apparently a big user, although they’re sticking to opt-in from their end of the tube.

    Especially as it’s just been discovered that Google Street View cars are logging all the WLANs they encounter - so essentially every Wi-Fi network in the world. The idea is to improve their IP-geolocation database, stashing away the GPS coordinates for all the networks they find so that Local Search, Maps and friends will work without a GPS - or a telco - as a location source. Lawsuits seem to be on the way in Germany and perhaps elsewhere.

    In an interesting sidelight on Google, clouds, and data privacy, Telco 2.0 recently noticed that Google is hiring Salesforce.com administrators and developers - and they explicitly say that it’s for their own sales operation. The best-run businesses may run SAP, as the adverts say, but we’re not sure whether to be impressed by Google’s commitment to the Web 2.0, cloud-based, software as a service vision, or astonished that having sucked up all the data they can find, they’ve injected a significant chunk of it into yet another Big Cloud.

    According to TelecomTV, Google is investing heavily in speech-to-text technology.

    We’ve said before that Google launches a product when other companies call their lobbyist; the latest example of this is a visualisation tool that shows which governments send it the most nastygrams. The real point is that China isn’t shown - because in China, the existence of a request for censorship is an official secret and therefore, censored.

    It was a major results week; Nokia had Q1 numbers and an assortment of news. The Q1s showed profits bounding back from the recession-hit low of €55m to €488m, with 107 million gadgets shipped and an impressive boost to smartphone (“Converged Mobile Device/Multimedia Computer”) shipments, although the average selling price is down to €62 and things aren’t looking good in North America (or “Apple Continent” as it may soon be known).

    Nokia EVP (and Telco 2.0 speaker) Anssi Vanjoki suggested that high-end smartphones might soon outcompete digital SLR cameras; The Register points out that this is very optimistic from the technical point of view (lens physics is difficult in a mobile device form factor), but there’s probably an argument that a lot of dSLRs are wildly overspecified for their users’ needs and a “good enough” solution might sell.

    But there was bigger news at Nokia; Symbian ^3 isn’t going to be out this spring, and Symbian ^4 won’t be in the field before 2011. The follow-up to Series 60 has been sliding right for a while; this latest delay may be intentional, with a view to seeing what the upcoming new versions of iPhone OS and RIM BlackBerry OS are like, or perhaps a sign that the IT Project Zombies have arrived. In the meantime, Nokia has cut prices of its E-series, business-focused devices by 10%.

    There’s a Forum Nokia lecture on how to develop for mobile devices using free software tools here, while NSN landed a major contract in China.

    Last week, Nokia was meant to be buying Palm. This week, the latest rumour is Facebook, at least as a strategic partner.

    Results from Verizon; net profits fell by a stomach-clenching 29%, but much of this was a one-off charge “linked to health care reform”. The actual business is in a fine balance; ARPU is up 12.3%, while access lines are being lost at a rate of 11%. Just keeping ahead of the wolves…they also announced new service bundles for FiOS, and started an probably unwise row with the security community.

    In fact, VZ chose to argue with the security researchers just when they might need them as hackers demonstrated this week that they could extract the location and details of arbitrary GSM phones from the network. They signed up for a VoIP account with caller ID, hooked up an Asterisk box, and had it make many, many phone calls with spoofed phone numbers - getting the caller-ID information for the real phone from their carrier each time.

    Vodafone, meanwhile, has launched an exciting new product for its business customers; Vodafone Mobile Recording basically records all your phone calls and messaging traffic and indeed everything. The idea is that financial companies faced with special disclosure requirements will be able to keep all their calls, for when the customers sue. Another market might be people who want to be watched by MI5…

    Ericsson reported sales down 9% year on year; the fall is concentrated in 2G voice kit, which makes sense. Ericsson also reckons mobile data traffic has now surpassed voice in quantity.

    The ITU issued its annual data-fest, with a key detail being that the price of broadband fell 42% worldwide last year, with mobile telephony prices dropping 25% and fixed voice prices dropping 20%.

    Eric Klinker, BitTorrent, Inc. CEO and Telco 2.0 speaker, spoke at eComm, saying that he expected the market to regulate broadband and that the operators who want Google to pay them to reach their customers didn’t dare block them, which is almost certainly true. He further presented the new network protocol that BitTorrent showed at Telco 2.0 in Orlando, pointing out that “neutral” and “priority” traffic can co-exist like rush-hour traffic and ambulances. (A more colourful analogy might be that being non-neutral would be like putting in the special VIP lanes Moscow had in the bad old days…)

    Google has confirmed that their FTTH plans include full access for competing service providers, essentially implementing structural separation or at least wholesale line rental. Benoit Felten points out that separation might be a solution to some issues about foreign ownership, and that 1Gbps to the home costs $26 a month in Hong Kong. You might be needing it soon as OTT video keeps growing.

    Orange UK is outsourcing its DSL network back to the incumbent; OFCOM may be in the process of hacking the Digital Economy Bill to let the small ISPs off, which would mean that the premium you pay for a boutique ISP’s services includes all the piracy you can eat…

    What if the value of telephony was migrating towards features before, after, and adjacent to the call, the price and value of the actual bearer traffic was vanishing, and operators were learning to cooperate with innovative applications developers? Wired reports that it’s already happening, and the operators are rather pleased that minutes of use over WLAN offset the loss of billable GSM minutes. This includes a cameo from Telco 2.0’s friend Disruptive Dean Bubley.

    What if operators were to calm down and realise that being a happy pipe is a possibility, especially for the Internet of Things? Connected Planet reports on AT&T’s M2M efforts, and quotes AT&T execs as making the point that although most M2M work is basic connectivity, it’s mostly high-margin quality-guaranteed messaging, as opposed to lolcats and smut to your iPhone.

    Alcatel-Lucent has a new mobile ads service, focused on “permission-based direct marketing”.

    When social networks attack: site that lets you share details of what you’ve bought recently and how much you paid also shares the credit card details you used. Fring security fail. McAfee decides Windows is a virus and disables it. How to build a cybernuke - or not, as the Renesys blog points out.

    Finally, Amazon CTO and Telco 2.0 alumni Werner Vogels is looking for interesting platforms - help him out!

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April 23, 2010

Telenor’s ‘Two-Sided Business Model’ in action

See how Telenor Norway is making its API’s available, here: http://www.telenorfusion.no/. Very ‘Telco 2.0’. Frank Elter, who has led its development, will be at the Telco 2.0 Executive Brainstorm next week in London.

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April 19, 2010

Telco 2.0 News Review

Telco 2.0 Top Stories

Google is in the news yet again, following last week’s article, reporting that DTAG, Telefonica, and France Telecom had a Ed Whitacre moment, complaining that Google wasn’t paying them to reach “their” customers, and that the EU Commissioner had already joined the debate. There’s more below on this plus our usual news round-up.

Meanwhile, if you haven’t yet done so, please give your views on the threats and opportunities presented by Google here in our short online survey. We’ll be sharing the findings in forthcoming articles and at the 9th Telco 2.0 Executive Brainstorm next week on the 27th-29th April in London (the Brainstorm is definitely ON in case you were wondering).

In a significant announcement last week, EU Digital Agenda Commissioner Neelie Kroes promised a consultation on net neutrality by the summer and reminded the national regulators that they already have a European mandate to ensure “‘the ability of end-users to access and distribute information or run applications and services of their choice”.

Kroes’ last assignment was as Competition Commissioner, where she defied suggestions that her conflicts of interest (she was on a galaxy of major European corporate boards at the time, from Alcatel-Lucent to Philips) would render her ineffective, and successfully completed the EU case against Microsoft. Perhaps not someone to pick a fight with, then. She makes it even more clear here.

In other regulatory news, the FCC chairman who ruled that broadband isn’t a telecoms service explains to the Washington Post why he thinks he’s right. He’s now the chairman of an industry lobby called “Broadband for America”; what that means in practice is illuminated by the light of Brough Turner, who compares pricing and performance in Boston and Bucharest. Boston doesn’t do too well.

TCP inventor turned Googler Vint Cerf explains why Google wants to build FTTH networks; it’s all about information, and specifically, learning by doing.

“What does [a fiber network buildout] take technologically, and what does it cost not only to deliver it but to maintain it?” Cerf said. “Our business model isn’t to replicate that all over the world, but to understand it.”

Africa’s new submarine cables are in the process of bringing about seismic change in the telecoms market there; the proportion of Africa’s Internet traffic that goes via satellite has gone from about half to 15%. It might be interesting to know how the breakdown between international backbone and cellular backhaul traffic has changed.

Having led the National Broadband Plan drafting process, Blair Levin moves on from the FCC to the Aspen Institute.

Intel announced a smart-grid hub - a device for monitoring electricity consumption from multiple appliances, and sending them commands, in real time. Did you know there are 10 CPUs in an average wind turbine? You do now.

Here’s a round-up of what happened with the UK’s telecoms legislation. When the bell rang for the election campaign, although the Digital Economy Bill passed, the orders implementing OFCOM’s long-awaited spectrum plan fell. The whole issue is therefore kicked into touch yet again, to be reviewed after the election. Also, the planned landline tax to fund universal broadband was stripped out of the Finance Bill (i.e. the budget) at the last moment; so the universal broadband (well, 2Mbps) plan, which consisted of a tax on copper lines plus open-access 800MHz spectrum, has now become content-free.

British politics was not, in fact, rocked by the Conservatives’ “Call a Friend” iPhone app; the idea was that canvassers would use it to register Tory-leaning voters, who would then presumably be targeted to get out the vote. However, it turns out that it may violate the Data Protection Act, and more interestingly, it’s not so much an application as an HTML form that sends e-mail to callafriend@myconservatives com with the details you enter. Clearly, it’s only a matter of time before this gets spammed into the middle of next week.

Apple, meanwhile, alters the iPhone developer agreement to kibosh third-party ads now that they’ve got their own ad network. More specifically, it allows you to have ads, but forbids third-party ad servers to collect any data - which basically destroys the whole point of a mobile ad network, and would be very difficult for any system to comply with. They have server logs, after all. Wired also has some detail on Twitter’s planned ads here.

Apple, meanwhile, ate humble pie about a political cartoon it barred from the App Store for “satirising public figures”. That didn’t stop veteran tech journalist Victor Keegan from releasing his first iPhone app commercially at the age of 70, the week he retired from The Guardian. The application tells you which poems were written near you in London, using a Google Docs spreadsheet as the data backend to simplify distributing more data.

The Google Android team and the Linux kernel developers are meeting in order to settle their differences, after Android’s code was binned from the kernel project earlier this year. GigaOm reports more signs of Android success, as new devices arrive, some significant app projects hop over to the platform, and Google claims that it makes money on Nexus Ones. (This may only mean that developing a new handset is cheaper than it used to be.) Connected Planet reports on the increasing fleet of old Android devices.

Microsoft announced a pair of new Windows gadgets optimised for messaging and social networking; their target market is described as

“A 20 something living in Brooklyn on your parents’ money while pursuing a career in the arts.”
Don’t they all have iPhones? Either way, anyone considering developing applications for these gadgets should be aware that although it’s a Windows Phone, it doesn’t support Microsoft Silverlight, Microsoft’s Flash-like graphic-apps environment. And, of course, it doesn’t support Adobe Flash itself either, or any third party applications.

Connected Planet notes a certain confusion and reminds us that Microsoft’s core product is still called “Office”.

There’s a nice chart on Apple/Google/Microsoft competition here, although it won’t be new to regular readers or Telco 2.0 event delegates.

Stuart Henshall suspects that background applications in iPhone OS 4 may be an important step for mobile VoIP applications. Jamie Zawinski is not pleased with some aspects of iPhone development, or Facebook for that matter.

Verizon Wireless has given a timeframe for LTE launch that is both more specific and later. JK On the Run has a really bad experience with VZW customer services staff.

Marc Andreesen’s social network platform Ning is going “freemium” after discovering the downsides of being free (as in, no money). He promises that the users will be able to suck their data out of the system if they want to leave.

Here’s a surprise: Sony Ericsson makes a profit. Should Nokia buy Palm? We can’t help remembering the crack that whenever a newspaper headline forms a question, the answer is always “no”.

Forum Nokia’s champion of the month is Indian, specialises in location-based services, and mostly codes in Python for S60. The US Securities Exchange Commission, meanwhile, wants some filings to be written in Python.

The United Nations calculates that there are now more mobile phones in India than there are toilets.

And the legendary British tech journalist Guy Kewney has died.

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April 15, 2010

1st Hollywood-Telco Industry-to-Industry Exec Brainstorm

We’re delighted to report a superb list of participants for the 1st Hollywood-Telco industry-to-industry Executive Brainstorm, taking place on 5 May in Santa Monica (described before here) - see below. It’s an exclusive intensive brainstorm to look at new, global commercial models for collaboration between these industries.

There’s now an understanding from the major film, tv, advertising and gaming companies that they need help in protecting, distributing and monetising their product and that the telecoms industry has assets that could help them with this. In return, the telecoms industry is seeing that there’s an opportunity to open up a new ‘upstream’ market for them, rather than merely re-selling content.

It’s not often you get such a group from across the whole value chain in a room in such a way for such an important topic. There are a few places left, email us for details on costs and availability.

Confirmed Participants currently include:
Carlson Choi, VP Interactive Marketing, Activision; Dave Bailey, CEO, Aura Group; Curtis Beck, CEO, Bandito Bros; Carl Bressler, CEO, Basecamp; Huan Lee, VP, Break Media; Christian Briggs, CEO, Briggs Media; Mark Wilson-Dunn, Global Marketing Director, BT Media & Broadcast; Chris Rooke, EVP, CBS; Vickey Callen, VP Broadband Development, Century Link; Rick Karo, CEO, ComFlix; Todd, Barrish, VP, DBG; Chris Gunn, VP Branded Entertainment, Demand Media; Bill Jeffries, VP, Demand Media; Thomas Rambold, CEO, Dess; Thomas Curran, CTO, Group Products & Innovation, Deutsche Telekom; Albert Cheng, EVP Digital Media, Disney; Ron Geller, VP, Dolby; Jordan Hoffner, President Digital, Electus; Joerg Bachmaier, SVP/GM Americas, Endemol Worldwide; Jerry Kowal, SVP Digital Media, Endemol USA; Alan Edgett, Senior Director Advertising, Experian; Peter Levinsohn, President New Media & Digital Distribution, Fox Filmed Entertainment; Olivier Delfosse, Director Digital, Fremantle; Christian Grober, VP Fremantle; David Justin, CEO America, Global Cast (France Telecom); Steve Bradbury, VP, GOTV Networks; Peter Tortorici, CEO, GroupM Entertainment; Jonathan Aubry, Senior Director Branded Entertainment, Here Media; Thomas Fellger, CEO, IconMobile; Dave Martin, SVP Digital, Ignited; Frank Johnson, Independent Consultant; Rajan Samtani, Independent Consultant; Dave Goodrich, SVP Digital, IPG (Inter Public Group); Lori Schwartz, SVP, IPG (Inter Public Group); John Ferro EVP Distribution Lionsgate; Curt Marvis, President Digital, Lionsgate; Michael Karp, Independent Consultant; Krishnan Rajagopalan, VP, MPAA; Lee Coleman, SVP Business Devt, MTV; Stacey Negata, VP Strategy & Operations Digital Entertainment, NBC Universal; Jens Horstmann, VP, NCR; Eric Rodli, VP, Panavision; Chris Carey, EVP Worldwide Technology Strategy, Paramount; Ajay Dugar, Executive Director Digital Entertainment, Paramount; Barbary Brunner, CMO, PriceGrabber; Dave Hutchison, VP, Program Partners; Ken Papagan, President, Rentrak; Charlie Koones, CEO, Rockmore Media; Jeremy Butteriss, Senior Director, Broadband Entertainment, Rogers Communications; Kelly Perdew, CEO, Rotohog; Will Wynperle, Director, Shamrock; Dave Morgan, CEO, Simulmedia; Michael Paull, EVP, Sony Music; Mitch Singer, CTO Sony Pictures Entertainment & President the DECE; Keith McMahon, Senior Analyst, Telco 2.0 Initiative; Simon Torrance, CEO, Telco 2.0 Initiative (event facilitator); Roberto Saracco, Director Future Center, Telecom Italia; Yotam Ben-Ami, Director Strategic Partnerships, Telefonica; Dino Corazza, Director IPTV, Telus; Don Buckley, EVP, Terry Hines & Associates; Jeff Maynard, SVP Post Production, The Weinstein Company; Scott Holmes, CEO, United Future.

Awaiting final delegation details from:

AT&T, BT, Cisco, Disney, MGM, MTV, Orange Group, Showtime, Sprint, TeliaSonera, Verizon Wireless, Vodafone Group, Warner Bros, and others…

Many thanks to our associates Mark Kapczynski and Thomas Rambold in helping us put this together… We’ll report back after the event.

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April 12, 2010

Google: 3 Big Telcos Reach For Their Guns

Earlier this week the Financial Times reported that Deutsche Telekom, Orange Group and Telefonica had mounted a joint assault on Google, accusing YouTube of taking ‘a free ride’ on telcos’ networks. The argument is that with the immense growth of video traffic on networks that the internet giant should be helping to alleviate the costs, and that this might in some way help the media industry too. Are they blindly pursuing self-interest, or are there more sophisticated business model options available to them in supporting online media?

The Telco 2.0 View

Telco 2.0 has recently published a briefing on Google: where to cooperate, where to compete, and a full new Strategy Report on New Mobile and Fixed Broadband Business Models that covers the issue of charging ‘upstream’ players for services like delivering video in some depth. [Ed. These topics will also feature in our session on ‘Living with Google’ at our 28th-29th April 2010 Executive Brainstorm in London.]

Further, in How Google’s Chief Magician Stole the Show, we analysed Eric Schmidt’s address to the GSMA back in February. In that write-up we likened Eric Schmidt’s performance to a cross between a magician and Zorro, producing sparkling surprises while deftly fencing off the slings, arrows and gushing flirts from the audience with aplomb.

In this analysis, we applaud the telcos for at least starting to defend themselves, but if we had to characterise this skirmish, we’d liken it to the classic scene in Western Movies where the farmhands try to challenge the gun-toting stranger of uncertain morals over a call in a game of saloon poker. It is not clear quite what they want, whether they will win, or who else in on their side. And it looks rather like Neelie Kroes, the EU telecoms commissioner, has already gone some way to spike their guns as the FT reports today.

Overall, we argue the telcos might do better by having intelligent and creative conversations with Google and the Media Industry about it, and we outline below how they might achieve this. Plus, make sure you have your say on Google too via our short online survey here - we’d really welcome your input, and will share the outcome in forthcoming articles and brainstorms.

What, exactly, is the problem here?

First, it seems a little unclear what the telco posse are demanding. According to the FT, César Alierta, chairman of Telefónica, said Google: “should share some of its online advertising revenue with the telecoms groups, so as to compensate the network operators for carrying the technology company’s bandwidth-hungry content over their infrastructure.” So Google should pay, but what, when and how?

The FT also reported that Mr Alierta went on to say that the regulator(s) should get involved if no settlement is reached. That seems quite an unspecific, and frankly, a rather risky threat. Regulators are usually necessary when the market fails, but what exactly is failing here, which regulator would be involved, and what would they be expected to do? Telco 2.0 suspects that Google has some smart lawyers too, so is unlikely to be worried about this at present, other than the threat of a rising legal bill.

Secondly, whose interest are the telcos protecting? Stéphane Richard, France Telecom’s new chief executive, said: “Let’s see the development of digital society in terms of the winners and the victims. And today, there is a winner who is Google. There are victims that are content providers, and to a certain extent, network operators. We cannot accept this.” So how will it help the media companies, the alleged victims, if Google share the loot with the telcos?

René Obermann, Deutsche Telekom’s chief executive, said “There is not a single Google service that is not reliant on network service… We cannot offer our networks for free.” Yet surely, the networks are not offered for free - consumers and businesses all over the world pay for them, don’t they?

Turn the challenge around for a moment: imagine if Google or YouTube wasn’t available via your Broadband Service Provider (BSP) - how would you (and your kids) feel about your choice of BSP. Might you switch to a BSP that did? A non-representative poll of Telco 2.0 offspring and employees carried some potential danger signs for the telcos, and Google could argue that telcos have benefited from the success of their services as well as incurred some costs. (NB Have your say here.)

The Case for Business Model Innovation

You might expect us at Telco 2.0, enthusiastic purveyors of the ‘two-sided’ telecoms business model with its core concept of serving ‘upstream’ players like Google, to leap onto the band-wagon with gusto and demand telco revenues from Google.

diagram

‘Upstream’ Players sometimes pay in ‘Two-Sided’ Business Models

So why aren’t we doing just that? Well first, let us clarify that we’re not saying there’s never a case for upstream players paying, but we do think that successful business models are usually based around good reasons for paying for something. We question the argument that just because the telcos have got an end-user pricing model that now no longer works for them, that this should immediately be a problem for Google because consumers happen to like Google’s free services.

The Vexed Question of Data Costs

Yet there must be a balance in the cost debate, and an outlook of rising costs without redress with additional revenues is unsustainable for any industry. But just how much additional cost does the video traffic add to the networks?

The answer to this important question is somewhat disputed. Part of our line of enquiry is to conduct a detailed syndicated research study Fixing Wireless Data Economics to answer this question directly, and with the involvement of the main players.

Mobile Video Syndicated Study Cb Mar 4 2010

A number of major telcos and vendors have expressed an interest in this project, as have Google. Might doing it together with us be a better (and cheaper) way of aiding the process of reconciliation than firing up the regulatory departments and the big city lawyers? We think so, so if you would like to find out more about participation in this important project, please email FAO Chris Barraclough at contact@telco2.net.

There are other solutions

Moreover, however much of a problem the rising costs are, there are other solutions than purely charging Google, and we explore a number of these in our latest strategy report Mobile, Fixed and Wholesale Broadband Business Models. The report includes a mobile-to-fixed data offload use case and outlines our more detailed views on when it might become acceptable to charge upstream video providers.

Working with the Media Industry

1604_DigitalEnt2.0_300x250.jpg

Rather than pointing fingers (or guns) at Google, we think the best way forward is to help the media industry and the telcos understand how they could support each others’ business model better.

To this end, we’re running a special brainstorm with senior execs from the major Film and TV studios and telco execs in Santa Monica, California (more here). For those based in Europe, we are running a ‘Digital Entertainment 2.0’ Summit on 29th April in London, as part of the 9th Telco 2.0 Exec Brainstorm.

Based around a set of new ‘use cases’ the brainstorms will define a set of strategic word-wide growth opportunities for the entertainment industry that leverage telco assets in new ways. Specifically, how to:

• Protect intellectual property
• Engage directly with billions of consumers via the mobile channel
• Increase the methods of monetisation for Film, TV and Gaming content

For Telcos, the aim is to define more creative ways to serve the global entertainment industry:

• Generate new sources of revenue from the online content market
• Improve the mobile user experience
• Complement the Cable, Internet and Apple channels

The brainstorms will use Telco 2.0’s special interactive methods and tools.

‘Jaw-Jaw is better than War-War’

The dynamics of the online content delivery value chain are changing. Google has massive market power through the dominance of its search platform, and the profits from this are enabling them to invest to invest in many other areas.

However, as Neelie Kroes has shown this week, going via the regulator is a risky path for any of the players at this point. Telco 2.0 contends that, in any case, the pages of the press, court rooms and the back offices of the regulators’ palaces are not the best places to attempt to deal with the issues that Google, the Telcos, and the media companies all currently face - and they are certainly not the only ways and means.

We think the key is for the parties to understand each others’ objectives, and find ways to build mutually supportive new business models. Google are an advertising lead business, media players want a return on their content, and telcos can bring both to their markets and a wealth besides. We will continue to work collaboratively with all parties to facilitate this through our published research, EMEA and Hollywood Brainstorms, and syndicated project work.

In the meantime, let us know what you think via our online survey on Google’s impact on telecoms and the media industry here. It should take about 3 minutes.

You can also watch this 5 minute Telecom TV video interview on ‘Living with Google’, filmed with Telco 2.0’s CEO and MD ten days ago:


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April 11, 2010

Google: Where to Collaborate, Where to Compete?

Yesterday the Financial Times did a big splash on the joint assault by Deutsche Telekom, Orange Group and Telefonica on Google about the ‘free ride’ the internet giant gets on their pipes. Clearly Telco 2.0’s work on how telcos can best collaborate and compete with Google becomes even more pertinent.

As readers may know we have a major session dedicated to this topic at our next Executive Brainstorm on 28-29 April in London, involving panelists from Vodafone Group, Deutsche Telekom, Amdocs Interactive and Ericsson. Telco 2.0 will be presenting a summary of our analysis to kick-start the debate. Should get lively…

In the meantime, for those who missed it, our analysis of Eric Schmidt’s address to Mobile World Congress in Feb is here, a new syndicated research project designed to de-bunk the myths of wireless data traffic is described here, and below is a video interview with Telecom TV on ‘Living with Google’, filmed with Telco 2.0’s CEO and MD ten days ago:

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April 6, 2010

Telco 2.0 News Review

Telco 2.0 Top Stories


Verizon slows new FiOS deployments, while Google staff are sifting through 1,100 RFPs for their FTTH experimental project. VZ is apparently going to concentrate on filling in the gaps in the current FiOS footprint; discussion elsewhere suggests that the take rate for FiOS has been disappointing, arguably because their strategy for it was based on competing for cable or satellite TV subscribers, with voice and Internet service as a side project. Margins in the TV business haven’t proven to be good enough to let Verizon undercut the TV players.

However, Windstream and Qwest this week applied for funding from the Rural Utilities Service for major broadband projects.

In other US infrastructure news, Brough Turner notes that the idea of structural separation is no longer as controversial as it used to be in the US.

As a result of the National Broadband Plan, the lobbying war is cranking up, with AT&T and Verizon launching rival petitions on spectrum issues and against the idea of declaring broadband a telecommunications service, which would place it within the FCC’s Title II jurisdiction. One of their concerns is the proposed new network that would use a chunk of spectrum allocated for satellite service - it’s clear that you can have both satellites and terrestrial stations, but how much of your network has to be satellite-based before you’re allowed to crack open the MSS spectrum?

Connected Planet reports on the US mobile operators’ efforts to cope with the mobile data capacity crunch - interestingly, one impact of the smartphone boom is that urban cell sectors are now being angled upwards to boost coverage in tall buildings. CP makes the point that, even though AT&T has the advantage of having experienced the problem first, with the iPhone, it’s more heavily dependent on copper backhaul than VZW.

In the UK, the Digital Economy Bill is going into the final stage; with an election called for the 6th of May, remaining parliamentary business is going to be cleared up in the so-called “washup”, where bills can pass quickly if all parties agree. You may recall that, at long last, OFCOM and Telco 2.0 ally Kip Meek had come up with a solution to the complicated spectrum position in the UK, that foresaw a major release of new spectrum, the reservation of some of the 800MHz band for universal service, and a re-shuffle of the GSM bands between the operators. To make it happen, Parliament has to pass a statutory instrument directing OFCOM to act; although it only needs one reading in each house, it looks like it may run out of time, in which case we get to argue over it for another aeon or two while all those iPhones keep hammering away at the networks.

The DEB itself is going into the wash today; a summary of the worst bits is here. There’s clearly scope for a deal over the two pieces of legislation. The regulator, meanwhile, proposed a further round of termination rate cuts and faster number porting, but didn’t back the idea of a Finnish-style central pool of numbers with direct call routing.

A key deadline in the UK’s troubled e-health project was the 31st of March, by which time the Lorenzo system at Morecambe Bay NHS trust was meant to go live. To nobody’s surprise, crunch, bang, thud. As a result, the single biggest contractor on the project, CSC, may be sacked outright. Another key-deliverable - a patient administration system at Kingston Hospital - has finally been delivered. And that was a BT job.

It still seems unlikely that anyone is really swayed in their purchasing decisions by the prospect of simultaneous telephony and data service, but they’re advertising on it in the US. Will Sprint’s latest HTC Android gadget do concurrent voice and data? The answer is “sort of” - it may be able to operate the dialler and the CDMA radio while the WLAN radio is active, but the DO in EV-DO stands for Data Only, so you can have concurrency or mobility but not both.

It’s an Apple product week; they’re claiming to have sold 300,000 iPads, but this actually means “shipped to retailers” rather than sold to end users. The point is also made that, even if the iPad hits the tablet market as hard as it did smartphones, that would be a huge share of…not very much. Everyone is trying to read the tealeaves as to whether this number is good or bad; the Financial Times rounds up the available data.

In wild speculation: will iTunes offer a discount “go legit” option? A survey casts doubt on developer interest in the device. HP promises that their next tablet will be far better. And iPhone 4.0 is coming.

Samsung announced a seven-fold rise in its profits for the first quarter, as demand recovered sharply across its entire product line. Prices of DRAM and other chips, which are a highly volatile commodity market, were up sharply, suggesting that recovering demand is emptying out the supply chain. Samsung intends to increase its stockbuilding in chips sharply this year.

As Google pulled out of China last week, the service went down, but it turned out to be due to a combination of cock-up and censorship - a fix to the search engine meant that the string “gs_rfa” appeared in search requests, and the Great Firewall interpreted this as referring to Radio Free Asia. Wired has a rather good FAQ on the issue, and a rather disappointing one on YouTube’s success.

There’s a new report out on Ghostnet, the semi-official Chinese hackers who spy on the Party’s enemies with dodgy PDF files; the complete document is here and it’s a PDF…

Sony, meanwhile, not content with the infamy that followed the Sony Rootkit scandal, has decided to make life difficult for those people who installed Linux on their PlayStation 3s, which is cheeky as running another operating system through virtualisation was actually a feature. The hacker community (which in this case includes the US Army, whose researchers bought 2,000 of them to build a supercomputer based on their powerful graphical processors) is working on a complete replacement for the Sony firmware. Who can blame them?

Pay for your coffee at Starbucks…with your iPhone, and perhaps for all sorts of other stuff too. It’s an interesting implementation - you send the transaction details, the back-end servers send back a QR code, and you show the QR code to the cashier, who scans it off the screen and checks it against the details they received. And it means Apple is deriving revenue, however thin, from mobile payments.

Citigroup wants to do mobile banking in India, in order to get around restrictions on its branch network and to reduce its credit losses. This suggests they need to get around the restrictions on mobile banking in India to get around the restrictions on ordinary banking…

Bill Ray of The Register reckons that Nokia wants Novarra in order to get a foot in the door of mobile advertising.

VZW has opened the app store it promised last CTIA; it’s also launched the mobile Skype client it promised. It turns out to be rather like the implementation of Skype 3UK offered as part of its X-Series tariff - rather than actually running the Skype protocol, voice is carried as a traditional circuit-switched call to a termination point in VZW’s network that acts as a SkypeIn/SkypeOut number.

Cisco gets to buy Tandberg and its videoconferencing assets, but the European Commission will force it to publish the Telepresence Interoperability Protocol, its proprietary networking standard for telepresence.

There’s now a LinkedIn client for the BlackBerry; it’s like Facebook on an iPhone, for suits!

A US court has ruled that the warrantless wiretapping was, indeed, illegal; specifically, the court denied the validity of the government’s defence based on executive privilege. It’s OK, though, if you’re a British newspaper; it turns out that the News of the World voicemail hack extended to no fewer than 2,978 telephone numbers. And the policeman in charge of the case now has a regular column with the paper.

And finally, meet the watch that comes with a software-development kit.

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April 1, 2010

World’s first ‘Augmented Reality’ conference - recommended

Our good friends at the The Emerging Communications Conference & Awards (eComm) are running the world’s first commercial event on ‘Augmented Reality’ on 21st April in San Francisco. This is probably the best place to go to get the inside track on this important new technology…

The rest of eComm (19-20 April) is also very strong and highly stimulating, as always. It focuses on What’s Next in Telecom, Mobile & Internet Communications. Registration and agenda details here.

eComm’s thinking is very complementary to Telco 2.0’s. If you can’t get to San Francisco our upcoming events are listed here.

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Cloud Computing: How Telcos can profit from it?

An interesting video here with analysts IDC and dutch operator KPN from our friends at Parallels, a company which provides cloud computing enablement services. It’s worth looking at the 5 minute video.

The video describes how Telcos and network operators can rapidly and efficiently become profitable providers of Cloud services using ‘end-to-end’ automation software. We were particularly interested that it’s been helping KPN launch webhosting, voip and unified comms (reselling a lot of Microsoft services) very fast (reducing the time from 1 year and a lot of ‘home brew’ IT development to 1 month and no internal IT development).

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

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