Telco 2.0 News Review
Telco 2.0 Top Stories
- Broadband Connectivity: NSN on how to be a happy pipe
- Strategy & Finance: T-Orange’s “Everything Everywhere”, a super-wholesale operator?
- Regulation: Indian spectrum auctions gone wild, government hits Vodafone for £1bn
- Technology Disruptions: VZW’s LTE rollout strategy, AT&T sticks with HSPA
- Advertising 2.0: IBM - the $140bn opportunity in business analytics
Telco 2.0 Best Practice Live! Virtual (online) event, 28-30 June 2010, FREE to attend. Registration now open here. We’re delighted with the support we’re getting from the industry for this important project designed to show the ‘art of the possible’, with senior representatives preparing special material, for example: Hans Vestberg, President and CEO, Ericsson; Dr Hans Wijayasuriya, CEO, Dialog Group; JP Rangaswami, Chief Scientist, BT Group. If you have a best practice case study you’d like to promote, contact firstname.lastname@example.org
What if being a bit-pipe wasn’t such a bad idea after all? Nokia Siemens Networks published a study into the economics of mobile data (document here) that suggests it’s possible to provide up to 5GB of data transfer per user per month profitably. Doing so requires a flat-architecture IP network, a rigorous focus on efficiency, and some counter-intuitive factors; the more heavily trafficked cells are the cheapest to serve. It also strongly suggests that this segment of the business has major economies of scale, so being a “happy pipe” may be restricted to the biggest operators. That would suggest that the biggest operators might be better off pursuing a wholesale platform strategy supporting many applications, MVNOs, content players, and the like.
Meanwhile, the data repricing begins: Vodafone has abolished its 500MB usage cap, and instead is planning to simply charge users who go over the cap more. You will need to work at it, as the line is drawn at 500MB, after which a further £5 is charged for the next 500MB, so this is aimed at the heaviest of the heavy users. Sprint announced that there will be no usage cap on their WiMAX network.
T-Mobile UK and Orange have announced the brand for their network-sharing joint venture - “Everything Everywhere”, which sounds about right for an infrastructure-focused wholesale business. They’re also putting a lot of emphasis on their combined retail presence. This raises an interesting point. What could your telco do with its retail assets? Your upstream customers might need forward and reverse logistics and a high-street presence, just as they need connectivity and a call centre.
DTAG posted rather good figures for Q1 - adjusted EBITDA was up 1.6%, but net profit was up from €655m to €900m, with cash flow also doing well. The fixed-line base, by the way, is declining by 6.6% year on year. It was results week for Zain, which reported revenues up 11%, excluding the African businesses in advance of the sale to Bharti Airtel. NTT announced a big jump in profits, essentially all down to good results at DoCoMo, and promised to return cash to shareholders. No less than three Brazilian operators reported Q1s this week - Oi (you may remember them) showed strong growth in profits after successfully integrating its acquisition of Brasil Telecom, UOL boasted of a 37% jump in ad revenue, and Telefonica’s local division reported shrinkage in both revenue and profits as the core voice business was squeezed.
India’s spectrum auction is fast becoming a sort of scaled-down version of the European spectrum hysteria of 2000; the bidding war is running in parallel with a vicious price war driven by multiple new entrants, many of which are going to be eliminated. The Indian government is delighted; they’re proposing to make Vodafone and Bharti pay again for their GSM spectrum holdings, marking their value to the market for 3G spectrum. Unsurprisingly, the industry is displeased, but it’s difficult to see what they can do about it if they want to stay in India - so Vodafone may have to fork out as much as a billion, on top of the £4.5bn they paid for Hutch-Essar back in 2007.
Verizon Wireless is looking at ways of covering the expensive rural markets of the US with LTE that won’t use too much capital. The idea is to rent chunks of the carrier’s $4.5bn worth of 700MHz spectrum to small regional carriers, who would build out their own LTE networks and then provide service to Verizon customers under a wholesale/roaming agreement. The details will be settled on a case-by-case basis. They’ve also started a low-key publicity effort.
Ben Verwaayen’s recent trip to New Zealand has been explained - Alcatel-Lucent is going to pay Telecom NZ $100m in compensation for the poor performance of the 3G network they built there. Apparently the Radio Network Controllers were the awkward squad, which is a handy data point.
There’s another reorganisation on at Nokia; the new setup creates a division for marketing and distribution, another for “Mobile Phones”, which means the Series 40 devices, and “Mobile Solutions”, which includes all the high-end devices, Symbian, MeeGo, Ovi, and all software activities. Anssi Vanjoki gets the nod for Mobile Solutions. In an ominous touch, hackers persuaded a N900 to run Android 2.1.
Comcast showed off an application for the Apple iPad that makes it function as a remote control for your TV. A remote control the size of a dinner plate, that is. BT, meanwhile, showed off its own tablet device - is this their idea of what comes after the house phone?
The Electronic Frontier Foundation defends the finders of the lost iPhone 4, in what is unquestionably the most Californian news story in Telco 2.0’s history. More seriously, workers at an Apple subcontractor in China are suing, and Apple has tried to patent absolutely any form of location-based service, as far as we can make out.
Google, meanwhile, has stopped selling Nexus Ones direct-to-customer; instead, the webstore will “showcase a range of Android devices”. It’s increasingly clear that Android’s success - in the same story, we learn that Androids are outselling iPhones - has led to Google losing control of it. Arguably, in fact, Google losing control of Android is why it’s such a success - all the vendors, all the developers, and all the operators can do business with it.
Palm’s official blog, meanwhile, apologised for the failure of their app store, which went down and left customers without apps they’d paid for, or without updates for apps they’d already installed. Skype is looking away from Windows Phone and concentrating on iPhone, Android, and Symbian.
SAP, meanwhile, bought Sybase for a cute $5.8bn. It’s being suggested that SAP specifically wants Sybase’s telecoms BSS/OSS products, in-memory database technology, and Sybase Unwired, its platform for enterprise mobile apps.
Perhaps more telling as to the “why” of the deal is this IBM story. At their annual investor briefing, IBM CEO Sam Palmisano said that they were planning to spend up to $20bn on acquisitions in the Business Analytics and Optimisation sector, where their existing businesses were growing at 16%. They reckon the total market opportunity is of the order of $140bn - data really is the business of our time. Meanwhile, CEBP specialists Dialogic bought Veraz Networks, an IP NGN vendor.
Another major meta-analysis shows no evidence that THE RAYS will eat your brain. On the other hand, Facebook might. It was the week of Facebook rage; the EFF demands they stick to their declared principles, but it really went off when Mark Zuckerberg was quoted as saying that maintaining more than one identity was a sign of “a lack of integrity”. As if by magic, a search engine appeared that lets you search Facebook for embarrassing status messages.
And finally, we know there is plenty wrong with the Digital Economy Act, but this is going too far.